Equivalent current dipoles are a powerful tool for modeling focal sources. The dipole is often sufficient to adequately represent sources of measured scalp potentials, even when the area of activation exceeds 1 cm2 of cortex. Traditional least-squares fitting techniques involve minimization of an error function with respect to the location and orientation of the dipoles. The existence of multiple local minima in this error function can result in gross errors in the computed source locations. The problem is further compounded by the requirement that the model order, i.e. the number of dipoles, be determined before error minimization can be performed. An incorrect model order can produce additional errors in the estimated source parameters. Both of these problems can be avoided using alternative search strategies based on the MUSIC (multiple signal classification) algorithm. Here the authors review the MUSIC approach and demonstrate its application to the localization of multiple current dipoles from EEG data. The authors also show that the number of detectable sources can be determined in a recursive manner from the data. Also, in contrast to least-squares, the method can find dipolar sources in the presence of additional non-dipolar sources. Finally, extensions of the MUSIC approach to allow the modeling of distributed sources are discussed.