We refined the baseline design and conducted a System Design Requirements Review. A number of subsystem requirements and trade studies were concluded. We initiated a study of the data readout approach for the signal-recycled interferometer. The preliminary result is that the DC readout (in contrast to the traditional RF-modulation technique) appears to take advantage of the coupling that exists in a signal-recycled interferometer between the shot-noise fluctuations and the photon pressure on the test masses. We have also been working with industry to develop a low noise Digital-to-Analog Converter (DAC). Test results on the first prototypes should be available before the end of this year.