This Small Business Innovation Research (SBIR) Phase II project will develop prototypes of fieldable eddy-current systems with GMR and SDT sensors that can detect defects in metals even with significant lift off from the material under inspection due to such things as thermal barrier coatings. Techniques for maintaining the a constant distance between the eddy-current probe and the conductive surface despite intervening coatings will also be developed in this project. Such a system can be used to lengthen the lifetime of mission critical components such as aircraft bearings, which at present have to be replaced on schedule using rather conservative lifetime estimates.<br/> The main commercial application of these systems would be military and commercial aircraft. A simple system capable of rapidly scanning an area would require eddy-current probes that can inspect a large surface in a single pass. Compact and low-power arrays of GMR and Spin Dependent Tunneling (SDT) sensors developed for this program can be used in this application as well as other applications such as nanotechnolgy read heads to read implanted magnetic noise that is extremely difficult to compromise. The implications for more secure forms of identification are clear for the post 9/11 world.