<PAGE>

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


                                     FORM 10-QSB


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


                    For the quarterly period ended March 31, 1997

                            Commission File No. 000-21375


                           ONTRACK DATA INTERNATIONAL, INC.
          (Exact name of small 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, EDEN                         55346
        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 
                                        ------                 -----

Number of shares of Common Stock, $.01 par value, outstanding as of
April 30, 1997     9,785,924

Transitional Small Business Disclosure Format (check one): 

                                   Yes                     No    X
                                        ------                 -----

<PAGE>


                           ONTRACK DATA INTERNATIONAL, INC.

                                        INDEX

                                           
PART 1.  FINANCIAL INFORMATION                                              PAGE
                                                                            ----
    Item 1.   Financial Statements:

           Consolidated Condensed Balance Sheets as of
           March 31, 1997 (unaudited) and
           December 31, 1996                                                 3

           Consolidated Condensed Statements of Income (unaudited)
           for the three months ended March 31, 1997 and 1996                4

           Consolidated Condensed Statements of Cash Flows
           (unaudited) for the three months ended March 31, 1997
           and 1996                                                          5

           Notes to consolidated condensed 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.  FINANCIAL STATEMENTS


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

<TABLE>
<CAPTION>
         
ASSETS                                                                March 31, 1997   December 31, 1996
                                                                   ------------------ -------------------
                                                                       (Unaudited)
<S>                                                                   <C>              <C>

CURRENT ASSETS:
Cash and cash equivalents                                                 $  20,654         $  22,684 
Accounts receivable, net                                                      2,846             2,499 
Prepaid expenses and other current assets                                     1,257             1,244 
                                                                   ------------------ -------------------
Total current assets                                                         24,757            26,427 

Furniture and equipment, net                                                  3,712             3,733 
Other assets                                                                    589               618 
Marketable securities                                                         8,299             5,857 
                                                                   ------------------ -------------------
TOTAL ASSETS                                                              $  37,357         $  36,635 
                                                                   ------------------ -------------------
                                                                   ------------------ -------------------

LIABILITIES AND SHAREHOLDERS' EQUITY 

CURRENT LIABILITIES:    
Current portion of long-term debt                                         $      71         $      69 
Accounts payable                                                                714               579 
Accrued expenses                                                              2,702             3,439 
                                                                   ------------------ -------------------
Total current liabilities                                                     3,487             4,087 

Long-term debt, less current portion                                            125               142 
                                                                   ------------------ -------------------
TOTAL LIABILITIES                                                             3,612             4,229 

SHAREHOLDERS' EQUITY:

Common stock ( 9,797,455 and 9,789,240 shares issued and
  outstanding at March 31, 1997 and December 31, 1996, respectively)             98                98 

Additional paid-in capital                                                   29,697            29,599 

Cumulative translation adjustment                                                (2)               33 

Retained earnings                                                             3,952             2,676 
                                                                   ------------------ -------------------
Total shareholders' equity                                                   33,745            32,406 
                                                                   ------------------ -------------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                                $  37,357         $  36,635 
                                                                   ------------------ -------------------
                                                                   ------------------ -------------------

</TABLE>

                             SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.

                                                 3

<PAGE>

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

<TABLE>
<CAPTION>

                                                           THREE MONTHS ENDED MARCH 31,
                                                          -----------------------------
                                                              1997             1996
                                                          ------------    -------------
<S>                                                       <C>             <C>
REVENUES:
  Services                                                $   6,112       $   4,339 
  Software                                                    1,958           1,174 
                                                          ------------    -------------
     TOTAL REVENUES                                           8,070           5,513 


COST OF REVENUES:  
  Services                                                      946             569 
  Software                                                      315             319 
                                                          ------------    -------------
     TOTAL COST OF REVENUES                                   1,261             888 
                                                          ------------    -------------

GROSS MARGIN                                                  6,809           4,625 

OPERATING EXPENSES:
  Research and development                                    1,488           1,045 
  Sales and marketing                                         1,799           1,519 
  General and administrative                                  1,809             872 
                                                          ------------    -------------
     TOTAL OPERATING EXPENSES                                 5,096           3,436 
                                                          ------------    -------------

OPERATING INCOME                                              1,713           1,189 

INTEREST AND OTHER INCOME                                       218              14 
                                                          ------------    -------------
INCOME BEFORE INCOME TAXES                                    1,931           1,203 

PROVISION FOR INCOME TAXES                                      686             458 
                                                          ------------    -------------

NET INCOME                                                $   1,245       $     745 
                                                          ------------    -------------
                                                          ------------    -------------

NET INCOME PER SHARE (PRO-FORMA NET INCOME
  PER SHARE FOR THREE MONTHS ENDED MARCH 31, 1996)        $    0.12       $    0.10 
                                                          ------------    -------------
                                                          ------------    -------------

WEIGHTED AVERAGE SHARES USED IN
  COMPUTATION OF NET INCOME PER SHARE                    10,096,057       7,794,457 
                                                         -------------    -------------
                                                         -------------    -------------

