Sensor nodes have limited local storage, computational power, and battery life, as a result of which it is desirable to minimize the storage, processing and communication from these nodes during data collection. The problem is further magnified by the large volumes of data collected. In real applications, sensor streams are often highly correlated with one another or may have other kinds of ... [Show full abstract] functional dependencies. For example, a group of sound sensors in a given geographical proximity may pick almost the same set of signals. Clearly, since there are considerable functional dependencies between different sensors, there are huge redundancies in the data collected by sensors. These redundancies may also change as the data evolve over time. In this paper, we discuss real time algorithms for reducing the volume of the data collected in sensor networks. The broad idea is to determine the functional dependencies between sensor streams efficiently in real time, and actively collect the data only from a minimal set of sensors. The remaining sensors collect the data passively at low sampling rates in order to detect any changing trends in the underlying data. We present real time algorithms in order to minimize the power consumption in reducing the data collected and show that the resulting data retains almost the same amount of information at a much lower cost.