The purpose of this collaborative Idaho National Engineering and Environmental Laboratory (INEEL) and Massachusetts Institute of Technology (MIT) Laboratory Directed Research and Development (LDRD) project is to investigate the suitability of lead or lead-bismuth cooled fast reactors for producing low-cost electricity as well as for actinide burning. The goal is to identify and analyze the key technical issues in core neutronics, materials, thermal-hydraulics, fuels, and economics associated with the development of this reactor concept. Work has been accomplished in four major areas of research: core neutronic design, plant engineering, material compatibility studies, and coolant activation. The publications derived from work on this project (since project inception) are listed in Appendix A. This is the third in a series of Annual Reports for this project, the others are also listed in Appendix A as FY-00 and FY-01 Annual Reports.