SECURITIES AND EXCHANGE COMMISSION
                           WASHINGTON, DC 20549

                               FORM 10-KSB
(MARK ONE)

[X]  Annual  report  pursuant  to Section 13 or  15(d)  of  the  Securities
     Exchange Act of 1934 [Fee Required]
     For the fiscal year ended    September 30, 1994   OR

[ ]  Transition  report pursuant to Section 13 or 15(d) of  the  Securities
     Exchange Act of 1934 [No Fee Required]
     For the transition period from _________ to _________

                    Commission File Number   0-14204

                         DATA NATIONAL CORPORATION
          ______________________________________________________
          (Exact name of registrant as specified in its charter)

             Colorado                                84-0958983
________________________________         __________________________________   
(State  or other jurisdiction of         (IRS  Employer Identification No.)
incorporation or organization)

    11365 West, I-70 Frontage Road-North
         Wheat Ridge, Colorado                             80033                
  ________________________________________              __________
  (Address of principal executive offices)              (Zip Code)

Registrant's telephone number, including area code:   (303) 431-1933

Securities registered pursuant to Section 12(b) of the Act: NONE

Securities registered pursuant to Section 12(g) of the Act: NONE

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 (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject  to
such filing requirements for the past 90 days.  Yes    No  X .

Indicate by check mark if disclosure of delinquent filers pursuant to  Item
405  of  Regulation S-B 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-KSB or any
amendment to this Form 10-KSB.[   ]
Issuer's  revenues  for  the  fiscal year ended  September  30,  1994  were
$2,369,435.
As of September 30, 1994, the aggregate market value of the common stock of
the  Registrant held by non-affiliates was undeterminable at that time  due
to a lack of any consistent trading market for the Registrant's shares.

As of September 30, 1994, there were 327,478,340 shares of the Registrant's
$.0001 par value common stock outstanding.
<PAGE>

INDEX
                                                                  PAGE   
PART 1 

  ITEM 1.  DISCRIPTION OF BUSINESS
            a) Business Developement                                2        
            b) Business of Issuer                                  3-6
  ITEM 2.  DISCRIPTION OF PROPERTY                                  6
  ITEM 3.  LEGAL PROCEEDINGS                                        6
  ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS      6

PART 2

  ITEM 5.  MARKET FOR COMPANY'S COMMON EQUITY AND RELATED
           STOCKHOLDER MATTERS                                      
            a) Market Information                                   7
            b) Holders                                              7
            c) Dividends                                            7
  ITEM 6.  MANAGMENT'S DISCUSSION AND ANALYSIS OR PLAN OF
           OPERATION                                               7-9
  ITEM 7.  FINANCIAL STATEMENTS                                   
            a) Letter to the Stockholders and Board of Directors    10
            b) Consolidated Balance Sheets                          11
            c) Consolidated Income Statements                       12
            d) Statement of Changes in Stockholders Equity          13
            e) Statement of Cash Flows                              14
            f) Notes to Consolidated Financial Statements         15-20 
  ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON            
           ACOUNTING AND FINANCIAL DISCLOSURE                       21  

PART 3

  ITEM 9.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
           PERSONS                                                 21-23
  ITEM 10. EXECUTIVE COMPENSATION                                  23-25
  ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
           MANAGMENT                                                 25
  ITEM 12. CERTAIN RELATIONSHIPS AND TRANSACTIONS                  25-26
  
SIGNATURES                                                           27

<PAGE>
    

                               PART 1

Item 1.  Description of Business
________________________________
(a)  Business Development.

      Data  National Corporation (the Company) was formed under  the
laws  of the State of Colorado in November 1982.  On March 23, 1987,
the  Company  acquired  97.8%  of the  outstanding  shares  of  Data
National Inc. (DNI), which resulted in a complete change in  control
of  the Company.  In June 1986, DNI acquired, through an exchange of
its  common  stock, 100% of the outstanding common stock of  Service
Business  Systems,  Inc. (SBS) and National COM-LINK  Systems,  Inc.
(COM-LINK).   The  Company  acts as  a  holding  company  for  these
subsidiaries and coordinates their activities.

      The  Company had substantial operating losses for  the  period
from  inception through the year ended September 30, 1990.   At  one
time during 1990, the Company and its subsidiaries were indebted  to
the  Internal Revenue Service and the Colorado Department of Revenue
for  over  $190,000 in past due withholding taxes and its  continued
operation was in substantial doubt.

      In  1990, there were changes in the management of the Company.
In October 1990, Richard Simms became the Chief Executive Officer of
the  Company and the previous president and CEO was dismissed.   The
Dillon  family, major stockholders and a member of which is a  Board
member,  loaned the Company funds to enable the Company to  pay  its
obligations to the Internal Revenue Service.

      The Company filed Form 10-K for the period ended September 30,
1990,  but did not include audited financial statements due  to  the
cost of an audit and the working capital deficit accumulated by  the
Company.  As of September 30, 1990, the current liabilities  of  the
Company exceeded the current assets by $342,470.

      The Company lost a major customer in March 1991 that accounted
for  22%  of its revenue, and experienced other extensive  operating
difficulties,  resulting in much of the staff being  dismissed.   In
1991,  the  Company  discontinued filing  with  the  Securities  and
Exchange  Commission (SEC) because of its lack of staff and pressing
operational   concerns  resulting  from  its  precarious   financial
situation.

      The Company has been profitable each year since September  30,
1990.   The profits have been fairly small but consistent,  and  the
Board of Directors decided in 1994 to resume filings with the SEC.

      SBS  is  the  only  active subsidiary, although  during  1994,
COM-LINK received royalties from licensing a trademarked name.
<PAGE>
(b)  Business of Issuer.

     Principal Products and Services

     The Company derives revenue from products and services provided
by  its subsidiary, SBS.  SBS markets and sells the Autotrac system
to  the  service  stations  of  major  oil  companies,  auto  repair
facilities  that  specialize in tire sales,  quick-lube  facilities,
tune-up  facilities,  and  independent repair  facilities  that  are
members  of national groups (subscribers).  The Autotrac system  is
designed  to  increase  repeat business to subscribers  through  the
mailing  of  postcards to customers thanking them for the  business,
reminding them that it is time for regular servicing (such as a tune-
up or oil change), or reminding customers that certain parts need to
be replaced for safety reasons (e.g., brakes, tires, or shocks).  To
utilize the services provided by SBS, participating subscribers send
SBS  copies of their repair orders that include information about  a
specific customer, their vehicle, and the services performed by  the
repair  facility.  SBS extracts certain information  and  enters  it
into their computerized database.  Each subscriber then selects when
and  what  types  of  cards are to be sent, and reminder  cards  are
produced  and  mailed directly to the subscriber's  customers.   The
subscriber also selects the messages to be printed on the cards, the
promotions  and/or specials to be offered, etc.  The subscriber  can
update or change the messages, as desired.

