The only additional prerequisite required for this talk is the material of the overview lecture. Theory concerning algebraic group actions will be explicitly quoted as needed.

This part addresses arbitrary algebras $A$ over an algebraically closed field. We will reinforce the concept of a degeneration of a finite dimensional $A$-module with initial examples. Then we will discuss the projective varieties introduced at the end of the first lecture and exploit them to advance the degeneration theory of $A$. No proofs of the theorems will be included in the lecture (but I will be available to present proofs outside the lectures to anybody who is interested). Instead, we will emphasize concrete interpretations of the theory. In particular, we will demonstrate its force in applying it to concrete examples (these can be presented graphically, without a big buildup of technical and notational ballast, with the aid of a diagrammatic method which, in essence, was introduced by Alperin).