Direct fuel oxidization yields major fuel cell power system simplifications and potential performance advantages, particularly for an automotive power plant application. The system simplification is particularly striking when a direct fuel system is compared to an “indirect” fuel cell system in a vehicle (where the fuel on board must be “reformed” and “cleaned” to provide a hydrogen-rich gas “reformate” for use in the fuel cell system). The inherent complexity, the losses of efficiency, and the emissions associated with the fuel processor required for the indirect system combine to make the comparison to a direct fuel system extremely favorable toward the latter in all important aspects.Although direct fuel oxidation is possible in principle for almost any hydrocarbon or alcohol fuel, at the present time the direct fuel cell system with the highest levels of system fuel efficiency and power density is the direct-hydrogen system. However, the use of hydrogen as a vehicle fuel (compressed, adsorbed, or liquefied), has one overwhelming disadvantage - the problem of effectively storing the hydrogen on-board the vehicle (added volume and weight, for example, which inhibit acceleration performance and efficiency, and intrude on passenger and payload space). These disadvantages largely negate the cell/stack advantage of a direct-hydrogen system.In contrast, the major system simplifications and potential performance advantages of a direct fuel cell system are available, essentially without significant disadvantage, if the fuel cell system can directly use a high-energy-density liquid fuel (e.g.; an alcohol or hydrocarbon). The R&D and commercialization challenge is to develop a liquid-fueled direct fuel cell system for automotive applications which has adequate levels of fuel conversion efficiency and power density.Within the existing technical limitations of the direct fuel cell state-of-the-art (especially the available catalysts and electrolytes), there is only one liquid fuel with sufficient reactivity to use directly in a fuel cell - that fuel is methanol (Methyl Alcohol, CH3OH, MeOH). The status and future potential for the Direct-Methanol Fuel Cell (DMFC) is an important consideration in evaluating the overall future commercial possibilities for all Fuel Cell Vehicle (FCV) designs, and for understanding the potential long-term - and transitional -- role of methanol as an FCV Fuel. The state-of-the-art for DMFCs is reviewed here, and the issue of operation in a load-following vs. a hybrid powersystem are evaluated, together with some indications of future improvements for the DMFC. A major consideration is that the conventional wisdom that a DMFC stack must be operated in a hybrid power system is based on a fundamental misinterpretation of the operating characteristics of the DMFC.