SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-K



(X)     ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
        ACT OF 1934

                  For the Fiscal Year Ended December 31, 1996.

                                       OR

( )     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
        EXCHANGE ACT OF 1934


                         Commission file number 0-15405.

                      DATA TRANSMISSION NETWORK CORPORATION
             -------------------------------------------------------
              (Exact name of registrant as specified in its charter)


                    Delaware                    47-0669375
            ------------------------  ------------------------------
            (State of Incorporation)     (I.R.S. Employer ID Number)


         9110 West Dodge Road, Suite 200, Omaha, Nebraska   68114
         ------------------------------------------------  ---------
              (Address of principal executive office)      (Zip Code)


       Registrant's telephone number, including area code: (402) 390-2328

        Securities Registered Pursuant to Section 12(b) of the Act: None

           Securities Registered Pursuant to Section 12(g) of the Act:


                          Common Stock, $.001 Par Value
                          -----------------------------
                                (Title of Class)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months and (2) has been subject to such filing requirements for
the past 90 days. Yes X  No
                     ---   ---

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-K is not contained  herein,  and will not be contained,  to the
best of registrant's  knowledge,  in definitive proxy or information  statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K [ ].

The aggregate market value of voting stock (based upon the "bid" price as quoted
on  NASDAQ)  of the  registrant  held by  non-affiliates  on March  1,  1997 was
approximately $203,000.000.

At March 1, 1997, the registrant had outstanding 11,063,020 shares of its common
stock.

                             - Continued to Page 2 -

                                       1
<PAGE>
                       DOCUMENTS INCORPORATED BY REFERENCE

1.    Portions of the Registrant's  Annual Report to Stockholders for the fiscal
      year ended December 31, 1996 are  incorporated  by reference into Parts I,
      II, and IV.

2.    Portions of the  Registrant's  definitive  Proxy  Statement  filed for the
      Registrant's Annual Meeting of Stockholders to be held April 23, 1997, are
      incorporated by reference into Part III.

                                     PART I
ITEM 1.  BUSINESS.

(a)     General Development of Business:

        Data  Transmission  Network  Corporation  (the  "company",   "DTN")  was
incorporated on September 17, 1987 to change the name and state of incorporation
of its predecessor company, Dataline, Inc. from Nebraska to Delaware pursuant to
an  Agreement  and Plan of  Merger  dated  October  8,  1987.  The  company  was
originally  incorporated  in Nebraska on April 9, 1984,  as Scoular  Information
Services,  Inc., a subsidiary of a regional  grain  company,  later changing its
name to Dataline, Inc.

        On December  19, 1985 and January  31,  1986,  in related  transactions,
certain  employees of the company  purchased all of the outstanding stock of the
company from the regional grain company.

        In January,  1987, the company  completed an initial public  offering of
common stock selling 698,085 shares at $5.40 per share (pre-stock split).

(b)     Financial Information About Industry Segments:

        Not Applicable

(c)     Narrative Description of Business:

        Data  Transmission  Network  Corporation (DTN) began operations in April
1984. The Company is in the business of providing  information and communication
services.  During  1996,  DTN added  several new  services  in the  agriculture,
weather and financial service lines. All of these services are discussed in this
report. DTN services reach 145,900 subscribers throughout the U.S. and Canada.

        The  Company's  subscription  services  are  targeted at niche  business
markets  and  designed to be timely  (NEWS...NOT  HISTORY),  simple to use,  and
convenient.  The  Company's  information  distribution  technology  provides  an
efficient means of sending data and information from point to multi-point.

        The  development  of  a  cost-effective  electronic  satellite  delivery
system, plus a total commitment to customer service and information quality, has
enabled the Company to become a major player in the communications industry. The
Company  continues  to  make  large  investments  to  develop  and  enhance  its
information distribution technology.  These investments have allowed the Company
to take advantage of many  engineering and software  advancements in an exciting
and growing industry.
                                                         2

<PAGE>

                       INFORMATION DISTRIBUTION TECHNOLOGY

        The  Company  is   committed   to  research   and  develop   information
distribution  technologies that cost effectively  deliver the timely (NEWS...NOT
HISTORY) information that the Company's subscribers demand. DTN supports several
information distribution  technologies allowing the distribution  (transmission)
and  receiving  (capture,   manipulation  and  display)  of  information.  These
technologies  include FM radio  side-band  channels  (FM),  small  dish  Ku-band
satellite (Ku), Fax, Cable TV (by using the vertical blanking interval, or VBI),
E-Mail and the Internet.

        The first  technology used by the Company was FM radio side band. The Ku
technology was added in 1989,  providing the ability to reach customers  outside
the geographic territory of the signal of the FM stations.  Fax, VBI, E-Mail and
the Internet have since been added to further expand our distribution network.

        The Company  provides all of the equipment  necessary for subscribers to
receive  their  service  based on FM,  Ku and VBI.  This  equipment  includes  a
receiver, specifically built for the Company, a video monitor, a FM antenna or a
small 30 Ku-band  satellite dish. A keyboard,  mouse and printer may be provided
depending on the service.  DTN is  responsible  for the normal  maintenance  and
repair of the subscriber equipment.

        Prior  to  1992,  the  Company  utilized  a  "page-based"  receiver  and
monochrome  system.  The monochrome  system translates the Company's data stream
into text and has the capability,  depending on capacity, to receive and display
from 126 to 246 different pages of information.  The monochrome receiver has the
capability to download information to a printer or computer.

        In 1992, the Company introduced the Advanced Communications Engine (ACE)
receiver, a color graphics receiver system, that expanded the ability to provide
information and communication  services.  This receiver has multiple  processors
that capture,  manipulate and display high resolution  color pictures,  graphics
and text. A separate  processor provides the ability to play audio clips such as
weather  forecasts,  voice  advertisements or audio alarms which are used when a
futures contract  reaches a pre-set price. In addition,  this processor may send
and retrieve information by using an internal modem connected to a phone line.

        The ACE receiver also has the  capability to download  information  to a
printer or computer.  This receiver is equipped with an internal hard drive that
allows   processed   information  to  be  stored,   archived   (versus  frequent
rebroadcasting) and displayed. The receivers built-in control panel, keyboard or
mouse allows the subscribers to conveniently view this information.

        One of the unique  aspects  of the  Company's  information  distribution
technology is the computer  software  developed by the Company  specifically for
use with the DTN receivers.  This software manages information from a wide array
of  input   sources,   runs  routines,   sets   priorities  and  then  initiates
transmissions  to  the  satellite.  The  software  provides  the  capability  to
individually address each receiver unit placed with a subscriber, permitting the
Company to transmit  specific  information to a specific  subscriber or group of
subscribers.

        The Company leases FM radio side-band  channels,  satellite channels and
VBI space to deliver the  information  to the  Company's  receivers  used by its
subscribers.  All  information  is  up-linked  from Omaha to  satellite  (except
Internet,  Fax and other telephone delivery technology) and down-linked from the
satellite to the subscriber based on the distribution technology.

        The FM  monochrome  subscribers  receive their  information  using an FM
antenna that receives the information via the side-band signal  transmitted from
radio stations.

                                                         3

<PAGE>

        On December 31, 1996,  15,600  subscribers  were receiving the Company's
services via FM distribution technology.

        The Ku subscribers utilize a 30" satellite dish, a direct down-link,  to
receive  their  information.  On December 31,  1996,  128,000  subscribers  were
receiving the Company's services via Ku distribution technology.

        Early in 1994,  the  Company  began  using a new  cable TV  distribution
technology   involving  vertical  blanking  intervals  (VBI).  The  Company  has
contracted with a major cable TV superstation to transmit information along with
the station's TV signal.  This technology  eliminates the need for an FM antenna
or satellite  dish and is available to businesses  or residences  that are wired
for cable TV and receive the superstation's service. On December 31, 1996, 2,300
subscribers   were  receiving  the  Company's   services  by  VBI   distribution
technology.

        The Company has approximately 10,500 Fax customers receiving information
using Fax  technology.  The E-Mail business is primarily a subscriber (an E-Mail
source)  communicating  specific messages to a group of subscribers.  Currently,
there are over 500 E-Mail sources  delivering over 1,500 pages of information to
subscribers  daily.  The Company  began to deliver  services on the  Internet in
1995. The Company is currently offering services in the agriculture, produce and
finance  service  lines  and  plans to  continue  researching  this  information
distribution technology.
                                SERVICES OFFERED

        The  Company's  revenue  is derived  mainly  from five  categories:  (1)
monthly,   quarterly  or  annual  subscriptions,   (2)  optional  services,  (3)
communication services, (4) advertising and (5) service initiation fees.

        The  percentage  of total  revenue for each category over the last three
fiscal years was:
<TABLE>
<CAPTION>

                                                    1996        1995        1994
                                                    ----        ----        ----
<S>                                                  <C>         <C>         <C>
Subscriptions                                        76%         74%         73%
Optional services                                     6%          6%          8%
Communication services                                9%         11%         10%
Advertising                                           3%          3%          5%
Service Initiation Fees                               6%          6%          4%

</TABLE>

         The subscription revenue is generated from monthly, quarterly or annual
subscription  fees  for one of the  Company's  services.  The  Company  offers a
discount  to  subscribers  who  pre-pay  their  subscriptions  annually.  A more
detailed review of each service is found later in this report.

