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DiMethyl Ether (DME) has been shown to be a very promising alternative fuel, which offers low emissions and good economy when directly injected into the cylinder of diesel cycle engines. However, as it is a liquified gas, it poses special demands in terms of storage and handling. Over the last few years, AVL has been developing fuel injection and handling systems for DME so that its full potential can be realised. This paper describes the choice of fuel injection system, describes its function and control as well as present test results. In addition, the future outlook for DME as a fuel in transportation will be discussed.