This paper generalizes 2-state (binary-state) reliability parameters 'R(t), F(t), /spl lambda/(t), and mean-time to-failure' to multi-state reliability parameters 'R(t,i), G(t,i), /spl lambda/(t,i), mean-life-span-at-specified-performance-level(i), for each state'. By using these generalized reliability parameters, multi-state reliability dynamic analysis can be transformed to a set of 2-state reliability dynamic analyses. Then, the authors extend some theoretical results in 2-state reliability analysis to the multi-state case. Measures for evaluating performance degradation of multi-state system are developed. By combining Markov processes and s-coherent multi-state system structure functions, the dynamic multi-state reliability can be analyzed. Several examples are given.