diff --git a/README.md b/README.md
index 82eca44..a6e2305 100644
--- a/README.md
+++ b/README.md
@@ -112,6 +112,9 @@ Open `http://localhost:5000`.
 - **Series Continuity:** When generating Book 2+, carries forward character visual tracking, established relationships, plot threads, and a cumulative "Story So Far" summary.
 - **Persona Refinement Loop:** Every 5 chapters, analyzes actual written text to refine the author persona model, maintaining stylistic consistency throughout the book.
 - **Consistency Checker (`editor.py`):** Scores chapters on 8 rubrics (engagement, voice, sensory detail, scene execution, etc.) and flags AI-isms ("tapestry", "palpable tension") and weak filter verbs ("felt", "realized").
+- **Dynamic Character Injection (`writer.py`):** Only injects characters explicitly named in the chapter's `scene_beats` plus the POV character into the writer prompt. Eliminates token waste from unused characters and reduces hallucinated appearances.
+- **Smart Context Tail (`writer.py`):** Extracts the final ~1,000 tokens of the previous chapter (the actual ending) rather than blindly truncating from the front. Ensures the hand-off point — where characters are standing and what was last said — is always preserved.
+- **Stateful Scene Tracking (`bible_tracker.py`):** After each chapter, the tracker records each character's `current_location`, `time_of_day`, and `held_items` in addition to appearance and events. This scene state is injected into subsequent chapter prompts so the writer knows exactly where characters are, what time it is, and what they're carrying.
 
 ### Marketing Assets (`marketing/`)
 - **Cover Art:** Generates a visual prompt from book themes and tracking data, then calls Imagen (Gemini or Vertex AI) to produce the cover. Evaluates image quality with multimodal AI critique before accepting.
@@ -316,7 +319,10 @@ data/
     "descriptors": ["Blue eyes", "Tall"],
     "likes_dislikes": ["Loves coffee"],
     "last_worn": "Red dress (Ch 4)",
-    "major_events": ["Injured leg in Ch 2"]
+    "major_events": ["Injured leg in Ch 2"],
+    "current_location": "The King's Throne Room",
+    "time_of_day": "Late afternoon",
+    "held_items": ["Iron sword", "Stolen ledger"]
   }
 }
 ```
diff --git a/core/config.py b/core/config.py
index 63b5f1b..f61ffe7 100644
--- a/core/config.py
+++ b/core/config.py
@@ -65,4 +65,4 @@ LENGTH_DEFINITIONS = {
 }
 
 # --- SYSTEM ---
-VERSION = "1.4.0"
+VERSION = "1.5.0"
diff --git a/story/bible_tracker.py b/story/bible_tracker.py
index 2f48ded..ced46da 100644
--- a/story/bible_tracker.py
+++ b/story/bible_tracker.py
@@ -70,12 +70,15 @@ def update_tracking(folder, chapter_num, chapter_text, current_tracking):
 
     OPERATIONS:
     1. EVENTS: Append 1-3 key plot points to 'events'.
-    2. CHARACTERS: Update 'descriptors', 'likes_dislikes', 'speech_style', 'last_worn', 'major_events'.
+    2. CHARACTERS: Update 'descriptors', 'likes_dislikes', 'speech_style', 'last_worn', 'major_events', 'current_location', 'time_of_day', 'held_items'.
        - "descriptors": List of strings. Add PERMANENT physical traits (height, hair, eyes), specific items (jewelry, weapons). Avoid duplicates.
        - "likes_dislikes": List of strings. Add specific preferences, likes, or dislikes mentioned (e.g., "Hates coffee", "Loves jazz").
        - "speech_style": String. Describe how they speak (e.g. "Formal, no contractions", "Uses slang", "Stutters", "Short sentences").
        - "last_worn": String. Update if specific clothing is described. IMPORTANT: If a significant time jump occurred (e.g. next day) and no new clothing is described, reset this to "Unknown".
        - "major_events": List of strings. Log significant life-altering events occurring in THIS chapter (e.g. "Lost an arm", "Married", "Betrayed by X").
