This report is the third in a series of annual reports describing the research performed by Stanford Research Institute to provide the technology that will allow speech understanding systems to be designed and implemented for a variety of different task domains and environmental constraints. The current work is being carried out cooperatively with the System Development Corporation, which is responsible for signal processing, acoustics, phonetics, and phonology. Following an Introduction and Overview, separate sections describe in detail the Definition System, the Parsing System, the Language Definition, Semantics, and Discourse Analysis and Pragmatics. Appendix A contains a listing of the language currently defined in the speech understanding system. Appendix B lists the reports and publications issued by the project staff. (Author)