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The aim of this paper is to examine current trends in the development of digital libraries (DL), with particular reference to Australia. This paper is the result of primitive study based on the visits made to university libraries in Canberra, Sydney and Melbourne. The objective of this paper is to analyze the various aspects of Knowledge Organisation System (KOS) in Digital Libraries (DL) and its services. This study analyses the different projects towards the development of DL and its features in Australian universities. This article showcases the latest trends in DL which has adopted technologies (i.e. open source or commercial or mixed) which gives insight to re-use of the knowledge. This enables to save the time of the users & library staff within the local infrastructure. The government plays a prominent role in development of DL and Universities themselves unite together to bring out the practical ways of handling resource sharing and cut down the budget constraint. This case study will provide hints for decision making to adopt some of these features in future planning of DL.