         Optional  services are offered to subscribers on an "a la carte basis",
similar to premium  channels on cable TV. The  information for these services is
primarily  provided  by a  third  party  with  DTN  receiving  a  share  of  the
subscription revenue paid by the subscriber. Optional services revenue continues
to grow in total  dollars  and has  maintained  the level  achieved in 1996 as a
percentage  of  total  revenue  during  this  period  of  rapid  subscriber  and
subscription revenue growth.

         The Company sells communication  services that allow companies to cost-
effectively   communicate  a  large  amount  of  timely   (NEWS...NOT   HISTORY)
information to their customers or field offices.  This category includes revenue
generated from FAX and E-Mail services.  Communication  revenue has continued to
grow in total dollars and management believes this area offers opportunities for
future growth.

         The  Company sells advertising space interspersed  among  the pages  of
news and information, similar to a newspaper or magazine.  The advantage of an

                                        4

<PAGE>

electronic  advertisement  over  typical  print media is the timely  (NEWS...NOT
HISTORY)  delivery of the ad, as well as the  ability to change the  advertising
message  quickly and as frequently  as market  conditions  dictate.  Advertising
revenue continues to grow in total dollars and has maintained the level achieved
in 1996 as a percentage of total revenue during this period of rapid  subscriber
and subscription revenue growth.

         Service  initiation  fees are  one-time  charges for new  subscriptions
depending on the service and the information distribution  technology.  DTN also
charges an initiation fee for those  subscribers  who convert to another service
(ie: from a monochrome FM to a Ku color service).

DTN Agricultural Services

         The DTN Agricultural  Services include DTN AgDaily, DTN ProSeries,  DTN
FarmDayta, DTNstant, DTNiron and DTN PROduce.

<TABLE>
<CAPTION>
                                         1996            1995            1994
                                     -----------     -----------     -----------
<S>                                  <C>             <C>             <C>
Revenues                             $69,700,000     $45,000,000     $33,700,000
Subscribers at year end                  116,200          77,400          67,100
</TABLE>
         New  subscription  are primarily  sold by the Company's  national sales
force of employee  district sales  representatives,  in-house  sales staff,  and
independent,  commission-only sales  representatives.  The Company obtains leads
for the sales force through telemarketing,  direct mail, print media advertising
and  customer  referrals.  The  Company's  management  continues  to analyze the
markets in the U.S. and Canada to determine the optimum sales force necessary to
cost-effectively maximize sales.
         The biggest competition to these services is the combination of printed
advisory services,  radio,  television,  telephone,  other satellite information
services, on-line services and the changing of old information gathering habits.
         DTN's  agricultural  subscribers  have more than 150 optional  services
available  to them.  These  services  consist  of  advisory,  informational  and
educational products. Additional services include newswire, association and free
services.  DTN subscribers are given the opportunity to tailor their DTN unit to
their specific needs by choosing from a broad mix of "a la carte" services.  DTN
continues to develop new optional services to meet customer demands by listening
closely to the marketplace.
         The Company markets these services  through a combination of individual
free trials,  system-wide trials,  on-screen  advertising,  direct mail, invoice
stuffers,  equipment  stuffers  and  telemarketing.  The total number of monthly
subscriptions increased over 27% primarily due to these marketing campaigns. The
increase in subscriptions  fueled the impressive  increase in optional  services
revenue.  Optional  service  subscription  prices  range  from $6 to $1,200  per
quarter with the average subscription price of $60/quarter.
         In 1996,  the  agricultural  related  services  sold over three million
dollars  in  advertising  space.  The  companies   purchasing   advertising  are
considered major players in the agriculture,  ag chemicals, seeds, equipment and
finance businesses.  The color system  capabilities,  such as inter-activity and
animation,  continue  to entice new  advertisers.  Advertising  research in 1996
confirmed that DTN is an important player in the agriculture media field.

DTN AGDAILY SERVICES

         The DTN  AgDaily  Services  are DTN  AgDaily,  DTN Pro  Series  and DTN
FarmDayta.  Approximately  80% of  the  services'  subscribers  are  farmers  or
livestock  producers with the balance  consisting  primarily of grain elevators,
agribusinesses,   and  financial  institutions.  DTN  AgDaily,  Pro  Series  and
FarmDayta  subscribers  farm nearly one third of the nation's total cropland and
market more than 50% of the nation's  cattle and hogs.  Subscribers can be found
throughout the U.S and Canada.

                                                         5

<PAGE>

         DTN AgDaily  management  believes the trend toward  consolidation  into
larger  farms is expanding  the market for  agricultural  information  services.
Also, the government's move toward fewer agricultural price supports and an open
market system will support expansion of agricultural  information services. This
expansion  should provide steady growth for DTN AgDaily,  DTN Pro Series and DTN
FarmDayta.

DTN AgDaily

SERVICE REVIEW
         The Company's first service,  DTN AgDaily,  is an  agricultural  market
information,  quote and  weather  service.  Monochrome  (FM and Ku) DTN  AgDaily
subscribers  receive delayed  commodity  futures and options quotes;  local cash
grain and livestock prices;  selected regional and world weather updates;  and a
variety of daily  analysis,  commentary and news that affect grain and livestock
prices.
         The DTN AgDaily  color  graphics  system  includes an advanced  weather
segment  with  national  and  regional  radar maps  (updated  every 15 minutes),
infrared  satellite cloud cover maps,  precipitation,  temperature,  jet stream,
surface  wind and snow cover  maps,  and much more.  The  subscriber  can custom
design high resolution charts and/or select from a library that holds over 1,000
charts.  Subscribers can custom program the futures quotes pages to display only
the quotes they  desire.  The service  also  includes  information  segments for
specific crop and livestock enterprises as well as general, business, sports and
entertainment news.
         DTN AgDaily color service offers crop liability insurance and livestock
profitability  calculators  by using the  inter-activity  feature  that allows a
subscriber  to  search  a  comprehensive  database.  This  feature  also  allows
subscribers to search an extensive seed catalog.
         The price of the monochrome FM service is currently $29 per month,  $35
per month for monochrome Ku service and $52 per month for color Ku service.
         DTN offers  services  with advanced  features  bundled with DTN AgDaily
called the DTN Pro Series.  The DTN Pro Series  services  are also  managed as a
service within DTN AgDaily.

DTN Pro Series

SERVICE REVIEW
         The DTN Pro Series services are an advanced information source designed
for agricultural  subscribers who require more extensive information that can be
customized for their specific needs and operations. The Pro Series includes five
services: Weather Pro, News Pro, Chart Pro, Intraday Pro and Stock Pro.
         Weather Pro is the  "meteorological  connection"  to the most  complete
array of current weather, forecast and satellite radar information. This service
allows the subscriber to choose from over 70 new weather maps including detailed
regional, state and zone forecasts. The Weather Pro service gives the subscriber
32 programmable pages to create their own unique weather information chapter.
         News Pro is the "broadcast  connection" to the most timely  (NEWS...NOT
HISTORY) business,  sports,  entertainment,  financial,  and general news of the
day. The service also provides an audio summary of the day's  agricultural news.
News Pro subscribers  receive AP Online, a service of the Associated Press, as a
news source.
         Chart Pro is the "graphic connection" bringing a variety of information
to the screen in an organized  format to allow the subscriber to analyze trends,
patterns and cycles.  This  service  includes 40 pages for  programmable  charts
allowing the subscriber to create an extensive "chart book".
         Intraday Pro is the "trading  connection" to the first low-cost  system
with the ability to chart market  sessions  minute-by-minute  during the trading
day. This service allows the subscriber to choose the time intervals they desire
to chart and keep them abreast of the markets.

                                                         6

<PAGE>

         Stock Pro is the  "market  connection"  providing  access to prices for
over 50,000  issues of stocks,  bonds and funds.  This  service  includes  stock
quotes using either the quick quote  feature or the  programmable  quotes pages.
Additional  features are the personal library used to store news and information
and the high interest  windows that allows the subscriber to constantly  monitor
up to six futures, options, stock or bond quotes.
         The Pro Series' enhanced  functionality includes a high interest window
that allows a user to view future or options quotes on any page, key word search
that  automatically  searches the news story database for articles affecting the
user's operation,  a user custom segment that creates a customized  segment with
up to five of the user's favorite pages, and a personal library that serves as a
customized archive segment.
         Each individual Pro Series service is currently priced at $62 per month
except the Stock Pro which is  currently  priced at $66 a month.  DTN Premier is
the package of Weather  Pro,  News Pro,  Chart Pro and Intraday  Pro,  currently
priced at $79 per month.  DTN  Premier  Plus is the  package of DTN  Premier and
Stock Pro,  currently priced at $82 a month.  This service is available by color
Ku-band satellite transmission.

