  The Argus Optical Array is a synoptic survey observatory, currently in
development, that will have a total collecting area equivalent to a 5-meter
monolithic telescope and an all-sky field of view, multiplexed from 900
commercial off-the-shelf telescopes. The Array will observe 7916 deg$^2$ every
second during high-speed operations ($m_g\leq16.1$) and every 30 seconds at
base cadence ($m_g\leq19.1$), producing 4.3 PB and 145 TB respectively of data
per night with its 55-gigapixel mosaic of cameras. The Argus Array Hierarchical
Data Processing System (Argus-HDPS) is the instrument control and analysis
pipeline for the Argus Array project, able to create fully-reduced data
products in real time. We pair sub-arrays of cameras with co-located compute
nodes, responsible for distilling the raw 11 Tbps data rate into transient
alerts, full-resolution image segments around selected targets at 30-second
cadence, and full-resolution coadds of the entire field of view at $15+$-min
cadences. Production of long-term light curves and transient discovery in deep
coadds out to 5-day cadence ($m_g\leq24.0$) will be scheduled for daytime
operations. In this paper, we describe the data reduction strategy for the
Argus Optical Array and demonstrate image segmentation, coaddition, and
difference image analysis using the GPU-enabled Argus-HDPS pipelines on
representative data from the Argus Array Technology Demonstrator.
