A method and system for splitting a text document into individual sentences using sentence boundary detection, and establishing co-relationships between terms which are present in the same sentence. A document corpus, or collection of text records, is provided, containing text with terms to be extracted. The text records in the document corpus are divided into individual sentences, using a set of rules for sentence boundary detection. The individual sentences are then analyzed to extract and correlate terms, such as parts and symptoms, symptoms and actions, or parts and failure modes. The correlated terms are then validated based on frequency of occurrence, with term pairs being considered valid if their frequency of occurrence exceeds a minimum frequency threshold. The validated term correlations can be used for fault model development, document classification, and document clustering.