diff --git a/src/ast/rewriter/quant_hoist.h b/src/ast/rewriter/quant_hoist.h
index df643950a..50cbd1ba4 100644
--- a/src/ast/rewriter/quant_hoist.h
+++ b/src/ast/rewriter/quant_hoist.h
@@ -66,7 +66,7 @@ public:
        Return index of maximal variable.
     */
 
-    unsigned pull_quantifier(bool is_forall, expr_ref& fml, svector<symbol>* names);
+    unsigned pull_quantifier(bool is_forall, expr_ref& fml, ptr_vector<sort>* sorts, svector<symbol>* names);
 
 };
 
diff --git a/src/muz_qe/dl_util.cpp b/src/muz_qe/dl_util.cpp
index 74c16a6ea..6d93dd84c 100644
--- a/src/muz_qe/dl_util.cpp
+++ b/src/muz_qe/dl_util.cpp
@@ -431,8 +431,6 @@ namespace datalog {
         }
     }
 
-<<<<<<< HEAD
-=======
     
     void rule_counter::count_rule_vars(ast_manager & m, const rule * r, int coef) {
         count_vars(m, r->get_head(), 1);
@@ -453,7 +451,6 @@ namespace datalog {
         }
         return get_max_var(has_var);
     }
->>>>>>> 26f4d3be202606ff0189aefc103de187caf06d5d
 
