Finite Temperature Density Matrix Renormalization using an enlarged   Hilbert space
  We apply a generalization of the time-dependent DMRG to study finite temperature properties of several quantum spin chains, including the frustrated $J_1-J_2$ model. We discuss several practical issues with the method, including use of quantum numbers and finite size effects. We compare with transfer-matrix DMRG, finding that both methods produce excellent results. 
A. E. Feiguin and Steven R. White