Direct Micro Wxpelling (DME) is a v ery  small-scale, low  pressure, moisture  assisted oil extraction system. The rationale for its development is economic; copra pricesfluctuate widely;remote locations have small markets but high potential profits  if  they can convert alow priced export in to import- substituting final goods -such as coconut oil for  cosmetics , cooking and fuel. DME is designed to meet this niche requirement for the  South Pacific. Initial R & D  focussed on the choice of techniques for grating ,drying and pressing out of oil: motorised grating is required to maintain small particle size and through put; a kit thermal oven drier was built and tested in Fiji  with optimum moisture content (about 10% ) judged by feel; and, a simple manual press completes the set of equipment. The process of technology transfer to Fiji commenced with extensive discussions with 4 village communities selected by the Department of Agriculture. This was followed by a 2 -week  training course. Village oil production started in September 1995. In the 6n-farm "trials to  Mid -March, 3 villages had produced about 6 L  oil/operating  day. This was much  less than the potential. A serious constraint in dryi g  with the thermal oven drier seems to have been overcome with the on site construction of a solar- thermal drier. Community ownership also restricted productivity and may preclude full commercialisation .Average extraction rates (oil recovered/oil available) declined from over 70% to 60% between 1995 and 1996. Solar drying resulted in significantly higher yields. Most of the oil has been sold within the confines of the village as body and cooking oil. The latter has substituted  for imported oil. Gross  (Net) returns should be over 3 ( 4 )  times that of copra .The dissemination of a new technology producing abaiccaly new product faces more problems that do situations which only involve an improvement in processing. In particu ­lar, new marketing channels have to be formed to  move surplus oil a way from the  village.