The Swedish Defence Research Agency (FOI) has developed a concept demonstrator called the Information Fusion Demonstrator 2003 (IFD03) for demonstrating information fusion methodology for a future Network Based Defense (NBF) C4ISR system. The focus of the demonstrator is on real-time tactical intelligence processing at the division level in a ground warfare scenario. The demonstrator integrates force aggregation, particle filtering, and sensor allocation methods to create, dynamically update, and maintain components of a tactical situation picture. This represents an important step towards the goal of creating in real time a dynamic, high fidelity representation of a moving battalion-sized organization, based on sensor data as well as a priori intelligence and terrain information. The motives behind this project, the fusion methods developed for the system, its scenario model simulator architecture, as well as key aspects of its development process, are describes. The main services of the demonstrator are discussed, and essential experience from the use and development of the system is shared. Further development of the techniques used in IFD03 may eventually permit concurrent tracking of solid objects and group objects, as well as more powerful sensor resource management methods. Also, studies are being carried out which are likely to lead to capability to automatically recognize certain kinds of tactical plans and intentions.