
4. Set N(V) = ∑_{W : (W,U) ∈ E} N(W). 
4. Set N(V) = ∑_{W:(W,U)∈ E} N(W). 

How many distinct paths are there from S to T in this graph?
Each vertex is labeled with the number of paths from S to that vertex.
Note that each label is the sum of the labels of the vertices coming into that vertex. (Except at S, which has label 1.)
In fact, this is true in general in any acyclic digraph:
Define N(V) = the number of distinct paths from S to V.
Then N() satisfies the following recurrence relation:
This recurrence relation leads to a lineartime algorithm for counting the number of S>T paths in a given DAG.
Namely,
1. Topologically sort the vertices. 2. Set N[S] = 1, and, for each vertex V before S in the ordering, set N[V] = 0. 3. For each vertex V after S in the ordering, in order of the ordering, do: 4. Set N(V) = ∑_{W:(W,U)∈ E} N(W). 5. Return N(T)
How do we do that?
We want to show that the number of distinct paths from S to V in the above diagram equals the number of distinct paths from S to any W_{1},W_{2},...,W_{k}.
This may seem obvious, but let's do a careful proof.
Let P be the set of paths from S to any W_{i}.
Form a set P' of paths as follows:
Note that the size of P' is the same as the size of P, because for each path p in P there is exactly one path p' in P'. (All the paths p' produced by the process are distinct because all the paths in P are distinct, and adding a vertex to each of two distinct paths yields two distinct paths.)
I claim that P' is exactly the set of paths from S to V.
Clearly every path in P' is a path from S to V, since each W_{i} has an edge to V.
Conversely, every path from S to V is in P', because every path from S to V is of the form p' = (p,v) where p is a path from S to some W_{i}. (In words, every path from S to V goes through some W_{i} just before reaching V.
In sum, we know:
Thus, the recurrence is correct.