================================================================================

                     U.S. Securities and Exchange Commission
                             Washington, D.C. 20549


                                   FORM 10-QSB


 |X| QUARTERLY REPORT UNDER SECTION 13 OR 15 (D) OF THE SECURITIES EXCHANGE
                                   ACT OF 1934

                For the quarterly period ended September 30, 2004

                                       OR

 |_| TRANSITION REPORT UNDER SECTION 13 OR 15 (D) OF THE SECURITIES EXCHANGE ACT

           For the transition period from             to            .

                          Commission File No. 000-29299


                                CorVu Corporation
             (Exact name of registrant as specified in its charter)


              Minnesota                                      41-1457090
      (State of Incorporation)                          (IRS Employer ID #)


                              3400 West 66th Street
                             Edina, Minnesota 55435
                    (Address of Principal Executive Offices)


                                  952-944-7777
                (Issuer's Telephone Number, Including Area Code)


     Check whether the issuer (1) filed all reports required to be filed by
   Sections 13 or 15(d) of the Exchange Act during the past 12 months (or such
   shorter period that the registrant was required to file such reports), and
     (2) has been subject to such filing requirements for the past 90 days.
                                 Yes |X| No |_|


State the number of shares outstanding of each of the issuer's classes of common
equity as of the latest practicable date.


                  Class: Common Stock, par value $.01 per share
              Outstanding shares as of October 31, 2004: 23,970,268


<PAGE>

                                                     CorVu Corporation
                                                   Index to Form 10-QSB

PART I FINANCIAL INFORMATION

    Item 1.  Financial Statements

       Consolidated Balance Sheets September 30, 2004 (Unaudited) and June 30,
       2004

       Consolidated Statements of Cash Flows (Unaudited) Three Month Periods
       Ended September 30, 2004 and 2003

       Consolidated Statements of Operations (Unaudited) Three Month Periods
       Ended September 30, 2004 and 2003

       Notes to Unaudited Consolidated Financial Statements For the Three Month
       Periods Ended September 30, 2004 and 2003

       Item 2. Management's Discussion and Analysis of Financial Condition or
       Plan of Operations

    Item 3.  Controls and Procedures

PART II OTHER INFORMATION

    Item 1.  Legal Proceedings

    Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds

    Item 3.  Default Upon Senior Securities

    Item 4.  Submission of Matters to a Vote of Security Holders

    Item 5.  Other Information

    Item 6.  Exhibits

SIGNATURES

EXHIBITS


                                       2
<PAGE>

                                     PART I
                              FINANCIAL INFORMATION

Item 1. Financial Statements

                       CORVU CORPORATION AND SUBSIDIARIES

                           Consolidated Balance Sheets


<TABLE>
<CAPTION>
                                                                                   September 30,     June 30,
                                                                                       2004            2004
                                                                                   ------------    ------------
                                                                                    (Unaudited)      (Audited)
                                     Assets

Current assets:
<S>                                                                                <C>                  <C>
   Cash and cash equivalents                                                       $    455,592         148,475
   Trade accounts receivable, net of allowance for doubtful accounts of $114,000
     and $112,000, respectively                                                       2,640,612       4,207,058
   Deferred income taxes                                                                727,000         727,000
   Prepaid expenses and other                                                           348,336         285,384
                                                                                   ------------    ------------
        Total current assets                                                          4,171,540       5,367,917
Furniture, fixtures and equipment, net                                                  252,773         262,619
Deferred income taxes                                                                 1,888,000       1,888,000
                                                                                   ------------    ------------
                                                                                   $  6,312,313       7,518,536
                                                                                   ============    ============

                      Liabilities and Stockholders' Deficit

Current liabilities:
   Line of credit                                                                  $    118,765         300,000
   Accounts payable                                                                   1,984,693       1,489,123
   Accrued compensation and related costs                                             2,476,233       2,425,730
   Deferred revenue                                                                   5,088,407       4,948,118
   Accrued interest                                                                      94,131         100,534
   Other accrued expenses                                                               766,334         911,966
                                                                                   ------------    ------------
        Total current liabilities                                                    10,528,563      10,175,471
                                                                                   ------------    ------------

Notes payable-stockholder                                                               600,784         600,784
                                                                                   ------------    ------------

