diff --git a/def/05-reference-frames-instead-of-embedding.md b/def/05-reference-frames-instead-of-embedding.md
new file mode 100644
index 0000000..7169956
--- /dev/null
+++ b/def/05-reference-frames-instead-of-embedding.md
@@ -0,0 +1,124 @@
+# 05 - Reference Frame Files Instead of Embedding
+
+## Date
+2025-10-28
+
+## Context
+Embedding base64 images made the enhanced transcript files very large (3.7MB for ~40 frames). This made them harder to work with and slower to process.
+
+## Problem
+- Enhanced transcript with embedded base64 images was 3.7MB
+- Large file size makes it slow to read/process
+- Difficult to inspect individual frames
+- Harder to share and version control
+
+## Solution: Reference Frame Paths
+Instead of embedding base64 image data, reference the frame files by their relative paths.
+
+### Before (Embedded):
+```
+[00:08] SCREEN CONTENT:
+  IMAGE (base64, 85KB):
+  <image>data:image/jpeg;base64,/9j/4AAQSkZJRg...</image>
+```
+File size: 3.7MB
+
+### After (Referenced):
+```
+[00:08] SCREEN CONTENT:
+  Frame: frames/zaca-run-scrapers_00257.jpg
+```
+File size: ~50KB
+
+## Implementation
+
+**Directory Structure:**
+```
+output/20251028-003-zaca-run-scrapers/
+├── frames/
+│   ├── zaca-run-scrapers_00257.jpg
+│   ├── zaca-run-scrapers_00487.jpg
+│   └── ...
+├── zaca-run-scrapers.json (whisper transcript)
+└── zaca-run-scrapers_enhanced.txt (references frames/ directory)
+```
+
+**Enhanced Transcript Format:**
+```
+================================================================================
+ENHANCED MEETING TRANSCRIPT
+Audio transcript + Screen frames
+================================================================================
+
+[00:30] SPEAKER:
+  Bueno, te dio un tour para el proyecto...
+
+[00:08] SCREEN CONTENT:
+  Frame: frames/zaca-run-scrapers_00257.jpg
+
+[01:00] SPEAKER:
+  Mayormente en Scrapping lo que tenemos...
+
+[01:15] SCREEN CONTENT:
+  Frame: frames/zaca-run-scrapers_00487.jpg
+  TEXT:
+  | Code snippet from screen (if OCR was used)
+```
+
+## Benefits
+
+✓ **Much smaller files**: ~50KB vs 3.7MB (74x smaller!)
+✓ **Easier to inspect**: Can view individual frames directly
+✓ **LLM can access images**: Frame paths allow LLM to load images on demand
+✓ **Better version control**: Text files are small and diffable
+✓ **Cleaner structure**: Frames organized in dedicated directory
+✓ **Flexible**: Can still do OCR/vision analysis if needed (adds TEXT section)
+
+## Flags
+
+**`--embed-images`**: Skip OCR/vision analysis, just reference frame files
+- Faster (no analysis needed)
+- Lets LLM analyze raw images
+- Enhanced transcript only contains frame references
+
+**Without `--embed-images`**: Run OCR/vision analysis
+- Extracts text from frames
+- Enhanced transcript includes both frame reference AND extracted text
+- Useful for code/dashboard analysis
+
+## Usage
+
+```bash
+# Reference frames only (no OCR, faster)
+python process_meeting.py samples/video.mkv --run-whisper --embed-images --scene-detection -v
+
+# Reference frames + OCR text extraction
+python process_meeting.py samples/video.mkv --run-whisper --use-hybrid --scene-detection -v
+
+# Adjust frame quality (smaller files)
+python process_meeting.py samples/video.mkv --run-whisper --embed-images --embed-quality 60 --scene-detection -v
+```
+
+## Files Modified
+
+- `meetus/transcript_merger.py` - Modified `_format_detailed()` to output frame paths instead of base64
+- `process_meeting.py` - Updated help text and examples to reflect frame referencing
+- All processors (OCR, vision, hybrid) already include `frame_path` in results (no changes needed)
+
+## Workflow Example
+
+```bash
+# First run: Generate everything
+python process_meeting.py samples/meeting.mkv --run-whisper --embed-images --scene-detection -v
+
+# Result:
+# - output/20251028-004-meeting/
+#   - frames/ (40 frames, ~80KB each)
+#   - meeting.json (whisper transcript)
+#   - meeting_enhanced.txt (~50KB, references frames/)
+
+# LLM can now:
+# 1. Read enhanced transcript
+# 2. See timeline of audio + screen changes
+# 3. Load individual frames as needed from frames/ directory
+```
diff --git a/meetus/transcript_merger.py b/meetus/transcript_merger.py
index 30b5b40..dda4ff3 100644
--- a/meetus/transcript_merger.py
+++ b/meetus/transcript_merger.py
@@ -45,14 +45,15 @@ class TranscriptMerger:
             with open(path, 'r', encoding='utf-8') as f:
                 data = json.load(f)
 
