one of the things that is going to make this slow is the linked server;

the execution plan will end up copying the entire table over to tempdb, and THEN filter the data witht eh WHERE / do the joins;

that's a lot of data over the wire that's not needed, most likely.

switching to a divide-and-conquor plan, you can get just the data that matches form the linke dserver into a temp table, adn then join on that.

something like this is my first guess, without any DDL to back it up.

--get the minimal data over the wire possible by using EXECUTE AT

INSERT INTO #temp

EXECUTE ( 'SELECT

c.DocType,c.Crtd_DateTime,c.VendId,c.user1,c.vendid

FROM marlin_test.dbo.apdoc c

WHERE c.DocType = ''VO''

AND c.Crtd_DateTime > ''2012-01-01 00:00:00''

AND c.VendId LIKE ''01%'';' ) AT NJACCOUNTING01;

--data was already filtered at linked server, just join and distinct it.

SELECT DISTINCT

d.dlr_reference_num,

d.dlr_key,

a.app_dlr_fkey,

CONVERT(VARCHAR(30), a.app_key)AS RapAPP,

c.user1,

c.vendid

FROM #temp c

INNER JOIN dbo.application a

ON CONVERT(VARCHAR(30), a.app_key) = SUBSTRING(c.user1, 1, 6),

dbo.dealer d