      As  an  integral  part  of the reminder system,  SBS  provides
subscribers  with  monthly management reports detailing  information
concerning their customers served and services performed, a customer
zip   code   analysis,  new  versus  repeat  customers,  and   other
information  based  on the data collected by  SBS  from  the  repair
orders submitted by the subscriber.

      SBS  also  markets and sells products that utilize information
regarding  the subscriber and their customer databse.  The  products
are as follows:

      1.   Greeting Cards.  Using the facility's database, SBS mails
holiday greeting cards to customers of the subscriber.

       2.    New  Residence.   SBS  mails  promotional  material  to
individuals who have moved into the subscriber's market area.

      3.   Cashier Handout.  SBS produces point-of-sale coupons that
can be used to increase the repair business of the subscriber.

       4.    Customer  Surveys.   SBS  sends  survey  cards  to  the
subscriber's customers and reports the results of the survey to  the
subscriber.

      The  key  to  the services provided by SBS is  being  able  to
utilize the existing customer database of the subscriber.

      SBS  also derives revenue from providing creative services  to
the facilities.
<PAGE>
     Employees

      SBS  employs  all  of the employees of  the  Company.   As  of
September  30, 1994, SBS had 21 full-time employees working  in  the
offices   of  the  Company.   In  addition,  SBS  has  approximately
20  employees for coding and inputting the information received from
customers  into the SBS computer system, some of whom are part-time.
These employees are home based.

     Status of Products

      The Autotrac system requires customer information to be input
into  the  database  maintained by SBS.  The information  is  either
input  by  the  SBS  home-based  computer  operators  or  downloaded
directly  from  the  subscriber's  computer.    The  information  is
processed  by the computer, and the subscriber's database for  their
customers  is  updated.   Notices are  printed  and  mailed  to  the
customers  in  the database.  The  Autotrac system  uses  a  Novell
network that includes PC equipment.  The system also includes  three
production printers.  In addition, SBS has numerous PC work stations
for  use  by  the  account  executives  and  data  entry  personnel.
Management of SBS believes this equipment will permit SBS to  handle
all  of  its  present and foreseeable data processing needs  through
September 30, 1995.

     Sources and Availability of Raw Materials

      The Company has experienced no significant difficulty with the
delivery  and  availability  of  supplies  that  it  sells  to   its
customers, and no difficulty is forecast for the immediate future.

     Patents, Licenses, Franchises, Concessions, Etc.

      The Company has no patent protection for its existing products
that  the  Company  considers to be proprietary  items.   Except  in
unusual  circumstances, which do not apply to the Company,  computer
software  is generally not patentable, but is protected by copyright
and  trade  secret  laws, as well as contractual  and  nondisclosure
provisions of the Company's licensing agreements.

     Seasonality

      SBS  produces holiday greeting cards in November and December.
For  the  year  ended September 30, 1994, SBS received  revenues  of
approximately   $229,000 as a result of the  holiday  greeting  card
program.   There  is  no  other seasonal  factor  to  the  Company's
business.
<PAGE>
     Dependence Upon Small Number of Customers

      The  business  of  SBS  is very dependent  upon  a  few  major
customers; the loss of any one or more of these customers could have
a  materially adverse effect on the business and operations  of  the
Company.   During  the fiscal year ended September 30,  1994,  major
customers represented approximately the following proportion of  the
SBS gross revenues:

               Company A - 41%
               Company B - 12.2%

     Competition

     SBS has approximately 20 competitors that compete directly with
them   in  the  automotive  aftermarket  business.   Most   of   the
competitors are small companies like SBS with none of them having  a
market  share of more than 20%.  However, the largest competitor  is
Moore/BCS, a division of Moore Business Forms in Toronto, Canada,  a
billion dollar conglomerate.  Mailmark, Inc., based in Canoga  Park,
California,  is  a direct marketing/data processing  company,  which
provides a specialized service reminder/customer contact program for
the   automotive  industry.   Other  companies  like  Reynolds   and
Reynolds, Brandt Contact Services, Computer Care, and InteliMail are
known competitors.

      A  competitive analysis suggests that there are many potential
entrants in this industry primarily because technology today  allows
just  about anyone with a computer to enter the business.  Suppliers
to  SBS, such as printing companies and direct mail companies  could
become  competitors if they choose to expand their own  channels  of
distribution.  Buyers could also decide that they have  all  of  the
information necessary to do their own marketing and evaluations.

     However, SBS believes that its marketing strategy permits it to
effectively compete with these companies.  With economies  of  scale
and  a  national  account strategy, SBS believes  that  the  service
provided is more cost effective.

     Research and Development Expenditures

      Although  no costs were classified as research and development
during  each  of  the  past two fiscal years,  the  Company  expends
considerable  effort for software improvements on an  annual  basis.
Such   effort   is   a   necessary  element  for   maintaining   the
competitiveness of its software modules, and such costs are recorded
as normal operating expenses.

     Governmental Regulation and Compliance

      There  are no governmental regulations pertinent to operations
that  would  differ from those applicable to any small manufacturer.
There  is no need for government approval of the Company's products.
<PAGE>
Any  costs or effects of compliance with environmental laws  are  de
minimis.


Item 2.  Description of Property

---------------------------------
      The Company occupies office space under two 3-year leases that
expire  in  April 1997 and require an aggregate monthly  payment  of
$2,800.


Item 3.  Legal Proceedings
__________________________
      In  October 1993, a corporation filed suit against the Company
and others in the United States District Court for Northern District
of  Texas, alleging copyright infringement, unfair competition,  and
misappropriation of trade secrets.  Basically, it has  been  alleged
that  certain  computer programs formerly marketed  by  the  Company
infringed on the plaintiff's copyright, through the use of  software
developed  by  another  defendant who had formerly  worked  for  the
plaintiff.   The plaintiff requested actual and punitive damages  in
excess of $5,000,000.

Item 4.  Submission of Matters to a Vote of Security Holders
____________________________________________________________
     No matter was submitted during the fourth quarter of the fiscal
year ended September 30, 1994 to a vote of security holders, through
the solicitation of proxies or otherwise.
<PAGE>
                              PART II

Item  5.  Market for Company's Common Equity and Related Stockholder
Matters
_____________________________________________________________________
(a)  Market Information.

     The Company's common stock has not been traded on the over-the-
counter  market.  Because of the lack of any viable  trading  market
for  the  Company's  securities, no accurate market  information  is
currently available.