-            # Handle different Whisper output formats
+            # Handle different Whisper/WhisperX output formats
             segments = []
             if isinstance(data, dict) and 'segments' in data:
-                # Standard Whisper JSON format
+                # Standard Whisper/WhisperX JSON format
                 segments = [
                     {
                         'timestamp': seg.get('start', 0),
                         'text': seg['text'].strip(),
+                        'speaker': seg.get('speaker'),  # WhisperX diarization
                         'type': 'audio'
                     }
                     for seg in data['segments']
@@ -63,6 +64,7 @@ class TranscriptMerger:
                     {
                         'timestamp': seg.get('start', seg.get('timestamp', 0)),
                         'text': seg['text'].strip(),
+                        'speaker': seg.get('speaker'),  # WhisperX diarization
                         'type': 'audio'
                     }
                     for seg in data
@@ -207,35 +209,28 @@ class TranscriptMerger:
         lines = []
         lines.append("=" * 80)
         lines.append("ENHANCED MEETING TRANSCRIPT")
-        if self.embed_images:
-            lines.append("Audio transcript + Embedded frame images (base64)")
-        else:
-            lines.append("Audio transcript + Screen content")
+        lines.append("Audio transcript + Screen frames")
         lines.append("=" * 80)
         lines.append("")
 
-        total_image_bytes = 0
-
         for seg in segments:
             timestamp = self._format_timestamp(seg['timestamp'])
 
             if seg['type'] == 'audio':
-                lines.append(f"[{timestamp}] SPEAKER:")
+                speaker = seg.get('speaker', 'SPEAKER')
+                lines.append(f"[{timestamp}] {speaker}:")
                 lines.append(f"  {seg['text']}")
                 lines.append("")
 
             else:  # screen
                 lines.append(f"[{timestamp}] SCREEN CONTENT:")
 
-                # Embed image if requested
-                if self.embed_images and 'frame_path' in seg:
-                    b64_img, img_size = self._encode_image_base64(seg['frame_path'])
-                    total_image_bytes += img_size
-
-                    if b64_img:
-                        lines.append(f"  IMAGE (base64, {img_size // 1024}KB):")
-                        lines.append(f"  <image>data:image/jpeg;base64,{b64_img}</image>")
-                        lines.append("")
+                # Show frame path if available
+                if 'frame_path' in seg:
+                    # Get just the filename relative to the enhanced transcript
+                    frame_path = Path(seg['frame_path'])
+                    relative_path = f"frames/{frame_path.name}"
+                    lines.append(f"  Frame: {relative_path}")
 
                 # Include text content if available (fallback or additional context)
                 if 'text' in seg and seg['text'].strip():
@@ -245,12 +240,6 @@ class TranscriptMerger:
 
                 lines.append("")
 
