This work considers the Michelson spectral line discriminator interferometer (SLDI), a field compensated instrument, as a linear device. The ability of the instrument to measure spectral discontinuities in the presence of strong background continua, the harmonic distribution of the signal, and the stability of the signal are examined. A figure of merit E(s), showing the background suppression efficiency is also discussed. The appropriate equations for several analytic line shapes are presented. An iterative solution for the determination of line intensities and widths is suggested. That convergences are assured is explicitly shown for the case of two Lorentz lines.