The Virgin Islands Demonstration Library Network Study (VIDLNS) seeks to determine whether the development of either local or regional library networks would be the key to optimal organization of small library collections in isolated areas. This report describes the research and demonstration components of the exploratory phase of the project: (1) a survey of local library needs and resources; (2) a national survey of library network activity in remote, disadvantaged areas; (3) feasibility studies of linkage to national library networks, and the formation of regional or local library networks; (4) development of local union lists of films, periodicals, and books; and (5) the development of local interlibrary loan services. The report recommends local, multi-type library networks as the goal for small libraries in remote, disadvantaged areas, and a model plan for the formation of such networks is proposed. Some problems are identified: local resource sharing networks seem to be more feasible than online bibliographic data bases because of cost and the failure of OCLC to offer Sears Subject Headings; and problems in document delivery and local data processing limitations in isolated areas present obstacles to effective interlibrary cooperation. The questionnaire used to survey local library needs, tabulation of data obtained from the national survey, and press releases and news articles on the VIDLNS project are appended. (Author/JPF)