Recent work on the development and testing of various components of the Lincoln Training System (LTS) is reported. Plans were further developed for the testing of the LTS-1 terminal at the Keeler Technical Training Center in order to prove that this type of terminal can function as the main medium of teaching in a self-paced training environment. Considerable progress was also noted in the development of the following hardware for the LTS-2 program. Techniques were developed for storing sampled audio signals, such as two-level (black-white) diffraction gratings, on microfiche. Construction of the LTS-2 breadboard audio read system was begun. Efforts to develop high-resolution, multilevel diffraction recordings are expected to yield higher recording density than is presently possible with two-level records. The design of the self-contained logical processor for the LTS-2 was completed, and a two-axis, random-access film platen was built and tested: (Author/MT)