We use the matrix formalism to investigate what happens to strings abo
ve the Hagedorn temperature. We show that it is not a limiting tempera
ture but a temperature at which the continuum string picture breaks do
wn. We study a collection of N D-0-branes arranged to form a string ha
ving N units of light-cone momentum. We find that at high temperatures
the favored phase is one where the string worldsheet has disappeared
and the low-energy degrees of freedom consists of N-2 massless particl
es (''gluons''). The nature of the transition is very similar to the d
econfinement transition in large-N Yang-Mills theories.