</TABLE>

                       SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS

                                             4

<PAGE>

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

<TABLE>
<CAPTION>

                                                               THREE MONTHS ENDED MARCH 31,
                                                             -------------------------------
                                                                   1997           1996
                                                             --------------   --------------
<S>                                                             <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
     NET INCOME                                                 $  1,245        $  745 

     ADJUSTMENTS TO RECONCILE NET INCOME TO NET
       CASH PROVIDED BY OPERATING ACTIVITIES:
         Depreciation                                                425           250 
         Changes in operating assets and liabilities: 
           Accounts receivable                                      (347)         (329)
           Prepaid expenses and other assets                         (15)         (107)
           Accounts payable and accrued expenses                    (602)          945 
                                                             --------------   --------------
NET CASH PROVIDED BY OPERATING ACTIVITIES                            706         1,504 


CASH FLOWS FROM INVESTING ACTIVITIES:
     Purchases of furniture and equipment                           (404)         (757)
     Purchases of marketable securities                           (2,442)          -
     Other                                                            29           -
                                                             --------------   --------------
NET CASH USED IN INVESTING ACTIVITIES                             (2,817)         (757)


CASH FLOWS FROM FINANCING ACTIVITIES:
     Principal payments on long-term debt                            (17)          (23)
     Proceeds from exercise of stock options and employee  
       stock purchase plan                                            98            48 
                                                             --------------   --------------
NET CASH PROVIDED BY FINANCING ACTIVITIES                             81            25 

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS              (2,030)          772 

Cash and cash equivalents, beginning of period                    22,684         2,028 
                                                             --------------   --------------
CASH AND CASH EQUIVALENTS, END OF PERIOD                        $ 20,654        $2,800 
                                                             --------------   --------------
                                                             --------------   --------------

</TABLE>

                            SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.

                                                  5

<PAGE>

                           ONTRACK DATA INTERNATIONAL, INC.

                         NOTES TO UNAUDITED FINANCIAL STATEMENTS
  
1.  ORGANIZATION

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

2.  SIGNIFICANT ACCOUNTING POLICIES

    BASIS OF PRESENTATION

    The unaudited March 31, 1996 and 1997 financial statements, included
    herein, have been prepared by the Company.  The information furnished in
    the unaudited financial statements includes all adjustments, consisting
    only of normal recurring accruals, which are, in the opinion of management,
    necessary for a fair presentation of such financial statements. 

    NET INCOME PER SHARE

    Net income per share for the quarter ended March 31, 1997 is based on
    weighted average number of shares of common stock and common equivalent
    shares outstanding for the period using the treasury stock method.

    PRO FORMA NET INCOME PER SHARE

    Pro forma net income per share for the quarter ended March 31, 1996 is
    based on the pro forma weighted average number of shares of common stock
    and common equivalent shares outstanding for the period using the treasury
    stock method.  The pro forma weighted average number of shares includes the
    conversion of the Company's Convertible Redeemable Preferred Stock into
    1,500,000 shares of common stock effective January 1, 1996.  Because of the
    significant impact of the conversion on the Company's capital structure and
    earnings per share, historical earnings per share has been excluded from
    the March 31, 1996 income statement.  
    
3.  INITIAL PUBLIC OFFERING

    The Company completed an initial public offering of shares of its common
    stock in October, 1996 at a price of $12.00 per share.  Net proceeds to the
    Company from the offering were $23,849,000.

                                         6

<PAGE>

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


COMPARISON OF THREE MONTHS ENDED MARCH 31, 1996 AND 1997

TOTAL REVENUES

Total revenues for the first quarter of 1997 increased 46.4% compared to the 
first quarter of 1996.  Of the Company's first quarter 1997 revenues, 
approximately 16.1% were attributable to the Company's European operations, 
compared to 16.1% in the first quarter of 1996.

SERVICES:

Service revenues for the first quarter of 1997 increased 40.9% compared to 
the first quarter of 1996.  The increase was due principally to three 
factors: (1) an increase in the number of data recovery jobs performed in the 
United States; (2) additional revenue generated by the Company's Stuttgart, 
Germany office which was opened in November, 1996, and (3) an increase in 
revenue from the Company's Computer Evidence Services which was launched in 
mid-1996.

SOFTWARE: 

Software revenues for the first quarter of 1997 increased 66.8% compared to 
the first quarter of 1996.  The increase was due principally to higher sales 
of Disk Manager software to existing hard drive original equipment 
manufacturers (OEM's) through royalty arrangements.  Also contributing to the 
increase were royalty revenues from Seagate Technology Inc.'s ("Seagate") 
DiscWizard software product. DiscWizard is a customized Windows-based hard 
disk drive installation utility which the Company developed and has been 
licensing exclusively to Seagate since the third quarter of 1996.  Because 
software revenues are derived principally from sales through OEM's, they are 
difficult to predict.  The Company does not expect software revenues to 
continue at the volume experienced in the first quarter of 1997.  