DTN FarmDayta

SERVICE REVIEW
         DTN  FarmDayta  was the  principle  asset  acquired  from the Broadcast
Partners acquisition in May 1996. The content of this service is very similar to
DTN AgDaily.  In fact,  since its start in 1990,  DTN  FarmDayta was the primary
competition for DTN AgDaily  services.  DTN FarmDayta is an agricultural  market
information,  quote and weather service delivering delayed commodity futures and
options quotes;  local cash grain and livestock  prices;  selected  regional and
world weather updates; and a variety of daily analysis, commentary and news that
affect grain and livestock prices.
         DTN FarmDayta Elite service is an advanced version of DTN FarmDayta and
is similar in content to the DTN AgDaily  service.  Additional  features include
additional options quotes, charting, weather maps and a hard drive to store data
in the receiver which is critical to maintaining storage of information during a
power outage.  DTN FarmDayta Elite Plus is an advanced service that includes the
DTN  FarmDayta  Elite  features and is similar in content to the DTN Pro Series.
This service  includes  more  advanced news  (Reuters  Headline  News),  quotes,
weather (including motion and zoom capabilities) and programmable charts.
         DTN FarmDayta,  and its enhanced versions DTN FarmDayta Elite and Elite
Plus, are currently priced at $44, $52, and $62 a month, respectively. All these
services are available by color Ku-band satellite transmission.  The addition of
DTN FarmDayta  gives the Company a fully  integrated  agricultural  service line
with price entry points across a wide spectrum, expanding the marketing horizons
for all DTN agricultural services.
         At the time of the acquisition,  DTN FarmDayta had 39,000  agricultural
subscribers. The Company does not plan to convert DTN FarmDayta equipment to DTN
AgDaily  equipment and currently  maintains the DTN FarmDayta  facilities,  with
nearly 100 employees, in Des Moines, Iowa.

DTNstant

SERVICE REVIEW
         DTNstant is a color  service  that  provides a selection  of  real-time
futures  and options  quotes from the major  commodity  exchanges  and  headline
commodity news from multiple sources such as the Associated Press, Futures World
News  and  Knight  Ridder.   The  service  also  provides  market  leading  cash
information,  in-depth charting capabilities, plus all the information available
on the DTN AgDaily color service. In addition, this service provides information
for the energy, metals, softs (ie: orange juice, coffee, cocoa),  transportation
and lumber  industries.  There are no other services in the industry  offering a
more comprehensive news and information service.

                                                         7

<PAGE>

         The primary  subscribers are commercial  grain companies and elevators,
feedlots,  commodity brokers and commodity speculators.  Due to the character of
this  industry,  the  Company  provides  on-site  service  and  installation  by
professional service technicians.
         DTNstant  operates in a very competitive  market with numerous national
and regional  providers of instant commodity quotes.  This service is the leader
in the satellite delivery of instant futures and options quotes.
         New  subscriptions  are primarily sold by the Company's  national sales
force  which is  supported  by  telemarketing  and direct mail  campaigns.  This
service is available by color Ku-band  satellite  transmission  and is currently
priced at $170 a month.

DTNiron

SERVICE REVIEW
         DTNiron is a color  service  providing a  cost-effective  communication
resource for the farm implement  industry.  DTNiron is an equipment  locator and
inventory  management  service  providing  a  communication  tool  for the  farm
implement dealers  throughout the U.S and Canada.  The service allows dealers of
all makes of farm  implements  and  equipment  to work  together to manage their
inventory resulting in increased sales and profitability.  This service provides
valuable information on the national outlook for farm equipment sales.
         DTNiron provides detailed listings of farm implements and equipment for
sale or needed by  dealers.  A listing  stays on the  system for a minimum of 30
days,  renewable at the dealer's  request.  Subscribers  receive  industry news,
financial information,  economic indicators and information from the DTN AgDaily
color service.
         The DTNiron service also includes  listings of construction  equipment,
trucks,  trailers and other equipment that is found in the agriculture industry.
The service provides listings for implement and equipment parts, especially hard
to find  parts.  In  addition,  the  service  sorts the  listings by regions and
provides hourly updates to keep the information as timely  (NEWS...NOT  HISTORY)
as possible.
         This service is available by color Ku-band  satellite  transmission and
is currently priced at $98 a month.

DTN PROduce

SERVICE REVIEW
        DTN PROduce is the authority in providing the produce  industry with the
most timely weather,  produce prices,  transportation  data and news information
available.  There are four major components to the DTN PROduce service. First is
weather  information,  providing the single most important  piece of information
for anyone in the produce  business.  Second is pricing  information,  providing
immediate updates upon release formatted by commodity, growing area and terminal
market. Third is transportation  information,  providing freight rates and daily
truck  availability by the major growing areas.  Finally,  the service  provides
comprehensive news including AP Online.
         DTN PROduce maintains a price discovery  network,  the DTNdex,  that is
the industry standard.  Competition in this industry continues to focus on older
technology, such as Fax machines.
         The  market  for this  service  is the  entire  produce  food  chain of
growers, shippers, packers, brokers, retailers and institutions. This service is
available via color Ku-band satellite and currently is priced at $88 per month.

DTN Weather Services

         The DTN Weather  Center  Services have expanded from DTN Weather Center
into specific  industry-related  services  including  DTN Weather  Center - Turf
Manager, DTN Aviation Center and DTN Weather Center - Contractor Dayta.

                                                         8
<PAGE>

<TABLE>
<CAPTION>
                                                1996             1995       1994
                                          ----------       ----------       ----

<S>                                              <C>              <C>       <C>
Revenues                                  $5,600,000       $1,000,000       --
Subscribers at year end                        7,900            2,600       --
</TABLE>

DTN WEATHER CENTER

SERVICE REVIEW
        DTN  Weather  Center  is  a  comprehensive  weather  information  system
designed  to meet the  weather  information  needs of many  industries.  Markets
specifically  targeted by DTN Weather Center are golf courses,  turf management,
emergency  management,   state  transportation  departments,   construction  and
aviation. DTN Weather Center has found a home in numerous other industries where
timely (NEWS...NOT HISTORY),  accurate and easily accessible weather information
is a critical ingredient in operational planning and staffing decisions.
         DTN Weather Center services  provide over 100 weather maps, 20 regional
radar  maps  including  NEXRAD  radar  and  infrared  satellite  photos  and six
satellite  maps.  The services  provide  short-range  (12-48  hours)  forecasts,
long-range (3-90 day) outlooks, and 10 day city forecasts for over 550 different
cities in the U.S.  and Canada.  The  services  include a personal  programmable
segment,  storing of maps in an "Archive Segment" and AP Online News is provided
as an optional service.
         This  DTN  Weather  Center  service  is  available  via  color  Ku-band
satellite transmission and is currently priced at $72 per month.

DTN WEATHER CENTER TURF MANAGER

SERVICE REVIEW
         Turf Manager is available to those individuals and businesses  involved
in turf-related  operations such as golf course,  lawn maintenance,  landscaping
and sod farm. This service provides the news,  weather and chemical  information
designed for turf management.
         Chemical and Pesticide  Press Turf Index is a unique feature  providing
an information  database of over 275 turf pesticides.  Lightning  Indicator Maps
are updated  hourly  including  the latest  information  on where  lightning  is
striking.  Evapotranspiration  Tables  provide  regional  evaporation  rates for
planning  watering and chemical  applications.  ESPN Sports Ticker  provides the
current golf related  stories and results from ESPN. AP ONLINE provides over 300
current  news  stories  in  four  chapters:   General,   Business,   Sports  and
Entertainment. The National Golf Course Directory is a database of the location,
phone number,  course pro, and course  superintendent of any member course. This
combination  of  features  along  with the  weather  information  makes the Turf
Manager a complete package.
         DTN  Weather  Center - Turf  Manager  is  available  via color  Ku-band
satellite transmission and is currently priced at $72 a month.

DTN AVIATION CENTER

SERVICE REVIEW
         DTN  Aviation  Center  is  a  comprehensive  aviation  weather  package
specially designed for pilots,  airports and Fixed Base Operators  (FBO's).  DTN
Aviation  Center  supplies  airports,  pilots and FBO's  with the  comprehensive
flight-plan  information found on many premier "on-line"  systems.  This package
includes U.S. and regional depiction maps, 24 hour low level significant weather
prognosis,  and U.S.  region winds and  temperatures  aloft.  Subscribers of DTN
Aviation  Center use it while speaking to flight  services to help visualize the
current weather conditions while they are making their flight plan. This service
can also help determine alternate route destinations.
         Subscribers can choose the Level I service, which is designed for the
local/regional flyers up to 18,000 feet, or the Level II service which is
designed for pilots and airports flying nationally up to 45,000 feet.  The Level
II service also provides European flight information.

                                                         9

<PAGE>

         DTN  Aviation   Center  is  available  via  color   Ku-band   satellite
transmission  and is currently  priced at $103/month  for Level I and $152/month
for Level II.

DTN WEATHER CENTER Contractor Dayta

SERVICE REVIEW
         The DTN  Contractor  Dayta  service  is  designed  to keep  subscribers
informed of all  construction  related news and industry  information  to assist
them in maintaining a competitive  advantage.  This service  provides all of the
valuable  weather  information  that  comes with the DTN  Weather  Center and is
necessary for making those important day-to-day business decisions.
         Industry specific information includes general information, association
and  industry  information,  construction  news,  bids  and  resources  and  the
contractors  exchange.  In  addition,  subscribers  receive  sports  scores  and
highlights and financial indicators.
         The DTN  Contractor  Dayta  service  in  available  via  color  Ku-band
satellite transmission and is currently priced at $82 a month.

