We describe the structure of string vacuum states in the supersymmetri
c matrix model for hi theory compactified on a circle in the large-N l
imit. We show that the theory admits topological instanton field confi
gurations which at short-distance scales reduce to ordinary Yang-Mills
instantons that interpolate between degenerate vacua of the theory. W
e show that there exists further classes of hadronic strings associate
d with the D-string super-fields. We discuss the relationships between
these non-perturbative string states and rigid QCD strings, critical.
strings, and membrane states. (C) 1997 Elsevier Science B.V.