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A new decision tree method for application in data mining, machine learning, pattern recognition, and other areas is proposed in this paper. The new method incorporates a classical multivariate statistical method, linear discriminant function, into decision trees' recursive partitioning process. The proposed method considers not only the linear combination with all variables, but also combinations with fewer variables. It uses a tabu search technique to find appropriate variable combinations within a reasonable length of time. For problems with more than two classes, the tabu search technique is also used to group the data into two superclasses before each split. The results of our experimental study indicate that the proposed algorithm appears to outperform some of the major classification algorithms in terms of classification accuracy, the proposed algorithm generates decision trees with relatively small sizes, and the proposed algorithm runs faster than most multivariate decision trees and its computing time increases linearly with data size, indicating that the algorithm is scalable to large datasets.