DTN Financial Services

         DTN  Financial  Services  offers five  services,  DTN Wall Street,  DTN
SPECTRUM,  DTN  FirstRate,  DTN GovRate and DTN Broker+.  Subscribers to all DTN
Financial  Services  have a variety of  optional  services  from which to choose
providing stock  selection and timing advice,  earnings  estimates,  fundamental
stock market data,  U.S.  Treasury  quotes and other  financial  market  related
services.

         DTN  Financial  Services  revenue grew 41% during  1996,  adding to its
bullish  35%  compounded  revenue  growth  for the past 5 years.  DTN  Financial
Services'  objective  is to  provide  a  comprehensive  in-depth  service  at an
affordable  cost to its  subscribers.  This objective will remain very important
due to the highly competitive nature of this business. The "a la carte" optional
services offered to subscribers give them an even larger variety of information.
Contents of all DTN  Financial  Services are broader in scope and cost less than
competitive   services.   This  combination  allows  the  services  to  continue
maintaining a competitive advantage in its market niches.
<TABLE>
<CAPTION>
                                  1996                1995                1994
                               -----------        -----------         ----------

<S>                            <C>                 <C>                <C>
Revenues                       $ 8,600,000         $6,100,000         $5,100,000
Subscribers at year end             11,300              9,600              8,800

</TABLE>

DTN SPECTRUM

SERVICE REVIEW
         DTN SPECTRUM was released in November, 1995, and is an enhanced version
of DTN Wall Street  utilizing  the ACE  technology.  The service  provides  many
additional  features and functions  that appeal to a wider market.  This service
provides advanced quote selection and custom programming along with alarms, news
search and charting capabilities.
         DTN  SPECTRUM  is being  very  well  received  by new  subscribers  and
existing subscribers who are electing to "switch-up" to gain use of the advanced
features of the service.  DTN SPECTRUM  subscription  sales accounted for 54% of
DTN Financial Services new subscription sales during 1996.
         An extension  of DTN  SPECTRUM is the DTN  SPECTRUM  R-T  service.  DTN
SPECTRUM  R-T  marked the entry by DTN  Financial  Services  into the  real-time
commodity   quotes  market  during  1996.   This  service   provides  a  mix  of
exchange-delayed  quotes along with the subscriber's choice of real-time futures
quotes.  By year-end  1996,  this higher  revenue and higher margin  service was
generating 21% of the total DTN SPECTRUM subscription sales.


                                                        10

<PAGE>

         DTN SPECTRUM and DTN SPECTRUM R-T are  available on the color  platform
by Ku-band  satellite  transmission and are currently priced at $68 and $118 per
month, respectively.

DTN Wall Street

SERVICE REVIEW
        DTN Wall  Street  provides  exchange-delayed  quotes on  stocks,  bonds,
mutual and money market funds, futures, interest rates, currencies and real-time
index  quotes.  This service also  provides  in-depth  economic,  financial  and
business news and other  time-sensitive  (NEWS...NOT  HISTORY)  financial market
information  such as  company-specific  news and earnings.  This service  allows
subscribers to custom  program the system to track their  selection of financial
quotes.
         The  majority  of   subscribers  to  DTN  Wall  Street  are  individual
investors,  and the balance of subscribers  are independent  brokers,  financial
advisors and financial institutions. The primary competition for DTN Wall Street
are satellite, TV cable (VBI), Internet and dial-up quote services.
         DTN Wall  Street is  available  on the  monochrome  platform by Ku-band
satellite  and TV cable (VBI)  transmission  and is currently  priced at $44 per
month.

DTN FirstRate

SERVICE REVIEW
         DTN  FirstRate  is  a  service  for  the  mortgage  industry  providing
wholesale  mortgage  rates in an  easy-to-use  standard  format  and  intra  day
interest rate information to indicate the direction of mortgage loan rates. This
service also provides  subscribers with snapshots of real-time rates from Fannie
Mae and  Freddie Mac plus other  news,  commentary  and  analysis  for  mortgage
lenders.
          Sales for DTN FirstRate  during 1996  remained  slow. In October 1996,
DTN FirstRate+ was made available on the ACE platform.  This service,  named DTN
FirstRate+,  provides  many  more  useful  features  which  are  proving  to  be
appreciated  by new  subscribers.  Marketing  for DTN FirstRate is now all being
done by DTN Financial  Services'  institutional sales group which assists direct
sales of this service by DTN's national sales force. We believe the availability
of DTN FirstRate+ on the ACE platform and a more focused  marketing  effort will
lead to higher sales in 1997.
         DTN  FirstRate  is  available  on the  monochrome  platform  by Ku-band
satellite  or TV cable (VBI)  transmission  and is  currently  priced at $98 per
month.  DTN  FirstRate+  is currently  available on the ACE platform via Ku-band
satellite transmission for $129 per month.

DTN GovRate

SERVICE REVIEW
         DTN GovRate provides executable U.S. government security quotes.  These
real-time  prices  are  provided  from a primary  dealer,  the  former  Discount
Corporation  of New York  (DCNY),  now  operated  as a division  of Zions  First
National  Bank. The Company views this service as an important  development  for
financial  institutions.  DTN GovRate is  providing  opportunities  for small to
mid-size banks, public and corporate treasurers, and independent brokerage firms
to participate in trading of U.S.  government  securities.  Zions First National
Bank facilitates this by offering odd lot trading and repurchase agreements.
         This  service is  currently  available  on the  monochrome  platform by
Ku-band  satellite  or TV cable (VBI)  transmission  for $34.95 per month and is
also currently  available on the ACE platform by Ku-band satellite  transmission
for $68 per month.

                                                        11

<PAGE>

DTN Broker+

SERVICE REVIEW
         DTN Broker+ is a modified  version of DTN  SPECTRUM  with  enhancements
designed  specifically  to serve  independent  securities  brokers and financial
advisors.  Marketing  for DTN  Broker+  is all done by DTN  Financial  Services'
institutional  sales group which  assists  direct sales of this service by DTN's
national sales force.
         DTN  Broker+  provides  a  comprehensive  source  of  market  data  and
time-sensitive,  market moving news. It is a low cost alternative source of news
and delayed market quotes in its targeted market niche.
         DTN  Broker+ is  available  on the ACE  platform  by Ku-band  satellite
transmission  and is  currently  priced at $73 per month.  An  extension  of DTN
Broker+,  which provides real-time futures quotes, is currently offered for $123
per month on the ACE platform by Ku satellite transmission.

DTN Energy Services

         The energy  related  services  include  DTNergy for the refined  fuels,
natural gas industries and electric industries.
<TABLE>
<CAPTION>

                                   1996               1995               1994
                                -----------        -----------        ----------

<S>                             <C>                <C>                <C>
Revenues                        $12,200,000        $10,000,000        $7,200,000
Subscribers at year end               7,700              7,100             6,700
</TABLE>

DTNERGY

SERVICE REVIEW
         DTNergy is a service  providing  pricing  information and communication
services for the petroleum  industry.  This service consists of several pages of
delayed  energy  futures and options  quotes plus  selected  news and  financial
information.  DTNergy is  designed  to connect  refiners  (producers  of refined
fuels) to wholesalers (distributors of refined fuels). The refiner sends refined
fuel prices to wholesalers they have authorized to receive this information. The
refiner  also has the  capability  to send  terminal  alerts,  electronic  funds
transfer  notifications,  invoices,  and other communications to the wholesaler.
DTNergy  subscribers can select from a variety of optional services to give them
even more prices or news related to the petroleum industry.
         The strength of the DTNergy  service is the ability to deliver,  within
seconds,  accurate refiner terminal prices and other vital communications to the
wholesalers.  This service is more reliable,  timely and less expensive than the
competition,  which utilize  telephone  delivered  printer-only  systems and FAX
services.
         DTNergy generates revenue from two primary sources,  the wholesaler and
the refiner.  Wholesalers currently pay a monthly subscription fee of $38.00 for
the monochrome Ku-band satellite service.  Refiners pay fees based on the number
and length of communications sent to wholesalers.
         DTNergy  also  has an  information  service  for  the  natural  gas and
electric industries. Subscribers receive instant or delayed NYMEX energy futures
and options quotes, a comprehensive  weather package and industry  specific news
and  market  information.  This  service is  marketed  to energy  producers  and
generators, transporters,  marketers, utilities and larger energy consumers. The
service is available on color Ku-band  satellite and is currently priced at $130
a month with 30-minute delayed quotes and $170 a month with real-time quotes.