(b)  Holders.

      The  number of holders of record of the Company's  $.0001  par
value common stock at September 30, 1994, was approximately 1,337.

(c)  Dividends.

      Holders of common stock are entitled to receive such dividends
as  may  be  declared  by  the Company's  Board  of  Directors.   No
dividends have been paid with respect to the Company's common  stock
and  no  dividends  are anticipated to be paid  in  the  foreseeable
future.


Item 6.   Management's Discussion and Analysis or Plan of Operation
___________________________________________________________________
Management's  Discussion  and Analysis of  Financial  Condition  and
Results of Operations.

     June 30, 1994 Compared to June 30, 1993

      From  June  30,  1993  to June 30, 1994, Registrant's  working
capital  increased by $43,487 (from $88,844 to $132,331).   Although
cash decreased by $116,010, trade receivables increased by $131,434,
a  result  of  an unusually large balance due from Sunoco  in  1994,
which  was collected shortly after year-end.  Repayment of the  note
due  to  a  major shareholder and board member and his  father  (the
"Dillon  note") aggregated $49,218, and repayment of capital  leases
amounted  to  $16,552.  Additionally, $33,236 was  used  to  acquire
additional property and equipment, almost all of which consisted  of
computers.   Management intends to continue to upgrade  its  systems
and  incur  similar capital expenditures in so doing,  but  was  not
obligated by contract for any capital expenditures at September  30,
1994.
<PAGE>
     The Company agreed to settle an old liability with the State of
Colorado  Department  of  Revenue  in  April  1995,  which  required
approximately  $37,600,  and  is included  in  accrued  expenses  at
September 30, 1994.

      The  Company is dependent upon the financing provided  by  the
Dillon note for its continued existence, and management is presently
negotiating for a multi-year extension of the note prior to its  due
date of October 1, 1996.

     As disclosed in the financial statements, the Company was named
as  a  defendant,  along with other parties, in a lawsuit  filed  in
October  1993  in which the plaintiff requested actual and  punitive
damages  in  excess of $5,000,000.  On November 6, 1995,  the  court
granted the Company's motion for summary judgement on the statute of
limitations  and  dismissed the case with prejudice.   However,  the
plaintiff has moved to reconsider, and the time for appeal  has  not
expired.  Accordingly, there is still the possibility of an  adverse
verdict.  The Company believes that favorable operating results will
continue and provide adequate liquidity for the near-term future.

Results of Operations

     1994 Compared to 1993

      For  the  year  ended September 30, 1994, the  nature  of  the
Company's   operations  was  unchanged  and  focused  on   providing
marketing   services  to  service  stations  and  similar  entities,
nationally.   One major customer accounted for 41% of net  sales  in
1994,  as compared to 37.8% in 1993, and loss of this customer would
have  a  materially adverse effect, including possible cessation  of
operations.   Another customer accounted for 12.2% of net  sales  in
1994, as compared to 10.1% in 1993.

      Sales were practically unchanged in 1994 as compared to  1993,
reflecting the general stability of the customer base, including the
major customers discussed previously.  Cost of sales increased  from
46.2%  of  sales  to  50.2%  because of an  increase  in  production
salaries  and  wages  of approximately $72,000,  due  to  additional
"coding and keying" as well as rate increases and more detailed cost
allocations  to  this  category based on time allocations  and  more
detailed  record  keeping than had been done in the  past.   Postage
costs,  which  is  also a significant component of  cost  of  sales,
increased by roughly $16,000.

     Selling and marketing expense increased by $35,105, or 9.1%, in
1994.    Salaries  of  account  executives  increased  by   $31,300,
reflecting  additional staff, which accounted for substantially  all
of  this increase.  General and administrative expense decreased  by
$167,069,  or 23%, in 1994.  Included in these costs in 1993  was  a
settlement  for  litigation of $48,000.  The  Company  also  accrued
$36,000  in  1993 as an estimate to reimburse its new president  for
certain   moving   expenses.    Approximately   $10,000   in    1993
administrative related expenses to COM-LINK were eliminated in  1994
when   COM-LINK  ceased  operations.   Additionally,   in   general,
management  attempted  to reduce administrative  costs  to  increase
working capital and began allocating certain costs to cost of sales,
which had not been done previously.
<PAGE>
       Interest   expense  was  stable  in  1994  and  is  primarily
(approximately  96% in 1994) related to the Dillon  note.   This  is
expected  to  continue to be a significant cost in  the  foreseeable
future, representing about 4% of net sales in both 1994 and 1993.
<PAGE>

Item 7.  Financial Statements
_____________________________  
  
  
  To the Stockholders and Board of Directors
  Data National Corporation
  
  
  I  have  audited  the consolidated balance  sheets  of  Data
  National  Corporation and subsidiaries as of  September  30,
  1994  and  September 30, 1993, and the related  consolidated
  statements  of income, changes in stockholders' equity,  and
  cash  flows  for  the  years then  ended.   These  financial
  statements   are   the  responsibility  of   the   Company's
  management.  My responsibility is to express an  opinion  on
  these financial statements based on my audits.
  
  I  conducted my audits in accordance with generally accepted
  auditing standards.  Those standards require that I plan and
  perform  the  audit  to  obtain reasonable  assurance  about
  whether  the  financial  statements  are  free  of  material
  misstatement.  An audit includes examining, on a test basis,
  evidence  supporting  the amounts  and  disclosures  in  the
  financial statements.  An audit also includes assessing  the
  accounting principles used and significant estimates made by
  management,  as  well  as evaluating the  overall  financial
  statement presentation.  I believe that my audits provide  a
  reasonable basis for my opinion.
  
  In  my  opinion, the financial statements referred to  above
  present  fairly, in all material respects, the  consolidated
  financial   position  of  Data  National   Corporation   and
  subsidiaries  as  of September 30, 1994 and  1993,  and  the
  consolidated   results   of  their  operations   and   their
  consolidated  cash  flows  for  the  years  then  ended,  in
  conformity with generally accepted accounting principles.
  
