well this kind of gets you the data chopped up into the pieces youa r elooking for;

i'm using the famous DelimitedSplit8K you'll find links to in many posters signitures, and you can search teh site as well:

With MyCTE( Code,[Desc])

AS

(

SELECT 'A1','AAAA BBBB CCCC' UNION ALL

SELECT 'A1.1','AAAA BBBB CCCC DDDDD' UNION ALL

SELECT 'A1.2','AAAA BBBB CCCC DDDDD EEEEE' UNION ALL

SELECT 'A2','XXXX' UNION ALL

SELECT 'A2.1','XXXX YYYY' UNION ALL

SELECT 'A2.3','XXXX YYYY ZZZZ'

)

select * From MyCTE

cross apply dbo.DelimitedSplit8K([Desc],' ') x

i have no idea what you wanted for your final outoput; it was just not intuitive what you are after.