Incremental Construction of Compact Acyclic NFAs
  This paper presents and analyzes an incremental algorithm for the construction of Acyclic Non-deterministic Finite-state Automata (NFA). Automata of this type are quite useful in computational linguistics, especially for storing lexicons. The proposed algorithm produces compact NFAs, i.e. NFAs that do not contain equivalent states. Unlike Deterministic Finite-state Automata (DFA), this property is not sufficient to ensure minimality, but still the resulting NFAs are considerably smaller than the minimal DFAs for the same languages. 
Kyriakos N. Sgarbas, Nikos D. Fakotakis, George K. Kokkinakis