Given any subset ℬ, containing the identity (1), of ℬ (ℋ) (the bounded operators on some Hilbert space ℋ), and given two states σ and ρ on ℬ(ℋ), a definition was given in [3] of entℬ (σℬ|ρ|ℬ) - ‘the entropy of σ relative to ρ given the information in ℬ’. It was shown that, for ℬ an injective von Neumann algebra, the resulting relative entropy agreed with those of Umegaki, Araki, Pusz and Woronowicz, and Uhlmann. The purpose of this paper is to explore this definition further. After some technical preliminaries in Section 2, in Section 3 a new characterization of entℬ(ℋ) (σ|ρ) for σ and ρ normal states will be given. In Section 4 it will be shown that under fairly general circumstances the relative entropy on algebras can be used for statistical inference. This is important for applications of the relative entropy. I shall given the briefest sketches of how I see these applications being made in the measurement problem in quantum theory and in a ‘many worlds’ interpretation. The vigilant reader will notice that the scheme proposed in Section 4 for modelling measurements subject to given compatibility requirements differs slightly from that proposed in the introduction to [3]. The reason for this is outlined in Section 5, where an explicit computation is made of the relative entropy for the simplest non-trivial case in which ℬ is not an algebra; when ℬ = {1, P, Q} for P and Q projections subject to certain conditions.