This annual report summarizes our second year of effort to fabricate low-loss fiber waveguides with potential loss near 10 to the minus 3 dB/km. To develop such low-loss waveguides, we have used alkali and thallium halides to form poly- and single-crystal fibers. To date our best polycrystalline KRS-5 (T1BrI) fiber remains 5 orders of magnitude above the goal of 10 to the minus 3 dB/km. (Author)