UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549


                                    FORM 10-Q


                  QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934


                  For the quarterly period ended March 31, 1999

                          Commission File No. 000-21375


                        ONTRACK DATA INTERNATIONAL, INC.
           (Exact name of business issuer as specified in its charter)


               MINNESOTA                                 41-1521650
    (State or other jurisdiction of         (I.R.S. Employer Identification No.)
     incorporation or organization)

     6321 BURY DRIVE, SUITES 13-21,                         55346
        EDEN PRAIRIE, MINNESOTA                          (Zip Code)
(Address of principal executive office)

           www.ontrack.com                            (612) 937-1107
            (Web address)                       (Issuer's telephone number)


Check whether the issuer (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 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 ___X___     No _______

As of April 30, 1999, the Company had 9,714,009 shares of Common Stock, $.01 par
value, outstanding.


                                       1
<PAGE>


                        ONTRACK DATA INTERNATIONAL, INC.

                                      INDEX


PART 1.   FINANCIAL INFORMATION                                           PAGE
                                                                          ----
          ITEM 1.  CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                   (UNAUDITED):

                   Condensed Consolidated Balance Sheets as of
                   March 31, 1999 and December 31, 1998                     3

                   Condensed Consolidated Statements of Income for the
                   three months ended March 31, 1999 and 1998               4

                   Condensed Consolidated Statements of Cash Flows
                   for the three months ended March 31, 1999 and 1998       5

                   Notes to Condensed Consolidated Financial Statements     6

          ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                   CONDITION AND RESULTS OF OPERATIONS                     7-9


PART II.  OTHER INFORMATION

          ITEM 1.  LEGAL PROCEEDINGS                                       10

          ITEM 2.  CHANGES IN SECURITIES                                   10

          ITEM 3.  DEFAULTS UPON SENIOR SECURITIES                         10

          ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS     10

          ITEM 5.  OTHER INFORMATION                                       10

          ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K                        10


SIGNATURES                                                                 11


                                       2
<PAGE>


PART 1. FINANCIAL INFORMATION

ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                        ONTRACK DATA INTERNATIONAL, INC.
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                      (IN THOUSANDS, EXCEPT SHARE AMOUNTS)

<TABLE>
<CAPTION>

ASSETS                                                                        March 31,        December 31,
                                                                                1999               1998
                                                                            ------------       ------------
                                                                             (Unaudited)
<S>                                                                         <C>                <C>         
CURRENT ASSETS:
  Cash and cash equivalents                                                 $      7,552       $     14,724
  Marketable securities                                                           20,529             18,872
  Accounts receivable, net                                                         4,208              3,759
  Deferred income taxes and other current assets                                   2,387              2,228
                                                                            ------------       ------------

    Total current assets                                                          34,676             39,583

  Long-term marketable securities                                                  6,143                716
  Capitalized software, net                                                        1,977              2,131
  Furniture and equipment, net                                                     3,675              4,019
                                                                            ------------       ------------

    TOTAL ASSETS                                                            $     46,471       $     46,449
                                                                            ============       ============

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES                                                         $      2,772       $      3,669

SHAREHOLDERS' EQUITY:


  Common stock (9,714,009 and 9,697,234 shares issued and
    outstanding at March 31, 1999 and December 31, 1998, respectively)                97                 97

  Additional paid-in capital                                                      29,186             29,131

  Accumulated other comprehensive income                                             (14)                22

  Retained earnings                                                               14,430             13,530
                                                                            ------------       ------------

    Total shareholders' equity                                                    43,699             42,780
                                                                            ------------       ------------

    TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                              $     46,471       $     46,449
                                                                            ============       ============
</TABLE>


                 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.


