The complimentary properties of neural network models, with their collective, iterative, nonlinear, robust, and fault-tolerant approach to information processing, and the inherent capabilities of optics (parallelism and massive interconnectivity) was first pointed out and the first optical associative memory demonstrated in 1985. Since then, work and interest in neuromorphic optical signal processing has been growing steadily. Work in this area is evolving rapidly enough to make it difficult to be aware of all relevant developments and to assess their implications for the purposes of this report. Some noteworthy work may have been left out. For that the author offers his sincere apologies and hopes that such work is included in next year's report.