                                                        12

<PAGE>

DTN Auto Services

DTN AUTO

SERVICE REVIEW
         DTNauto is a communication  and information  service for the automobile
industry.  This service offers automobile dealers precision information to value
trade-ins and locate used car  inventory  plus a host of other  information  and
convenient features.  Automobile auction companies and manufacturers are able to
communicate directly with the dealers.
         DTNauto  provides  information  on  pre-auction   automobile  listings,
results of past  auctions,  new and used car  industry  news,  weather and other
news.  The  service  allows  subscribers  to  perform  searches  of the  auction
listings, upcoming and past, for specific automobile information.
         The service offers a variety of optional services providing information
on credit reporting (CREDCO),  vehicle histories (CARFAX),  warranty information
(The Warranty Guide) and residual value of leased  vehicles  (Lease Guide).  The
CARFAX and CREDCO optional  services  extensively  utilize the internal modem to
send  and  receive  information.  These  services  create  a more  comprehensive
information service that puts the subscriber in the drivers seat.
         This service is being marketed by the DTNauto sales force to automobile
dealers  across the United  States.  This service is available by color  Ku-band
satellite transmission and is currently priced at $98 per month.


Joint Venture Services

         DTN has joined  forces with other  companies to market  their  services
using  the  Company's   technology.   The  services  are  TracElectric  and  DAT
Transportation Terminal.


TracElectric

SERVICE REVIEW
        TracElectric  is  an  equipment   locator  service  for  the  electrical
equipment industry. This service provides over 100 pages of new, remanufactured,
surplus and used electrical equipment listings.  The service connects buyers and
sellers throughout the U.S. and Canada.  This service is available by monochrome
Ku-band satellite and DTN receives a percentage of the revenue.

DAT SERVICES

SERVICE REVIEW
        The DAT (Dial-A-Truck) Transportation Terminal (DAT) service, located in
Beaverton, OR, is an information communication system for the trucking industry.
The service  provides load and truck matching  performed on a database of 30,000
listings updated daily.
         DAT service allows subscribers to input their own listings into the ACE
receiver and send this  information  to the database  using the internal  modem.
This service provides the subscriber the ability to perform  extensive  searches
to locate  loads and  trucks  and set  alarms to alert the user that a match has
occurred.  The service also provides  regional  radar maps of major highways and
interstates,  transportation  news,  diesel  fuel  prices  and  other  financial
information related to the trucking industry.
         The target market includes all freight brokers and carriers  throughout
U.S. and Canada.  This service is available by color  Ku-band  satellite and DTN
receives a monthly fee per receiver.

                                                        13

<PAGE>

Employee Data

         At  December  31,  1996  the  company  had  approximately  840 full and
part-time employees.

(d)      Financial Information about Foreign and Domestic Operations and Export
         Sales:

         Not applicable

ITEM 2. PROPERTIES.

         The company leases its executive and  administrative  offices in Omaha,
Nebraska and has outside sales offices in Arizona,  Florida,  Illinois and Utah.
Approximately 79,000 square feet of office space is leased for these offices for
various  periods  up  through  May  2005.  On May 3,  1996,  the  Company  added
approximately  19,000 square feet of office space  located in  Urbandale,  Iowa,
through the Broadcast Partners acquisition.

         In  addition,  the company  leases three  distribution  centers for the
purpose  of  storing  and  distributing  the  electronic   equipment  needed  by
subscribers to receive the company's  services.  The main distribution center is
located in Omaha,  Nebraska and occupies  approximately  28,000 square feet. The
company  also  serves  its  Canadian   subscribers  with  a  2,500  square  foot
distribution  center located in Winnipeg,  Manitoba.  Approximately 7,000 square
feet, located in Urbandale, Iowa, was added to the Company's distribution center
by way of the 1996 acquisition. The leases related to these distribution centers
are for various periods up through December, 2003.

         The  information  set forth in  Footnote  10 "Leases" on page 32 of the
company's  1996  Annual  Report  to  Stockholders  is  incorporated   herein  by
reference.

ITEM 3. LEGAL PROCEEDINGS.

         The  company  is not a  party  to nor is its  property  subject  to any
material  pending  legal  proceedings,  other than ordinary  routine  litigation
incidental to its business.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

         No  matter  was  submitted  to a vote of the  security  holders  of the
company during the fourth quarter of the fiscal year ended December 31, 1996.

                                                        14

<PAGE>

                      EXECUTIVE OFFICERS OF THE REGISTRANT

         Information  on the  current  executive  officers  of the company is as
follows:
<TABLE>
<CAPTION>
                                                                     Year Joined
      Name                             Title                   Age   the Company
-------------------          -------------------------         ---   -----------

<S>                          <C>                                <C>      <C>
Roger R. Brodersen           Chairman of the Board and          51       1984
                              Chief Executive Officer

Greg T. Sloma                President and Chief                45       1993
                               Operating Officer

Robert S. Herman             Senior Vice President              44       1984
                             Research and Technology

Roger W. Wallace             Senior Vice President and          40       1984
                             Co-President, Ag Services

James J. Marquiss            Senior Vice President and          52       1986
                             Co-President, Ag Services

Charles R. Wood              Senior Vice President and          56       1989
                             President, Financial Services

Keith A. Cook                Vice President and                 58       1986
                             President, Auto Services

H. Wade German               Vice President,                    55       1992
                             Business Research

Brian L. Larson              Vice President, Chief Financial    36       1993
                             Officer, Secretary and Treasurer

Gordon R. Lundy              Vice President and                 58       1990
                             President, Energy Services

Charles E. McQuinn           Vice President and President,      56       1995
                                West Financial Services

James G. Payne               Vice President, Services Support   41          1990
                                and Special Projects
</TABLE>

         The executive officers serve annual terms, and are elected by the board
of directors at their annual board of directors meeting in April of each year.


                                                        15

<PAGE>

                                     PART II

ITEM 5.           MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED
                  STOCKHOLDER MATTERS.

         Information  concerning the market for the company's  common stock, the
number of stockholders of record and the company's  dividend history is on pages
33  and  34  of  the  company's  1996  Annual  Report  to  Stockholders  and  is
incorporated herein by reference.

         Over-the-counter market quotations reflect inter-dealer prices, without
retail  mark-up,  mark-down or  commissions  and may not  necessarily  represent
actual transactions.

         The company's most  restrictive  loan covenant  restricts cash dividend
payments to 27% of net income after taxes.

ITEM 6.           SELECTED FINANCIAL DATA.

         Selected  financial data for the company is on page 16 of the company's
1996 Annual Report to Stockholders and is incorporated herein by reference.

ITEM 7.           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                  CONDITION AND RESULTS OF OPERATIONS.

         Management's discussion and analysis of financial condition and results
of operations  is on pages 17 through 21 of the company's  1996 Annual Report to
Stockholders and is incorporated herein by reference.

ITEM 8.           FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

         The financial statements of the company,  together with the Independent
Auditors' Report, are on pages 23 through 32 of the company's 1996 Annual Report
to Stockholders and are incorporated herein by reference.

         Supplementary  quarterly  financial  information  is on  page 33 of the
company's  1996 Annual  Report to  Stockholders  and is  incorporated  herein by
reference.

ITEM 9.           CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
                  ACCOUNTING AND FINANCIAL DISCLOSURE.

         None

                                    PART III

ITEM 10.          DIRECTORS OF THE REGISTRANT.

         Information  concerning  the present  directors  of the company and all
persons  nominated to become  directors at the Annual Meeting of Stockholders of
the company to be held April 23, 1997,  is  contained  in the section  captioned
"Election of Directors" of the Proxy  Statement  for such annual  meeting.  Such
section is on pages 2 through 3 of such  Proxy  Statement,  and is  incorporated
herein by reference.  Information concerning the registrant's executive officers
is furnished in a separate item captioned  "Executive  Officers of the Company",
included in Part I of this Form 10-K.

                                                        16

<PAGE>

Compliance With Section 16(a) Of The Exchange Act

        Section  16(a) of the  Securities  Exchange Act of 1934, as amended (the
"Exchange  Act"),  requires  the  Company's  directors,  executive  officers and
holders  of more  than  10% of the  Company's  common  stock  to file  with  the
Securities and Exchange  Commission  initial reports of ownership and reports of
changes in ownership of common stock and other equity securities of the Company.
The Company  believes that during the fiscal year ended  December 31, 1996,  its
executive  officers,  directors  and  holders of more than 10% of the  Company's
common  stock  complied  with all Section  16(a) filing  requirements,  with the
following exception.  James J. Marquiss,  an officer,  filed one late Form 4 for
the month of November 1996 with respect to a single transaction involving shares
of the  Company's  Common  Stock sold by him during such month.  In making these
statements,  the  Company  has  relied  solely  upon a  review  of Forms 3 and 4
furnished to the Company  during its most recent fiscal year,  Forms 5 furnished
to the  Company  with  respect  to its most  recent  fiscal  year,  and  written
representations from reporting persons that no Form 5 was required.

ITEM 11.       EXECUTIVE COMPENSATION.

        Information  concerning  executive  compensation  paid by the company is
contained in the sections captioned  "Executive  Compensation" and "Compensation
Committee  Report on Executive  Compensation" on pages 6 through 11 of the Proxy
Statement for the Annual Meeting of Stockholders of the company to be held April
23, 1997, and is incorporated herein by reference.

ITEM 12.       SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
               MANAGEMENT.

