Holographic Data Storage Systems (HDSS) have the capability of providing large capacity, high transfer rates, and short access times. Recently a major step forward has been made in the demonstration of this technology at Stanford University in Professor Hesseling's group, by storing, archiving and retrieving the first digital data in a HDSS. In this demonstration, color images, sound, compressed video, and computer programs were stored. This experiment demonstrates that HDSS is feasible with very attractive performance characteristics. In the work proposed here, we intend to build a compact, rugged second generation digital HDSS based on LiNbO3 technology and angular-spatial multiplexing. Components selected for this system include a frequency doubled, solid state YAG laser, an acousto-optic beam steerer, an improved 880 x 840 SLM device, and a 1024 x 1024 CCD array. These will be incorporated into a breadboard second generation testbed to verify system performance. Thereafter they will be incorporated into a compact monolithic package on the order of 1-2 ft. The packaged system will include implementation of temperature fixing and solid state beam steering. Performance goals are storage capacity of 1 Gbyte, data transfer rates of 22 Mbits/sec, random access times greater than 1 MSEC, and BER greater than 10-6.