Stockholders' deficit:
   Undesignated capital stock, 24,000,000 shares at September 30, 2004 and June
     30, 2004, none issued                                                                 --              --
   Series A convertible preferred stock, par value $10 per share; 1,000,000
     shares authorized; none issued and outstanding at September 30, 2004 and
     June 30, 2004, respectively                                                           --              --
   Common stock, $0.01 par value; 75,000,000 shares authorized; 23,970,268 and
     23,970,268 shares issued and outstanding at September 30, 2004 and June 30,
     2004, respectively                                                                 239,703         239,703
   Additional paid-in capital                                                        18,048,355      18,026,955
   Accumulated deficit                                                              (22,343,128)    (20,792,143)
   Deferred compensation                                                                (39,667)        (23,616)
   Accumulated other comprehensive loss                                                (722,297)       (708,618)
                                                                                   ------------    ------------
        Total stockholders' deficit                                                  (4,817,034)     (3,257,719)
                                                                                   ------------    ------------
        Total liabilities and stockholders' deficit                                $  6,312,313       7,518,536
                                                                                   ============    ============
</TABLE>

See accompanying notes to unaudited consolidated financial statements.

                                       3
<PAGE>

                       CORVU CORPORATION AND SUBSIDIARIES

                Consolidated Statements of Cash Flows (Unaudited)

              Three Month Periods Ended September 30, 2004 and 2003

<TABLE>
<CAPTION>
                                                                                         2004            2003
                                                                                     ------------    ------------
Cash flows from operating activities:
<S>                                                                                  <C>                 <C>
   Net loss                                                                          $ (1,550,985)       (385,177)
   Adjustments to reconcile net loss to net cash provided by operating activities:
     Depreciation                                                                          36,233          33,253
     Warrants and stock options vested                                                      5,349          10,988

     Changes in operating assets and liabilities:
        Trade accounts receivable, net                                                  1,566,446         (93,775)
        Prepaid expenses and other                                                        (62,952)        (14,819)
        Accounts payable                                                                  475,164         289,387
        Accrued compensation and related costs                                             50,503          19,520
        Deferred revenue                                                                  140,289          12,827
        Accrued interest                                                                   (6,403)          7,816
        Other accrued expenses                                                           (145,632)         20,889
                                                                                     ------------    ------------
          Net cash provided (used) by operating activities                                508,012         (99,091)
                                                                                     ------------    ------------

Cash flows from investing activities:
   Capital expenditures                                                                   (26,387)        (20,332)
                                                                                     ------------    ------------
          Net cash used in investing activities                                           (26,387)        (20,332)
                                                                                     ------------    ------------

Cash flows from financing activities:
   Repurchase of common stock                                                                --          (154,000)
   Net increase (decrease) in  line of credit                                            (181,235)         50,000
                                                                                     ------------    ------------
          Net cash used by financing activities                                          (181,235)       (104,000)
Effect of exchange rate changes on cash                                                     6,727          (1,382)
                                                                                     ------------    ------------
          Net increase (decrease) in cash and cash equivalents                            307,117        (224,805)
Cash and cash equivalents at beginning of period                                          148,475         643,346
                                                                                     ------------    ------------
Cash and cash equivalents at end of period                                           $    455,592         418,541
                                                                                     ============    ============
Supplemental cash flow disclosures:
Cash paid during the period for interest                                             $     23,829          14,247
                                                                                     ============    ============
</TABLE>

See accompanying notes to unaudited consolidated financial statements.


                                       4
<PAGE>

                       CORVU CORPORATION AND SUBSIDIARIES

                Consolidated Statements of Operations (Unaudited)

              Three Month Periods Ended September 30, 2004 and 2003

                                                       2004            2003
                                                   ------------    ------------
Revenues:
   Software and license fees                       $  1,038,246       1,394,406
   Maintenance fees                                   1,202,344       1,258,915
   Consulting and other                                 804,702         934,573
                                                   ------------    ------------

     Total revenues                                   3,045,292       3,587,894
                                                   ------------    ------------
Operating costs and expenses:
   Cost of consulting and other services                951,700         812,638
   Product development                                  527,925         444,841
   Sales and marketing                                1,964,285       1,669,571
   General and administrative                         1,129,950       1,025,712
                                                   ------------    ------------
     Total operating costs and expenses               4,573,860       3,952,762
                                                   ------------    ------------

     Operating loss                                  (1,528,568)       (364,868)

Interest expense, net                                   (22,417)        (20,309)
                                                   ------------    ------------

     Loss before income taxes                        (1,550,985)       (385,177)

Benefit from income taxes                                  --              --
                                                   ------------    ------------

     Net loss                                      $ (1,550,985)       (385,177)
                                                   ============    ============

Net loss per common share--basic                   $      (0.06)          (0.02)
Weighted average shares outstanding--basic           23,970,268      22,290,056
Net loss per common share--diluted                 $      (0.06)          (0.02)
Weighted average shares outstanding--diluted         23,970,268      22,290,056

See accompanying notes to unaudited consolidated financial statements.


