<PAGE>



                    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, 1995   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,  1995  were
$2,369,096.
As of September 30, 1995, 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, 1995, 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                                   6
            b) Holders                                              6
            c) Dividends                                            6
  ITEM 6.  MANAGMENT'S DISCUSSION AND ANALYSIS OR PLAN OF
           OPERATION                                               7-8
  ITEM 7.  FINANCIAL STATEMENTS                                   
            a) Letter to the Stockholders and Board of Directors    9
            b) Consolidated Balance Sheets                          10
            c) Consolidated Income Statements                       11
            d) Statement of Changes in Stockholders Equity          12
            e) Statement of Cash Flows                              13
            f) Notes to Consolidated Financial Statements         14-20 
  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                                  24-25
  ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
           MANAGMENT                                                 26
  ITEM 12. CERTAIN RELATIONSHIPS AND TRANSACTIONS                  26-27
  
SIGNATURES                                                           28

<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  through  an  exchange  of  shares  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.

   SBS  is  the  only active entity, although during  1994,  COM-LINK
received royalties from licensing a trademarked name.

(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 such 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  at  the
repair facility.  SBS extracts certain information and enters it into
a  computer  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  customers served and services performed, a  customer  zip
code  analysis of new versus repeat customers, and other  information
based  on  the data collected by SBS from the repair orders submitted
by the subscriber.

<PAGE>

   SBS  also  markets  and  sells products that  utilize  information
regarding  the  customer of the facility that  uses  Autotrac.   The
products are as follows:

   1.    Greeting Cards.  Using the subscriber'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  facility'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
subscriber.

   The  Company is expanding their customer base in fiscal 1996,  and
has  contracted  with a commonly controlled auto  dealerships  and  a
mortgage loan origination company to provide marketing services.  The
Company will focus its efforts on expansion of new markets and  their
existing customer base.

  Employees

    SBS  employs  all  of  the  employees  of  the  Company.   As  of
September  30,  1995, SBS had 21 full-time employees working  in  the
office   of   the   Company.   In  addition,  SBS  has  approximately
20  employees for coding and inputting the information received  from
repair facilities 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 database for the customer 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,
supplemented  by additions in fiscal 1996 estimated at $75,000,  will
permit  SBS  to  handle  all  of  its present  and  foreseeable  data
processing needs through September 30, 1996.

<PAGE>

  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,  1995,  SBS  received  revenues   of
approximately   $228,000  as a result of the  holiday  greeting  card
program.   There  is  no  other  seasonal  factor  to  the  Company's
business.

  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,  1995,  major
customers represented approximately the following proportion  of  the
SBS gross revenues:

            Company A - 40.1%
            Company B - 18.1%
            Company C - 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

<PAGE>

to  SBS,  such as printing companies and direct mail companies  could
become  competitors if they choose to expand their  own  channels  of
distribution.  Repair facilities 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.   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.

   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.

<PAGE>

  In December 1995, the Company's former president (president in 1994
and  part  of 1995) sued the Company for $36,000 relating to  alleged
unreimbursed  moving expenses and $18,000 in damages.  In  1994,  the
Company  and  the former president verbally agreed the Company  would
pay  him up to $36,000 in shares of the company's common stock  as  a
reimbursement  for  certain  moving expenses.   The  Company  was  to
determine  the  number  of  shares and the former  president  was  to
provide  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 the
stock.   In  June of 1995, the Company offered to pay this amount  in
cash  in return for certain releases regarding the departure  of  the
former president.  The Company was also under the impression that the
former president had executed various covenants as a condition of his
employment.   The  Company  determined the  covenants  had  not  been
executed  and demanded their execution as a condition of the payment.
The  former  president refused to sign the release and the covenants,
and  in  December 1995 sued the Company for $36,000  and  $18,000  in
damages.   Management has 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.


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, 1995 to a vote of security holders, through
the solicitation of proxies or otherwise.



                              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, 1995, was approximately 1,332.

(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.

<PAGE>

Item 6. Management's Discussion and Analysis or Plan of Operation
_________________________________________________________________

Management's  Discussion  and Analysis  of  Financial  Condition  and
Results of Operations

  September 30, 1995 as Compared to September 30, 1994

   The Company's working capital increased from $132,331 at September
30,  1994,  to  $173,347  at  September 30,  1995.   Cash  flow  from
operations amounted to $80,389 in 1995, as a result of net income  of
$87,487.   Included  in  the  net cash flow  from  operations  was  a
settlement  payment with the State of Colorado Department of  Revenue
of  $37,600, which was substantially offset by a non-cash charge  for
depreciation  of  $32,280.  $63,035 was used  to  acquire  additional
equipment, primarily computers, and $11,102 was used to repay capital
leases.

