diff --git a/PRDs/terraform-lxc-deployment.md b/PRDs/terraform-lxc-deployment-batch.md
similarity index 54%
rename from PRDs/terraform-lxc-deployment.md
rename to PRDs/terraform-lxc-deployment-batch.md
index 6e45c58..4f8dece 100644
--- a/PRDs/terraform-lxc-deployment.md
+++ b/PRDs/terraform-lxc-deployment-batch.md
@@ -1,12 +1,61 @@
-# Terraform LXC Deployment for Iron Legion — PRD
+# Terraform LXC Deployment — Batch/Dynamic Template PRD
 
-**Status:** Phase 1 Complete | **Author:** Artemis | **Date:** 2026-06-04
+**Status:** Batch POC Validated | **Author:** Artemis | **Date:** 2026-06-05
 
-> **Phase 1 validation:** Single LXC plan/build/destroy completed successfully on MK33 (pve-swarm). All open questions resolved. Phase 2 pending.
+> **Goal:** Dynamic LXC factory — one `terraform apply` creates N containers with auto-derived VMID, IPv4, hostname, and naming from a single base input.
 
 ## 1. Objective
 
-Deploy Proxmox LXC containers via Terraform using the `bpg/proxmox` provider, running inside a custom Docker container (lazy automator pattern). Support runtime parameterization for bulk LXC creation with auto-incrementing VMID, IPv4, and naming.
+Extend the Phase 1 single-LXC proven pipeline into a **parameterized batch generator**. A single variable set (`vmid_base`, `lxc_count`, `subnet_prefix`) drives auto-incrementing VMIDs, auto-derived static IPv4s, and consistent hostnames — no per-container hardcoding.
+
+## 2. Dynamic Derivation Rules
+
+### 2.1 Input Variables (User-Supplied)
+
+| Variable | Example | Description |
+|----------|---------|-------------|
+| `vmid_base` | `5050` | Starting VMID for first LXC |
+| `lxc_count` | `4` | Number of LXCs to create |
+| `subnet_prefix` | `192.168` | First two octets of IPv4 (fleet standard) |
+| `name_prefix` | `lxc` | Hostname prefix |
+| `gateway` | `192.168.18.1` | Default gateway |
+| `dns_servers` | `["192.168.7.7", "1.1.1.1"]` | DNS list |
+
+### 2.2 Auto-Derived Per-LXC (Index `i` from `0` to `lxc_count-1`)
+
+| Property | Formula | Example (`vmid_base=5050`, `i=2`) |
+|----------|---------|----------------------------------|
+| **VMID** | `vmid_base + i` | `5052` |
+| **IPv4** | `subnet_prefix.${first2(vmid)}.${last2(vmid)}/18` | `192.168.50.52/18` |
+| **Hostname** | `${name_prefix}-${vmid}` | `lxc-5052` |
+| **Cores** | Fixed | `2` |
+| **RAM** | Fixed | `2048` MB |
+| **Disk** | Fixed | `8` GB |
+
+**IP Derivation Detail:**
+```
+vmid = 5052
+first2(vmid) = 50    (digits 3-4)
+last2(vmid)  = 52    (digits 5-6)
+IPv4 = 192.168.50.52/18
+```
+
+This keeps VMID and IPv4 tightly coupled — **VMID is the single source of truth** for IP assignment. All IPs fall within the fleet `/18` subnet (`192.168.0.0/18`).
+
+### 2.3 Example Runs
+
+```bash
+# Create 4 LXCs: lxc-5050 → lxc-5053
+# IPs: 192.168.50.50 → 192.168.50.53
+TF_VAR_vmid_base=5050 TF_VAR_lxc_count=4 ./run.sh apply -auto-approve
+
+# Create 2 LXCs starting at 5100
+# IPs: 192.168.51.00, 192.168.51.01
+TF_VAR_vmid_base=5100 TF_VAR_lxc_count=2 ./run.sh apply -auto-approve
+
+# Create 7 LXCs at vmid_base=931 (validated POC run)
+TF_VAR_vmid_base=931 TF_VAR_lxc_count=7 ./run.sh apply -auto-approve
+```
 
 ## 2. Architecture
 
@@ -99,20 +148,28 @@ initialization {
 - Unprivileged required: `unprivileged = true` + `features { nesting = true }`
 - Password injection: `user_account.password` required for console login verification
 
-### Phase 2 — Modular + Bulk Creation
+### Phase 2 — Modular + Bulk Creation ✅ VALIDATED
 
-**Goal:** Add `count`, `vmid_base`, and auto-derived naming/IP.
+**Completed:** 2026-06-05 on MK33 (pve-swarm)
 
-**Deliverables:**
-- `modules/lxc/` — reusable LXC module
-- `locals.tf` — VMID/IP/name calculation logic
-- `main.tf` — uses module with `count = var.lxc_count`
+**Results:**
+- `modules/lxc/` — reusable LXC module with `proxmox_virtual_environment_container` resource
+- `main.tf` — `for_each` over module with `lxc_count` parameterization
+- `run.sh` — forwards `TF_VAR_*` environment variables into Docker container
 
-**Example execution:**
-```bash
-TF_VAR_lxc_count=4 TF_VAR_vmid_base=5050 ./run.sh apply
-# Creates: lxc-5050, lxc-5051, lxc-5052, lxc-5053
-```
+**Validated at multiple scales:**
+
+| Test | Command | Result |
+|------|---------|--------|
+| 4 LXCs at vmid_base=3550 | `TF_VAR_lxc_count=4 TF_VAR_vmid_base=3550 ./run.sh apply` | ✅ All created; 1 transient 500 error on start (PVE task queue race), container existed and operational despite error |
+| 7 LXCs at vmid_base=931 | `TF_VAR_lxc_count=7 TF_VAR_vmid_base=931 ./run.sh apply` | ✅ All 7 created successfully, no errors, ~14–16s per container |
+| 7 LXCs destroy | `./run.sh destroy -auto-approve` | ✅ All 7 destroyed cleanly in ~8s each |
+
+**Key runtime behavior discovered:**
+- `terraform.auto.tfvars` outranks `TF_VAR_*` environment variables — dynamic variables must **not** be set in `.tfvars`
+- `-auto-approve` required on Dockerized terraform (no interactive TTY for confirmation)
+- Parallel creation (default) works at N=7; transient race condition observed at N=4 (PVE task queue, not terraform logic)
+- All containers receive SSH key + password via `initialization.user_account` block
 
 ## 4. File Structure