diff --git a/parser/src/parser.rs b/parser/src/parser.rs
index 4ffab44..dead8e4 100644
--- a/parser/src/parser.rs
+++ b/parser/src/parser.rs
@@ -199,7 +199,7 @@ impl<T: Iterator<Item=char>> Parser<T> {
 
     fn state_machine(&mut self) -> ParseResult {
         let next_tok = self.peek();
-        //println!("cur_state {:?}, next tok: {:?}", self.state, next_tok);
+        println!("cur_state {:?}, next tok: {:?}", self.state, next_tok);
         match self.state {
             State::StreamStart => self.stream_start(),
 
@@ -222,6 +222,8 @@ impl<T: Iterator<Item=char>> Parser<T> {
             State::FlowSequenceFirstEntry => self.flow_sequence_entry(true),
             State::FlowSequenceEntry => self.flow_sequence_entry(false),
 
+            State::IndentlessSequenceEntry => self.indentless_sequence_entry(),
+
             _ => unimplemented!()
         }
     }
@@ -464,6 +466,30 @@ impl<T: Iterator<Item=char>> Parser<T> {
         }
     }
 
+    fn indentless_sequence_entry(&mut self) -> ParseResult {
+        let mut tok = try!(self.peek());
+        if tok.1 != TokenType::BlockEntryToken {
+            self.pop_state();
+            return Ok(Event::SequenceEnd);
+        }
+
+        self.skip();
+        tok = try!(self.peek());
+        match tok.1 {
+            TokenType::BlockEntryToken
+                | TokenType::KeyToken
+                | TokenType::ValueToken
+                | TokenType::BlockEndToken => {
+                self.state = State::IndentlessSequenceEntry;
+                Ok(Event::empty_scalar())
+            },
+            _ => {
+                self.push_state(State::IndentlessSequenceEntry);
+                self.parse_node(true, false)
+            }
+        }
+    }
+
     fn block_sequence_entry(&mut self, first: bool) -> ParseResult {
         // BLOCK-SEQUENCE-START
         if first {
diff --git a/parser/src/scanner.rs b/parser/src/scanner.rs
index 3f55eda..e56fa8a 100644
--- a/parser/src/scanner.rs
+++ b/parser/src/scanner.rs
@@ -1,4 +1,5 @@
 use std::collections::VecDeque;
+use std::char;
 
 #[derive(Clone, Copy, PartialEq, Debug, Eq)]
 pub enum TEncoding {
@@ -151,6 +152,21 @@ fn is_blankz(c: char) -> bool {
 fn is_digit(c: char) -> bool {
     c >= '0' && c <= '9'
 }
+#[inline]
+fn is_hex(c: char) -> bool {
+    (c >= '0' && c <= '9')
+        || (c >= 'a' && c <= 'f')
+        || (c >= 'A' && c <= 'F')
+}
+#[inline]
+fn as_hex(c: char) -> u32 {
+    match c {
+        '0'...'9' => (c as u32) - ('0' as u32),
+        'a'...'f' => (c as u32) - ('a' as u32) + 10,
+        'A'...'F' => (c as u32) - ('A' as u32) + 10,
+        _ => unreachable!()
+    }
+}
 
 pub type ScanResult = Result<(), ScanError>;
 
@@ -804,9 +820,29 @@ impl<T: Iterator<Item=char>> Scanner<T> {
                         self.skip();
                         // Consume an arbitrary escape code.
                         if code_length > 0 {
-                            let val = 0;
+                            let val = 0usize;
                             self.lookahead(code_length);
-                            unimplemented!();
+                            let mut value = 0u32;
+                            for i in 0..code_length {
+                                if !is_hex(self.buffer[i]) {
+                                    return Err(ScanError::new(start_mark,
+                                        "while parsing a quoted scalar, did not find expected hexdecimal number"));
+                                }
+                                value = (value << 4) + as_hex(self.buffer[i]);
+                            }
+
+                            let ch = match char::from_u32(value) {
+                                Some(v) => v,
+                                None => {
+                                    return Err(ScanError::new(start_mark,
+                                        "while parsing a quoted scalar, found invalid Unicode character escape code"));
+                                }
+                            };
+                            string.push(ch);
+
+                            for i in 0..code_length {
+                                self.skip();
+                            }
                         }
                     },
                     c => { string.push(c); self.skip(); }