   The  Company  is not obligated by contract for additional  capital
expenditures at September 30, 1995, but may be expected  to  continue
to upgrade its systems, given the nature of its business.  Management
estimates capital expenditures of up to $75,000 in fiscal 1996.

   The  Company remains dependent upon the Dillon note for financing,
and  almost certainly would cease operations if the note were  deemed
in  default  and called for payment or not refinanced.  The  maturity
date is presently extended to October 1, 1997.

   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

  1995 Compared to 1994

   For the year ended September 30, 1995, the nature of the Company's
operations was unchanged and focused on providing marketing  services
to  repair  facilities and similar entities, nationally.   One  major
customer accounted for 40.1% of net sales in 1995, as compared to 41%
in  1994,  and loss of this customer would have a materially  adverse

<PAGE>

effect, including possible cessation of operations.  Another customer
accounted  for 18.1% of net sales in 1995, as compared  to  12.2%  in
1994.   One other group of customers, affiliated with a national  oil
company,  has been aggregated and constituted 12.2% of net  sales  in
1995  but  did  not  exceed  10% in 1994.   However,  this  group  of
customers is not subject to the same contractual relationship as  the
other two major customers discussed above and presumably subjects the
Company to less risk through potential loss of the contract.

  Sales were practically unchanged in 1995 as compared to 1994.  Cost
of  sales  increased  from  51% of sales in  1994  to  53%  in  1995,
primarily  because  production salaries  increased  by  approximately
$45,000 as new positions were created.  The other components of  cost
of sales (postage and card inventory) remained stable as a percentage
of sales (22.1% in 1995 and 1994 for postage, and 6.8% versus 7.1% in
1995 and 1994, respectively, for materials).

   Selling and marketing expenses decreased by $55,682, or 13.2%,  in
1995.   The  decrease  resulted primarily  from  the  elimination  of
certain  consulting  fees, approximately $18,000  to  an  independent
party  and  $12,000  to  a member of the Board  of  Directors.   Such
services  are  now  provided by Company staff.   Other  changes  that
resulted in cost reduction included not attending trade shows of  two
major   customers,  which  occur  biannually,  and   termination   of
employment of the Company president in July, which reduced travel and
related expenses.

   General and administrative expenses increased by $36,694, or 6.8%,
in  1995.  Executive salaries increased approximately $14,200 because
of  a  raise  for  the  former president and employment  of  a  Chief
Operating  Officer  in  July  1995.   Administrative  salaries   also
increased  by approximately $10,500, a result of raises for  existing
employees and employment of additional clerical staff.  There were no
other significant changes in individual expense accounts.

   Interest expense is substantially all related to the Dillon  note,
as  described above, and is expected to remain a significant cost  in
the near future.
 
<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,
    1995  and  September 30, 1994, 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  audits  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, 1995 and  1994,  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 10, 1996

<PAGE>

                     DATA NATIONAL CORPORATION
  
                    Consolidated Balance Sheets
  
                    September 30, 1995 and 1994
<TABLE>
<CAPTION>
  
  
                                                        1995          1994
                                                      ________      ________
                               Assets
  <S>                                                <C>           <C> 
  Current Assets:
    Cash and equivalents............................. $ 91,359      $ 84,245
    Receivables:
      Trade  less allowance for bad debts of $5,077... 244,932       245,221
       in 1995 and 1994, respectively
      Other............................................. 5,989        15,134
    Inventory, at cost................................. 47,692        41,568
    Prepaid expenses.................................... 4,633         7,843
                                                       _______       _______  
        Total current assets.......................... 394,605       394,011
  
  Property and equipment, at cost..................... 431,141       368,106
  Less:  Accumulated depreciation.................... (319,137)     (286,856)
                                                      _________     _________
                                                       112,004        81,250
                                                      _________     _________
  Other assets.......................................... 9,696         2,888
                                                      _________     _________
                                                      $516,305      $478,149
                                                      _________     _________
                                                      _________     _________
               Liabilities and Stockholders' Deficit
  