                                       5
<PAGE>

                       CORVU CORPORATION AND SUBSIDIARIES

    Notes to Unaudited Consolidated Financial Statements For the Three Month
                    Periods Ended September 30, 2004 and 2003

(1)   Unaudited Financial Statements

      The accompanying unaudited consolidated financial statements of CorVu
      Corporation and Subsidiaries have been prepared by the Company in
      accordance with accounting principles generally accepted in the United
      States of America for interim financial information, pursuant to the rules
      and regulations of the Securities and Exchange Commission. Pursuant to
      such rules and regulations, certain financial information and footnote
      disclosures normally included in the consolidated financial statements
      have been condensed or omitted. The results for the periods indicated are
      unaudited, but reflect all adjustments (consisting only of normal
      recurring adjustments) which management considers necessary for a fair
      presentation of operating results.

      Operating results for the three months ended September 30, 2004 are not
      necessarily indicative of the results that may be expected for the year
      ending June 30, 2005. These unaudited consolidated financial statements
      should be read in conjunction with the consolidated financial statements
      and footnotes thereto included in the Company's Annual Report on Form
      10-KSB for the year ended June 30, 2004.

(2)   Summary of Significant Accounting Policies

      (a)   Revenue Recognition

      Software license revenue is recognized when all of the following criteria
      have been met: there is an executed license agreement, software has been
      delivered to the customer, the license fee is fixed and payable within
      twelve months, collection is deemed probable and product returns are
      reasonably estimable. Revenues related to multiple element arrangements
      are allocated to each element of the arrangement based on the fair values
      of elements such as license fees, maintenance, and professional services.
      Fair value is determined based on vendor specific objective evidence.
      Maintenance revenues are recognized ratably over the term of the
      maintenance contract, typically 12 to 36 months. Consulting and other
      revenues are recognized when services are performed.

      Deferred revenue represents payment received or amounts billed in advance
      of services to be performed.


                                       6
<PAGE>

      (b)   Net Loss per Common Share

      Basic net loss per common share is computed by dividing net loss by the
      weighted average number of common shares outstanding during the period.
      Diluted net loss per common share is computed by dividing net loss by the
      weighted average number of common shares outstanding plus all additional
      common stock that would have been outstanding if potentially dilutive
      common stock related to stock options and warrants had been issued.
      Dilutive common equivalent shares have not been included in the
      computation of diluted net loss per share for the three months ended
      September 30, 2004 and 2003 because their inclusion would be
      anti-dilutive.

      Following is a reconciliation of basic and diluted net loss per common
      share for the three months ended September 30, 2004 and 2003,
      respectively:

                                                  Three Months Ended
                                                     September 30,
                                              ----------------------------
                                                  2004            2003
                                              ------------    ------------

      Net loss                                $ (1,550,985)       (385,177)

      Weighted average shares outstanding       23,970,268      22,290,056

      Net loss per common share-- basic       $      (0.06)          (0.02)

      Net loss per common share -- diluted:
      Net loss                                $ (1,550,985)       (385,177)

      Weighted average shares outstanding       23,970,268      22,290,056

      Common stock equivalents                           0               0

      Weighted average shares and potential
         diluted shares outstanding             23,970,268      22,290,056

      Net loss per common share -- Diluted    $      (0.06)          (0.02)

      The Company uses the treasury method for calculating the dilutive effect
      of the stock options and warrants (using the average market price). All
      options and warrants, which totaled 8,056,340 and 7,048,032 as of
      September 30, 2004 and 2003, respectively, were anti-dilutive.


                                       7
<PAGE>

      (c)   Stock-Based Compensation

      In accordance with Accounting Principles Board (APB) Opinion No. 25 and
      related interpretations, the Company uses the intrinsic value-based method
      for measuring stock-based compensation cost which measures compensation
      cost as the excess, if any, of quoted market price of the Company's common
      stock at the grant date over the amount the employee must pay for the
      stock. The Company's general policy is to grant stock options at fair
      value at the date of grant. Options and warrants issued to non-employees
      are recorded at fair value, as required by Statement of Financial
      Accounting Standards (SFAS) No. 123, "Accounting for Stock-Based
      Compensation", using the Black Scholes pricing method. The Company has
      adopted the disclosure only provisions of SFAS No. 148 "Accounting for
      Stock-Based Compensation".

