The data storage system is connected to a local area network and includes a storage server that on a demand basis and/or on a periodically scheduled basis audits the activity on each volume of each data storage device that is connected to the network. Low priority data files are migrated via the network and the storage server to backend data storage media, and the directory resident in the data storage device is updated with a placeholder entry to indicate that this data file has been migrated to backend storage. When the processor requests this data file, the placeholder entry enables the storage server to recall the requested data file to the data storage device from which it originated.