  Current Liabilities:
    Deferred revenue................................. $132,478      $127,977
    Accounts payable................................... 61,778        64,475
    Accrued expenses................................... 20,070        60,967
    Current portion - capital leases.................... 6,932         8,261
                                                      ________      ________   
        Total current liabilities..................... 221,258       261,680
                                                      ________      ________  
  Note payable-related party.......................... 869,072       868,208
  Capital leases, net of current portion.................. 753        10,526
  
  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.............................. (607,525)     (695,012)
                                                      _________     _________
                                                      (574,778)     (662,265)
                                                      _________     _________ 
                                                      $516,305      $478,149
                                                      _________     _________
                                                      _________     _________
</TABLE>
  See accompanying notes to financial statements.
<PAGE>
                     DATA NATIONAL CORPORATION
  
                   Consolidated Income Statements
  
              Years Ended September 30, 1995 and 1994
<TABLE>
<CAPTION>
  
                                                    1995          1994
                                                  ________       _______
  <S>                                           <C>            <C>  
  Net sales..................................... $2,369,096     $2,369,435
  Cost of sales.................................. 1,256,193      1,216,457
                                                 __________     __________ 
      Gross profit............................... 1,112,903      1,152,978
  
  Selling and marketing expense.................... 366,290        421,972
  General and administrative expense............... 575,808        530,614
                                                 __________      _________  
      Operating income............................. 170,805        200,392
  
  Other income (expense):
    Interest and other income........................ 5,824          4,927
    Interest expense, primarily related party...... (88,793)       (95,284)
    Other expense..................................... (349)           -
                                                 ___________      _________
                                                    (83,318)       (90,357)
                                                 ___________      _________
      Net income.................................. $ 87,487       $110,035
                                                 ___________      _________
                                                 ___________      _________

  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
  
     Consolidated Statement of Changes in Stockholders' Equity
  
              Years Ended September 30, 1995 and 1994
<TABLE>
<CAPTION>
  
  
                                                                  Accumulated
                                     Shares         Amount          Deficit
  <S>                            <C>             <C>            <C>
  Balance, October 1, 1993....... 327,478,340     $32,747        $(805,047)
  
  Net income.....................      -             -             110,035
  
  Balance, September 30, 1994.... 327,478,340      32,747         (695,012)
  
  Net income.....................      -             -              87,487
  
  Balance, September 30, 1995.... 327,478,340     $32,747        $(607,525)
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
</TABLE>  
  See accompanying notes to financial statements.
<PAGE>
                     DATA NATIONAL CORPORATION
  
               Consolidated Statements of Cash Flows
  
              Years Ended September 30, 1995 and 1994
<TABLE>
<CAPTION>  
  
                                                          1995        1994
                                                        ________    ________
  <S>                                                   <C>        <C>
  Cash flow from (used in) operating activities
    Net  income......................................... $87,487    $110,035
    Adjustments to reconcile net income to cash flow
    from operating activities:
     Depreciation........................................ 32,280      32,932
      Changes in assets and liabilities:
         (Increase) decrease in receivables............... 9,434    (131,434)
         (Increase) decrease in inventory................ (6,124)      4,219
          (Increase) decrease in prepaid expenses......... 3,210      (5,258)
         (Increase) decrease in other assets............. (6,808)     (2,738)
          Increase (decrease) in accounts payable........ (2,697)      7,638
          Increase (decrease) in accrued expenses....... (40,896)    (38,999)
         Increase in deferred revenue..................... 4,501       6,601
                                                         ________   _________
         Total adjustments............................... (7,100)   (127,039)
                                                         ________   _________

          Cash flow from (used in) operating activities.. 80,389     (17,004)
  
  Cash flow (used in) investing activities:
    Purchases of property and equipment................. (63,035)    (33,236)
  
  Cash flow from (used in) financing activities:
    Borrowings - related party.............................. 864         -
    Repayment of related party note.........................  -      (49,218)
    Repayment of capital leases......................... (11,102)    (16,552)
                                                        _________   _________
    Cash flow (used in) financing activities............ (10,238)    (65,770)
  
     Increase (decrease) in cash and equivalents.......... 7,114    (116,010)
    Cash and equivalents, beginning of year.............. 84,245     200,255
                                                        ________    _________
    Cash and equivalents, end of year................... $91,359     $84,245
                                                        ________    _________
                                                        ________    _________

    Supplemental information:
      Income taxes paid.................................     -          -
      Interest paid..................................... $87,929     $93,329
  
  
  
  
  
  
  </TABLE>
  See accompanying notes to financial statements.
<PAGE>
                   DATA NATIONAL CORPORATION

           Notes to Consolidated Financial Statements

                  September 30, 1995 and 1994


(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.