      Had compensation cost been recognized based on the fair values of options
      at the grant dates consistent with the provisions of SFAS No. 123, the
      Company's net loss and basic and diluted net loss per common share would
      have been changed to the following pro forma amounts:

                                                Three Months Ended
                                                  September 30,
                                           ----------------------------
                                               2004            2003
                                           ------------    ------------
      Net loss:
         As reported                       $ (1,550,985)       (385,177)
         Pro forma                           (1,697,997)       (432,870)
      Basic net loss per common share:
         As reported                              (0.06)          (0.02)
         Pro forma                                (0.07)          (0.02)
      Diluted net loss per common share:
         As reported                              (0.06)          (0.02)
         Pro forma                                (0.07)          (0.02)
      Stock based compensation:
         As reported                                 --          10,988
         Pro forma                              147,012          47,693

      In determining the compensation cost of options granted during the three
      months ended September 30, 2004 and 2003, as specified by SFAS No. 123,
      the fair value of each option grant has been estimated on the date of
      grant using the Black-Scholes option pricing model and the weighted
      average assumptions used in these calculations are summarized as follows:

                                                  Three Months Ended
                                                     September 30,
                                            --------------------------------
                                                 2004             2003
                                            ---------------  ---------------

      Risk-free interest rate                  3.375-3.625%     2.625-3.250%
      Expected life of options granted             7 years          7 years
      Expected volatility                              122%              84%
      Expected dividend yield                            0%               0%


                                       8
<PAGE>

(3)   Liquidity

      The accompanying consolidated financial statements are prepared assuming
      the Company will continue as a going concern. During the year ended June
      30, 2004, the Company generated an operating loss of $2,057,189. For the
      ensuing three month period ended September 30, 2004, an additional
      operating loss of $1,528,568 was incurred. As of September 30, 2004, the
      Company had an accumulated deficit of $22,343,128 and total stockholders'
      deficit of $4,817,034.

      Subsequent to September 30, 2004, the Company sold 100,000 shares of
      Series B Convertible Preferred Stock that is convertible into 333,333
      shares of the Company's common stock (at the option of the holder) to two
      investors for $100,000. In addition, five-year warrants to purchase up to
      233,333 shares of the Company's common stock at an exercise price of $0.20
      per share were also granted as part of this sale.

      Management expects revenues to improve as sales and marketing initiatives
      commenced within the last twelve months allows the Company to more
      effectively sell its products and services. In the event these initiatives
      do not materialize at the expected rates, management would seek additional
      financing through private equity placements or would conserve cash by
      reducing operating expenses. There can be no assurance that the Company
      will be successful in achieving these objectives. The Company's ability to
      continue as a going concern is dependent on it achieving profitability and
      generating cash flow to fund operations.

(4)   Comprehensive Loss

      Comprehensive loss and its components consist of the following::

                                            Three Months Ended September 30,
                                             ----------------------------
                                                 2004            2003
                                             ------------    ------------
      Net loss                               $ (1,550,985)       (385,177)
      Other comprehensive loss:
      Foreign currency translation
         adjustment                               (13,679)        (26,666)
                                             ------------    ------------
      Comprehensive loss                     $ (1,564,664)   $   (411,843)
                                             ============    ============

(5)   Income Taxes

      At September 30, 2004, the Company has U.S. net Federal and State
      operating loss carryforwards of approximately $6.6 million and $2.8
      million, respectively. The net operating loss carryforwards expire in the
      years 2010 through 2024. The Company has recorded a deferred tax asset of
      $2,615,000 as of September 30, 2004 and June 30, 2004. A valuation
      allowance has been provided for the remaining deferred tax assets related
      to certain foreign net operating loss carryforwards as of September 30,
      2004 and June 30, 2004, respectively.

      Federal tax laws impose significant restrictions on the utilization of net
      operating loss carryforwards in the event of a change in ownership of the
      Company which constitutes an "ownership change," as defined by the
      Internal Revenue Code, Section 382. The Company's net operating loss
      carryforward may be subject to the above limitations.

(5)   Notes Payable- Stockholder

      The Company has received interest-bearing advances from a stockholder
      under short-term notes. The notes bear interest at 8.5% and mature on
      December 31, 2006, with the right to demand payment after September 30,
      2005. The notes are secured by substantially all of the assets of the
      Company. Interest expense was $12,983 and $16,742 for the three month
      periods ended September 30, 2004 and 2003, respectively.


