my $LOGFILE = "iptraf.log";
open(LOGFILE, $LOGFILE) or die("Could not open log file.");
foreach my $line (<LOGFILE>) {
    #chomp($line);      
}
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Depending on the actual structure of your script you may even use Perl's own automagic <>. Whatwever, it is generally recommended to avoid slurping files all at once (and if doing so, possibly to use a suitable module, e.g. File::Slurp¹), unless of course one has to do so. A for loop will slurp in all at once. In any case Perl5's idiomatic cycle for iterating over the lines of a file is

while (<$handle>) {
   # ...
}
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I understand their is a bit of work in this script, but some heads up on how to structure this array for creating and writing. Or should i directly begin inserting data in the database rather than reading it into an associate array?

This is up to you, and hopefully someone more experienced with DBses than I am will give you more insightful advice. In any case, split is your friend.

Update: on a second reading, the format of the log file is not simple enough that a plain split would suffice. Fortunately holli has shown you how to do it with an extensive code sample at Re: How to Process Log file.

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¹ I'm not really sure about the latter point. But many people recommend doing so.