GROSS MARGINS 

SERVICES:
 
Gross margins on service revenues as a percentage of service revenues for the 
first quarter of 1997 were approximately 84.5%, compared to 86.9% for the 
comparable period of 1996.  The decrease in gross margin percentages in 1997 
was due principally to increased engineering compensation and facility costs. 
Since the first quarter of 1996, the Company has opened a new data recovery 
facility in Stuttgart, Germany and has been adding additional engineering 
staff in its other locations to support the expected growth in its data 
recovery service revenue.

                                       7

<PAGE>

SOFTWARE:

Gross margins on software revenues as a percentage of software sales for the 
first quarter of 1997 were approximately 83.9%, compared to 72.8% for the 
comparable period of 1996.  The increased percentage was due to higher OEM 
royalty sales which involve minimal costs to the Company.  Future gross 
margins in the software business will continue to be impacted by the mix of 
royalty sales and non-royalty sales.

OPERATING EXPENSES

RESEARCH AND DEVELOPMENT: 

Research and development expenses for the first quarter of 1997 increased 
42.3% compared to the first quarter of 1996.  The increase is due to the 
addition of software developers and data recovery engineers who perform 
research and development activities, as well as increased expenditures on 
development of a new process to provide diagnostic and data recovery services 
on a remote basis. Research and development expenses were 18.4% of revenues 
for the first quarter of 1997 compared to 19.0% of revenues for the 
comparable period of 1996. Research and development expenses, and such 
expenses as a percentage of revenues, may fluctuate in the future as the 
Company identifies and responds to such market opportunities as remote data 
recovery services, or as necessary to respond to new technologies that pose 
challenges in the data recovery business.

SALES AND MARKETING:
 
Sales and marketing expenses increased 18.4% for the first quarter of 1997 
compared to the first quarter of 1996. The increase in sales and marketing 
dollars is due principally to compensation costs associated with generating 
increased revenue.  As a percentage of revenues, sales and marketing expenses 
were 22.3% for the first quarter of 1997, compared to 27.6% for the 
comparable period of 1996. The decreased percentage is due principally to two 
factors: (1) the increase in software royalty revenue, which has minimal 
related sales and marketing expenses and (2) certain advertising programs 
which took place in the first quarter of 1996 are scheduled for later 
quarters in 1997. 

GENERAL AND ADMINISTRATIVE:

General and administrative expenses for the first quarter of 1997 increased 
107.5% compared to the first quarter of 1996.  As a percentage of revenues, 
general and administrative expenses were 22.4% for the first quarter of 1997 
compared to 15.8% for the comparable period of 1996.  The increases in 
general and administrative dollars and as a percent of revenue are 
principally due to increased compensation and related costs resulting from 
new personnel at manager and executive levels who were added in the second 
quarter of 1996 to support the Company's growth strategy.  Also contributing 
to the increase were costs related to the Stuttgart, Germany office, which 
opened in November, 1996.

                                     8

<PAGE>

INTEREST AND OTHER INCOME

The increase in interest and other income is a result of increased cash and 
marketable securities balances, primarily due to the Company's initial public 
offering completed in October, 1996. 

PROVISION FOR INCOME TAXES:

For the first quarter of 1997, the Company provided for taxes at an effective 
rate of 35.5% compared to 38.1% in the first quarter of 1996.  The decrease 
is due principally to the cash received from the Company's initial public 
offering being invested in tax exempt securities.

NET INCOME PER SHARE

Net income per share for the first quarter of 1997 increased 20.0% to $0.12 
from $0.10 in the first quarter of 1996.  The increase is due to a 
combination of a 67.1% increase in net income offset by a 29.5% increase in 
weighted average shares outstanding.

LIQUIDITY AND CAPITAL RESOURCES

Net cash flow from operations was $706,000 and $1.5 million for the first 
quarter of 1997 and 1996, respectively.  The decrease was due principally to 
a combination of increased first quarter 1997 earnings offset by the timing 
of the payment of certain accrued expenses. 

Cash used in investment activities was primarily for furniture and equipment. 
Additions to furniture and equipment were $404,000 and $757,000 in the first 
quarter of 1997 and 1996, respectively.  

In October, 1996 the Company completed an initial public offering of its 
common stock which resulted in net proceeds to the Company of $23.8 million.  
Pending use, the Company has invested the net proceeds in tax exempt 
government securities, $8.3 million of which are classified as long-term, 
with the remaining proceeds classified as cash or cash equivalents.

FORWARD-LOOKING STATEMENTS

Please refer to the Management's Discussion and Analysis section of the 1996 
Annual Report to Shareholders, incorporated by reference into the Company's 
Form 10-KSB report for the year ended December 31, 1996, for cautionary 
statements on important factors to consider in evaluating the forward-looking 
statements included in this Form 10-QSB. 

                                        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)  Report 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 12, 1997           By: /s/ Michael W. Rogers
                                        ---------------------------------------
                                        Michael W. Rogers
                                        Chairman and Chief Executive Officer 



    Date:     May 12, 1997           By: /s/ Thomas P. Skiba
                                        ---------------------------------------
                                        Thomas P. Skiba 
                                        Vice President & Chief Financial Officer