Adaptive Demodulation (ADM) is a newly proposed rate-adaptive system which operates without requiring Channel State Information (CSI) at the transmitter (unlike adaptive modulation) by using adaptive decision region boundaries at the receiver and encoding the data with a rateless code. This paper addresses the design and performance of an ADM scheme for two common differentially coherent schemes: M-DPSK (M-ary Differential Phase Shift Keying) and M-DAPSK (M-ary Differential Amplitude and Phase Shift Keying) operating over AWGN and Rayleigh fading channels. The optimal method for determining the most reliable bits for a given differential detection scheme is presented. In addition, simple (near-optimal) implementations are provided for recovering the most reliable bits from a received pair of differentially encoded symbols for systems using 16-DPSK and 16- DAPSK. The new receivers offer the advantages of a rate-adaptive system, without requiring CSI at the transmitter and a coherent phase reference at the receiver. Bit error analysis for the ADM system in both cases is presented along with numerical results of the spectral efficiency for the rate-adaptive systems operating over a Rayleigh fading channel.