  
  
  
  
  
  
  
  Littleton, Colorado
  January 20, 1995
  (December 28, 1995 as to Note 6)
<PAGE>
                   DATA NATIONAL CORPORATION

                  Consolidated Balance Sheets

                  September 30, 1994 and 1993
<TABLE>
<CAPTION>

                                                         1994          1993
                                                       _________     ________
                             Assets
<S>                                                     <C>          <C>
Current Assets:
  Cash and equivalents.................................. $ 84,245    $200,255
  Receivables:
    Trade  less allowance for bad debts of $5,077..........45,221     110,743
     in 1994 and 1993, respectively
    Other................................................. 15,134      18,178
  Inventory, at cost...................................... 41,568      45,787
  Prepaid expenses......................................... 7,843       2,585
                                                          _______     _______
      Total current assets............................... 394,011     377,548

Property and equipment, at cost.......................... 368,106     314,111
Less:  Accumulated depreciation......................... (286,856)   (253,924)
                                                         _________   _________
                                                           81,250      60,187
                                                         _________   _________
Other assets............................................... 2,888         150
                                                         _________    _________ 
                                                         $478,149    $437,885
                                                         _________   _________

             Liabilities and Stockholders' Deficit

Current Liabilities:
  Deferred revenue...................................... $127,977    $121,376
  Accounts payable.......................................  64,475      56,837
  Accrued expenses........................................ 60,967      99,966
  Current portion - capital leases......................... 8,261      10,525
                                                          _______     _______
      Total current liabilities.......................... 261,680     288,704
                                                          _______     _______
Note payable-related party............................... 868,208      17,426
Capital leases, net of current portion.................... 10,526       4,055

Stockholders' Deficit
  Common stock $.0001 par value, authorized 600,000,000
   shares; 327,478,340 shares issued and outstanding....... 32,747     32,747
  Accumulated deficit.................................... (695,012)  (805,047)
                                                          _________  _________
                                                          (662,265)  (772,300)
                                                          _________  _________
                                                          $478,149   $437,885
                                                          ________   ________
                                                          ________   ________
</TABLE>
See accompanying notes to financial statements.
<PAGE>
                   DATA NATIONAL CORPORATION

                 Consolidated Income Statements

            Years Ended September 30, 1994 and 1993
<TABLE>
<CAPTION>

                                                        1994          1993
                                                      ________      ________
<S>                                               <C>            <C>
Net sales.......................................... $2,369,435     $2,374,610
Cost of sales....................................... 1,188,457      1,097,223
                                                    __________     __________
    Gross profit.................................... 1,180,978      1,277,387

Selling and administrative expense.................... 980,586      1,112,550
                                                    ___________    __________ 
    Operating income.................................. 200,392        164,837

Other income (expense):
  Interest and other income............................. 4,927         (2,829)
  Interest expense, primarily related party........... (95,284)       (94,213)
                                                      _________      _________
                                                       (90,357)       (97,040)
                                                      _________      _________
    Net income....................................... $110,035        $67,795
                                                      _________      _________
                                                      _________      _________

Net income per share.................................     -              -


Weighted  average shares outstanding.............. 327,478,340    327,478,340
                                                   ___________    ___________
                                                   ___________    ___________













</TABLE>
See accompanying notes to financial statements.
<PAGE>
                   DATA NATIONAL CORPORATION

          Statement of Changes in Stockholders' Equity

            Years Ended September 30, 1994 and 1993
<TABLE>
<CAPTION>

                                                                 Accumulated
                                  Shares           Amount          Deficit
                                 ________         ________       ___________
<S>                             <C>                <C>          <C>
Balance, October 1, 1992....... 327,478,340        $32,747        $(872,842)

Net income.....................     -                 -              67,795

Balance, September 30, 1993.... 327,478,340         32,747         (805,047)

Net income.....................     -                 -             110,035

Balance, September 30, 1994.... 327,478,340        $32,747        $(695,012)
































</TABLE>
See accompanying notes to financial statements.
<PAGE>
                   DATA NATIONAL CORPORATION

                    Statements of Cash Flows

            Years Ended September 30, 1994 and 1993
<TABLE>
<CAPTION>

                                                             1994      1993
                                                           ________  ________
<S>                                                     <C>         <C>
Cash flow from (used in) operating activities
  Net  income............................................. $110,035    67,795
  Adjustments to reconcile net income to cash flow
  from operating activities:
   Depreciation............................................. 32,932    28,610
    Changes in assets and liabilities:
       (Increase) decrease in receivables................. (131,434)   38,015
       (Increase) decrease in inventory...................... 4,219   (15,787)
        (Increase) decrease in prepaid expenses............. (5,258)   (2,585)
       (Increase) decrease in other assets.................. (2,738)    4,850
        Increase (decrease) in accounts payable.............. 7,638    16,456
        Increase (decrease) in accrued expenses............ (38,999)   36,268
        Increase in deferred revenue......................... 6,601       890
                                                           _________  ________
       Total adjustments.................................. (127,039)  106,717
                                                           _________  ________ 
        Cash flow from (used in) operating activities...... (17,004)  174,512

Cash flow (used in) investing activities:
  Purchases of property and equipment...................... (33,236)     (854)

Cash flow from (used in) financing activities:
  Borrowings - related party...............................     -         707
  Repayment of related party note.......................... (49,218)       -
  Repayment of capital leases.............................. (16,552)  (10,085)
                                                            ________  ________
  Cash flow (used in) financing activities................. (65,770)   (9,378)

   Increase (decrease) in cash and equivalents............ (116,010)  164,280

  Cash and equivalents, beginning of year.................. 200,255    35,975
                                                            _______  ________
  Cash and equivalents, end of year........................ $84,245  $200,255
                                                            _______  ________
                                                            _______  ________
  Supplemental information:
    Income taxes paid......................................    -         -
    Interest paid.......................................... $93,329   $92,802
                                                            _______   ________
                                                            _______   ________




</TABLE>
See accompanying notes to financial statements.
<PAGE>
                   DATA NATIONAL CORPORATION

           Notes to Consolidated Financial Statements

                  September 30, 1994 and 1993


(1)  Organization, Operations, and Significant Accounting Policies

     Organization and Operations
     ___________________________

     Data  National Corporation (DNC) was incorporated under  the
     laws of the State of Colorado on November 5, 1982.

     On  March  23,  1987,  and  in a  subsequent  exchange,  DNC
     acquired  97.8%  of  the outstanding common  stock  of  Data
     National,  Inc. (DNI) in exchange for 168,688,240 shares  of
     DNC's common stock, plus warrants to certain shareholders of
     DNI.  The combination of the two companies was accounted for
     as  a recapitalization, with DNI considered as the acquiring
     company (although DNC itself is the surviving corporation).

     On June 2, 1986, DNI acquired 100% of the outstanding common
     stock  of  Service Business Systems (SBS) and National  Com-
     Link Systems, Inc. (Com-Link) by exchanging 1,050,000 shares
     of its common stock.  The combination of these companies was
     accounted for as a pooling of interests.

     SBS  provides  marketing and database  services  for  repair
     facilities, and is the only operating subsidiary at present.

