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According to a Kickstarter update from Nightdive, EDMS was the physics system, written by Seamus Blackley. It stands for 'Emetic Dynamics Modeling System'... Possibly a reference to the way discarded items would go flying out the center of the viewport :)

Edit: EDMS/SOLITON.CC confirms above is correct (speculation about origin of the name is still speculation, however)

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Oh, that EDMS! I had totally forgotten its code name.

Seamus's physics system was really ahead of its time, but unfortunately a ton of the work of getting a physics system to work in a real game is dealing with edge cases, numerical stability, etc., and we had huge problems getting everything to an industrial-strength state. (You will probably not be surprised if you look at the code.) Terra Nova: Strike Force Centauri's full biped physics eventually had to be replaced by run-of-the-mill sphere physics just to make sure that things worked 100% of the time instead of 95%. Flight Unlimited was the real culmination of Seamus's physics work.

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