                                       9
<PAGE>

(6)   Line of Credit

      In April 2003, the Company entered into a one-year revolving line of
      credit agreement with a bank with a credit limit of $300,000. The line of
      credit carried an interest rate based on the prime rate plus 2% and was
      secured by the assets of its wholly-owned subsidiary CorVu North America,
      Inc. and was guaranteed by the Company. In April 2004, the due date of the
      line of credit was extended to July 2004 and was subsequently repaid and
      replaced by another credit facility (see below). Interest expense for the
      three month periods ended September 30, 2004 and 2003 was $947 and $3,218,
      respectively, which is included in interest expense in the accompanying
      consolidated statement of operations.

      In July 2004, the Company entered into a one-year financing agreement with
      a bank that provides financing based on eligible receivables up to a
      maximum amount of $800,000. The financing agreement carries an interest
      rate based on the prime rate plus 2.5% (7.25% as of September 30, 2004)
      and is collateralized by substantially all assets of its wholly-owned
      subsidiary CorVu North America, Inc. and is guaranteed by the Company. In
      addition, the Company pays an additional fee equal to 0.5% per month of
      the outstanding balance on each financed receivable. The financing
      agreement also called for an up-front loan fee equal to 1% of the maximum
      facility ($8,000). In connection with this agreement, the Company issued a
      seven-year warrant to purchase up to 38,867 shares of common stock at a
      price of $0.6175 per share that expires in July 2011. The fair value of
      the warrants at the date of grant were estimated to be approximately
      $21,000 using the Black-Scholes pricing model, which will be charged to
      operations on a straight-line basis over the term of the facility. The
      following assumptions were used to calculate the fair value of the
      warrants: dividend yield of 0%; expected volatility of 122%; risk-free
      interest rate of 3.625%; and an expected life of seven years. Interest
      expense for the three month period ended September 30, 2004 was $11,203
      (including $5,349 of non-cash charges related to the warrants issued),
      which is included in interest expense in the accompanying consolidated
      statement of operations.

(7)   Subsequent Event

      Subsequent to September 30, 2004, the Company authorized 600,000 shares of
      Series B Preferred Stock and sold, under a private placement, a total of
      100,000 shares of those shares at a price of $1.00 per share that resulted
      in gross proceeds to the Company of $100,000. Under the terms of these
      shares, holders of the Series B Convertible Preferred Stock (1) are
      entitled to a liquidation preference equal to $1.00 per share in the event
      of any liquidation or dissolution of the Company, (2) are entitled to
      receive a dividend of 6% per annum, payable quarterly in either cash or
      common stock, at the option of the Company and (3) received piggyback
      registration rights. Shares of the Series B Convertible Preferred Stock
      are convertible into shares of the Company's common stock, at the option
      of the holder, at a rate of $0.30 per share, or a total of 333,333 shares.
      The conversion price is subject to adjustment under certain conditions
      such as stock dividends, stock splits and reclassifications. In addition,
      shares of the Series B Convertible Preferred Stock participate on an as-if
      converted basis in any dividends paid of common stock and are entitled to
      voting rights together with the common stock, on an as-if converted basis.
      In addition, five-year warrants to purchase up to 233,333 shares of the
      Company's common stock at an exercise price of $0.20 per share were also
      granted as part of this sale to the investors. The fair value of the
      warrants at the date of grant was estimated to be approximately $41,200
      using the Black-Scholes pricing model, which will be charged to additional
      paid-in capital as a preferred stock dividend in the second quarter of
      fiscal 2005. The following assumptions were used to calculate the fair
      value of the warrants: dividend yield of 0%; expected volatility of 122%;
      risk-free interest rate of 3.375%; and an expected life of five years.

      For their efforts in securing this financing, the Company's placement
      agent received a five-year warrant to purchase up to 100,000 shares of the
      Company's common stock at an exercise price of $0.20 per share.


                                       10
<PAGE>

     Item 2. Management's Discussion and Analysis of Financial Condition or
                               Plan of Operations

              For the Three Month Periods Ended September 30, 2004
                            versus September 30, 2003

REVENUES:

Total revenues for the three-month period ended September 30, 2004 decreased
15%, compared to the same period a year ago.

