Abstract: A method and apparatus for processing round logs in which substantially the entire log is utilized to produce a relatively high value wood stock. The outer area of the log is peeled in sheets to square the central area for the formation of planks, beams, boards or the like while the peeled sheets may be dried, graded, cut to size and joined together and glued to form strips of any desired length and width which, in turn, may be glued in layers to form panels or other high value components. A plurality of powered, adjustable peeling knives are arranged in opposed sets to machine the log as it is caused to pass thereby on a conveyor. In one form of the invention the knives are driven to undergo a circular oscillatory motion while a second embodiment discloses a knife drive in which the knives are guided in vibratory movement. A third form of drive permits a drawcut in that the peeling knives are drive in a longitudinal direction relative to their cutting edges.