     The  Company  derives  revenue from  products  and  services
     provided by its subsidiary, SBS, which is the only operating
     subsidiary.  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.    The
     Autotrac system is designed to increase repeat business  to
     such   facilities  through  the  mailing  of  postcards   to
     customers  thanking them for their 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).

     As  an  integral part of the system, SBS provides the repair
     facilities   with   monthly  management  reports   detailing
     information   concerning  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 facility.

     SBS also markets and sells products that utilize information
     regarding the customer and/or auto repair facility that uses
     Autotrac.  The products are as follows:

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

          2.    SBS mails promotional material to individuals who
          have moved into the facility's market.

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

          4.   SBS sends survey cards to the facility's customers
          and reports the results of the survey to the facility.
<PAGE>
     SBS also derives revenue from providing creative services to
the facilities.


     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.

     Revenue and Credit Risk

     Revenue  is  recognized  upon  production  and  shipping  of
     products.

     Sales   are  substantially  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  carried
     at cost determined on a first-in-first-out basis.

     Property and Equipment

     Property  and  equipment  are  stated  at  cost,   and   are
     depreciated over useful lines of from 5 to 7 years primarily
     using  the straight-line method.  A summary of property  and
     equipment at September 30, 1995 and 1994 follows:

<TABLE>
<CAPTION>
                                             1995          1994
                                           ________      ________   
         <S>                              <C>           <C>
         Furniture  and  fixtures          $ 13,584      $ 11,984
         Office    equipment                 66,535        58,587
         Production     equipment           340,964       287,477
         Vehicles                            10,058        10,058
                                           ________      ________  
                                           $431,141      $368,106

     Cash Equivalents

     The  Company considers investments with an original maturity
     of three months or less to be cash equivalents.
<PAGE>
     Net Earnings Per Share of Common Stock

     Net  earnings  per  share has been  computed  based  on  the
     weighted average number of common shares outstanding  during
     the  year.   Warrants will be considered when the  Company's
     stock  is  actively traded and the market price exceeds  the
     exercise price.

     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 was nil because of the
     uncertainty  regarding  its  realization.   Accordingly,  an
     allowance   that  offsets  the  estimated  tax  benefit   of
     $260,000  and  $286,000  at  December  31,  1995  and  1994,
     respectively, has been provided.

     The  amount of the net operating loss carry forward and  its
     expiration is as follows:

</TABLE>
<TABLE>
<CAPTION>
      Expiration      Amount
     ____________    ________  
       <S>      <C>
       1999           43,000
       2000          208,000
       2001           87,000
       2002           11,000
       2003          501,000
       2004          432,000
       2005          399,000
                  __________ 
                  $1,681,000
                  __________
                  __________
</TABLE>
     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.

     Deferred Revenue

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

     Advertising

     The  Company expenses advertising costs when incurred.  Such
     costs  amounted  to  $6,001 and $13,385 in  1995  and  1994,
     respectively.
<PAGE>
     Reclassification of Accounts

     Certain  depreciation  in the amount  of  $28,000  has  been
     reclassified  from  general  and administrative  expense  to
     cost  of sales in 1994 to conform with the presentation  for
     the current year.

     Use of Estimates

     Preparation  of  financial  statements  in  accordance  with
     generally  accepted accounting principles requires  the  use
     of estimates.

(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
     now  Chairman of the Board of Directors and owns or controls
     104,793,403  shares  of  the Company's  common  stock.   The
     principal  amount of the note is $869,072, with interest  at
     10%,  originally due on or before October 1, 1996, including
     $182,441  in accrued interest from prior indebtedness.   The
     note  is 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.

     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.

      On  January  10, 1996, the Note was extended to  mature  on
      October 1, 1997.

     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 original  principal  of
     $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  $86,860,
     and $91,358, in 1995 and 1994, respectively.

     A  member  of  the  Board of Directors received  $3,000  per
     month  in  1994  and  for 8 months in  1995  for  consulting
     services.   Additionally, a company  that  he  controls  was
     indebted  to  the  Company  in  the  amount  of  $2,924   at
     September  30,  1995 and 1994 for certain  health  insurance
     premiums.   At September 30, 1995, the Company was  indebted
     to this individual for $3,000.

