A Mauldin--Williams graph $\mathcal{M}$ is a generalization of an iterated function system by a directed graph. Its invariant set $K$ plays the role of the self-similar set. We associate a $C^{*}$-algebra $\mathcal{O}_{\mathcal{M}}(K)$ with a Mauldin--Williams graph $\mathcal{M}$ and the invariant set $K$, laying emphasis on the singular points. We assume that the underlying graph $G$ has no sinks and no sources. If $\mathcal{M}$ satisfies the open set condition in $K$, and $G$ is irreducible and is not a cyclic permutation, then the associated $C^{*}$-algebra $\mathcal{O}_{\mathcal{M}}(K)$ is simple and purely infinite. We calculate the $K$-groups for some examples including the inflation rule of the Penrose tilings.

Unlike the (classical) Kolakoski sequence on the alphabet $\{1,2\}$, its analogue on $\{1,3\}$ can be related to a primitive substitution rule. Using this connection, we prove that the corresponding bi-infinite fixed point is a regular generic model set and thus has a pure point diffraction spectrum. The Kolakoski-$(3,1)$ sequence is then obtained as a deformation, without losing the pure point diffraction property.

We consider two dynamical systems associated with a substitution of Pisot type: the usual $\mathbb{Z}$-action on a sequence space, and the $\mathbb{R}$-action, which can be defined as a tiling dynamical system or as a suspension flow. We describe procedures for checking when these systems have pure discrete spectrum (the ``balanced pairs algorithm'' and the ``overlap algorithm'') and study the relation between them. In particular, we show that pure discrete spectrum for the $\mathbb{R}$-action implies pure discrete spectrum for the $\mathbb{Z}$-action, and obtain a partial result in the other direction. As a corollary, we prove pure discrete spectrum for every $\mathbb{R}$-action associated with a two-symbol substitution of Pisot type (this is conjectured for an arbitrary number of symbols).