diff --git a/IMPLEMENTATION.md b/IMPLEMENTATION.md
index adf577b..71ddab0 100644
--- a/IMPLEMENTATION.md
+++ b/IMPLEMENTATION.md
@@ -545,12 +545,109 @@ Phase 40.1 complete with all issues resolved:
 - ✅ Red flash on invalid movement
 - ✅ Clean, production-ready code
 
+---
+
+## Iteration 7: Phase 40.2 - Complete Vim Motion System
+
+**Date**: 2025-01-22
+
+### Goals
+- Implement anchor moves (0, ^, $, gg, G)
+- Add count prefixes (5j, 10l, etc.)
+- Add repeat motion (.)
+- Handle the "0 caveat" properly
+
+### Tasks Completed
+
+#### 1. Created useVimMotions Hook
+Complete vim motion processor with state management:
+- Count buffer tracking (countRef)
+- Last motion tracking for repeat
+- Pending g state for gg sequence
+
+#### 2. Implemented Anchor Moves
+**Horizontal (Row-based):**
+- `0` or `^` → Start of row (col 0)
+- `$` → End of row (col 8)
+
+**Vertical (Column-based):**
+- `gg` → Top of column (row 0)
+- `G` → Bottom of column (row 8)
+
+#### 3. Count Prefix Support
+- Works with all directional moves: h, j, k, l
+- Examples: `5j`, `10l`, `3k`, `2h`
+- Bounded to grid limits (0-8)
+- Red flash on invalid moves
+
+#### 4. Repeat Motion
+- `.` → Repeats last motion with same count
+- Tracks motion direction and step count
+- Works with both direct moves and counted moves
+
+#### 5. Solved the "0 Caveat"
+**Problem**: 0 needs to work as both anchor AND count digit
+- `0` alone → anchor to start
+- `10j` → count of 10
+
+**Solution** (from vim-maze):
+```typescript
+if (key === '0' && countRef.current === '') {
+  return { type: 'anchor', data: 'start' };  // Anchor
+}
+countRef.current += key;  // Count digit
+```
+
+**Logic**: Check if count buffer is empty
+- Empty → 0 is anchor
+- Not empty → 0 is count digit
+
+#### 6. Fixed gg Two-Key Sequence
+**Bug**: Single `g` was triggering immediately
+
+**Solution**: Added `pendingGRef` state
+- First `g` → Set flag, wait for second key
+- Second `g` → Trigger "top" anchor
+- Any other key → Clear flag, no action
+
+### Technical Implementation
+
+**processKey Return Types:**
+```typescript
+{ type: 'move', data: Motion }      // h/j/k/l with count
+{ type: 'anchor', data: string }    // 0/^/$/gg/G
+{ type: 'repeat', data: Motion }    // .
+{ type: 'count', data: string }     // 0-9
+null                                 // Ignored key or pending state
+```
+
+**Motion Tracking:**
+```typescript
+type Motion = { dr: number; dc: number; steps: number };
+// Example: 5j → { dr: 1, dc: 0, steps: 5 }
+```
+
+**State Management:**
+- `countRef` → Accumulates count digits
+- `lastMotionRef` → Stores last motion for repeat
+- `pendingGRef` → Tracks first g press for gg
+
+### Testing Results
+✅ All anchor moves working
+✅ Count prefixes working (5j, 10l, etc.)
+✅ Repeat motion (.) working
+✅ 0 works as both anchor and count
+✅ gg requires two presses
+✅ All moves bounded with red flash feedback
+
 ### Next Steps
-- Continue Phase 40: Add vim motions (counts, anchors, repeat)
-- Or sidequest before next phase
+- Phase 40.3: Implement cell editing (i/r modes)
+- Add digit entry (1-9)
+- Add erase (x, Backspace)
+- Mode indicators
 
 ---
 
-## Iteration 7: [Pending]
+## Iteration 8: [Pending]
 
 *To be filled as implementation progresses...*