ABSTRACT: Aerospace systems undergo a wide array of operating and environmental conditions that may lead to degradation of system components, and a reduction of the ability to system to safely operate at the original design parameters.  Designing for longevity results in inefficient early life cycle use, as the system must be overly safe in its pristine condition in order to be safe at the original design loads later.  A new design paradigm is in development, attritable aircraft.  The design focuses on lower factors of safety, constantly estimating the dynamic structural limits throughout a structure's lifecycle, and adjusting the operation of that structure accordingly.  As safety factors are minimized, it becomes much more likely that significant damage will occur in flight, necessitating real time analysis of the system's safety.  In this talk, we present a new, efficient Kalman filtering algorithm for highly nonlinear systems, theoretical and empirical comparisons of methods used for capability analysis, and a preview of our current work on dynamic Markov chain Monte Carlo algorithms.