Software revenues decreased $356,160 (26%) for the three-month period ended
September 30, 2004 from the same period last year. Results were substantially
impacted by the decision made in the first quarter of fiscal 2004 to overhaul
and upgrade our sales teams across the world, from both a management and
salesperson perspective. During fiscal 2004:

      o     We hired a new Vice President of Sales for the Americas region in
            early Q1 of 2004 who then installed a regional sales management team
            and completely overhauled the sales team by hiring a total of 18
            sales and technical pre-sales personnel. Headcount in this region
            has increased by 38% from the same period last year. Software
            revenues increased by $44,494 (12%) for the three month period ended
            September 30, 2004 from the same period last year,

      o     We moved an experienced and proven CorVu Sales Director from the
            Asia-Pacific region to the UK/European region in Q3 of 2004 to
            completely overhaul the sales process and personnel. As of the end
            of September, staffing levels in this region are reduced by six
            positions, or 43%. Software revenues decreased $91,058 (28%) for the
            three month period ended September 30, 2004 from the same period
            last year, and

      o     We hired an experienced software sales manager in Q3 of 2004 to
            head-up the Asia-Pacific sales team to overhaul and upgrade the
            sales personnel. Software revenues decreased $309,596 (44%) for the
            three month period ended September 30, 2004 from the same period
            last year.

In total, we hired a total of 34 new sales and marketing people during fiscal
2004. Because of the lead time required to properly train the new people plus
the time required to build a sales pipeline and to work through a sales cycle
that extends anywhere from 3-9 months, a number of the new salespeople have not
yet contributed significantly to our license revenues. We are expecting the new
sales team to significantly improve our software and license fee revenues in
2005.

Maintenance revenues decreased $56,571 (4%) for the three-month period ended
September 30, 2004 from the same period last year.

Consulting and other revenues decreased $129,871 (14%) for the three-month
period ended September 30, 2004 from the same period last year. The results in
this area normally follow results in new license sales. If that area of revenue
improves, we would expect consulting and other revenues to also show
improvement.

OPERATING COSTS AND EXPENSES:

Operating expenses increased $621,098 (16%) for the three-month period ended
September 30, 2004 from the same period last year.

Cost of maintenance, consulting and other expenses increased $139,062 (17%) for
the three-month period ended September 30, 2004 from the same period last year.
In line with staffing increases in the sales and marketing area, we have
increased the number of staff in this area by 14% as we expect the number of new
installations to increase.

Product development costs increased $83,084 (19%) for the three-month period
ended September 30, 2004 from the same period last year. Staffing levels in this
area increased by 10% (two additional positions). We continue to invest in the
improvement and enhancement of current products as well as the development of
new products and, would expect our level of expenditure to continue at its
current rate throughout fiscal 2005.

Sales and marketing expenses increased $294,714 (18%) for the three-month period
ended September 30, 2004 from the same period last year. As stated under license
fee revenues above, we have increased staffing in this area. We have also
significantly increased our marketing activities to aggressively increase market
awareness and to improve lead generation. This included the hiring of a Vice
President of Marketing with world-wide responsibilities in Q3 of 2004. In
addition, two additional marketing professionals were added to the staff.


                                       11
<PAGE>

General and administrative expenses increased $104,238 (10%) for the three-month
period ended September 30, 2004 from the same period last year. Increases were
experienced in executive travel costs, legal and professional fees and office
rent for the new corporate offices in Sydney, Australia.

INTEREST EXPENSE, NET:

Interest expense, net increased $2,108 (10%) for the three-month period ended
September 30, 2004 compared to the same period last year due to higher borrowing
rates under the new line of credit facility.

NET LOSS:

CorVu Corporation reported net losses of $1,550,985 and $385,177 for the
three-month periods ended September 30, 2004 and 2003, respectively.

Liquidity and Capital Resources

Total cash and cash equivalents increased by $307,117 during the three-month
period ended September 30, 2004 from $148,475 as of June 30, 2004 to $455,592 as
of September 30, 2004. Net cash provided by operating activities was $508,012
for the three-month period ended September 30, 2004. Net cash used in investing
activities was $26,387, reflecting the acquisition of capital assets during the
period. Net cash used by financing activities was $181,235 for the three-month
period ended September 30, 2004, reflecting the reduction in the line of credit
facility borrowings.

The accompanying consolidated financial statements are prepared assuming the
Company will continue as a going concern. During the year ended June 30, 2004,
the Company generated an operating loss of $2,057,189. For the ensuing three
month period ended September 30, 2004, an additional operating loss of
$1,528,568 was incurred. As of September 30, 2004, the Company had an
accumulated deficit of $22,343,128 and total stockholders' deficit of
$4,817,034.