     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, 1995:
<TABLE>
<CAPTION>
     <S>           <C>
     1996          $7,554
     1997             939
     Less: intrest   (838)
                   ______
                   $7,685
</TABLE>
     Assets held under capital leases are summarized as follows:
<TABLE>
<CAPTION>

                                                        1995          1994
                                                      ________      ________
    <S>                                               <C>           <C>  
    Assets at cost................................... $ 20,758      $ 65,394
           Less:  accumulated depreciation........... (4,448)      (27,015)
                                                      ________      ________
                                                      $ 16,310      $ 38,379
                                                      ________      ________
                                                      ________      ________
</TABLE>
          A summary of capital leases follows:
<TABLE>
<CAPTION>
                                                          1995          1994
                                                       _________     ________
  <S>                                                  <C>           <C> 
  Monthly payment of $444, interest at 18.5%,
  due  in  March  1995..................................  $  -        $ 2,523
  Monthly payment of $251, interest at 14.1%,
  due  in  April  1995...................................    -          1,533
  Monthly payment of $174 (final payment of $591) to
  related party, interest  at 14%, due in November 1996... 2,590        4,175
  Monthly payment of $233 (final payment of $1,186) to
  related party, interest at 14%, due in August 1996...... 3,230        5,239
  Monthly payment of $285 (final payment of $240) to
  related party, interest at 14%, due in April 1996....... 1,865        5,319
  Less:  current portion................................. (6,932)      (8,261)
                                                          _______     ________
                                                            $753      $10,526
                                                          ________    ________
                                                          ________    ________ 
</TABLE>
     Amortization  of capital leases is included in  depreciation expense.
<PAGE>
(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 these leases:
<TABLE>
<CAPTION>
     <S>          <C>
     1996         $33,600
     1997         $19,600
</TABLE>
     Rent  expenses and related charges amounted to  $33,600  and
     $34,900 in 1995 and 1994, 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  quarters
     ended   September  30,  1995  and  1994,  this  contribution
     amounted  to $1,424 and $1,422, respectively, 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, 1995, there  were
     no contributions due.

     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  1995 and 1994, such contributions amounted to $1,433 and
     $1,300, respectively.


(5)  Major Customers

     The following customers each accounted for more than 10%  of
     sales in 1995 or 1994:
<TABLE>
<CAPTION>
                    % of Sales
                  ______________
     Customer     1995      1994
     ________    _____     ______ 
      <S>         <C>      <C>
       A          40.1       41
       B          18.1     12.2
       C          12.2        _
</TABLE>
<PAGE>
(6)  Subsequent Events

     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, 1994, and 1995.

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

<PAGE>

                            PART III

Item  9.  Directors, Executive Officers, Promoters  and  Control Persons; 
          Compliance With Section 16(a) of the Exchange Act of the Company
___________________________________________________________________________
      The Directors and Officers of the Company at September  30,
1995, are as follows:
<TABLE>
<CAPTION>

       Name             Age              Position
     ________________  _____     ___________________________       
     <S>               <C>       <C>
     Richard Simms      45        Chief Financial Officer, Director, Treasurer

     Ray E. Dillon III  42        Director and Chairman of the Board

     Donald Warriner    45        Chief Executive Officer, President
                                  and Director
</TABLE>
      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 then  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.

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

      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.

<PAGE>

      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 devotes only such time to the business of  the
Company as is necessary in his position.

     Donald V. Warriner is President and CEO of the Company as of
August  1995.   Prior to joining the Company,  Mr.  Warriner  was
employed by Cherry Creek Mortgage Company.  Prior to working  for
Cherry   Creek,   Mr.  Warriner  was  President   of   Bainbridge
International,  a  company that was involved in acquisitions  and
buy  outs of small- to medium-sized firms.  Mr. Warriner  devotes
all of his time to the business of the Company.

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.

