In this lecture I shall expound a theory coping with the dynamics of inconsistent information. A method is set forth to represent possibly inconsistent information by a *finite state*. Next, operations for expansion and contraction of finite states are given. No extra-logical element - a choice function or an ordering of (sets of) sentences - is presupposed for the definition of contraction. Moreover, expansion and contraction are each other's duals. AGM-style representation theorems for these operations follow. Finally, *extractors*, operations retrieving a set of consistent "plausible" beliefs from a finite state, are studied, as well as their relative strength.