  We present a novel approach for model reduction of nonlinear dynamical
systems based on proper orthogonal decomposition (POD). Our method, derived
from Density Matrix Renormalization Group (DMRG), provides a significant
reduction in computational effort for the calculation of the reduced system,
compared to a POD. The efficiency of the algorithm is tested on the one
dimensional Burgers equations and a one dimensional equation of the Fisher type
as nonlinear model systems.