     void del_rule(horn_subsume_model_converter* mc, rule& r) {
         if (mc) {
diff --git a/src/muz_qe/hnf.cpp b/src/muz_qe/hnf.cpp
new file mode 100644
index 000000000..88e28699e
--- /dev/null
+++ b/src/muz_qe/hnf.cpp
@@ -0,0 +1,487 @@
+/*++
+Copyright (c) 2013 Microsoft Corporation
+
+Module Name:
+
+    hnf.cpp
+
+Abstract:
+
+    Horn normal form conversion.
+
+Author:
+
+    Nikolaj Bjorner (nbjorner) 3-20-2013
+
+Notes:
+
+   Convert formula 
+
+       (forall x f(x)) 
+
+   into conjunction 
+ 
+       (f1 xy) (f2 xy) (f3 xy)
+
+   such that 
+
+       (forall x f(x)) ~ /\ (forall xy (f_i xy))
+
+   modulo definitions that are introduced.
+    
+
+   Convert proof with 
+       asserted (forall xy (f' xy))
+
+   To:      
+       (forall xy (f' xy))             by mp~ 1, 2
+    1. asserted/def-intro (forall xy (f xy)) 
+    2. (forall xy (f xy))  ~ (forall xy (f' xy)) by trans, 3, 4
+    3. (forall xy (f xy))  ~ (forall xy (f1 xy)) by pull quantifiers (rewrite)
+    4. (forall xy (f1 xy)) ~ (forall xy (f' xy)) by oeq_quant_intro 5
+    5. f1 xy ~ f' xy                             by sub-proof.
+     
+                
+--*/
+#include"hnf.h"
+#include"warning.h"
+#include"used_vars.h"
+#include"well_sorted.h"
+#include"var_subst.h"
+#include"name_exprs.h"
+#include"act_cache.h"
+#include"cooperate.h"
+#include"ast_pp.h"
+#include"quant_hoist.h"
+#include"dl_util.h"
+#include"for_each_ast.h"
+#include"for_each_expr.h"
+
+class hnf::imp {
+    ast_manager&          m;
+    bool                  m_produce_proofs;
+    volatile bool         m_cancel;
+    expr_ref_vector       m_todo;
+    proof_ref_vector      m_proofs;
+    expr_ref_vector       m_refs;
+    symbol                m_name;
+    svector<symbol>       m_names;
+    ptr_vector<sort>      m_sorts;
+    quantifier_hoister    m_qh;
+    obj_map<expr, app*>   m_memoize_disj;
+    obj_map<expr, proof*> m_memoize_proof;
+    func_decl_ref_vector  m_fresh_predicates;
+
+public:
+    imp(ast_manager & m):
+        m(m),
+        m_produce_proofs(false),
+        m_cancel(false),
+        m_todo(m),
+        m_proofs(m),
+        m_refs(m), 
+        m_qh(m),
+        m_name("P"),
+        m_fresh_predicates(m) {
+    }
+
+    void operator()(expr * n, 
+                    proof* p,
+                    expr_ref_vector& result, 
+                    proof_ref_vector& ps) {
+        expr_ref fml(m);
+        proof_ref pr(m);
+        m_todo.reset();
+        m_proofs.reset();
+        m_refs.reset();
+        m_memoize_disj.reset();
+        m_memoize_proof.reset();
+        m_fresh_predicates.reset();
+        m_todo.push_back(n);
+        m_proofs.push_back(p);
+        m_produce_proofs = p != 0;
+        while (!m_todo.empty() && !m_cancel) {
+            fml = m_todo.back();
+            pr = m_proofs.back();
+            m_todo.pop_back();
+            m_proofs.pop_back();
+            mk_horn(fml, pr);
+            if (fml) {
+                result.push_back(fml);
+                ps.push_back(pr);
+            }
+        }
+        TRACE("hnf",
+              tout << mk_pp(n, m) << "\n==>\n";
+              for (unsigned i = 0; i < result.size(); ++i) {
+                  tout << mk_pp(result[i].get(), m) << "\n";
+              });
+    }
+
+    void set_cancel(bool f) {
+        m_cancel = f;
+    }
+
+    void set_name(symbol const& n) {
+        m_name = n;
+    }
+
+    func_decl_ref_vector const& get_fresh_predicates() {
+        return m_fresh_predicates;
+    }
+
+    void reset() {
+        m_cancel = false;
+        m_todo.reset();
+        m_proofs.reset();
+        m_refs.reset();
+        m_memoize_disj.reset();
+        m_memoize_proof.reset();
+        m_fresh_predicates.reset();
+    }
+
+    ast_manager& get_manager() { return m; }
+
+private:
+
+    bool produce_proofs() const {
+        return m_produce_proofs;
+    }
+
+    bool is_predicate(expr* p) const {
+        return is_app(p) && is_predicate(to_app(p)->get_decl());
+    }
+
+    bool is_predicate(func_decl* f) const {
+        return m.is_bool(f->get_range()) && f->get_family_id() == null_family_id;
+    }
+
+    class contains_predicate_proc {
+        imp const& m;
+    public:
+        struct found {};
+        contains_predicate_proc(imp const& m): m(m) {}
+        void operator()(var * n) {}
+        void operator()(quantifier * n) {}
+        void operator()(app* n) {
+            if (m.is_predicate(n)) throw found();
+        }
+    };
+
+    bool contains_predicate(expr* fml) const {
+        contains_predicate_proc proc(*this);
+        try {
+            quick_for_each_expr(proc, fml);
+        }
+        catch (contains_predicate_proc::found) {
+            return true;
+        }
+        return false;
+    }
+
+
+    void mk_horn(expr_ref& fml, proof_ref& premise) {
+        expr* e1, *e2;
+        expr_ref_vector body(m);
+        proof_ref_vector defs(m);
+        expr_ref fml0(m), fml1(m), fml2(m), head(m);
+        proof_ref p(m);
+        fml0 = fml;
+        m_names.reset();
+        m_sorts.reset();
+        m_qh.pull_quantifier(true, fml0, &m_sorts, &m_names);
+        if (premise){
+            fml1 = bind_variables(fml0);
+            if (!m_sorts.empty()) {
+                proof* p1 = m.mk_pull_quant(fml, to_quantifier(fml1));
+                premise = mk_modus_ponens(premise, p1);
+            }
+        }
+        head = fml0;
+        while (m.is_implies(head, e1, e2)) {
+            body.push_back(e1);
+            head = e2;
+        }
+        datalog::flatten_and(body);
+        if (premise) {
+            p = m.mk_rewrite(fml0, mk_implies(body, head));
