Many cortical networks contain recurrent architectures that transform input patterns before storing them in short-term memory (STM). Theorems in the 1970's showed how feedback signal functions in rate-based recurrent on-center off-surround networks control this process. A sigmoid signal function induces a quenching threshold below which inputs are suppressed as noise and above which they are contrast-enhanced before pattern storage. This article describes how changes in feedback signaling, neuromodulation, and recurrent connectivity may alter pattern processing in recurrent on-center off-surround networks of spiking neurons. In spiking neurons, fast, medium, and slow after-hyperpolarization (AHP) currents control sigmoid signal threshold and slope. Modulation of AHP currents by acetylcholine (ACh) can change sigmoid shape and, with it, network dynamics. For example, decreasing signal function threshold and increasing slope can lengthen the persistence of a partially contrast-enhanced pattern, increase the number of active cells stored in STM, or, if connectivity is distance-dependent, cause cell activities to cluster. These results clarify how cholinergic modulation by the basal forebrain may alter the vigilance of category learning circuits, and thus their sensitivity to predictive mismatches, thereby controlling whether learned categories code concrete or abstract features, as predicted by Adaptive Resonance Theory. The analysis includes global, distance-dependent, and interneuron-mediated circuits. With an appropriate degree of recurrent excitation and inhibition, spiking networks maintain a partially contrast-enhanced pattern for 800 ms or longer after stimuli offset, then resolve to no stored pattern, or to winner-take-all (WTA) stored patterns with one or multiple winners. Strengthening inhibition prolongs a partially contrast-enhanced pattern by slowing the transition to stability, while strengthening excitation causes more winners when the network stabilizes.