diff --git a/HANDOFF-h3-dmd2-vsa.md b/HANDOFF-h3-dmd2-vsa.md
new file mode 100644
index 000000000..d7559b3b9
--- /dev/null
+++ b/HANDOFF-h3-dmd2-vsa.md
@@ -0,0 +1,88 @@
+# Handoff: VSA-H3 DMD2 overfit — run directly on tray 1795370
+
+State as of 2026-08-09. Everything is staged on the tray; only the launch is
+left (my login-node srun path was blocked by per-user thread exhaustion —
+running inside the tray's container sidesteps it entirely).
+
+## The experiment
+
+Single-sample DMD2 overfit on `c17_v2` (your prompt-rewrite v2 generation,
+1344×768 / 5.2 s / with audio), parity-first: **student on the VSA-H3 backend
+at sparsity 0.0** (parity-proven ≤2e-4 vs dense in unit tests) vs **teacher +
+critic on FLASH_ATTN with FA4**. 3-step schedule `[1000, 757, 522]`,
+`generator_update_interval: 5` (TTUR: critic every step, student every 5th),
+4 GPUs, sp=4, pure-FSDP sharding (hsdp 1×4), all three models
+gradient-checkpointed, batch 1, 2000 steps, ckpt+validation every 250.
+
+## What is already staged
+
+- **Code**: `/mnt/fv-h3ssim` on branch `h3-dmd2-vsa` (= `feat/h3-dmd2-vsa`
+  @ d81f1f166 = DMD2-for-H3 + PR #1695 VSA backend + per-role backend wiring
+  + wandb credential guard). Also pushed to origin as `feat/h3-dmd2-vsa`.
+- **Data**: `/mnt/h3-dmd2-overfit/data/data_00000.parquet` — one preprocessed
+  t2va record (video+audio VAE latents + text embedding 225×5120).
+- **Validation prompts**: `/mnt/h3-dmd2-overfit/c17_validation.json` (the c17
+  v2 prompt, 3-step sampling) — the YAML may still point at the Wan
+  placeholder; step 2 below fixes it idempotently.
+- **Config**: `examples/train/configs/distribution_matching/minimax_h3/dmd2_vsa0_overfit.yaml`
+- Raw inputs (for reference): `/mnt/h3-dmd2-overfit/c17_v2.mp4`, `c17_v2_prompt.txt`.
+
+## Run it (on the tray)
+
+```bash
+# 0. enter the persistent container (created by my earlier runs)
+docker exec -it fv-dev-1795370-0 bash
+# (if it's gone: ~/docker.sh style run with /home/scratch.willlin_ent -> /mnt)
+
+# 1. clean any leftover trainer from my attempts + confirm GPUs are free
+ps -eo pid,args | grep entrypoint.train | grep -v grep   # kill any PIDs listed
+nvidia-smi --query-gpu=memory.used --format=csv,noheader  # expect ~0 MiB x4
+
+# 2. env + config fix (idempotent)
+cd /mnt/fv-h3ssim
+export PYTHONPATH=/mnt/studio8/pyoverride   # routes 'import fastvideo' to THIS checkout
+export FASTVIDEO_FA4=1                      # teacher/critic FLASH_ATTN -> FA4 path
+export WANDB_API_KEY=8d9f4b39abd68eb4e29f6fc010b7ee71a2207cde
+sed -i "s|dataset_file: examples/training/finetune/Wan2.1-Fun-1.3B-InP/crush_smol/validation.json|dataset_file: /mnt/h3-dmd2-overfit/c17_validation.json|" \
+  examples/train/configs/distribution_matching/minimax_h3/dmd2_vsa0_overfit.yaml
+
+# 3. launch (interactive; or wrap in setsid nohup ... & for detach)
+torchrun --nproc_per_node 4 -m fastvideo.train.entrypoint.train \
+  --config examples/train/configs/distribution_matching/minimax_h3/dmd2_vsa0_overfit.yaml \
+  2>&1 | tee /mnt/h3-dmd2-overfit/logs/train.log
+```
+
+wandb: project `h3-dmd2-vsa`, run `dmd2_vsa0_overfit` — the URL prints within
+the first seconds of trainer init (`https://wandb.ai/...`). Logged per step:
+total/generator/fake-score loss, update_student flag, step_time_sec,
+vsa_sparsity.
+
+## What to expect / what parity means
+
+- Trio load: ~3×(33B DiT) FSDP-sharded + text encoder; first load on this
+  tray is warm for the text encoder (preprocess touched it) but cold for the
+  3 transformer copies — expect ~10-20 min before step 1.
+- Healthy signals: both losses finite from step 1; fake-score loss drops
+  fast (critic fitting one sample); generator loss moves every 5th step.
+- Parity claim to check: with sparsity 0.0 the student's VSA-H3 path should
+  train indistinguishably from a dense student (the sparsity-0 mask selects
+  every tile; kernel parity ≤2e-4). If it diverges/NaNs where a dense run
+  wouldn't, that's a VSA-H3-under-autograd bug — grab
+  `/mnt/h3-dmd2-overfit/logs/train.log` and the wandb run.
+- Next knob after parity holds: `training.vsa.sparsity` (e.g. 0.5 → 0.875
+  → 0.9) in the YAML — student-only; teacher/critic stay dense by
+  construction (`models.*.attention_backend`).
+
+## Known traps (all pre-paid)
+
+- `PYTHONPATH=/mnt/studio8/pyoverride` is mandatory — without it,
+  `import fastvideo` resolves to `/mnt/FastVideo` (the maintainer's checkout)
+  via the venv's editable-install finders, and cwd `/mnt/FastVideo` shadows too.
+- Don't set `FASTVIDEO_ATTENTION_BACKEND` globally — per-role backends come
+  from the YAML (`models.student/teacher/critic.attention_backend`).
+- The tile-buffer autograd fix is in this branch (grad paths get fresh
+  buffers); if you see "modified by an inplace operation" at backward, you're
+  on a stale checkout — `git -C /mnt/fv-h3ssim log --oneline -1` should show
+  d81f1f16.
+- Checkpoints land in `outputs/minimax_h3_dmd2_vsa0_overfit/` under the
+  checkout (NFS); validation videos under the same tree per callback config.