In this paper, a new optimum input encoding algorithm with m-out-of-2m code which is called Half-Hot Code is presented. By applying Half-Hot Code to the input encoding in PLA-based digital system, the logic functions of the system turn out to be unate functions, thus, the number of bit-lines of PLA may be reduced. The proposed method further reduces the number of product-lines of PLA optimally. In this code assignment procedure, computed Boolean subspaces satisfying suggeset two conditions are assigned to each partitioned subset of digital input variables which are obtained by disjoint minimization or other techniques. As an experiment to evaluate the method, the state assignment for finite state machines of two-lavel implementation is considered. Specifically, the proposed Half-Hot Code assignment is compared with arbitrary Half-Hot Code assignment. The results show that the optimum encoding is superior to an arbitrary assignment up to about 24% in the number of product-lines of PLA.