                                        3
<PAGE>


                        ONTRACK DATA INTERNATIONAL, INC.
                   CONDENSED CONSOLIDATED STATEMENTS OF INCOME
               (IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                               THREE MONTHS
                                                             ENDED MARCH 31,
                                                    ------------------------------
                                                         1999              1998
                                                    ------------      ------------
<S>                                                 <C>               <C>         
REVENUES:
  Data recovery services and products               $      7,151      $      7,205
  Software                                                 1,259             1,702
                                                    ------------      ------------
    TOTAL REVENUES                                         8,410             8,907

COST OF REVENUES:
  Data recovery services and products                      1,876             1,328
  Software                                                   244               312
                                                    ------------      ------------
    TOTAL COST OF REVENUES                                 2,120             1,640
                                                    ------------      ------------

GROSS MARGIN                                               6,290             7,267

OPERATING EXPENSES:
  Research and development                                 1,437             1,655
  Sales and marketing                                      2,213             1,952
  General and administrative                               1,577             1,660
                                                    ------------      ------------
    TOTAL OPERATING EXPENSES                               5,227             5,267
                                                    ------------      ------------

OPERATING INCOME                                           1,063             2,000

INTEREST AND OTHER INCOME                                    260               321
                                                    ------------      ------------

INCOME BEFORE INCOME TAXES                                 1,323             2,321

PROVISION FOR INCOME TAXES                                   423               766
                                                    ------------      ------------
NET INCOME                                          $        900      $      1,555
                                                    ============      ============

BASIC NET INCOME PER SHARE                          $       0.09      $       0.16

DILUTED NET INCOME PER SHARE                        $       0.09      $       0.15

WEIGHTED AVERAGE SHARES
  USED IN COMPUTATION OF:

  BASIC NET INCOME PER SHARE                           9,697,420         9,916,917

  DILUTED NET INCOME PER SHARE                         9,732,094        10,165,457
</TABLE>


                 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.


                                        4
<PAGE>


                        ONTRACK DATA INTERNATIONAL, INC.
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                     THREE MONTHS
                                                                   ENDED MARCH 31,
                                                            ---------------------------
                                                               1999             1998
                                                            ----------       ----------
<S>                                                         <C>              <C>       
CASH FLOWS FROM OPERATING ACTIVITIES:
  NET INCOME                                                $      900       $    1,555

  ADJUSTMENTS TO RECONCILE NET INCOME TO NET
   CASH PROVIDED BY OPERATING ACTIVITIES:
    Depreciation                                                   508              548
    Amortization of capitalized software                           154               --
    Changes in operating assets and liabilities:
     Accounts receivable                                          (449)             443
     Other current assets                                         (159)             (69)
     Accounts payable and accrued expenses                        (933)          (1,991)
                                                            ----------       ----------

NET CASH PROVIDED BY OPERATING ACTIVITIES                           21              486

CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchase of furniture and equipment                             (164)            (546)
  Net sale (purchase) of short-term and long-term
   marketable securities                                        (7,084)           4,580
  Other                                                             --              (70)
                                                            ----------       ----------

NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES             (7,248)           3,964

CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from exercise of stock options and employee
   stock purchase plan                                              55              209
                                                            ----------       ----------

NET CASH PROVIDED BY FINANCING ACTIVITIES                           55              209
                                                            ----------       ----------

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS            (7,172)           4,659

Cash and cash equivalents, beginning of period                  14,724           17,315
                                                            ----------       ----------

CASH AND CASH EQUIVALENTS, END OF PERIOD                    $    7,552       $   21,974
                                                            ==========       ==========
</TABLE>


                 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.


                                        5
<PAGE>


                        ONTRACK DATA INTERNATIONAL, INC.

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

1.       ORGANIZATION

         ONTRACK Data International, Inc. (the "Company") provides data recovery
         services and products, utility software and other computer data related
         services. The Company's headquarters are in Minneapolis, Minnesota, and
         it has locations in Los Angeles, California; San Jose, California;
         Washington, DC.; New York, New York; London, England; Stuttgart,
         Germany and Paris, France.

2.       SIGNIFICANT ACCOUNTING POLICIES

         BASIS OF PRESENTATION

         The accompanying unaudited condensed consolidated financial statements
         have been prepared pursuant to the rules and regulations of the
         Securities and Exchange Commission. Certain information and footnote
         disclosures normally included in annual financial statements prepared
         in accordance with generally accepted accounting principles have been
         condensed or omitted as permitted by such rules and regulations. These
         financial statements and related notes should be read in conjunction
         with the financial statements and notes thereto included in the
         Company's audited consolidated financial statements for the year ended
         December 31, 1998 contained in the Company's Annual Report on Form 10-K
         for 1998.