     Principles of Consolidation
     ___________________________

     The  consolidated financial statements include the  accounts
     of  DNC, DNI, SBS, and Com-Link (collectively, the Company).
     All  material  intercompany accounts  and  transactions  are
     eliminated in consolidation.

     Deferred Revenue
     ________________

     Prepayments  for  products are recorded as deferred  revenue
     until the product is delivered.

     Revenue and Credit Risk
     _______________________

     Revenue  is  recognized  upon  production  and  mailing   of
     products.   Sales are made by extending credit to  customers
     on  a  short-term basis, using informal credit  evaluations,
     and  are  on  an  uncollateralized basis.  See  Note  5  for
     disclosure  of  major customers for further  information  on
     credit risk.

     Inventory
     _________

     Inventory consists of unprinted card stock, and is presented
     at cost on a first-in-first-out basis.
<PAGE>

     Property and Equipment
     ______________________

     Property  and  equipment  are  stated  at  cost,   and   are
     depreciated  over useful lines of from  5  to  7  years.   A
     summary of property and equipment at September 30, 1994  and
     1993 follows:
<TABLE>
<CAPTION>

                                                     1994        1993
                                                  _________   _________ 
         <S>                                     <C>         <C> 
         Furniture and fixtures                   $  11,984    $ 11,984
         Office equipment                            58,587      38,623
         Production equipment                       287,477     253,446
         Vehicles                                    10,058      10,058
                                                   ________    ________
                                                   $368,106    $314,111
                                                   ________    ________
                                                   ________    ________
</TABLE>
     Cash Equivalents
     ________________

     The  Company considers investments with an original maturity
     of three months or less to be cash equivalents.

     Net Earnings or (Loss) Per Share of Common Stock
     ________________________________________________
     Net earnings (loss) per share has been computed based on
     the weighted average number of common  shares  outstanding
     during the year.

     Income taxes
     ____________

     The   Company  adopted  Statement  of  Financial  Accounting
     Standards  109  in  the  year  ended  September  30,   1994.
     However,  because of the large net operating loss available,
     the  effect of this accounting change is nil because of  the
     uncertainty  regarding  its  realization.   Accordingly,  an
     allowance   that  offsets  the  estimated  tax  benefit   of
     $286,000 has been provided.

     The  amount of the net operating loss carry forward and  its
     expiration is as follows:
<TABLE>
<CAPTION>
    
     Expiration     Amount
     __________    _______
      <C>     <C>
       1999        130,000
       2000        208,000
       2001         87,000
       2002         11,000
       2003        501,000
       2004        432,000
       2005        399,000
                __________
                $1,768,000
                __________
                __________
<PAGE>
     This  amount may be further limited by separate return  year
     limitations  for  the  years 1984 to 1987,  which  aggregate
     $437,000   and   would  reduce  the  carry   forwards   with
     expirations from 1999 to 2002.

(2)  Related Party Transactions
     __________________________

     The  Company refinanced certain existing indebtedness to two
     individuals  (father  and son), considered  collectively  in
     the note, in October 1991.  One of the two individuals is  a
     member  of the Board of Directors and owns 36,763,324 shares
     of  the Company's common stock.  The principal amount of the
     note  is  $737,000, with interest at 10%, due on  or  before
     October  1,  1996.  Additionally, the Company owed  $182,441
     in  accrued interest from the prior indebtedness.  The  note
     and  this  accrued interest are secured by inventory;  trade
     receivables;   the  right  to  the  name,   "Data   National
     Corporation," and related trademarks, licensing  agreements,
     patents,  and similar rights; bank accounts; and  the  stock
     of   DNI  and  all  of  its  subsidiary  corporations.   The
     extension or refinancing of this note is significant to  the
     Company's continued operation.

     In  conjunction  with the refinancing, the  two  individuals
     also received warrants to purchase 64,000,000 shares of  the
     common  stock  of Data National Corporation.   The  warrants
     are  exercisable  on  or before September  30,  1996,  at  a
     purchase price of $.0005 per share.

     The  two individuals have entered into an agreement with the
     (then)  president (now chief financial officer) whereby,  in
     consideration for him becoming president, they sold  to  him
     certain  shares  of  stock, agreed to pay  him  10%  of  any
     principal  paid  to  them (i.e., the  $737,000  referred  to
     above),   agreed  to  pay  him  50%  of  interest   payments
     collected  by  them, and assigned the warrants  to  purchase
     64,000,000  shares of common stock to him.  There  have  not
     been  any (original) principal repayments to date.  Interest
     expense amounted to $91,358, and $91,702, in 1994 and  1993,
     respectively.

     A  member  of  the  Board of Directors received  $3,000  per
     month  in  1994  and  1993  for consulting  services.   This
     director  at  one  time  was indebted  to  the  Company  for
     $28,870,  but this amount was not collected and was  written
     off  prior  to 1993.  A company controlled by this  director
     owed   the   Company  $2,924  at  September  30,  1994,   as
     reimbursement for health insurance premiums.

     The  son of the chief financial officer leases equipment  to
     the   Company   under  three  capital  leases,   which   are
     summarized in Note 3.

<PAGE>
(3)  Capital Leases
     ______________

     The  Company leases various equipment under capital  leases.
     Following  is  a summary of minimum lease payments  required
     under capital leases as of September 30, 1994:

</TABLE>
<TABLE>
<CAPTION>

     <C>         <C>       
     1995         $12,720
     1996           7,732
     1997             695
                  _______
                   21,147
     Less:        (2,360)
     interest     _______
                  $18,787
                  _______ 
                  _______

   Assets held under capital leases are summarized as follows:

</TABLE>
<TABLE>
<CAPTION>
                                                           1994        1993
                                                         ________    ________ 
    <S>                                                 <C>         <C>  
    Assets at cost...................................... $65,394     $44,636
         Less:  accumulated depreciation................ (27,015)    (17,062)
                                                         ________    ________
                                                         $38,379     $27,574
                                                         ________    ________
                                                         ________    ________

        A summary of capital leases follows:
                                                           1994         1993
                                                          ________    ________
    Monthly payment of $444, interest at 18.5%,
    due  in  March  1995................................. $ 2,523     $ 6,925
    Monthly payment of $251, interest at 14.1%,
    due  in  April  1995................................... 1,533       4,311
    Monthly payment of $174 (final payment of $591) to
    related party, interest at 14%, due in November 1996....4,175         -
    Monthly payment of $233 (final payment of $1,186) to
    related party, interest at 14%, due in August 1996..... 5,239         -
    Monthly payment of $285 (final payment of $240) to
    related party, interest at 14%, due in April 1996...... 5,319         -
</TABLE>
<PAGE>
  Assets held under capital leases (continued):
<TABLE>
<CAPTION>
                                                          1994        1993
                                                       _________    ________
       <S>                                             <C>          <C>
       Monthly payment of $328, interest at 20.5%,
       retired  in   March 1994......................      -           2,077
       Monthly payment of $325, interest at 16.7%,
       retired  in November 1993.....................      -             333
       Monthly payment of $333, interest at 19.4%,
       retired  in December 1993.....................      -             935

                                                         18,787       14,581

            Less: current portion                       ( 8,261)     (8,230)
                                                        ________     _______ 
                                                         $10,526     $ 6,351
                                                        ________     _______
                                                        ________     _______
</TABLE>
       Amortization of capital leases is included in depreciation expense.


