Development of nuclear reactor cores having high power density, long fuel life, and low fabrication costs is the objective of this program sponsored by the AEC. Five tasks are in progress: (1) Task 1A-High Power Density Fuel Development. All fuel irradiation has been terminated with the final shutdown of the VBWR. The high burnup average achieved by a single assembly in the group is 10,000 MWD/T (assembly 1F). Twenty-one of the original 24 assemblies have failed or are suspected of failure. Profilometer tests rung on HPD assembly 2E, Rod B, indicate that localized clad deformation occurs during operation. (2) Task 1B-Fuel Fabrication Development. Assembly. All fuel irradiation has been terminated with the final shutdown of the VBWR. The highest average burnup achieved by a single assembly in the group was assembly 4S with 8400 MWD/T. All assemblies in the group have failed or are suspected of failure. The Phase I developmental fuel continues to be irradiated in the Big rock Point reactor with the lead assembly having reached 1500 MWD/T. Fifteen phase II developmental assemblies are being construction for insertion at Big Rock Point in March. Engineering is underway to provide one instrumented assembly probe and two spare flowmeters for use in phase II testing. Flowmeter bearing are being redesigned to minimize crud access and changes of bearing seizure. (3) Task II-Stability, Heat Transfer and Fluid Flow. Phase I of the reactor performance tests has now been completed. These tests consisted of core performance, control rod oscillator, pressure transient, and flow tests. Reduction of the data from these tests has begun, and preliminary results have been prepared for use by the Consumers Power Company in relicensing for Phase II. (4) Task III-Physics Development. Power distribution calculations have been performed for the proposed 84-bundle, 75 MWe core and for the high power density (60KW/1) 41-bundle core, which are planned during Phase II. The results show that operation under the proposed conditions is feasible. The core loading has been increased from 56 bundles to 74 bundles to achieve additional reactivity and to gain experience with larger core operation. The use of temporary poison rods to reduce the axial power peaking factor is being planned for Phase II. These rods may be used to replace selected fuel rods in the r and D assemblies. The on-line computer system at Big Rock Point appears to be operational and debugged as of the end of the report period. A draft version of the Computer Users Manual was prepared, and work is continuing on the System Manual. Several program changes, which were required by the core configuration used in the 74-bundle core, have been made and checked out. (5) Task IV-Co-Ordination and Test Planning. Phase I R and D performance and transient testing at Big Rock Point has been concluded, broadly confirming pre-test analyses. The Big Rock Point Reactor core has been increased to 74 bundles and is operating with eight development fuel assemblies among the core complement. Physics and thermal-hydraulic analyses have been performed in support of safeguards and licensing of the Big Rock Point Plant for operation to 240 MWt and, at reduced power, to 80 KW/1. Phase II tests have been planned, and are to be detailed, and possibly initiated, during the next quarter.