Maintaining fuel sheath integrity during dry storage is important. Intact sheath acts as the primary containment barrier for both fuel pellets and fission products over the dry storage periods and during subsequent fuel handling operations. In KNF, in-house fuel performance code was developed to predict the overall behavior of a fuel rod under normal operating conditions. It includes the analysis modules to predict temperature, pellet cracking and deformation, sheath stress and strain at the mid-plane of the pellet and pellet-pellet interfaces, fission gas release and internal gas pressure. The main focus of the code is to provide information on initial conditions prior to dry storage, such as fission gas inventory and its distribution within the fuel pellet, initial volumes of storage spaces and their locations, radial profile of heat generation within the pellet, etc. To upgrade the developed code that address all the damage mechanisms, the first step was a review of the available technical information on phenomena relevant to fuel integrity. Potential degradation mechanisms that may affect sheath integrity of CANDU spent fuel during dry storage are: creep rupture under internal gas pressure, sheath oxidation in air environment, stress corrosion cracking (SCC), delayed hydride cracking (DHC), and sheath splitting due to UO2 oxidation for a defective fuel. The failure by creep rupture, SCC or DHC is in the form of small cracks or punctures. The failure by sheath oxidation or sheath splitting due to UO2 oxidation results in a gross sheath rupture. The second step was to examine the technical bases of all modules of the in-house code, identify and extend the ranges of all modules to required operating ranges. This step assessed the degradation mechanisms for the fuel integrity. The objective of this assessment is to predict the probability of sheath through-wall failure by a degradation mechanisms as a function of the sheath temperature during dry storage. Further improvements being considered include upgrades of the analysis module to achieve sufficient accuracy in key output parameters. The emphasis in the near future will be on validation of the inhouse code according to a rigorous and formal methodology. The developed models provide a platform for research and industrial applications, including the design of fuel behavior experiments and prediction of safe operating margins for CANDU spent fuel.