+        }
+
+        //
+        // Case:
+        // A \/ B -> C
+        // => 
+        // A -> C
+        // B -> C
+        // 
+        if (body.size() == 1 && m.is_or(body[0].get()) && contains_predicate(body[0].get())) {
+            app* _or = to_app(body[0].get());
+            unsigned sz = _or->get_num_args();
+            expr* const* args = _or->get_args();
+            for (unsigned i = 0; i < sz; ++i) {
+                m_todo.push_back(bind_variables(m.mk_implies(args[i], head)));
+                m_proofs.push_back(0);
+            } 
+
+            if (premise) {
+                expr_ref f1 = bind_variables(mk_implies(body, head));
+                expr* f2 = m.mk_and(sz, m_todo.c_ptr()+m_todo.size()-sz);
+                proof_ref p2(m), p3(m);
+                p2 = m.mk_def_axiom(m.mk_iff(f1, f2));
+                p3 = mk_quant_intro(fml, f1, p);                    
+                p2 = mk_transitivity(p3, p2);
+                p2 = mk_modus_ponens(premise, p2);
+                for (unsigned i = 0; i < sz; ++i) {
+                    m_proofs[m_proofs.size()-sz+i] = m.mk_and_elim(p2, i);
+                }
+            }                
+            fml = 0;
+            return;
+        }
+
+
+        eliminate_disjunctions(body, defs);
+        p = mk_congruence(p, body, head, defs);
+
+        eliminate_quantifier_body(body, defs);
+        p = mk_congruence(p, body, head, defs);          
+
+        fml2 = mk_implies(body, head);
+
+        fml = bind_variables(fml2);
+
+        if (premise) {
+            SASSERT(p);
+            p = mk_quant_intro(fml1, fml, p);     
+            premise = mk_modus_ponens(premise, p);
+        }
+    }
+
+    proof* mk_quant_intro(expr* e1, expr* e2, proof* p) {
+        if (m_sorts.empty()) {
+            return p;
+        }
+        quantifier* q1 = to_quantifier(e1);
+        quantifier* q2 = to_quantifier(e2);
+        if (m.is_iff(m.get_fact(p))) {
+            return m.mk_quant_intro(q1, q2, p);
+        }
+        if (m.is_oeq(m.get_fact(p))) {
+            return m.mk_oeq_quant_intro(q1, q2, p);
+        }
+        UNREACHABLE();
+        return p;
+    }
+
+
+    void eliminate_disjunctions(expr_ref_vector::element_ref& body, proof_ref_vector& proofs) {
+        expr* b = body.get(); 
+        expr* e1;
+        bool negate_args = false;
+        bool is_disj = false;
+        unsigned num_disj = 0;
+        expr* const* disjs = 0;
+        if (!contains_predicate(b)) {
+            return;
+        }
+        TRACE("hnf", tout << mk_pp(b, m) << "\n";);
+        if (m.is_or(b)) {
+            is_disj = true;
+            negate_args = false;
+            num_disj = to_app(b)->get_num_args();
+            disjs = to_app(b)->get_args();
+        }
+        if (m.is_not(b, e1) && m.is_and(e1)) {
+            is_disj = true;
+            negate_args = true;
+            num_disj = to_app(e1)->get_num_args();
+            disjs = to_app(e1)->get_args();
+        }
+        if (is_disj) {
+            app* old_head = 0;
+            if (m_memoize_disj.find(b, old_head)) {
+                body = old_head;
+            }
+            else {
+                app_ref head = mk_fresh_head(b);
+                proof_ref_vector defs(m);
+                for (unsigned i = 0; i < num_disj; ++i) {
+                    expr* e = disjs[i];
+                    if (negate_args) {
+                        e = m.mk_not(e);
+                    }
+                    m_todo.push_back(bind_variables(m.mk_implies(e, head)));
+                    m_proofs.push_back(0);
+                    if (produce_proofs()) {
+                        defs.push_back(m.mk_def_intro(m_todo.back()));
+                        m_proofs[m_proofs.size()-1] = defs.back();
+                    }
+                }
+                if (produce_proofs()) {
+                    proof* p = m.mk_apply_defs(body.get(), head, defs.size(), defs.c_ptr());
+                    m_refs.push_back(p);
+                    m_memoize_proof.insert(b, p);
+                }
+                m_memoize_disj.insert(b, head);
+                m_refs.push_back(b);
+                m_refs.push_back(head);
+                // update the body to be the newly introduced head relation
+                body = head;
+            }
+
+            if (produce_proofs()) {
+                proofs.push_back(m_memoize_proof.find(b));
+            }
+        }
+    }
+
+    app_ref mk_fresh_head(expr* e) {
+        ptr_vector<sort> sorts0, sorts1;
+        get_free_vars(e, sorts0);
+        expr_ref_vector args(m);
+        for (unsigned i = 0; i < sorts0.size(); ++i) {
+            if (sorts0[i]) {
+                args.push_back(m.mk_var(i, sorts0[i]));
+                sorts1.push_back(sorts0[i]);
+            }
+        }
+        func_decl_ref f(m);
+        f = m.mk_fresh_func_decl(m_name.str().c_str(), "", sorts1.size(), sorts1.c_ptr(), m.mk_bool_sort());
+        m_fresh_predicates.push_back(f);
+        return app_ref(m.mk_app(f, args.size(), args.c_ptr()), m);
+    }
+
+    void eliminate_disjunctions(expr_ref_vector& body, proof_ref_vector& proofs) {
+        for (unsigned i = 0; i < body.size(); ++i) {
+            eliminate_disjunctions(body[i], proofs);
+        }
+    }
+
+    void eliminate_quantifier_body(expr_ref_vector::element_ref& body, proof_ref_vector& proofs) {
+        if (is_forall(body.get()) && contains_predicate(body.get())) {
+            quantifier* q = to_quantifier(body.get());
+            expr* e = q->get_expr();
+            if (!is_predicate(e)) {
