• Oh all right then. No funny stuff either.

    DECLARE @ItemID INT

    DECLARE @FirstCol varChar(5), @SecondCol INT, @ThirdCol Char(1)

    SET @ItemID = 1

    UPDATE #Testing SET ThirdCol = CASE @ItemID WHEN 1 THEN 'D' ELSE ThirdCol END,

    @ItemID = CASE WHEN @FirstCol = FirstCol AND @SecondCol = SecondCol AND @ThirdCol = ThirdCol THEN @ItemID+1 ELSE 1 END,

    @FirstCol = FirstCol, @SecondCol = SecondCol, @ThirdCol = ThirdCol

    DELETE FROM #Testing WHERE ThirdCol = 'D'

    “Write the query the simplest way. If through testing it becomes clear that the performance is inadequate, consider alternative query forms.” - Gail Shaw

    For fast, accurate and documented assistance in answering your questions, please read this article.
    Understanding and using APPLY, (I) and (II) Paul White
    Hidden RBAR: Triangular Joins / The "Numbers" or "Tally" Table: What it is and how it replaces a loop Jeff Moden