-        if self.embed_images and total_image_bytes > 0:
-            total_mb = total_image_bytes / (1024 * 1024)
-            lines.append("")
-            lines.append(f"Total embedded images size: {total_mb:.2f} MB")
-            logger.info(f"Embedded {len([s for s in segments if s['type'] == 'screen'])} images, total size: {total_mb:.2f} MB")
-
         return "\n".join(lines)
 
     def _format_compact(self, segments: List[Dict]) -> str:
@@ -259,7 +248,10 @@ class TranscriptMerger:
 
         for seg in segments:
             timestamp = self._format_timestamp(seg['timestamp'])
-            prefix = "SPEAKER" if seg['type'] == 'audio' else "SCREEN"
+            if seg['type'] == 'audio':
+                prefix = seg.get('speaker', 'SPEAKER')
+            else:
+                prefix = "SCREEN"
             text = seg['text'].replace('\n', ' ')[:200]  # Truncate long screen text
             lines.append(f"[{timestamp}] {prefix}: {text}")
 
diff --git a/meetus/workflow.py b/meetus/workflow.py
index b1e5f46..3c2b0be 100644
--- a/meetus/workflow.py
+++ b/meetus/workflow.py
@@ -184,10 +184,10 @@ class ProcessingWorkflow:
         logger.info("STEP 0: Running Whisper Transcription")
         logger.info("=" * 80)
 
-        # Check if whisper is installed
-        if not shutil.which("whisper"):
-            logger.error("Whisper is not installed. Install it with: pip install openai-whisper")
-            raise RuntimeError("Whisper not installed")
+        # Check if whisperx is installed
+        if not shutil.which("whisperx"):
+            logger.error("WhisperX is not installed. Install it with: pip install whisperx")
+            raise RuntimeError("WhisperX not installed")
 
         # Unload Ollama model to free GPU memory for Whisper (if using vision)
         if self.config.use_vision:
@@ -199,16 +199,17 @@ class ProcessingWorkflow:
             except Exception as e:
                 logger.warning(f"Could not unload Ollama model: {e}")
 
-        logger.info(f"Running Whisper transcription (model: {self.config.whisper_model})...")
+        logger.info(f"Running WhisperX transcription with diarization (model: {self.config.whisper_model})...")
         logger.info("This may take a few minutes depending on video length...")
 
-        # Run whisper command
+        # Run whisperx command with diarization
         cmd = [
-            "whisper",
+            "whisperx",
             str(self.config.video_path),
             "--model", self.config.whisper_model,
             "--output_format", "json",
-            "--output_dir", str(self.output_mgr.output_dir)
+            "--output_dir", str(self.output_mgr.output_dir),
+            "--diarize",
         ]
 
         try:
diff --git a/process_meeting.py b/process_meeting.py
index 5b9d499..1e9d526 100644
--- a/process_meeting.py
+++ b/process_meeting.py
@@ -32,13 +32,13 @@ def main():
         formatter_class=argparse.RawDescriptionHelpFormatter,
         epilog="""
 Examples:
-  # Embed images for LLM analysis (recommended - let LLM analyze actual frames)
+  # Reference frames for LLM analysis (recommended - transcript includes frame paths)
   python process_meeting.py samples/meeting.mkv --run-whisper --embed-images --scene-detection
 
-  # Embed with custom quality (lower = smaller file size)
+  # Adjust frame extraction quality (lower = smaller files)
   python process_meeting.py samples/meeting.mkv --run-whisper --embed-images --embed-quality 60 --scene-detection
 
-  # Hybrid approach: OpenCV + OCR (extracts text, no images)
+  # Hybrid approach: OpenCV + OCR (extracts text from frames)
   python process_meeting.py samples/meeting.mkv --run-whisper --use-hybrid --scene-detection
 
   # Hybrid + LLM cleanup (best for code formatting)
@@ -183,12 +183,12 @@ Examples:
     parser.add_argument(
         '--embed-images',
         action='store_true',
-        help='Embed frame images (as base64) in enhanced transcript for LLM analysis'
+        help='Skip OCR/vision analysis and reference frame files directly (faster, lets LLM analyze images)'
     )
     parser.add_argument(
         '--embed-quality',
         type=int,
-        help='JPEG quality for embedded images (default: 80, lower = smaller file)',
+        help='JPEG quality for extracted frames (default: 80, lower = smaller files)',
         default=80
     )