        Information concerning the ownership of equity securities of the company
by certain  beneficial  owners  and  management  is  contained  in the  sections
captioned  "Ownership By Certain  Beneficial Owners" and "Election of Directors"
on  pages  2  through  6 of the  Proxy  Statement  for  the  Annual  Meeting  of
Stockholders  of the  company to be held  April 23,  1997,  and is  incorporated
herein by reference.

ITEM 13.       CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

        Information  concerning  transactions  with  management  and  others and
indebtedness of management is contained in the section  captioned  "Transactions
with  Management"  on page 14 of the Proxy  Statement for the Annual  Meeting of
Stockholders of the company to be held April 23, 1997 and is incorporated herein
by reference.

                                                      PART IV

ITEM 14.       EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS
               ON FORM 8-K.

(A)     1.  Financial Statements:

        The  Registrant's  financial  statements,  together with the Independent
Auditors' Report, are incorporated herein by reference to the 1996 Annual Report
to Stockholders,  pages 23 through 32. With the exception of the  aforementioned
information and the information incorporated by reference into Items 2,5,6,7 and
8 of this report,  the Annual Report to Stockholders for the year ended December
31, 1996, is not to be deemed filed as a part of this report.  The  supplemental
financial  information  listed  below  should  be read in  conjunction  with the
financial  statements  in the Annual Report to  Stockholders  for the year ended
December 31, 1996.

                                                        17

<PAGE>

(A)     2.     Financial Statement Schedule:                                Page

               Auditors' Report on Financial Statement Schedule               24

               Schedule
                Number                       Description of Schedule
                  II              Valuation and Qualifying Accounts           27

All other schedules are omitted because they are not applicable or not required,
or because the required  information is included in the financial  statements or
notes thereto.

(B)     Reports on Form 8-K:

        1. The  Registrant  filed a report on 8-K dated May 16, 1996  related to
the Asset  Acquisition of Broadcast  partners on May 3, 1996. The Asset Purchase
and Sale Agreement was filed as Exhibit 2.1 of this filing.

        2. The  Registrant  filed a report on 8-K/A  dated  June 20,  1996 which
amends Item 7 of the Form 8-K filed on May 16, 1996.

No reports on Form 8-K were filed by the Registrant during the fourth quarter of
the year ended December 31, 1996.

(C)            Exhibits:

               (3)       (a)      Certificate of Incorporation of Registrant.

                         (b)      By-Laws of Registrant.
               (These documents are filed as exhibits to the Registrant's
               Registration Statement on Form S-1 as filed December 4, 1987.)

               (4)       (a)      Specimen certificate representing  shares  of
                                  Common Stock, $.001 par value, of Registrant.
               (This  document  is  filed  as an  exhibit  to  the  Registrant's
               Registration Statement on Form S-1 as filed November 4, 1988.)

                         (b)      Certificate of Incorporation of Registrant.
               (This document is filed as an exhibit to the Registrant's  Regis-
               tration Statement on Form S-1 as filed December 4, 1987.)

               (10)      (a)      Lease Agreement  between  the Registrant  and
                                  Embassy Plaza Limited Partnership.
               (This document is filed as an exhibit to the Registrant's  Annual
               Report on Form 10-K for the fiscal year ended December 31, 1990.)

                         (b)      Registrant's Stock Option Plan of 1989.
               (This  document is included  as  an  exhibit to the Registrant's
               Proxy Statement for the Annual Meeting  of Shareholders held  on
               April 26, 1989.)

                         (c)      Registrant's  Non-employee  Directors   Stock
                                  Option Plan.
               (This  document  is  included  as an exhibit to the Registrant's
               Proxy Statement  for  the Annual Meeting of Shareholders held on
               April 26, 1989.)

                         (d)      Form of indemnification agreement between  the
                                  Registrant and the Officers and  Directors  of
                                  the Registrant.
               (This  document  is  filed  as an  exhibit  to  the  Registrant's
               Registration Statement on Form S-1 as filed May 22, 1989.)

                         (e)      First Amendment to Registrant's Employee Stock
                                  Option Plan of 1989 (amends Exhibit 10(b)).

                                                        18

<PAGE>

                         (f)      First Amendment to  Registrant's Non-employee
                                  Directors Stock Option Plan (amends Exhibit 10
                                  (c)).
               (These  documents  are  included as exhibits to the  Registrant's
               Proxy  Statement for the Annual Meeting of  Stockholders  held on
               April 27, 1990.)

                         (g)      Second  Amendment  to  Registrant's  Employee
                                  Stock Option Plan of 1989 (amends Exhibit 10
                                  (b)).

                         (h)      Second Amendment to Registrant's  Non-employee
                                  Directors Stock Option Plan (amends Exhibit 10
                                  (c)).
               (These  documents  are  included as exhibits to the  Registrant's
               Proxy  Statement for the Annual Meeting of  Stockholders  held on
               April 24, 1991.)

                         (i)      Loan Agreement dated October 9, 1992 among the
                                  Registrant,  First  National  Bank  of  Omaha,
                                  FirsTier Bank Lincoln and First  National Bank
                                  of Wahoo.

                         (j)      First   Amendment  to  Loan  Agreement   dated
                                  October  9, 1992 among the  Registrant,  First
                                  National  Bank  of  Omaha,  FirsTier  Bank  of
                                  Lincoln and First National Bank of Wahoo.

                         (k)      Independent   Sales  Representative  Agreement
                                  dated  March 28, 1990  between the  Registrant
                                  and Phil Huston.

                         (l)      First  Amendment dated  March 1, 1991 to Inde-
                                  pendent Sales  Representative  Agreement dated
                                  March 28,  1990  between  Registrant  and Phil
                                  Huston.

                         (m)      Amendment to Independent Sales Representative
                                  Agreement   dated  March  28,   1990   between
                                  Registrant and Phil Huston.
               (These  documents  are  included as exhibits to the  Registrant's
               Annual Report on Form 10-K as filed March 24, 1993).

                         (n)      Third Amendment to  Registrant's Stock  Option
                                  Plan of 1989 (amends Exhibit 10(b)).

                         (o)      Third  Amendment to Registrant's Non-Employee
                                  Directors  Stock Option Plan  (amends  Exhibit
                                  10(c)).

                         (p)      Fourth Amendment to Employee Stock Option Plan
                                  of 1989 (amends Exhibit 10(b)).

                         (q)      Fourth  Amendment to  Non-Employee  Directors
                                  Stock Option Plan (amends Exhibit 10(c)).
               (These  documents  are  included as exhibits to the  Registrant's
               Proxy Statement for the Annual Meeting of Stockholders to be held
               April 27, 1994).

                         (r)      Restated Loan Agreement dated November 8, 1993
                                  among the  Registrant,  First National Bank of
                                  Omaha,  FirsTier Bank Lincoln,  First National
                                  Bank  of  Wahoo,  National  Bank  of  Detroit,
                                  Norwest Bank  Nebraska,  NA and The  Boatmen's
                                  Bank of St. Louis.

                         (s)      Restated Security Agreement dated November  8,
                                  1993 among the Registrant, First National Bank
                                  of  Omaha,   FirsTier  Bank   Lincoln,   First
                                  National  Bank  of  Wahoo,  National  Bank  of
                                  Detroit,  Norwest  Bank  Nebraska,  NA and The
                                  Boatmen's Bank of St. Louis.
               (These  documents  are  included as exhibits to the  Registrant's
               Annual Report on Form 10-K as filed March 14, 1994).

                                                        19

<PAGE>
                         (t)      Restated and amended  Non-Employee  Directors
                                  Stock Option Plan.
               (This  document  is  included  as an exhibit to the  Registrant's
               Proxy Statement for the annual meeting of stockholders to be held
               April 26, 1995).

                         (u)      First Amendment to the Restated Loan Agreement
                                  dated  November 8, 1993 among the  Registrant,
                                  First  National  Bank of Omaha,  Firstier Bank
                                  Lincoln,   First   National   Bank  of  Wahoo,
                                  National   Bank  of  Detroit,   Norwest   Bank
                                  Nebraska,  NA and  The  Boatmen's  Bank of St.
                                  Louis.

                         (v)      Second   Amendment   to  the   Restated   Loan
                                  Agreement  dated  November  8, 1993  among the
                                  Registrant,  First  National  Bank  of  Omaha,
                                  Firstier Bank Lincoln,  First National Bank of
                                  Wahoo, National Bank of Detroit,  Norwest Bank
                                  Nebraska,  NA and  The  Boatmen's  Bank of St.
                                  Louis.

                         (w)      Third Amendment to the Restated Loan Agreement
                                  dated  November 8, 1993 among the  Registrant,
                                  First  National  Bank of Omaha,  Firstier Bank
                                  Lincoln,   First   National   Bank  of  Wahoo,
                                  National   Bank  of  Detroit,   Norwest   Bank
                                  Nebraska,  NA and  The  Boatmen's  Bank of St.
                                  Louis.

                         (x)      Fourth   Amendment   to  the   Restated   Loan
                                  Agreement  dated  November  8, 1993  among the
                                  Registrant,  First  National  Bank  of  Omaha,
                                  Firstier Bank Lincoln,  First National Bank of
                                  Wahoo, National Bank of Detroit,  Norwest Bank
                                  Nebraska,  NA and  The  Boatmen's  Bank of St.
                                  Louis.

