  M(atrix) theory compactified on an orbifold ${\bf T}_9/{\bf Z}_2$ is studied.
Via zero-brane parton scattering we find that each of the $2^9 = 512$ orbifold
fixed points carry $-1/32$ units of zero-brane charge. The anomalous flux is
cancelled by introducing a twisted sector consisting of 32 zero-branes that are
spacetime supersymmetry singlets. These twisted sector zero-branes are nothing
but gravitational waves propagating along the M-theory direction. There is no
D0-partons in the untwisted sector, a fact consistent with holographic
principle. For low-energy excitations, the orbifold compactification is
described by ten-dimensional supersymmetric Yang-Mills theory with gauge group
$SO(32)$.
