This Small Business Innovation Research Phase II project will further develop a nondestructive inspection technique (NDI) for composites first explored in Phase 1. Composite materials are strong, lightweight substitutes for many traditional metallic structural components. However, composites are often difficult to inspect for discontinuities due to their high electrical resistively and/or high ultrasonic attenuation. In Phase I, Physical Research Inc. (PRi) demonstrated the basic feasibility of using real time magneto-optic/eddy current imaging (MOI) techniques (developed by PRi) to form images of defects in `tagged` composites. Composites tagged during manufacturing with trace quantities of magnetic particles, or constructed with electrically conducting wire screens, were successfully inspected for voids, cracks, impact damage and discontinuities in fiber weave. The principal objectives of the Phase II research are to 1) Develop an MOI system that is specially adapted to applications in composites (e.g., improved magneto-optic sensors, on-board magnetizing devices) 2) Work with manufacturers of composite materials to develop tagging techniques that are compatible with industry needs 3) Complete studies designed to elucidate basic principles. The Phase II research will consist of controlled experiments (and calculations) designed to determine the optimum kinds of tagging for a particular type of defect, the minimum amount of tagging required and the effect this tagging has on the physical properties of composites. Pri anticipates that the Phase II research will be successful and that an MOI system capable of inspecting a wide range of composite materials will be the outcome. Both the military and civilian aerospace sectors will benefit from this new NDI method. Tagging composites with magnetic particles (or wire screens) during manufacturing will result in a simple, low cost, rapid method for MOI-based NDI of composites. This new capability for NDI of composites during manufacture and later in-service or during repairs, will lead to enhanced sales of the MOI.