Form 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.  20549


[x]     Quarterly Report Pursuant to Section 13 or 15(d)
         of the Securities Exchange Act of 1934
           For the Twelve Weeks Ended September 7, 1996.

OR

[ ]    Transition Report Pursuant to Section 13 or 15(d)
          of the Securities Exchange Act of 1934
           For the Transition Period from       to       .

Commission File No.1-7348


DYNAMICS RESEARCH CORPORATION
(Exact name of registrant as specified in its charter)


     Massachusetts                               04-2211809
(State or other Jurisdiction of           (I.R.S. Employer
 Incorporation or Organization)            Identification No.)


60 Frontage Road, Andover, Massachusetts       01810-5498
  (Address of Principal Executive Offices)      (Zip Code)

Registrant's telephone number, including area code 
(508) 475-9090


    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  x     No     .

    The number of shares outstanding of the Registrant's
Common stock, par value $.10 per share, at October 7, 1996
was 5,688,335 shares.








DYNAMICS RESEARCH CORPORATION


INDEX

                                                         Page
Part I     Financial Information                         Number


 Item 1.     Financial Statements

   Consolidated Balance Sheets -
      September 7, 1996 and December 30, 1995  . . .        3

   Consolidated Statements of Income -
      Twelve and Thirty-Six Weeks Ended 
      September 7, 1996 and September 9, 1995  . . .        4

   Consolidated Statements of Cash Flows -
      Thirty-Six Weeks Ended September 7, 1996 
      and September 9, 1995  . . . . . . . . . . . .        5

   Notes to Consolidated Financial Statements  . . .        6


 Item 2.  Management's Discussion and Analysis of
          Financial Condition and Results of Operations     7


Part II.  Other Information

 Item 6.     Exhibits and Reports on Form 8-K  . . .        9


Signature  . . . . . . . . . . . . . . . . . . . . .       10

PART I.  FINANCIAL INFORMATION

DYNAMICS RESEARCH CORPORATION
CONSOLIDATED BALANCE SHEETS
(in thousands of dollars except share data)
                    (unaudited)
ASSETS                              September 7, 1996     December 30, 1995
CURRENT ASSETS:
  Cash and cash equivalents              $     3,912            $     777
  Receivables, less allowances of 
    $435 in 1996 and $475 in 1995             20,163               16,095
  Unbilled expenditures and 
    fees on contracts in process              17,070               16,383
  Inventories                                  3,504                2,612
  Refundable income taxes                        282                  286
  Prepaid expenses and  
    other current assets                         894                1,284
       Total current assets                   45,825               37,437

Property, plant and equipment, at cost
  Land                                         1,126                1,126
  Building                                     7,774                7,774
  Machinery and equipment                     40,491               33,352
  Less accumulated depreciation 
    and amortization                         (28,903)             (25,743)
     Net property, plant and equipment        20,488               16,509
  Excess of purchase price over net assets
    of business acquired, net                  1,493                    0
       Total assets                      $    67,806            $  53,946

LIABILITIES AND SHAREHOLDERS' INVESTMENT
CURRENT LIABILITIES:
  Notes payable                          $    11,650            $       0
  Accounts and drafts payable                  4,223                3,550
  Accrued payroll and employee benefits        7,570                6,416
  Deferred contract and other revenue            164                  983
  Other accrued expenses                       1,748                1,691
  Current deferred income taxes                4,649                4,407
  Current portion of long-term debt            1,205                1,217
       Total current liabilities              31,209               18,264

  Long-term debt                                 600                1,500
  Deferred income taxes                          976                  976

SHAREHOLDERS' INVESTMENT:
  Preferred stock, par value $.10 per share -
    5,000,000 shares authorized, none issued
  Common stock, par value $.10 per share -
    Authorized - 15,000,000 shares
    Issued -  6,684,443 shares in 1996 
    and 6,618,880 in 1995                        669                  662
  Less: Treasury stock - 996,108 in 1996 
    and 1995, at par value                      (100)                (100)
  Capital in excess of par value               9,489                9,219
  Retained earnings                           24,963               23,425
       Total shareholders' investment         35,021               33,206
       Total liabilities and 
        shareholders' investment         $    67,806            $  53,946

The accompanying notes are an integral part of these
consolidated  financial statements.



DYNAMICS RESEARCH CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(in thousands of dollars, except per share data)
(unaudited)



                               Twelve                     Thirty-Six
                             Weeks Ended                 Weeks Ended
                   Sept. 7, 1996 Sept. 9, 1995  Sept. 7, 1996 Sept. 9, 1995

Product sales 
 and contract revenue:
   Contract revenue      $ 23,441     $  19,043       $  65,405    $  55,057
   Product sales            6,488         5,311          19,524       15,162
Total revenue              29,929        24,354          84,929       70,219

Cost and expenses:
   Cost of 
    contract revenue       21,109        17,422          59,062       50,122
   Cost of product sales    4,451         3,845          13,741       12,107
   Selling, engineering 
    and administrative 
    expenses                2,904         2,543           9,354        7,498
Total operating costs 
 and expenses              28,464        23,810          82,157       69,727

Operating income (loss)     1,465           544           2,772          492

Interest expense 
 (income), net                114            45             283          106

Income (loss) before 
 provision for income taxes 1,351           499           2,489          386

Provision (benefit) for 
 income taxes                 520           190             951          147

Net income (loss)        $    831     $     309       $   1,538    $     239


Net income (loss) per 
 common share:           $    .15     $     .06       $     .27    $     .04


Weighted average common 
 shares outstanding     5,685,930     5,575,387       5,669,987    5,606,918


The accompanying notes are an integral part of these
consolidated financial statements.