(4)  Commitments
     ___________

     Office Lease
     ____________

     The  Company  occupies office space under two 3-year  leases
     that  expire  in April 1997 and require monthly payments  of
     $2,800.  Following is a summary of future rental commitments
     under this lease:
<TABLE>
     <C>          <C>
     1995         $33,600
     1996         $33,600
     1997         $19,600
</TABLE>
     Rent and related charges amounted to $34,900 and $34,129  in
     1994 and 1993, respectively.

     Incentive Plans
     _______________

     In  July  1994,  the  Company adopted an Employee  Incentive
     Plan, which provides for a contribution to the Plan of 5% of
     quarterly  sales  in excess of $480,000.   For  the  quarter
     ended September 30, 1994 (the first eligible quarter),  this
     contribution amounted to $11,422 and has been accrued in the
     accompanying balance sheet.

     Also   in  July  1994,  the  Company  adopted  an  Executive
     Compensation   Incentive  Plan,   which   provides   for   a
     contribution to the Plan of 20% of quarterly net  income  in
     excess  of $75,000.  Through September 30, 1994, there  were
     no contributions due.
<PAGE>

     Profit-Sharing Plan
     ___________________

     In  August 1992, the Company adopted a 401-K Profit  Sharing
     Plan,  which  covers all employees with  one  quarter  of  a
     year's service who are at least 21 years old.  A participant
     may  defer  a maximum of 15% of compensation to a  statutory
     limit, and the Company matches the first 5% of the deferral.
     In   1994,   such  contributions  amounted  to  $1,300   and
     approximately $1,000 in 1993.


(5)  Major Customers
     _______________

     The following customers each accounted for more than 10%  of
     sales in 1994 and 1993:
<TABLE>
<CAPTION>
                       % of Sales
                      ____________
     <S>           <C>       <C>
     Customer       1994      1993
     ________       ____      ____    
       A             41       37.8
       B            12.2      10.1

</TABLE>
(6)  Litigation
     __________

     In  October  1993,  a  corporation filed  suit  against  the
     Company  and others in the United States District Court  for
     Northern District of Texas, alleging copyright infringement,
     unfair  competition, and misappropriation of trade  secrets.
     Basically,  it  has  been  alleged  that  certain   computer
     programs formerly marketed by the Company infringed  on  the
     plaintiff's copyright, through the use of software developed
     by  another  defendant  who  had  formerly  worked  for  the
     plaintiff.   The  plaintiff requested  actual  and  punitive
     damages in excess of $5,000,000.

     On  November 6, 1995, the Court granted the Company's motion
     for  summary  judgement on the statute  of  limitations  and
     dismissed  the case with prejudice.  However, the  plaintiff
     has  moved  to reconsider, and the time for appeal  has  not
     expired.  Accordingly, there is still the possibility of  an
     adverse verdict.

     In  1994, the Company and its former president (who  was  at
     that  time president) verbally agreed that the Company would
     pay  him  up  to  $36,000 in shares of the Company's  common
     stock  as  reimbursement for certain  moving  expenses  upon
     proper  documentation of the expenses.  The stock was  never
     issued,  and in February 1995, the former president informed
     the  Company that he did not want the stock as there was  no
     market  for  it.  In June 1995, the Company offered  to  pay
     this  amount  in  cash  in return for certain  releases  and
     covenants  and  documentation of the claimed expenses.   The
     former president refused to sign the releases and covenants,
     and  in  December  1995  sued the Company  for  $36,000  and
     $18,000 in damages.  Management accrued $36,000 at September
     30,  1993 to recognize the estimated liability, and believes
     that  settlement  of the claim will not be material  to  the
     accompanying financial statements.

<PAGE>

Item 8.   Changes  in  and  Disagreements  with  Accountants   on
          Accounting and Financial Disclosure
_________________________________________________________________
            
      In  June  1994,  the  Company  reported  a  change  in  its
independent  accountant.   The firm of Miller  and  McCollom  had
performed the last audit of the Company's financial statements as
of  September 30, 1989, and for the year then ended.  There  were
no  reportable disagreements with that firm, and its  report  for
1989 was qualified regarding the Company's ability to continue as
a going concern.

      The Company engaged the firm of William G. Lajoie, P.C., to
audit its financial statements for the years ending September 30,
1993 and 1994.

     These actions were approved by the Company's Board of Directors.

                            PART III

Item  9.   Directors, Executive Officers, Promoters  and  Control
Persons; Compliance With Section 16(a) of the Exchange Act.
__________________________________________________________________

The  Directors and Officers of the Company at September 30, 1994,
are as follows:

        Name              Age                  Position
   ___________________   ____    ____________________________________________  
   William R. Jones       60     Chairman of the Board
   Richard Simms          44     Chief Financial Officer, Director, Treasurer
   Ray E. Dillon III      41     Director
   Thomas R. Young III    47     Director
   William  Eyerdom       54     Chief Executive Officer, Director

      There  is  no  family  relationship between  any  director,
executive  officer, or person nominated or chosen by the  Company
to  become  a director or executive officer.  All directors  will
hold office until the next annual meeting of shareholders.  There
are no arrangements or understandings between any director of the
Company  or  any other person or persons pursuant to  which  such
director was or is to be selected as a director.

      The  Board of Directors held two meetings during  the  past
fiscal  year, and all of the members currently on the Board  were
present at all of the meetings.  There were no meetings of any of
the  committees of the Board of Directors during the past  fiscal
year.

     All officers of the Company hold office at the discretion of
the Board of Directors.  Except as set forth herein, there is  no
arrangement  or  understanding between any such  officer  or  any
other person pursuant to which such officer is to be selected  as
an  officer  of the Company.  There is no person  who  is  not  a
designated  officer  who  is expected  to  make  any  significant
contribution to the business of the Company.

<PAGE>

      Directors  are paid a fee of $200 per meeting attended  and
are reimbursed for any out-of-pocket expenses incurred.

      The following sets forth biographical information as to the
business experience of each officer and director of the Company.

