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Given the increasing importance of mobile data access, extending broadband wireless access has become a global grand challenge. Relaying has been introduced to enable wireless communication between users lacking a common link. Distributed relay networks (DRN) are a special case where the relay consists of many geographically distributed single-antenna nodes to achieve spatial diversity. In this paper we introduce a quantized DRN where the relay nodes perform vector quantization before broadcasting downlink signals to the users. We derive performance-efficient receivers for this system and investigate a strategy for bit allocation across quantizers of the relay nodes to enhance the performance.