         In the opinion of management, the interim financial statements reflect
         adjustments, consisting of normal recurring accruals, which are
         necessary to present fairly the Company's financial position, results
         of operations and cash flow for the periods indicated. The results of
         operations of the three months ended March 31, 1999 are not necessarily
         indicative of the results for the full year.

         NET INCOME PER SHARE

         Basic net income per share includes no dilution and is computed by
         dividing net income available to common stockholders by the weighted
         average number of common shares outstanding for the period. Diluted net
         income per share reflects the potential dilution of securities that
         could share in the earnings of the Company. The difference between the
         Company's basic and diluted net income per share data as presented is
         due to the dilutive impact from stock options whose exercise price was
         below the average common stock price for the respective period
         presented.

         COMPREHENSIVE INCOME

         The components of comprehensive income for the three months ended March
         31, 1999 and 1998 are foreign currency translation adjustments.
         Comprehensive income is not separately reported, as amounts were not
         significant.


                                        6
<PAGE>


ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
        RESULTS OF OPERATIONS


COMPARISON OF FIRST QUARTER ENDED MARCH 31, 1999 AND 1998

REVENUES

DATA RECOVERY SERVICES AND PRODUCTS:

Data recovery services and products revenues for the first quarter of 1999
decreased 1% compared to the first quarter of 1998. 1999 data recovery services
and products revenues include $333,000 relating to sales of the Company's newly
acquired do-it-yourself data recovery software product, TIRAMISU(TM).

SOFTWARE:

Software revenues for the first quarter of 1999 decreased 26% compared to the
first quarter of 1998. The expected decrease in software revenues is attributed
to pricing pressure with the Company's DISK MANAGER(R) product from the
Company's main customers, the hard drive manufacturers. The Company expects this
pricing pressure to continue.

GROSS MARGINS

DATA RECOVERY SERVICES AND PRODUCTS:

Gross margin on data recovery services and products revenues for the first
quarter ended March 31, 1999 was approximately 74% compared to 82% for the
comparable period of 1998. The decrease is due to the inclusion of amortization
of capitalized software related to the TIRAMISU(TM) product line and increased
engineering labor costs.

SOFTWARE:

Gross margin on software revenues for the first quarter ended March 31, 1999 was
81% compared to 82% for the comparable period of 1998. The decrease in margin
percentage in the first quarter is due to lower OEM royalty revenues.

OPERATING EXPENSES

RESEARCH AND DEVELOPMENT:

Research and development expenses for the first quarter of 1999 decreased 13%
compared to the first quarter of 1998. As a percentage of revenues, research and
development expenses were 17% for the quarter ended March 31, 1999 compared to
19% for the comparable period of 1998. The reductions are due principally to
less engineering labor costs.


                                       7
<PAGE>


SALES AND MARKETING:

Sales and marketing expenses for the first quarter of 1999 increased 13%
compared to the first quarter of 1998. As a percentage of revenues, sales and
marketing expenses were 26% for the first quarter March 31, 1999 compared to 22%
for the comparable period of 1998. The increased dollars and percentages are due
to an increase in salaries worldwide and additional marketing and promotion
costs in Europe.

GENERAL AND ADMINISTRATIVE:

General and administrative expenses for the first quarter of 1999 decreased 5%
compared to the first quarter of 1998. As a percentage of revenues, general and
administrative expenses were 19% for both the first quarter ended March 31, 1999
and for the comparable period of 1998. The decline in general and administrative
expenses for the first quarter of 1999 is due principally to lower compensation
related costs.

INTEREST AND OTHER INCOME

The decrease in interest and other income for the quarter is due principally to
lower interest rates. To a lesser extent the decline was also due to exchange
losses resulting from currency fluctuations in the value of the Euro against the
US Dollar.

PROVISION FOR INCOME TAXES

For the quarter ended March 31, 1999, the Company provided for taxes at an
effective rate of 32%. The effective rate is lower than the statutory rate
because of the impact of tax exempt interest income earned on investments and
the impact of research and development credits.

NET INCOME PER SHARE

The changes in basic and diluted net income per share for the quarter ended
March 31, 1999 and 1998 are due to changes in net income.