      William R. Jones was Chairman of the Board, President,  and
Chief  Executive Officer of the Company from March 23, 1987,  and
of   DNI   from  its  inception.   On  September  30,  1989,   he
relinquished the title and duties as President of the Company and
DNI.  He was President and Chairman of the Board of National COM-
LINK  and  Service Business Systems since inception.   These  two
companies became subsidiaries of DNI in June 1986.  Mr. Jones  is
also  President  and a principal shareholder of Warranty  Service
Systems,  Inc.,  which he co-founded in 1984.   Warranty  Service
Systems, Inc., is engaged in providing third-party administration
for  warranty  programs for Shell, Amoco, Goodyear,  and  Sunoco.
Mr. Jones devotes part of his time to the business of the Company
and its subsidiaries.

      Richard  Simms  is  the Vice President of  Finance  of  the
Company.   He  was President and Chief Executive Officer  of  the
Company  from October 1990 to July 1993.  He has been a  Director
of  the  Company  since  March 23, 1987, and  of  DNI  since  its
inception.   Since  1986, he has practiced as a certified  public
accountant and an independent financial advisor.  Mr. Simms is  a
CPA  registered in Colorado.  Mr. Simms devotes part of his  time
to the business of the Company and its subsidiaries.

      Ray  E. Dillon III has been a Director of the Company since
March  23,  1987,  and of DNI since its inception.   He  is  Vice
President  of  Dillon  Investments, a  private  trust  management
company  for the Dillon family, where he has been employed  since
1985.  Mr. Dillon only devotes such time to the activities of the
Company as is necessary

      Thomas  R.  Young III was Secretary and a Director  of  the
Company since March 23, 1987, and of DNI since its inception.  On
September  30,  1989,  he relinquished the  title  of  Secretary.
Mr.  Young is in the casualty insurance business.  Prior to that,
he  was President of Omni Bank of University Hills, N.A., Denver,
Colorado.  Mr. Young devotes only such time to the activities  of
the Company as is necessary.

      William  Eyerdom was appointed President of the Company  in
July 1993.  Prior to working for the Company, he was employed  by
Sun  Oil Company as a Franchise Development Manager.  Mr. Eyerdom
devotes all of his time to the activities of the Company.

<PAGE>

     Compliance With Section 16(a) of the Exchange Act
     _________________________________________________

      Section  16(a) of the Securities Exchange Act of 1934  does
not  require any of the Company's officers, directors or  persons
who  own more than ten percent of the Company's equity securities
to file any reports of ownership or changes in ownership with the
Securities and Exchange Commission because the Company  does  not
currently  have any class of securities registered under  Section
12 of that Act.


Item 10.  Executive Compensation
________________________________
      The  following  table sets forth the compensation  paid  or
accrued to the Chief Executive Officer and each executive officer
of  the Company and its subsidiaries who received compensation in
excess  of  $100,000 during the fiscal years ended September  30,
1994 and 1993:


                            Summary Compensation
                            ____________________

               Annual Compensation1           Long-Term Compensation
               ____________________     ______________________________
  
                                         Awards                   Payouts
                                      _____________            _______________
<TABLE>
<CAPTION>
                                  Other
Name                             Annual  Restricted                  All Other
and                              Compen-   Stock               LTIP   Compen-
Principal         Salary  Bonus  sation   Award(s)  Options/  Payouts  sation
Position    Year   ($)    ($)     ($)            ($) SARs(#)    ($)      ($)
______________________________________________________________________________
<S>        <C>   <C>      <C>     <C>       <C>        <C>      <C>   <C>
William    1993  16,000   -0-      --        2          --      -0-    $ 900 
Eyerdom, CEO                                                               (3)

William    1994  85,000   -0-      --        __         --      -0-    $6,156
Eyerdom, CEO                                                               (3) 

Richard    1994  35,000   -0-      --        __         --      -0-       --
Simms, CEO
</TABLE>
________________________________

(1)  There were no executive officers whose compensation exceeded
     $100,000 in either 1993 or 1994.
(2)  Mr.   Eyerdom  was  offered  certain  restricted  stock   as
     reimbursement  for moving expenses incurred  in  1993.   Mr.
     Eyerdom refused the stock, and was not awarded the stock  in
     1993 or 1994.
(3)  Represents   the   value   of  a   leased   automobile   and
     reimbursement of gas and certain maintenance charges.

<PAGE>
      The  following table shows certain information with respect
to  stock  options  granted to the Company's  executive  officers
during the fiscal year ended 1994:


              Option/SAR Grants in Last Fiscal Year

                         Individual Grants
<TABLE>
<CAPTION>
      _____________________________________________________________
<S>              <C>            <C>            <C>                <C> 
                 Number of      % of Total
                 Securities     Options/SARs
                 Underlying     Granted to
                 Options/SARs   Employees in    Exercise or Base   Expiration
Name             Granted (#)    Fiscal  Year       Price($/Sh)        Date
______________________________________________________________________________
William Eyerdom      -0-           N/A                N/A             N/A

Richard Simms        -0-           N/A                N/A             N/A

</TABLE>
The  following table sets forth certain information with  respect
to  option  exercises during the fiscal year ended September  30,
1994  by  the executive officers of the Company and the value  of
each such officer's unexercised options at September 30, 1995.

                    Aggregated Option/SAR Exercises in
        Last Fiscal Year and Fiscal Year - End Option/SAR Values
    __________________________________________________________________
<TABLE>
<CAPTION>
                                                         Value of Unexercised
          Shares        Number of Securities Underlying      in-the-Money
         Acquired          Unexercised Options/SARs          Options/SARs
            on      Value    at Fiscal Year-End(#)       at Fiscal Year-End($)
         Exercise  Realized
Name       (#)       ($)   Exercisable Unexercisable Exercisable Unexercisable 
______________________________________________________________________________
<S>      <C>       <C>      <C>            <C>         <C>            <C>    
William   None      None      -0-           0           $  -0-         0
Eyerdom

Richard   None      None      -0-           0           $  -0-         0
Simms
 
</TABLE>

                                   Estimated Future Payouts under Non-Stock
                                              Price-Based Plans
                                   _________________________________________
<TABLE>
<CAPTION>
                             Performance
             Number of         or Other
            Shares, Units    Period Until
             or Other        Maturation or    Threshold    Target      Maximum
Name         Rights(#)         Payout          ($ or #)   ($ or #)    ($ or #)
<S>             <C>             <C>              <C>         <C>         <C>
                -0-             -0-              N/A         N/A         N/A

                -0-             -0-              N/A         N/A         N/A
</TABLE>
<PAGE>

Directors' Fees

      The Company authorized the payment of fees in the amount of
$200 to any Directors for attendance at Director's meetings.


