A sputter coating system (10) is disclosed comprising: a vacuum chamber; a movable substrate support mounted within said vacuum chamber (11) and adapted for mounting substrates (15) thereon for moving the substrates past at least first and second physically spaced work stations (30); a linear magnetron-enhanced sputter device positioned at said first work station (26) and including a target of selected material and means for generating an associated plasma within said device and adjacent said work station and substantially throughout an extended region of the chamber including the physically spaced second work station, for sputter depositing material on said substrates (15) traversing the first work station; and an ion source device positioned at said second work station (28) and adapted for using electrons from said plasma associated with said sputter device and applying reactive gas to form along a relatively narrow zone adjacent the substrate support a second plasma comprising ions of the reactive gas, the ion source device further comprising means for applying a directed potential between said ion source and said plasma associated with said sputter device for accelerating the reactive ions to the substrates for effecting a selected reaction with the sputter-deposited material.