+                app_ref head = mk_fresh_head(e);
+                m_todo.push_back(bind_variables(m.mk_implies(e, head)));
+                m_proofs.push_back(0);
+                body = m.update_quantifier(q, head);
+                if (produce_proofs()) {
+                    proof* def_intro = m.mk_def_intro(m_todo.back());
+                    proof* def_proof = m.mk_apply_def(e, head, def_intro);
+                    proofs.push_back(m.mk_nnf_neg(q, body.get(), 1, &def_proof));
+                    m_proofs[m_proofs.size()-1] = def_intro;
+                }
+            }
+        }
+    }
+
+    void eliminate_quantifier_body(expr_ref_vector& body, proof_ref_vector& proofs) {
+        for (unsigned i = 0; i < body.size(); ++i) {
+            eliminate_quantifier_body(body[i], proofs);
+        }
+    }
+
+    app_ref mk_implies(expr_ref_vector const& body, expr* head) {
+        switch (body.size()) {
+        case 0: 
+            return app_ref(to_app(head), m);
+        case 1: 
+            return app_ref(m.mk_implies(body[0], head), m);
+        default:
+            return app_ref(m.mk_implies(m.mk_and(body.size(), body.c_ptr()), head), m);
+        }        
+    }
+
+
+    proof_ref mk_congruence(proof* p1, expr_ref_vector const& body, expr* head, proof_ref_vector& defs) {
+        if (defs.empty()) {
+            return proof_ref(p1, m);
+        }
+        else {
+            SASSERT(p1);
+            proof_ref p2(m), p3(m);
+            app_ref fml = mk_implies(body, head);
+            expr* fact = m.get_fact(p1);
+            if (m.is_iff(fact)) {
+                p1 = m.mk_iff_oeq(p1);
+                fact = m.get_fact(p1);
+            }
+            VERIFY (m.is_oeq(fact) || m.is_eq(fact));
+            app* e2 = to_app(to_app(fact)->get_arg(1));
+            p2 = m.mk_oeq_congruence(e2, fml, defs.size(), defs.c_ptr());
+            p3 = mk_transitivity(p1, p2);
+            defs.reset();
+            return proof_ref(p3, m);
+        }
+    }
+
+    proof_ref mk_modus_ponens(proof* premise, proof* eq) {
+        proof_ref result(m);
+        result = m.mk_modus_ponens(premise, eq);
+        if (m.get_fact(premise) == m.get_fact(result)) {
+            result = premise;
+        }
+        return result;
+    }
+
+    proof* mk_transitivity(proof* p1, proof* p2) {
+        if (p1) {
+            app* f = to_app(m.get_fact(p1));
+            if (f->get_arg(0) == f->get_arg(1)) {
+                return p2;
+            }
+        }
+        if (p2) {
+            app* f = to_app(m.get_fact(p2));
+            if (f->get_arg(0) == f->get_arg(1)) {
+                return p1;
+            }
+        }
+        return m.mk_transitivity(p1, p2);
+    }
+
+    expr_ref bind_variables(expr* e) {
+        SASSERT(m_sorts.size() == m_names.size());
+        if (m_sorts.empty()) {
+            return expr_ref(e, m);
+        }
+        return expr_ref(m.mk_forall(m_sorts.size(), m_sorts.c_ptr(), m_names.c_ptr(), e), m);
+    }
+
+};
+
+hnf::hnf(ast_manager & m) {
+    m_imp = alloc(imp, m);
+}
+
+hnf::~hnf() {
+    dealloc(m_imp);
+}
+    
+void hnf::operator()(expr * n, proof* p, expr_ref_vector & rs, proof_ref_vector& ps) {
+    m_imp->operator()(n, p, rs, ps);    
+    TRACE("hnf", 
+          ast_manager& m = rs.get_manager();
+          tout << mk_ismt2_pp(n, m) << "\nHNF result:\n";
+          for (unsigned i = 0; i < rs.size(); ++i) {
+              tout << mk_pp(rs[i].get(), m) << "\n";
+          }
+          );
+}
+
+void hnf::set_cancel(bool f) {
+    m_imp->set_cancel(f);
+}
+
+void hnf::set_name(symbol const& n) {
+    m_imp->set_name(n);
+}
+
+void hnf::reset() {
+    m_imp->reset();
+}
+
+func_decl_ref_vector const& hnf::get_fresh_predicates() {
+    return m_imp->get_fresh_predicates();
+}
diff --git a/src/muz_qe/hnf.h b/src/muz_qe/hnf.h
new file mode 100644
index 000000000..37339540b
--- /dev/null
+++ b/src/muz_qe/hnf.h
@@ -0,0 +1,49 @@
+/*++
+Copyright (c) 2013 Microsoft Corporation
+
+Module Name:
+
+    hnf.h
+
+Abstract:
+
+    Horn normal form convertion.
+Author:
+
+
+Notes:
+
+    Very similar to NNF.
+
+--*/
+
+#ifndef _HNF_H_
+#define _HNF_H_
+
+#include"ast.h"
+#include"params.h"
+#include"defined_names.h"
+#include"proof_converter.h"
+
+class hnf {
+    class imp;
+    imp *  m_imp;
+public:
+    hnf(ast_manager & m);
+    ~hnf();
+    
+    void operator()(expr * n,                          // [IN] expression that should be put into Horn NF
+                    proof* p,                          // [IN] proof of n
+                    expr_ref_vector & rs,              // [OUT] resultant (conjunction) of expressions
+                    proof_ref_vector& ps               // [OUT] proofs of rs
+                    );
+
+    void cancel() { set_cancel(true); }
+    void reset_cancel() { set_cancel(false); }
+    void set_cancel(bool f);
+    void set_name(symbol const& name);    
+    void reset();
+    func_decl_ref_vector const& get_fresh_predicates();
+};
+
+#endif /* _HNF_H_ */
diff --git a/src/muz_qe/horn_tactic.cpp b/src/muz_qe/horn_tactic.cpp
index 98c21288e..02c41c091 100644
--- a/src/muz_qe/horn_tactic.cpp
+++ b/src/muz_qe/horn_tactic.cpp
@@ -275,11 +275,6 @@ class horn_tactic : public tactic {
             func_decl* query_pred = to_app(q)->get_decl();
             m_ctx.set_output_predicate(query_pred);
             m_ctx.get_rules(); // flush adding rules.
-<<<<<<< HEAD
-            m_ctx.set_model_converter(mc);
-            m_ctx.set_proof_converter(pc);
-=======
->>>>>>> 26f4d3be202606ff0189aefc103de187caf06d5d
             m_ctx.apply_default_transformation();
             
