This paper describes an assignment study that is undertaken at Heriot-Watt University by students who have elected to study the digital/state-space control module as part of their Masters program in Digital Systems Engineering. The assignment is based around the inverted pendulum system and uses the computer package MATLAB/SIMULINK. The assignment allows exploration of topics that are difficult through conventional tutorial examples and is structured in a manner that enhances the traditional classroom teaching approach. The topics covered are pole-placement design and both deterministic and stochastic state estimation. The given design performance specifications result in nonunique state-feedback and observer gain matrices. This has the dual advantages of reflecting a common practical control situation and also helps eliminate the potential for plagiarism among the students.