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The performance of dynamic distance-based location management schemes (DBLMS) in wireless communication networks is analyzed. A Markov chain is developed as a mobility model to describe the movement of a mobile terminal in 2D cellular structures. The paging area residence time is characterized for arbitrary cell residence time by using the Markov chain. The expected number of paging area boundary crossings and the cost of the distance-based location update method are analyzed by using the classical renewal theory for two different call handling models. For the call plus location update model, two cases are considered. In the first case, the intercall time has an arbitrary distribution and the cell residence time has an exponential distribution. In the second case, the intercall time has a hyper-Erlang distribution and the cell residence time has an arbitrary distribution. For the call without location update model, both intercall time and cell residence time can have arbitrary distributions. Our analysis makes it possible to find the optimal distance threshold that minimizes the total cost of location management in a DBLMS.