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The design of a communications system consisting of a sequential encoder-decoder, working in conjunction with a modulation-detection system is considered from the point of view of high-information transmission efficiency. Emphasis is placed on orthogonal signal modulation and a scheme known as list-of- quantization. The results of a computer study of the computational behavior of the sequential decoder are described and used to predict buffer memory overflow probability. The described design procedure allows prediction of system performance to within a fraction of a decibel. A practical sequential decoder and a list-of- modulation-detection system of reasonable complexity, can achieve performance on a white Gaussian channel to within 4.5 dB of the Shannon limit with coherent reception and to within 7 dB with incoherent reception.