1. A physics based prognostics system for real-time prediction of remaining life prior to crack or flaw nucleation and prediction of residual life of engine components in the presence of a flaw or distortion, the system comprising: a graphical user input interface for inputting in-service machine operating data collected from sensors and signal processing modules installed in a machine under investigation, finite element model and quantitative microstructural parameters and internal state variable material parameters of a component of the machine, temperature dependent physical and mechanical properties of the component including creep, low cycle fatigue, thermal mechanical fatigue, high cycle fatigue, creep crack growth rate, fatigue crack growth rate oxidation, hot corrosion, corrosion fatigue, into a prognostics software database, a prognostics processor that contains materials engineering based damage rules and material microstructure and internal state variables based damage accumulation and fracture models for receiving data from the database and for processing the data to provide output information indicative of remaining life prior to flaw or crack nucleation and residual life of engine components in the presence of the flaw or distortion, and an output interface for displaying the output information from the processor, indicative of the remaining life prior to flaw or crack nucleation, life consumed and residual life in the presence of the flaw in engine components.