Subsequent to September 30, 2004, the Company sold 100,000 shares of Series B
Convertible Preferred Stock that is convertible into 333,333 shares of the
Company's common stock (at the option of the holder) to two investors for
$100,000. In addition, five-year warrants to purchase up to 233,333 shares of
the Company's common stock at an exercise price of $0.20 per share were also
granted as part of this sale.

Management expects revenues to improve as sales and marketing initiatives
commenced within the last twelve months allows the Company to more effectively
sell its products and services. In the event these initiatives do not
materialize at the expected rates, management would seek additional financing
through private equity placements or would conserve cash by reducing operating
expenses. There can be no assurance that the Company will be successful in
achieving these objectives. The Company's ability to continue as a going concern
is dependent on it achieving profitability and generating cash flow to fund
operations. We believe that we will generate sufficient cash flow from
operations to meet our operating cash requirements for the next 12 months.


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<PAGE>

(1)   Critical Accounting Policies and Estimates-

Our significant accounting policies are described in Note 1 to the consolidated
financial statements included in our annual report for the year ended June 30,
2004. The accounting policies used in preparing our interim 2004 consolidated
financial statements are the same as those described in our annual report, and
are as follows:

We believe the critical accounting policies listed below affect significant
judgments and estimates used in the preparation of our consolidated financial
statements.

      Revenue Recognition. We recognize revenues in accordance with the
      provisions of the American Institute of Certified Public Accountants'
      Statement of Position (SOP) 97-2, "Software Revenue Recognition," as
      amended by SOP 98-4 and SOP 98-9, as well as Technical Practice Aids
      issued from time to time by the American Institute of Certified Public
      Accountants, and in accordance with the Securities and Exchange Commission
      Staff Accounting Bulletin No. 101, "Revenue Recognition in Financial
      Statements." We license software under non-cancelable license agreements
      and provide related professional services, including consulting, training,
      and implementation services, as well as ongoing customer support and
      maintenance. Consulting, training and implementation services are not
      essential to the functionality of our software products, are sold
      separately and also are available from a number of third-party service
      providers. Accordingly, revenues from these services are generally
      recorded separately from the license fee. Our specific revenue recognition
      policies are as follows:

      Software License Fees -- Software license fee revenues from end-users and
      resellers are generally recognized when there is an executed license
      agreement, software has been delivered to the customer, the license fee is
      fixed and payable within 12 months, collection is deemed probable and
      product returns are reasonably estimable. Revenues related to multiple
      element arrangements are allocated to each element of the arrangement
      based on the fair values of elements such as license fees, maintenance,
      and professional services. Fair value is determined based on vendor
      specific objective evidence.

      Maintenance, Consulting and other - Revenues from training and consulting
      services are recognized as services are provided to customers. Revenues
      from maintenance contracts are deferred and recognized ratably over the
      term of the maintenance agreements.

Software Development Costs. Software development costs are expensed as incurred
until technological feasibility is established. Software development costs
incurred subsequent to establishing technological feasibility are capitalized
and amortized over their estimated useful lives. Management is required to use
professional judgment in determining whether development costs meet the criteria
for immediate expense or capitalization.

Allowance for Doubtful Accounts. We maintain allowances for doubtful accounts
for estimated losses resulting from the inability of our customers to make
required payments. If the financial condition of our customers were to
deteriorate, resulting in an impairment of their ability to make payments,
additional allowances may be required or revenue could be deferred until
collectibility becomes probable.

Accounting for Income Taxes. The Company accounts for income taxes using the
asset and liability method. Under the asset and liability method, deferred tax
assets and liabilities are recognized at the enacted rates for the future tax
consequences attributable to differences between the financial statement
carrying amounts of existing tax assets and liabilities and their respective tax
basis. The effect on deferred tax assets and liabilities of a change in tax rate
is recognized in income in the period that includes the enactment date.
Valuation allowances are established when necessary to reduce deferred tax
assets to the amounts expected to be realized. Any changes in the projections of
future taxable income may change the deferred asset amount expected to be
realized.

Contingencies. We are subject to the possibility of various loss contingencies
in the normal course of business. We accrue for loss contingencies when a loss
is estimable and probable.


