The report describes the third year's efforts in a program to develop criteria for extending the applicability of low-emission, high-efficiency coal burners. For the small-scale fuel studies, 28 coals covering all ranks were tested under a wide variety of conditions to ascertain the impact of coal properties on the fate of fuel nitrogen (N). Significant accomplishments in this part of the program include: (1) bench-scale test results confirm the pilot-scale concept that decreasing the initial air/fuel ratio decreases fuel NOx formation; (2) detailed studies on optimizing a staged combustion system suggest that the stoichiometry producing minimum NOx emissions is a function of both fuel composition and primary-zone conditions; (3) distribution of the total fixed nitrogen (TFN) species--NO, NH3, and HCN--leaving the first stage is strongly dependent on coal composition; (4) distribution of the first-stage fuel N emissions has a significant impact on second-stage exhaust NO emissions (minimum second-stage NO emissions depend on competition between first-stage NO and increased gas - and solid-phase N species); and (5) during staged combustion, increasing the rate of heat extraction from the first stage (fuel-rich zone) decreases the decay of TFN species, but dramatically decreases TFN conversion in the second stage (first-stage extraction reduces exhaust NO emissions).