                         (y)      Lease  agreement dated August 30, 1994 between
                                  Registrant   and  The   Prudential   Insurance
                                  Company of America.

                         (z)      First  Amendment  to  lease  agreement  dated
                                  August 30, 1994 among the  Registrant  and The
                                  Prudential Insurance Company of America.

                         (aa)     Senior  Subordinated  Note dated June 30, 1994
                                  between the Registrant  and Equitable  Capital
                                  Private Income and Equity Partnership II, L.P.
               (These  documents  are  included as exhibits to the  Registrant's
               Annual Report on Form 10-K as filed March 28, 1995).

                         (ab)     Fifth Amendment to the Restated Loan Agreement
                                  dated  November  8, 1993 among the  Registrant
                                  and six regional banks.

                         (ac)     Sixth Amendment to the Restated Loan Agreement
                                  dated  November  8, 1993 among the  Registrant
                                  and six regional banks.

                         (ad)     Lease  agreement dated May 2, 1995 between the
                                  Registrant   and  The   Prudential   Insurance
                                  Company of America.

                         (ae)     First Amendment to lease  agreement  dated May
                                  2,  1995  between  the   Registrant   and  The
                                  Prudential Insurance Company of America.

                         (af)     Restated  Loan  Agreement  dated June 29, 1995
                                  among the Registrant and seven regional banks.

                         (ag)     Purchase and service agreement dated July 13,
                                  1995 between the Registrant and  Knight-Ridder
                                  Financial.

                         (ah)     Adjustment to Independent Sales Representative
                                  Agreement   dated  March  28,   1990   between
                                  Registrant and Phil Houston.

                                                        20
<PAGE>

                         (ai)     Senior Subordinated Notes and Warrant Purchase
                                  Agreement   dated   June  30,   1994   between
                                  Registrant  and  Equitable   Capital   Private
                                  Income and Equity Partnership II, L.P.

                         (aj)     First Amendment to Senior Subordinated  Notes
                                  and Warrant Purchase  Agreement dated June 30,
                                  1994 between  Registrant and Equitable Capital
                                  Private Income and Equity Partnership II, L.P.
               (These  documents  are  included as exhibits to the  Registrant's
               Annual Report on Form 10-K as filed March 22, 1996).

                         (ak)     Independent  Sales  Representative  Agreement
                                  dated September 1, 1996,  between  Registrant,
                                  Huston, Inc., and Phil Huston.

                         (al)     Second Amendment to the lease agreement  dated
                                  May 2, 1995,  between the  Registrant  and The
                                  Prudential Insurance Company of America.

                         (am)     Third Amendment to the lease agreement  dated
                                  May 2, 1995,  between the  Registrant  and The
                                  Prudential Insurance Company of America.

                         (an)     Fourth  Amendment to the lease agreement dated
                                  May  2,  1995,   between  the  Registrant  and
                                  LAFP-SF,  Inc.,  successors in interest to The
                                  Prudential Insurance Company of America.

                         (ao)     Revolving  Credit   Agreement  dated  June 28,
                                  1996,  between the  Registrant  and a group of
                                  banks.

                         (ap)     First   Amendment  to  the  Revolving   Credit
                                  Agreement  dated June 28,  1996,  between  the
                                  Registrant and a group of banks.

                         (aq)     Second   Amendment  to  the  Revolving  Credit
                                  Agreement  dated June 28,  1996,  between  the
                                  Registrant and a group of banks.

                         (ar)     Term  Credit  Agreement  dated  May  3, 1996,
                                  between the Registrant and a group of banks.
                         (as)     First  Amendment to the Term Credit  Agreement
                                  dated May 3, 1996,  between the Registrant and
                                  a group of banks.

                         (at)     Second  Amendment to the Term Credit Agreement
                                  dated May 3, 1996,  between the Registrant and
                                  a group of banks.

                         (au)     Third  Amendment to the Term Credit  Agreement
                                  dated May 3, 1996,  between the Registrant and
                                  a group of banks.

                         (av)     Restated Security Agreement dated May 3, 1996,
                                  between the Registrant and a group of banks.

                         (aw)     First  Amendment  to  the  Restated   Security
                                  Agreement  dated  May  3,  1996,  between  the
                                  Registrant and a group of banks.

                         (ax)     Second  Amendment  to  the  Restated  Security
                                  Agreement  dated  May  3,  1996,  between  the
                                  Registrant and a group of banks.

                         (ay)     Third  Amendment  to  the  Restated   Security
                                  Agreement  dated  May  3,  1996,  between  the
                                  Registrant and a group of banks.

                                                        21
<PAGE>
                         (az)     Second Amendment to  the Senior  Subordinated
                                  Notes and  Warrant  Purchase  Agreement  dated
                                  June 30,  1994,  between  the  Registrant  and
                                  Equitable  Capital  Private  Income and Equity
                                  Partnership II, L.P.

               (11)      Statement re computation of income per share.
               (12)      Not applicable.
               (13)      Registrant's 1996 Annual Report to Stockholders.
                         (This document is hereby incorporated by reference.)
               (16)      None.
               (18)      None.
               (21)      None.
               (22)      None.
               (23)      Consent of Deloitte & Touche LLP.
               (24)      None.
               (27)      Financial Data Schedule.
               (28)      None.
               (99)      Proxy Statement for the Annual Meeting of Stockholders
                         of the Registrant to be held April 23, 1997.
                         (This document is hereby incorporated by reference.)

                                                        22
<PAGE>

                                   SIGNATURES

        Pursuant to the  requirements  of Section 13 or 15(d) of the  Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

Data Transmission Network Corporation,
a Delaware Corporation


By:     /s/ Roger R. Brodersen
        Roger R. Brodersen
        Chief Executive Officer

Dated March 27, 1997.

        Pursuant to the  requirements  of the  Securities  Exchange Act of 1934,
this  report has been  signed  below by the  following  persons on behalf of the
Registrant and in the capacities and on the dates indicated.
<TABLE>
<CAPTION>


<S>                                                               <C>
By:     /s/ Roger R. Brodersen                                    March 27, 1997
        ------------------------------
        Roger R. Brodersen, Chairman of the
        Board, Chief Executive Officer
        and Director


By:     /s/ Greg T. Sloma                                         March 27, 1997
        ------------------------------
        Greg T. Sloma, President and
        Chief Operating Officer
        and Director


By:     /s/ Roger W. Wallace                                      March 27, 1997
        ------------------------------
        Roger W. Wallace, Senior Vice
        President, Co-President-Ag
        Services and Director


By:     /s/ Robert S. Herman                                      March 27, 1997
        ------------------------------
        Robert S. Herman, Senior Vice
        President and Director


By:     /s/ Brian L. Larson                                       March 27, 1997
        ------------------------------
        Brian L. Larson, Vice President,
        Chief Financial Officer,
        Secretary and Treasurer


By:     /s/ David K. Karnes                                       March 27, 1997
        ------------------------------
        David K. Karnes, Director


By:     /s/ J. Michael Parks                                      March 27, 1997
        ------------------------------
        J. Michael Parks, Director


By:     /s/ Jay E. Ricks                                          March 27, 1997
        ------------------------------
        Jay E. Ricks, Director
</TABLE>

                                                        23

<PAGE>


INDEPENDENT AUDITORS' REPORT



Board of Directors and Stockholders
Data Transmission Network Corporation
Omaha, Nebraska




We  have  audited  the  financial   statements  of  Data  Transmission   Network
Corporation as of December 31, 1996 and 1995, and for each of the three years in
the period ended  December 31, 1996  and have issued our report  thereon  dated
January 31, 1997; such financial  statements and report are included in the 1996
Annual Report to  Stockholders  and are  incorporated  herein by reference.  Our
audits also  included  the  financial  statement  schedule of Data  Transmission
Network Corporation, listed in Item 14(a)2. This financial statement schedule is
the responsibility of the Company's management. Our responsibility is to express
an  opinion  based on our  audits.  In our  opinion,  such  financial  statement
schedule, when considered in relation to the basic financial statements taken as
a whole,  presents  fairly in all material  respects the  information  set forth
therein.






