This is the fourth Quarterly Report for this project. The background and technical justification for the project are described, including potential benefits of reducing fuel moisture, prior to firing in a pulverized coal boiler. A description is given of the equipment, instrumentation and procedures being used for the fluidized bed drying experiments. Experimental data were obtained during this last quarter on the effects of particle size on drying rate for a North Dakota lignite. Other experiments looked at drying a PRB coal. The tests comparing drying rates with lignite particles of different diameters were carried out with particle top sizes from 2 to 9.5 mm and covered a range of air velocities. The results show that drying rate increased with air velocity, but that, within the accuracy of the data, the data for all four particle size distributions follow the same curve. This suggests the higher drying rates associated with the larger particles are due to higher air velocities and not to any inherently different drying rates due to particle size. The drying data with the PRB coal show qualitatively similar behavior to that observed with lignite. However, quantitative comparisons of the drying rate data obtained so far for the …