This report presents the results of the second phase (3/1998 - 2/2001) of the research unit (Forschergruppe) “Image Sequence Processing to Study Dynamic Processes”. The research unit was founded in December 1995. In the second funding period two more application areas (projects E and F) were added to the research unit. The central theme of the research unit is the study of transport, exchange, and growth processes by • developing and using visualization techniques that take image sequences and extract the biological or physical parameters of interest and make them visible, and by • using image sequence processing techniques to tackle key scientific questions in various research areas that cannot be studied adequately without these techniques. A close and interdisciplinary cooperation between applications and fundamental research in image analysis is the most distinct feature of the research unit.