DELOITTE & TOUCHE LLP


Omaha, Nebraska
January 31, 1997
                                                        24

<PAGE>

                                                                     Schedule II

                      DATA TRANSMISSION NETWORK CORPORATION

                        VALUATION AND QUALIFYING ACCOUNTS

                  YEARS ENDED DECEMBER 31, 1996, 1995, AND 1994
<TABLE>
<CAPTION>

                                 Balance at               Charged to              Balance at
                                 Beginning   Charged to     Other                     End
Description                      of Period   Expenses      Accounts   Deductions   of Period
-----------------------------    ---------   ----------   ----------  ----------  ----------

Allowance for doubtful
 accounts:

<S>                              <C>         <C>             <C>       <C>         <C>
Year ended December 31, 1996:    $300,000    $672,000         -        $452,000    $520,000

Year ended December 31, 1995:    $220,000    $358,000         -        $278,000    $300,000

Year ended December 31, 1994:    $180,000    $283,000         -        $243,000    $220,000

</TABLE>
                                                        25

<PAGE>
<TABLE>
<CAPTION>

                                                                      EXHIBIT 11


DATA TRANSMISSION NETWORK CORPORATION


COMPUTATION OF INCOME(LOSS) PER SHARE




                                            Year Ended December 31,
                                       ---------------------------------------
                                        1996            1995            1994
                                       ------------  ------------   -----------
Primary

Computation of income (loss) per
 common and common equivalent share:

<S>                                    <C>           <C>            <C>
Net income (loss)                      ($  958,306)  ($  283,076)   ($1,602,738)
                                       ============  ============   ============


Average shares outstanding              10,657,893     9,908,592      9,760,200


Add shares applicable to stock
 options and warrants (1)

Add shares  applicable to stock
 options & warrants  prior to
 conversion,  using average market
 price prior to conversion(1)
                                       ------------  ------------   ------------

Total shares                            10,657,893     9,908,592      9,760,200
                                       ============  ============    ===========


Per common share:
Net income (loss)                           ($0.09)       ($0.03)         $0.16)
                                       ============  ============    ===========

-------------------------------------------------------------------------------
<FN>

(1)   Shares  applicable to warrants and stock options are  antidilutive for the
      period ended December 31, 1996, 1995 and 1994, and thus, are excluded from
      the calculation of net loss per common share.
</FN>
</TABLE>

                                       26
<PAGE>




<PAGE>
<TABLE>
<CAPTION>

                                                               EXHIBIT 11 - Pg 2
DATA TRANSMISSION NETWORK CORPORATION


COMPUTATION OF INCOME(LOSS) PER SHARE




                                                 Year Ended December 31,
                                       ----------------------------------------
                                           1996         1995            1994
                                       ------------  ------------   -----------
Fully Dilutive

Computation of income (loss) per
 common and common equivalent share:

<S>                                    <C>           <C>            <C>
Net income (loss)                      ($  958,306)  ($  283,076)   ($1,602,738)
                                       ============  ============   ============


Average shares outstanding              10,657,893     9,908,592      9,760,200

Add shares applicable to stock
 options and warrants (1)

Add shares  applicable to stock
 options & warrants  prior to
 conversion, using average market
 price prior to conversion(1)
                                       ------------  ------------   ------------

Total shares                            10,657,893     9,908,592      9,760,200
                                       ============  ============    ===========


Per common share:
Net income (loss)                           ($0.09)       ($0.03)        ($0.16)
                                       ============  ============    ===========
------------------------------------------------------------------------------
<FN>

(1)   Shares  applicable to warrants and stock options are  antidilutive for the
      period ended December 31, 1996, 1995 and 1994, and thus, are excluded from
      the calculation of net loss per common share.
</FN>
</TABLE>

                                                        27

<PAGE>


                                                                      Exhibit 23



INDEPENDENT AUDITORS' CONSENT








We consent to the incorporation by reference in Registration  Statements No. 33-
50406 and No. 33-50412 of Data Transmission  Network Corporation on Forms S-8 of
our reports dated  January 31, 1997,  appearing in this Annual Report on Form
10-K of Data  Transmission  Network  Corporation  for the year ended December
31, 1996.





DELOITTE & TOUCHE LLP


Omaha, Nebraska
January 31, 1997

                                                        28



                                    
<PAGE>

<TABLE>
<CAPTION>

                                                   EXHIBIT INDEX
Exhibit                                                                                                    Page
Number                                  Item                                                              Number
-------                                 ----                                                              ------
<S>            <C>                                                                                         <C>
 3.(a)         Certificate of Incorporation of Registrant                                                   *
 3.(b)         By-Laws of Registrant                                                                        *
 4.(a)         Specimen certificate representing shares of common stock,                                    *
               $.001 par value, of Registrant
 4.(b)         Certificate of Incorporation of Registrant                                                   *
10.(a)         Lease Agreement between the Registrant and Embassy Plaza                                     *
               Limited Partnership
10.(b)         Registrant's Stock Option Plan of 1989                                                       *
10.(c)         Registrant's Non-Employee Directors Stock Option Plan                                        *
10.(d)         Form of indemnification agreement between the Registrant                                     *
               and the Officers and Directors of the Registrant
10.(e)         First Amendment to Registrant's Stock Option Plan of 1989                                    *
10.(f)         First Amendment to Registrant's Non-Employee Directors                                       *
               Stock Option Plan
10.(g)         Second Amendment to Registrant's Stock Option Plan of 1989                                   *
10.(h)         Second Amendment to Registrant's Non-Employee Directors                                      *
               Stock Option Plan
10.(i)         Loan  Agreement  dated  October 9, 1992                                                      *
10.(j)         First  Amendment  to Loan Agreement  dated  October  9,  1992                                *
10.(k)         Independent  Sales  Representative Agreement with Phil                                       *
               Huston dated March 28, 1990
10.(l)         First Amendment dated March 1, 1991 to Independent Sales                                     *
               Representative Agreement with Phil Huston
10.(m)         Amendment to Independent Sales Representative Agreement                                      *
               with Phil Huston
10.(n)         Third Amendment to Registrant's Stock Option Plan of 1989                                    *
10.(o)         Third Amendment to Registrant's Non-Employee Directors                                       *
               Stock Option Plan
10.(p)         Fourth Amendment to Registrant's Stock Option Plan of 1989                                   *
10.(q)         Fourth Amendment to Registrant's Non-Employee Directors                                      *
               Stock Option Plan
10.(r)         Restated Loan Agreement dated November 8, 1993                                               *
10.(s)         Restated  Security Agreement dated November 8, 1993                                          *
10.(t)         Restated and amended  Non-Employee  Directors Stock Option Plan                              *
10.(u)         First Amendment to Restated Loan Agreement dated November 8, 1993                            *
10.(v)         Second Amendment to Restated Loan Agreement dated November 8, 1993                           *
10.(w)         Third Amendment to Restated Loan Agreement dated November 8, 1993                            *
10.(x)         Fourth Amendment to Restated Loan Agreement dated November 8, 1993                           *
10.(y)         Lease agreement with The Prudential Insurance Company of America                             *
               dated August 30, 1994
10.(z)         First amendment to Lease Agreement dated August 30, 1994                                     *
10.(aa)        Senior Subordinated Note between Registrant and The Prudentiaal Insurance                    *
               Company of America dated June 30, 1994
10.(ab)        Fifth Amendment to the Restated Loan Agreement dated November 8, 1993                        *
10.(ac)        Sixth Amendment to the Restated Loan Agreement dated November 8, 1993                        *
10.(ad)        Lease agreement with The Prudential Insuance Company of America                              *
               dated May 2, 1995
</TABLE>
                                       29
<PAGE>
<TABLE>
<S>            <C>                                                                                         <C>
10.(ae)        First Amendment to Lease Agreeement dated May 2, 1995                                        *
10.(af)        Restated Loan Agreement dated June 29, 1995                                                  *
10.(ag)        Purchase Agreement with Knight-Ridder Financial dated July 13, 1995                          *
10.(ah)        Adjustment to Indenpendent Sales Representative Agreement dated March 28, 1995               *
               with Phil Huston
10.(ai)        Senior Subordinated Notes and Warrant Purchase Agreement dated June 30, 1994                 *
10.(aj)        First Amendment to Senior Subordinated Notes and Warrant Purchase Agreement dated            *
               June 30, 1994
10.(ak)        Independent Sales Representative Agreement dated September 1, 1996                           1
10.(al)        Second Amendment to Lease Agreement dated May 2, 1995                                       13
10.(am)        Third Amendment to Lease Agreement dated May 2, 1995                                        19
10.(an)        Fourth Amendment to Lease Agreement dated May 2, 1995                                       21
10.(ao)        Revolving Credit Agreement dated June 28, 1996                                              25
10.(ap)        First Amendment to the Revolving Credit Agreement dated June 28, 1996                       76
10.(aq)        Second Amendment to the Revolving Credit Agreement dated June 28, 1996                      89
10.(ar)        Term Credit Agreement dated May 3, 1996                                                    105
10.(as)        First Amendement to the Term Credit Agreement dated May 3, 1996                            153
10.(at)        Second Amendment to the Term Credit Agreement dated May 3, 1996                            177
10.(au)        Third Amendment to the Term Credit Agreement dated May 3, 1996                             190
10.(av)        Restated Security Agreement dated May 3, 1996                                              202
10.(aw)        First Amendment to the Restated Security Agreement dated May 3, 1996                       220
10.(ax)        Second Amendment to the Restated Security Agreement dated May 3, 1996                      224
10.(ay)        Third Amendment to the Restated Security Agreement dated May 3, 1996                       226
10.(az)        Second Amendment to the Senior Subordinated Notes and Warranct Purchase Agreement dated    230
               June 30, 1994
11.            Statement re computation of income per share                                               233
13.            Registrant's 1995 Annual Report to Stockholders                                            235
23.            Consent of Deloitte & Touche  LLP                                                          279
27.            Financial Data Schedule for year ended 12/31/96                                            280
99.            Proxy Statement for the Annual Meeting of Stockholders                                     281
               of the Registrant to be held April 23, 1997
<FN>

*   - These  documents have been  incorporated by reference as indicated in Item
    14(a) (3).
</FN>
</TABLE>