Direct Preference Optimization Beyond Chatbots

In April, we released DharmaOCR, our specialized structured OCR model (available on Hugging Face) along with a paper detailing the methodology behind it and a benchmark demonstrating its superior quality and cost efficiency. The paper benchmarked leading vision-language model families - both open-source and commercial - on a structured document extraction task: OCR on Brazilian Portuguese text. Among the reported metrics was text degeneration rate: the frequency with which a model produces a repetition loop instead of a transcription.

Across the tested open-source families, vanilla degeneration rates ranged from below 1% to above 33%. Supervised fine-tuning reduced those rates for most models - but rarely to production-acceptable levels. The pattern points to a structural limitation: SFT optimizes for correct outputs, but does not explicitly penalize degeneration. There appears to be a ceiling on how much task-focused fine-tuning alone can reduce this failure mode (Text Degeneration Article).

A second training stage - applied after supervised fine-tuning (SFT), on the same documents, using the same model - reduced text degeneration in every family tested. No exceptions. Average reduction: 59.4%. Best case: 87.6%.

That second stage was Direct Preference Optimization (DPO). Almost all published DPO applications target chat alignment - models trained on human judgments about helpfulness or harmlessness (example: Rafailov et al., 2023). OCR carries none of that subjectivity: the task is objective, and there is no conversational context. There is, however, a clear preference signal. A correct transcription is chosen; a degeneration loop is rejected. DharmaOCR used that binary to construct a DPO training set, testing the technique not for alignment, but as a direct mitigation tool for a specific failure mode.

The training signal came from the model itself - specifically from the outputs it produced when it failed. How a failure mode becomes a training signal is a structural question about the failure, not the model.

Why SFT has a ceiling on degeneration is still an open question - but the leading conjecture points to loss granularity. SFT trains token by token: each prediction is evaluated in isolation, and a repetition loop is never penalized as a completion-level failure. DPO inverts that logic. The training signal is the full output - chosen or rejected - which means a degenerated completion can be explicitly labeled as the wrong outcome, not just a sequence of locally probable tokens.

When a training objective maximizes the likelihood of observed sequences, it concentrates probability mass in the regions of distribution space those sequences occupy. A model that enters one of those high-probability attractor regions during inference assigns elevated probability to the same token at the next step - which increases the probability further, which sustains the loop until the sequence hits the maximum token limit. Text degeneration is the output of this geometry: a self-reinforcing repetition loop that an autoregressive model cannot exit without external intervention (Holtzman et al., 2020). It is not purely a decoding artifact. The attractor involves the training objective, the learned distribution, and how probability mass concentrates during inference - a systems-level failure rather than a failure localized to any single component.

The geometry of this failure is visible at the token level.

Inference-layer interventions - repetition penalties, temperature adjustments, early-abort logic - operate on the sampling step. They contain the symptom without touching the distribution that produces it. The attractor persists.

Supervised fine-tuning moves the distribution closer to the task domain. For a structured generation pipeline, this means training on domain-specific documents, in the target language, with the required output format. The model gains fluency with longer sequences, constrained syntax, domain vocabulary. What SFT does not do is attack degeneration directly. Its objective - maximizing the likelihood of observed sequences - has no term that penalizes repetition loops. The failure mode is simply outside the scope of what the training signal optimizes for.

One model family in the DharmaOCR benchmark showed an unexpected pattern: vanilla degeneration rate of 0.60%, rising to 3.23% after SFT, before a subsequent DPO stage brought it to 1.41%. It is a single data point - an exception, not a rule - and it would be overstating the evidence to treat it as proof of a mechanism. What it does illustrate is that SFT does not reliably reduce degeneration. Capability and degeneration resistance can move independently.

The distinction matters structurally. SFT and DPO are not interchangeable training stages performing the same operation at different intensities. SFT closes the distance between the model's prior distribution and the task domain. What it does not do is target degeneration as an objective - its effect on the failure mode is incidental, and the benchmark results show it is not consistent. The attractor that produces degeneration is not a problem with the model's proximity to the task - it is a problem with the shape of the distribution space the model now occupies.

Addressing that geometry requires a training signal built specifically to point the model away from its own failure modes. For a structured, non-conversational task with no human preference labels and no conventional "helpful versus harmful" distinction, constructing that signal is a design decision.

The DharmaOCR pipeline's contribution to DPO methodology is specific: it used the SFT model's own degenerate outputs as the rejected examples - not as noise to remove, but as the negative training signal the optimization needed.

DPO requires preference pairs: a chosen output and a rejected output for the same input, with a quality difference clear enough for the optimization to learn from. In chat alignment, human annotators produce those judgments - rating responses as more or less helpful, accurate, or safe. Structured generation tasks have no equivalent annotation source. An OCR pipeline either produces a correct transcription or it does not. Quality differences exist, but they are not produced by human preference rankings - they are produced by the task's own criteria for correctness.

The DharmaOCR pipeline identified a preference signal that structured generation tasks already produce: the range of outputs the SFT model generates in inference. A model capable of performing a structured task is also capable of failing at it in characteristic ways. Those failures - outputs that enter the degeneration attractor - are not noise to filter. They are the most informative negative signal available.

The paper implemented this on 23,726 training documents, generating multiple candidate responses per document with the SFT model and scoring each with an automated LLM judge. The pipeline is shown below.

The conventional response when degenerate outputs appear in training data is to remove them. They are low-quality signal; filtering produces a cleaner dataset. The DharmaOCR approach inverted this logic. Degenerate outputs were deliberately retained as the rejected examples in each (chosen, rejected) pair, because they represent exactly the failure mode the