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A new approach to adaptive delta modulation is presented. This method adaptively adjusts the output pulse stream in a way that effectively provides signal tracking with no idle noise. Whereas conventional adaptive delta modulation schemes have a changing step size, the present approach can be viewed as adjusting the sample interval to achieve improved signal tracking for a given data rate. For this method a pre-filter is used to achieve reasonably good estimates of both the message signal and its derivative. Both signals are then used to drive a combined delta modulator and adaptive sampling logic unit. Based on adaptive sampler logic, the variable rate pulse output is effectively a tri-state (three-level) incremental signal quantization.