The Phase I effort has demonstrated that holographic windows for daylighting is a viable and valuable technology. The holograms effectively and efficiently diffract sunlight. The Phase I effort, as expected, uncovered several problem areas requiring additional research. In particular, to optimize the effectiveness of the holograms, high quality gelatin films of uniform and controlled thickness must be prepared. Commercially available films may be used for demonstration, but are not optimum. The chromatic problem was addressed by overlapping patterns from adjacent holograms and this area needs some further work. An invention under the contract using a film with imbedded mirror elements shows promise of deploying an inverted spectrum to mix with the direct spectrum. Other research areas for the Phase II effort were anticipated, namely those associated with scale up to a full size room illumination demonstration. The research will focus on both the fabrication of large holograms and the measurements of total room illumination.