             if (m_ctx.get_params().slice()) {
diff --git a/src/muz_qe/pdr_dl_interface.cpp b/src/muz_qe/pdr_dl_interface.cpp
index 033057683..e2232dafe 100644
--- a/src/muz_qe/pdr_dl_interface.cpp
+++ b/src/muz_qe/pdr_dl_interface.cpp
@@ -90,13 +90,6 @@ lbool dl_interface::query(expr * query) {
     func_decl_ref            query_pred(m);
     datalog::rule_ref_vector query_rules(rule_manager);
     datalog::rule_ref        query_rule(rule_manager);
-    model_converter_ref mc = datalog::mk_skip_model_converter();
-    proof_converter_ref pc;
-    if (m_ctx.get_params().generate_proof_trace()) {
-        pc = datalog::mk_skip_proof_converter();
-    }
-    m_ctx.set_model_converter(mc);
-    m_ctx.set_proof_converter(pc);
     rule_manager.mk_query(query, query_pred, query_rules, query_rule);
     m_ctx.add_rules(query_rules);
     expr_ref bg_assertion = m_ctx.get_background_assertion();
@@ -113,13 +106,8 @@ lbool dl_interface::query(expr * query) {
           m_ctx.display_rules(tout);
           );
 
-<<<<<<< HEAD
-    m_ctx.set_output_predicate(query_pred);
-
-=======
 
     m_ctx.set_output_predicate(query_pred);
->>>>>>> 26f4d3be202606ff0189aefc103de187caf06d5d
     m_ctx.apply_default_transformation();
 
     if (m_ctx.get_params().slice()) {
@@ -147,19 +135,10 @@ lbool dl_interface::query(expr * query) {
         transf1.register_plugin(alloc(datalog::mk_coalesce, m_ctx));
         transf2.register_plugin(alloc(datalog::mk_unfold, m_ctx));
         if (m_ctx.get_params().coalesce_rules()) {
-<<<<<<< HEAD
             m_ctx.transform_rules(transf1);
-=======
-            transformer1.register_plugin(alloc(datalog::mk_coalesce, m_ctx));
-            m_ctx.transform_rules(transformer1);
->>>>>>> 26f4d3be202606ff0189aefc103de187caf06d5d
         }
         while (num_unfolds > 0) {
-<<<<<<< HEAD
             m_ctx.transform_rules(transf2);
-=======
-            m_ctx.transform_rules(transformer2);
->>>>>>> 26f4d3be202606ff0189aefc103de187caf06d5d
             --num_unfolds;
         }
     }