<PAGE>

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 year ended  September  30,
1995 and 1994:

<TABLE>
<CAPTION>
                      Summary Compensation

               Annual Compensation1                Long-Term Compensation
               ____________________                ______________________
                                               Awards             Payouts
                                        _________________    ________________   
<S>      <C>   <C>      <C>    <C>      <C>        <C>      <C>    <C>        
                               Other
Name                           Annual   Restricted                  All Other
and                            Compen-    Stock              LTIP    Compen- 
Principal       Salary  Bonus  sation    Award(s)   Options/ Payouts  sation
Position  Year   ($)     ($)    ($)            ($)   SARs(#)   ($)      ($)
______________________________________________________________________________
William   1995  75,000   -0-    --          2          --      -0-    $3,766
Eyerdom, CEO                                                               (3)

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

Donald    1995  13,000   -0-    --          __          -       -0-      --
Warriner, CEO
</TABLE>
________________________________

(1)  There were no executive officers whose compensation exceeded
     $100,000 in either 1994 or 1995.
(2)  As  described  earlier,  Mr.  Eyerdom  was  offered  certain
     restricted  stock  as  reimbursement  for  moving   expenses
     incurred in 1993.  However, such stock was refused  and  the
     payment  of the expenses is the subject of litigation  filed
     in December of 1995 and more adequately explained under Item
     3.
(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 1995:


             Option/SAR Grants in Last Fiscal Year
<TABLE>
<CAPTION>
                    Individual Grants
    ____________________________________________________________________        
<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

Donald V. Warriner -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,
1995  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 

Donald V.   None    None      -0-           0           $  -0-         0
Warriner
</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>
William          -0-            -0-              N/A        N/A          N/A
Eyerdom

Donald V.        -0-            -0-              N/A        N/A          N/A
Warriner

</TABLE>
<PAGE>
Item  11.   Security Ownership of Certain Beneficial  Owners  and
Management
__________________________________________________________________
       The   following  table  sets  forth  information   as   of
December  31,  1995, 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>
     Richard Simms                 148,996,821(1)             38.06
     20 Dutch Creek Drive
     Littleton, CO 80123

     Ray E. Dillon III             104,793,403(2)              32.0
     1 Compound Drive
     Hutchinson, KS 67502

     All directors and executive      253,790,224               64.83
     officers as a group

</TABLE>
(1)  Includes  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)  There  are  no  additional officers  or  directors  who  own
     shares  of  the Company's common stock, but the Company  has
     agreed  to sell and grant certain employees shares of 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
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  now  Chairman of the Board of Directors and owns and controls
104,793,403 shares of the Company's common stock.  The  principal
amount  of  the note is $737,000, with interest at 10%,  and  was
originally  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
<PAGE>
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.

      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 $86,860, and $91,358, in 1995
and 1994, respectively.

      On January 10, 1996, the Dillon note was extended to mature
on October 1, 1997.

      The  Company has agreed to sell and grant restricted common
stock to the new President and CEO and the new Vice President and
COO   (management  team).   The  Company  has  agreed   to   sell
approximately 150,000,000 shares of stock of the Company  to  the
new  management team at a price of $.0006 per share.  The Company
will grant approximately 50,000,000 shares of common stock to the
new  management team.  It is anticipated the sale  and  grant  of
shares will take place before January 31, 1996.

<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


Date:  January 12,1996             By:/s/ Ray E. Dillon
                                   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-30-1995
[PERIOD-END]                               SEP-30-1995
[CASH]                                          91,359
[SECURITIES]                                         0
[RECEIVABLES]                                  250,009
[ALLOWANCES]                                     5,077
[INVENTORY]                                     47,692
[CURRENT-ASSETS]                               394,605
[PP&E]                                         431,141
[DEPRECIATION]                                 319,137
[TOTAL-ASSETS]                                 516,305
[CURRENT-LIABILITIES]                          221,258
[BONDS]                                              0
[COMMON]                                   327,478,340
[PREFERRED-MANDATORY]                                0
[PREFERRED]                                          0
[OTHER-SE]                                           0
[TOTAL-LIABILITY-AND-EQUITY]                   516,305
[SALES]                                      2,369,096
[TOTAL-REVENUES]                             2,369,096
[CGS]                                        1,256,193
[TOTAL-COSTS]                                2,198,291
[OTHER-EXPENSES]                                     0
[LOSS-PROVISION]                                     0
[INTEREST-EXPENSE]                            (83,318)
[INCOME-PRETAX]                                 87,487
[INCOME-TAX]                                         0
[INCOME-CONTINUING]                                  0
[DISCONTINUED]                                       0
[EXTRAORDINARY]                                      0
[CHANGES]                                            0
[NET-INCOME]                                    87,487
[EPS-PRIMARY]                                        0
[EPS-DILUTED]                                        0
</TABLE>