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This volume contains ten lectures presented in the series ULB Lectures in Nonlinear Optics at the Universite Libre de Bruxelles during the period October 28 to November 4, 1991. A large part of the first six lectures is taken from material prepared for a book of somewhat larger scope which will be published,by Springer under the title Quantum Statistical Methods in Quantum Optics. The principal reason for the early publication of the present volume concerns the material contained in the last four lectures. Here I have put together, in a more or less systematic way, some ideas about the use of stochastic wavefunctions in the theory of open quantum optical systems. These ideas were developed with the help of two of my students, Murray Wolinsky and Liguang Tian, over a period of approximately two years. They are built on a foundation laid down in a paper written with Surendra Singh, Reeta Vyas, and Perry Rice on waiting-time distributions and wavefunction collapse in resonance fluorescence [Phys. Rev. A, 39, 1200 (1989)]. The ULB lecture notes contain my first serious atte~pt to give a complete account of the ideas and their potential applications. I am grateful to Professor Paul Mandel who, through his invitation to give the lectures, stimulated me to organize something useful out of work that may, otherwise, have waited considerably longer to be brought together.