Item  11.   Security Ownership of Certain Beneficial  Owners  and
Management
__________________________________________________________________

       The   following  table  sets  forth  information   as   of
December  31,  1994, with respect to the beneficial ownership  of
the  Company's $0.0001 par value common stock by (a) each  person
known by the Company to be beneficial owner of 5% or more of  the
Company's  outstanding Common stock, (b)  the  directors  of  the
Company, and (c) the directors and officers of the company  as  a
group:

<TABLE>
<CAPTION>

          Name and Address       Nature of Beneficial     Percent
         of Beneficial Owner        Ownership             of Class
     ________________________    ____________________     ________                              
     <S>                           <C>                     <C>  
     William R. Jones                66,671,240             20.36
     4891 Independence Street,
     Suite 270
     Wheat Ridge, CO 80033

     Thomas R. Young                  5,900,400               1.8
     2856 South Saint Paul
     Denver, CO 80210

     Richard Simms                  115,723,701(1)            29.56
     20 Dutch Creek Drive
     Littleton, CO 80123

     Ray E. Dillon III               71,520,283(2)            21.84
     1 Compound Drive
     Hutchinson, KS 67502

     William Eyerdom                           (3)                 (3)
     2557 South Xenon Way                                     
     Lakewood, CO 80228                                       
</TABLE>                                                              
   All  directors and executive      259,815,624               66.37
   officers as a group
________________________

(1)  Includes   currently   exercisable  warrants   to   purchase
     64,000,000  shares, see Item 11 - Certain Relationships  and
     Related  Transactions.  Includes shares owned by  the  Simms
     Family Partnership, controlled by Mr. Simms.
(2)  Includes  30,506,959 shares owned by other  members  of  the
     Dillon family.
(3)  Mr.  Eyerdom was awarded shares for certain moving  expenses
     and refused the issuance of such shares.
(4)  There  are  no  additional officers  or  directors  who  own
     shares of the Company's common stock.


Item 12.  Certain Relationships and Related Transactions
________________________________________________________

      No  director and executive officer of the Company,  nominee
for  election as a director, security holder who is known to  the
Company  to  own of record or beneficially more than  5%  of  any
class  of the Company's voting securities, or any member  of  the
<PAGE>
immediate family of any such persons, has had any transaction  or
series  of  similar transactions, during the Company's  last  two
fiscal  years,  or  had  any currently proposed  transaction,  or
series of similar transactions, to which the Company was or is to
be  a  party, in which the amount involved exceeds $60,000 or  in
which any of such persons had or will have any direct or indirect
material interest, except as follows:

      The Company refinanced certain existing indebtedness to two
individuals (father and son), considered collectively in the note
(the "Dillon note"), in October 1991.  One of the two individuals
is  a  member  of  the Board of Directors and owns  and  controls
71,520,283  shares of the Company's common stock.  The  principal
amount of the note is $737,000, with interest at 10%, due  on  or
before  October 1, 1996.  Additionally, the Company owed $182,441
in  accrued interest from the prior indebtedness.  The  note  and
this   accrued   interest  are  secured   by   inventory;   trade
receivables;  the right to the name, "Data National Corporation,"
and   related  trademarks,  licensing  agreements,  patents,  and
similar  rights; bank accounts; and the stock of DNI and  all  of
its  subsidiary  corporations.  The extension or  refinancing  of
this note is significant to the Company's continued operation.

      In  conjunction  with the refinancing, the two  individuals
also  received  warrants  to purchase 64,000,000  shares  of  the
common  stock  of  Data National Corporation.  The  warrants  are
exercisable on or before September 30, 1996, at a purchase  price
of $.0005 per share.

      The two individuals have entered into an agreement with the
(then)  president  (now  chief  financial  officer)  whereby,  in
consideration  for  him  becoming president,  they  sold  to  him
certain  shares of stock, agreed to pay him 10% of any  principal
paid  to  them (i.e., the $737,000 referred to above), agreed  to
pay  him 50% of interest payments collected by them, and assigned
the  warrants  to purchase 64,000,000 shares of common  stock  to
him.  There have not been any (original) principal repayments  to
date.  Interest expense amounted to $91,358, and $91,702, in 1994
and 1993, respectively.
<PAGE>
                           SIGNATURES

     Pursuant to the requirements of Section 13 of the Securities
Exchange Act of 1934, the Company has duly caused this report  to
be  signed  on  its  behalf  by the undersigned,  thereunto  duly
authorized.

                              DATA NATIONAL CORPORATION
                              Registrant


Date:   January 12,1996            By:/s/ Richard Simms
                                   Richard Simms, Chief Financial
                                   Officer, Treasurer and Director




      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.




Date:  January 12, 1996            By:/s/ Richard Simms
                                   Richard Simms, Chief Financial
                                   Officer, Director and Treasurer



                                   Ray E. Dillon III, Chairman of the
                                   Board and Director



Date:  January 12, 1996            By:/s/ Donald Warriner
                                   Donald Warriner, Chief Executive
                                   Officer and Director




[ARTICLE] 5
<TABLE>
<S>                             <C>
[PERIOD-TYPE]                   12-MOS
[FISCAL-YEAR-END]                          SEP-30-1994
[PERIOD-END]                               SEP-30-1994
[CASH]                                          84,245
[SECURITIES]                                         0
[RECEIVABLES]                                  250,298
[ALLOWANCES]                                     5,077
[INVENTORY]                                     41,568
[CURRENT-ASSETS]                               394,011
[PP&E]                                         368,106
[DEPRECIATION]                                 286,856
[TOTAL-ASSETS]                                 478,149
[CURRENT-LIABILITIES]                          261,680
[BONDS]                                              0
[COMMON]                                   327,478,340
[PREFERRED-MANDATORY]                                0
[PREFERRED]                                          0
[OTHER-SE]                                           0
[TOTAL-LIABILITY-AND-EQUITY]                   478,145
[SALES]                                      2,369,435
[TOTAL-REVENUES]                             2,369,435
[CGS]                                        1,188,454
[TOTAL-COSTS]                                2,169,043
[OTHER-EXPENSES]                                     0
[LOSS-PROVISION]                                     0
[INTEREST-EXPENSE]                            (90,357)
[INCOME-PRETAX]                                110,035
[INCOME-TAX]                                         0
[INCOME-CONTINUING]                                  0
[DISCONTINUED]                                       0
[EXTRAORDINARY]                                      0
[CHANGES]                                            0
[NET-INCOME]                                   110,035
[EPS-PRIMARY]                                        0
[EPS-DILUTED]                                        0
</TABLE>