We continue the investigation of the algorithm of report TW79 for the minimal
partial realization of MIMO systems.
In this part we give its relation to a method proposed by Antoulas
who generates a matrix continued fraction.
It is shown how the algorithm of TW79 can be modified to generate the
matrix coefficients in this continued fraction.
A short note on the observability indices is added.
It shows how the observability indices are related to the potential
degrees of auxiliary vectors that appear in the algorithm.