Recent developments in the theory of point processes are used to analyze the accuracy by which signals are conveyed by the discharges of single auditory-nerve fibers. It is shown that the only spike trains which can convey a signal without distortion are those well-described by a Poisson process model. Theoretical predictions are made of the distortion present in the transmission of signals by auditory-nerve fiber discharge patterns. Absolute refractory effects are shown to result in more distortion than relative refractory ones. Procedures are developed to compensate for these distortions. The procedures designed to compensate for absolute refractory effects operate on the PST histogram. Computer simulations are used to confirm the theoretical predictions and to assess the accuracy of the compensation techniques.