The present invention is a component monitoring system which includes all sensor and plant component monitoring at distributed plant locations close to the sensors which are the source of the signals to be analyzed. Minimally preconditioned analog sensor signals are multiplexed and further conditioned by a sensor signal preprocessor that adjusts the gain and filters the sensor signals before being applied to an analog-to-digital converter controlled by a data acquisition computer. The analog sensor signals are converted into digital samples and stored in a data memory of a digital signal processor using a direct memory access technique. The data acquisition computer also controls the selection of sensors, gain, etc., based on commands from a controller. The digital signal processor, once sufficient sensor data has been collected, performs appropriate processing using known digital signal processing techniques. This processed data is then sent to the controller for analysis to determine plant component condition. The analysis and processing routines can be changed by downloading a new routine from the controller. Once a sensor signal is processed, the controller selects the next sensor by transmitting an appropriate command to the data acquisition computer.