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Subgroup discovery aims at finding subsets of a population whose class distribution is significantly different from the overall distribution. It has previously predominantly been investigated in a two-class context. This paper investigates multi-class subgroup discovery methods. We consider six evaluation measures for multi-class subgroups, four of them new, and study their theoretical properties. We extend the two-class subgroup discovery algorithm CN2-SD to incorporate the new evaluation measures and a new weighting scheme inspired by AdaBoost. We demonstrate the usefulness of multi-class subgroup discovery experimentally, using discovered subgroups as features for a decision tree learner. Not only is the number of leaves of the decision tree reduced with a factor between 8 and 16 on average, but significant improvements in accuracy and AUC are achieved with particular evaluation measures and settings. Similar performance improvements can be observed when using naive Bayes.