The external hot gas cleanup system at the PDU was commissioned in July 1986. From July 1986 to April 1987, three tests were completed to develop the zinc ferrite desulfurization process. In this quarter, the in-bed desulfurization system was coupled with the external hot gas cleanup system to study and evaluate PDU performance and the coal gasification and the hot gas cleanup processes while conducting tests with the integrated system. Test Plan TP-037-4 was completed in April 1989 and Test Plan TP-037-5 was initiated in June. During the reporting period, the reactivity of PDU gasifier bed samples (char/limestone or char/dolomite) was determined on the thermogravimetric analyzer. The carbon content of these samples was very low, indicating a high rate of carbon conversion. Test results showed that the gasifier bed samples are very reactive at high carbon conversion levels, thereby showing the effect of sorbent injection on the gasification rate. The effect of various operation parameters on gasifier performance during in-bed desulfurization testing at the PDU was also studied. Performance was analyzed in terms of gasification rate and product gas composition, using the mechanistic gasifier model. A comparison of the predicted versus the measured is provided herein. Work continued to study and evaluate PDU fines recycle performance. Also included in this report are test data from PDU test TP-037-3. 66 figs., 42 tabs.