The research program is designed to accomplish two primary objectives: (1) to obtain a basic understanding of the digital encoding algorithm under certain general conditions, and (2) to determine explicitly what kinds of practical digital encoding equipment should be used for the various tasks which require it. In order to accomplish these objectives, five working groups were formed and progress is reported here in each of these groups--source encoding theory, speech encoding, video encoding, pattern recognition, and computer simulation. This report is composed primarily of the individual progress reports of the team members, and each of these individual reports is a self-contained subsection of the larger report. New results are reported in every area of the research program. (Author/JY)