Optical Race moved the band's sound into a different direction when compared to recordings from the 1970s.

Optical Race, released in September 1988 in the USA and later in January 1989 in Germany, was composed and performed by Edgar Froese and Paul Haslinger. The tracks Mothers of Rain, Cat Scan, The Midnight Trail and Ghazal moved the band's sound into a different direction when compared to recordings from the 1970s. It was also the first appearance of band member Ralph Wadephul. Sun Gate was written by Ralph, Edgar and Paul. Optical Race was the first studio album out of an eventual four which appeared on Peter Baumann's Private Music label. Optical Race represents not only the end of the 80s, but also the generation of western mankind that had experienced that decade. On the 26-concert North American tour, performed in August and September 1988, TD were accompanied by Ralph Wadephul. Much later – in 2006 – Edgar and Ralph released some material, written on that US tour under the name Blue Dawn.

Edgar and Paul wrote the music to Miracle Mile in 1989, a film about the night before a nuclear catastrophe in the USA. In the same year, TD released the soundtrack for the film Destination Berlin. The music was composed in panoramic sound for a 360° video system in West-Berlin. The next album was titled Lily on the Beach. As well as Edgar and Paul, Jerome Froese participated for the first time on this production. Edgar’s son Jerome played lead guitar on the track Radio City. Analysing the finished album, Edgar and Paul were of the opinion that a certain touch was missing from their production. They wanted to add real drums or wind instruments. Paul suggested his old friend Hubert Waldner.