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A computer memory with defects is modeled as a discrete memoryless channel with states that are statistically determined. The storage capacity is found when complete defect information is given to the encoder or to the decoder, and when the defect information is given completely to the decoder but only partially to the encoder. Achievable storage rates are established when partial defect information is provided at varying rates to both the encoder and the decoder. Arimoto-Blahut type algorithms are used to compute the storage capacity.