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Performance evaluation methods that have been used so far failed to capture the real characteristics of network traffic. This is especially true when the service times are general such as the variable bit rate (VBR) video, which is proven to be self-similar. In the paper, diffusion approximation methods are proposed to analyse a dynamic scheduler for self-similar VBR video traffic in asynchronous transfer mode (ATM) networks. The proposed scheme employs a coupled queueing system that has been used extensively in the modelling of computer and communication systems. Diffusion approximations methods are used to decouple a queueing system which represents an ATM network node into separate G/G/1 queues. Real MPEG video traces are used in the discrete event simulation. Results are compared with the approximation, and are found to work very well under different traffic conditions.