The paper develops a receiver structure for random Gaussian signals in additive noise based on the classic maximum likelihood (M-L), estimator-correlator derivation of Kailath [1960], and applies it to differential phase shift keying (DPSK) on the correlated Rayleigh-fading channel. It is shown to lower the error floor found in the performance of conventional DPSK receivers by orders of magnitude. In addition, the maximum-likelihood procedure is shown to make uncorrelated symbol decisions. The performance of both conventional and optimal receivers, which require knowledge of the channel statistics, is examined analytically. A recursive, channel-adaptive version of the optimal receiver, utilizing decision feedback to estimate the channel statistics, is developed. Its simulated performance shows no penalty compared to theoretical calculations which require explicit knowledge of the channel statistics.>