This report deals with advances in linguistic analysis and programing. The theoretical theses for this work were presented in the first annual report. This second report concentrates on progress in the descriptive analysis of German and English, and on computer programs which have been developed during the year. Linguistic work during the period was directed at expanding the dictionaries for both German and English. The number of lexical items coded was increased, as were the features associated with each item. The coding involved complex problems of linguistic description, such as treatment of adverbs and extended forms of verbs. Since adverbs had not been adequately classified in any existing grammars of German or English, a new classificatory schema is being developed. The extended forms of German verbs have been treated in a recent monograph, which has served as the basis for the lexical analysis of these constructions within the German-English MT System. These extended forms are particularly difficult in having a small group of verbs used primarily to depict the verbal component and nouns combined with them to carry the semantic portion of the expression. (Author/RL)