LIQUIDITY AND CAPITAL RESOURCES

Net cash flow from operations was $21,000 and $486,000 for the three months
ended March 31, 1999 and 1998, respectively. The decline was due to lower net
income. Cash provided by and used in investment activities was primarily for the
purchase and sale of short-term and long-term marketable securities.

The Company has invested its cash principally in high grade taxable and tax
exempt government securities, $6,143,000 of which are classified as long-term,
with the remaining amount classified as cash and cash equivalents or short-term
and long-term marketable securities.

YEAR 2000 COMPLIANCE

The "Year 2000" problem concerns the inability of existing information systems
to properly recognize and process date-sensitive information beyond January 1,
2000. If not corrected, these systems could fail or create erroneous
information. The Company has undertaken various initiatives to evaluate and
respond to the potential impact of the Year 2000 issue on its computer and other
operating systems. A Year 2000 committee has formulated a plan to address the
Year 2000 issue.


                                       8
<PAGE>


Under this plan, Company personnel have identified business systems that are
critical to the Company's business operations that require testing. The Company
has completed testing and remediation of its software products and the software
and hardware used in product development. The Company is in the process of
testing its internal systems, the hardware and software tools it uses in its
data recovery business and the systems in its satellite offices. The Company has
completed this testing except for certain systems that are being updated for
reasons other than Year 2000 compliance. These systems are expected to be tested
and remediated by December 31, 1999. The Company also expects its
non-information technology systems to be compliant after it moves into its new
leased office space, anticipated for the third quarter of 1999.

The Company is also communicating and working with its significant vendors,
customers and other business partners to minimize Year 2000 risks and protect
the Company and its customers from potential service interruptions. However, the
Company could be adversely affected by the failure of third parties to become
Year 2000 compliant, including the risk of operational outages due to
disruptions in communications or electrical service. Although the Company
believes the effect of such disruptions would be localized and temporary, there
is no assurance that these or other Year 2000 risks will not have a material
financial impact in any future period.

After assessing the information received from vendors, customers and other
business partners, and evaluating the completion of its Year 2000 project, the
Company will develop contingency plans if appropriate. It is anticipated that
these plans will be developed before the fall of 1999.

The Company believes that its expenses for the Year 2000 compliance through
March 31, 1999 are not material, and total expenses for compliance are not
expected to exceed $100,000.

FORWARD-LOOKING STATEMENTS

This Form 10-Q contains forward-looking statements within the meaning of federal
securities laws. These statements include statements regarding intent, belief,
or current expectations of the company and its management. These forward-looking
statements are not guarantees of the future performance and involve a number of
risks and uncertainties that may cause the Company's actual results to differ
materially from the results discussed in these statements. Please refer to the
Management's Discussion and Analysis section of the Company's Annual Report on
Form 10-K for the year ended December 31, 1998, for cautionary statements on
important factors to consider in evaluating the forward-looking statements
included in this Form 10-Q.


                                       9
<PAGE>


                        ONTRACK DATA INTERNATIONAL, INC.


PART II.    OTHER INFORMATION

      ITEM 1.     LEGAL PROCEEDINGS

                  None

      ITEM 2.     CHANGES IN SECURITIES

                  None

      ITEM 3.     DEFAULTS UPON SENIOR SECURITIES

                  None

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

                  None

      ITEM 5.     OTHER INFORMATION

                  None

      ITEM 6.     EXHIBITS AND REPORTS ON FORM 8-K

                  (a).     Exhibit 27.1 Financial Data Schedule

                  (b).     Reports on Form 8-K

                           None


                                       10
<PAGE>


                        ONTRACK DATA INTERNATIONAL, INC.

                                   SIGNATURES



In accordance with the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.



                                 ONTRACK DATA INTERNATIONAL, INC.
                                           (Registrant)





      Date:  May 13, 1999               By: /s/ Michael W. Rogers
                                        ----------------------------------------
                                        Michael W. Rogers
                                        Chairman and Chief Executive Officer


      Date:  May 13, 1999               By: /s/ Thomas P. Skiba
                                        ----------------------------------------
                                        Thomas P. Skiba
                                        Vice President & Chief Financial Officer


                                       11