+       - "current_location": String. The character's physical location at the END of this chapter (e.g., "The King's Throne Room", "Aboard the Nighthawk ship"). Update whenever the character moves.
+       - "time_of_day": String. The approximate time of day at the END of this chapter (e.g., "Dawn", "Late afternoon", "Midnight"). Reset to "Unknown" if unclear.
+       - "held_items": List of strings. Items the character is actively carrying or holding at chapter end (e.g., "Iron sword", "Stolen ledger"). Remove items they have dropped or given away.
     3. WARNINGS: Append new 'content_warnings'.
 
     OUTPUT_FORMAT (JSON): Return the updated tracking object structure.
diff --git a/story/writer.py b/story/writer.py
index 4145d3a..5b6b1c5 100644
--- a/story/writer.py
+++ b/story/writer.py
@@ -46,10 +46,30 @@ def write_chapter(chap, bp, folder, prev_sum, tracking=None, prev_content=None,
         if samples:
             persona_info += "\nWRITING STYLE SAMPLES:\n" + "\n".join(samples)
 
+    # Only inject characters named in the chapter beats + the POV character
+    beats_text = " ".join(str(b) for b in chap.get('beats', []))
+    pov_lower = pov_char.lower() if pov_char else ""
+    chars_for_writer = [
+        {"name": c.get("name"), "role": c.get("role"), "description": c.get("description", "")}
+        for c in bp.get('characters', [])
+        if c.get("name") and (
+            c["name"].lower() in beats_text.lower() or
+            (pov_lower and c["name"].lower() == pov_lower)
+        )
+    ]
+    if not chars_for_writer:
+        chars_for_writer = [
+            {"name": c.get("name"), "role": c.get("role"), "description": c.get("description", "")}
+            for c in bp.get('characters', [])
+        ]
+    relevant_names = {c["name"] for c in chars_for_writer}
+
     char_visuals = ""
     if tracking and 'characters' in tracking:
-        char_visuals = "\nCHARACTER TRACKING (Visuals & Preferences):\n"
+        char_visuals = "\nCHARACTER TRACKING (Visuals, State & Scene Position):\n"
         for name, data in tracking['characters'].items():
+            if name not in relevant_names:
+                continue
             desc = ", ".join(data.get('descriptors', []))
             likes = ", ".join(data.get('likes_dislikes', []))
             speech = data.get('speech_style', 'Unknown')
@@ -62,6 +82,13 @@ def write_chapter(chap, bp, folder, prev_sum, tracking=None, prev_content=None,
             if worn and worn != 'Unknown':
                 char_visuals += f"  * Last Worn: {worn} (NOTE: Only relevant if scene is continuous from previous chapter)\n"
 
+            location = data.get('current_location', '')
+            items = data.get('held_items', [])
+            if location:
+                char_visuals += f"  * Current Location: {location}\n"
+            if items:
+                char_visuals += f"  * Held Items: {', '.join(items)}\n"
+
     style_block = "\n".join([f"- {k.replace('_', ' ').title()}: {v}" for k, v in style.items() if isinstance(v, (str, int, float))])
     if 'tropes' in style and isinstance(style['tropes'], list):
         style_block += f"\n- Tropes: {', '.join(style['tropes'])}"
@@ -71,13 +98,8 @@ def write_chapter(chap, bp, folder, prev_sum, tracking=None, prev_content=None,
 
     prev_context_block = ""
     if prev_content:
-        trunc_content = utils.truncate_to_tokens(prev_content, 2000)
-        prev_context_block = f"\nPREVIOUS CHAPTER TEXT (For Tone & Continuity):\n{trunc_content}\n"
-
-    chars_for_writer = [
-        {"name": c.get("name"), "role": c.get("role"), "description": c.get("description", "")}
-        for c in bp.get('characters', [])
-    ]
+        trunc_content = utils.truncate_to_tokens(prev_content, 1000)
+        prev_context_block = f"\nPREVIOUS CHAPTER TEXT (Last ~1000 Tokens — For Immediate Continuity):\n{trunc_content}\n"
 
     total_chapters = ls.get('chapters', '?')
     prompt = f"""