                                       13
<PAGE>

Cautionary Factors That May Affect Future Results

This Quarterly Report on Form 10-QSB, including the information incorporated by
reference herein and the exhibits hereto, and other written and oral statements
made from time to time by us may include "forward-looking" statements.
Forward-looking statements broadly involve our current expectations for future
results. Any statement that is not a historical fact, including estimates,
projections, future trends and the outcome of events that have not yet occurred,
are forward-looking statements. Our forward-looking statements generally relate
to our financing plans, trends affecting our financial condition or results of
operations, our growth and operating strategy, product development, competitive
strengths, the scope of our intellectual property rights, sales efforts, and the
declaration and payment of dividends. Words such as "anticipates," "believes,"
"could" "estimates," "expects," "forecast," "intend," "may," "plan," "possible,"
"project," "should," "will" and similar expressions generally identify our
forward-looking statements. You must carefully consider forward-looking
statements and understand that such statements involve a variety of assumptions,
risks and uncertainties, known and unknown, and may be affected by a number of
factors, including, among others, the factors discussed in our Annual Report on
Form 10-KSB for the year ended June 30, 2004.

We also caution you that forward-looking statements speak only as of the date
made. We undertake no obligation to update any forward-looking statement, but
investors are advised to consult any further disclosures by us on this subject
in our filings with the Securities and Exchange Commission, especially on Forms
10-KSB, 10-QSB, and 8-K (if any), in which we discuss in more detail various
important factors that could cause actual results to differ from expected or
historic results. We intend to take advantage of the safe harbor provisions of
the Private Securities Litigation Reform Act of 1995 regarding our
forward-looking statements, and are including this sentence for the express
purpose of enabling us to use the protections of the safe harbor with respect to
all forward-looking statements.

ITEM 3:  CONTROLS AND PROCEDURES

Management of the Company has evaluated, with the participation of the Chief
Executive Officer and Chief Financial Officer of the Company, the effectiveness
of the Company's disclosure controls and procedures (as defined in Rules
13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended
(the "Exchange Act")) as of the end of the fiscal quarter covered by this
Quarterly Report on Form 10-QSB. Based on that evaluation, the Chief Executive
Officer and Chief Financial Officer of the Company have concluded that the
Company's disclosure controls and procedures as of the end of the fiscal quarter
covered by this Quarterly Report on Form 10-QSB are effective to provide
reasonable assurance that information required to be disclosed by the Company in
the reports that it files or submits under the Exchange Act is recorded,
processed, summarized and reported within the time periods specified in the
rules and forms of the Securities and Exchange Commission. Management of the
Company has also evaluated, with the participation of the Chief Executive
Officer and Chief Financial Officer of the Company, any change in the Company's
internal control over financial reporting (as defined in Rules 13a-15(f) and
15d-15(f) under the Exchange Act) that occurred during the fiscal quarter
covered by this Quarterly Report on Form 10-QSB. There was no change in the
Company's internal control over financial reporting identified in that
evaluation that occurred during the fiscal quarter covered by this Quarterly
Report on Form 10-QSB that has materially affected, or is reasonably likely to
materially affect, the Company's internal control over financial reporting.


                                       14
<PAGE>

                                     PART II
                                OTHER INFORMATION

Item 1.  Legal Proceedings.

         None

Item 2.  Changes in Securities and Use of Proceeds.

         None

Item 3.  Default Upon Senior Securities.

         None

Item 4.  Submission of Matters to a Vote of Security Holders.

         None

Item 5.  Other Information.

         None

Item 6.  Exhibits and Reports on Form 8-K.

         (a)   Exhibits: See Exhibit Index immediately following the signature
               page of this Form 10-QSB.

         (b)   Reports on Form 8-K:   None


                                       15
<PAGE>

SIGNATURES

      In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                                                CORVU CORPORATION


Date:  November 12, 2004                        By /s/ David C. Carlson
                                                   -----------------------------
                                                   David C. Carlson
                                                   Chief Financial Officer


                                       16
<PAGE>

                                  EXHIBIT INDEX

Exhibit
Number      Description
------      -----------

10.1        CorVu Corporation 1996 Stock Option Plan, as amended through
            December 18, 2003 and approved by the shareholders at their meeting
            on December 18, 2003 *

10.2        Accounts Receivable Financing Agreement with Silicon Valley Bank

31.1        Certification of CEO Pursuant to Section 302 of Sarbanes-Oxley Act
            of 2002

31.2        Certification of CFO Pursuant to Section 302 of Sarbanes-Oxley Act
            of 2002

32.1        Certification of CEO Pursuant to Section 906 of Sarbanes-Oxley Act
            of 2002

32.2        Certification of CFO Pursuant to Section 906 of Sarbanes-Oxley Act
            of 2002

* Indicates a management contract or compensatory plan or arrangement


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