DYNAMICS RESEARCH CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands of dollars)
(unaudited)
<TABLE>

<CAPTION>

                                            Thirty-Six Weeks Ended
                                     September 7, 1996     September 9, 1995
<S>                                            <C>              <C>
Cash provided by operations:
  Net income (loss)                        $    1,538         $    239
  Depreciation and amortization                 3,657            2,831
  Provision for receivable reserves                33             (111)
                                                5,228            2,959                

Cash provided by (used for) 
 working capital:
  Receivables                                  (4,101)          (1,339)
  Unbilled expenditures and 
   fees on contracts in process                  (687)           1,843
  Inventories                                    (892)            (204)
  Refundable income taxes                           4              479
  Prepaid expenses and other current assets       390              391
  Accounts and drafts payable                     673             (854)
  Accrued payroll and employee benefits         1,154            1,530
  Deferred contract and other revenue            (819)             177
  Other accrued expenses                          (34)            (148)
  Accrued and current deferred income taxes       333              230
                                               (3,979)           2,105

 Net cash generated (used) in operations        1,249            5,064

Cash provided by (used for) 
 investing activities:
  Additions to property, plant 
   and equipment, net                          (7,139)          (2,408)
  Excess of purchase price over net assets   
   of business acquired, net                   (1,990)               0
  Net cash used for investing activities:      (9,129)          (2,408)

Cash provided by (used for) financing activities:
  Net borrowings (repayments) 
   under line of credit agreements             11,650           (1,214)
  Principal payments under 
   long-term borrowings                          (912)            (900)
  Proceeds from the exercise of stock options     277               --
  Purchase of treasury shares                      --             (230)
  Net cash generated (used) 
   in financing activities                     11,015           (2,344)

Net increase (decrease) in cash 
 and cash equivalents                           3,135              312
Cash and cash equivalents 
 at the beginning of the year                     777              206
Cash and cash equivalents 
 at the end of the period                  $    3,912         $    518

Supplemental disclosures of cash flow information:
Cash paid during the thirty-six week period for:
  Interest                                 $      309         $    199
  Income taxes                             $      678         $     39
</TABLE>
The accompanying notes are an integral part of these
consolidated financial statements.


DYNAMICS RESEARCH CORPORATION

Notes to Consolidated Financial Statements



Note 1.     The unaudited consolidated financial statements
     presented herein have been prepared by the registrant
     pursuant to the rules and regulations of the Securities
     and Exchange Commission.  Certain information in
     footnote disclosures normally included in financial
     statements prepared in accordance with generally
     accepted accounting principles has been condensed or
     omitted pursuant to such rules and regulations,
     although the registrant believes that the disclosures
     are adequate to make the information presented not
     misleading.  The accompanying consolidated financial
     statements have not been audited by independent
     accountants, but in the opinion of the management such
     financial statements include all adjustments,
     consisting only of normal recurring adjustments,
     necessary to fairly present the results of operations.

          The results of operations for the twelve weeks and
     thirty-six weeks ended September 7, 1996 may not be
     indicative of the results that may be expected for the
     fiscal year ending December 28, 1996.

Note 2.     Inventories are comprised of the following (in
thousands of dollars):

                                     September 7, 1996     December 30, 1995
     Work in process                      $   1,183             $     686
     Raw materials and subassemblies          2,321                 1,926
               Total inventories          $   3,504             $   2,612






       Item 2.  Management Discussion and Analysis of
Financial Condition and Results of Operations

Results of Operations

    Total revenue increased $5,575,000 or 23% for the third
quarter of 1996 compared to the third quarter of 1995,
consisting of increases in both the precision products and
systems and services business segments.

    Product sales increased by $1,177,000 or 22% for the
third quarter of 1996 primarily from the increased sales of
precision electroformed components for a line of ink-jet
printers.
   
    Contract revenue increased by $4,398,999 or 23% for the
third quarter of 1996 compared to the same period in 1995.
The increase in contract revenue was attributable primarily
to revenue generated under contract awards announced during
1995 and 1996, added work under the Company's long running
core Navy program, and the January 1996 acquisition of an
Air Force services business.  Defense budget pressures and
priorities may alter the future scope of defense programs,
and the potential impact of these changes on the Company's
future revenue remains difficult to predict.  Much of the
Company's contract revenue relates to the development and
operation of computer-based management information and
logistics support systems, as well as other information
technology services.  The company is continuing to pursue
additional programs both within the Department of Defense
(DoD) and with other government agencies.

    Cost of contract revenue as a percentage of contract
revenue decreased slightly to 90% for the third quarter of
1996 from 91% for the same period in 1995.

       Cost of goods as a percentage of product sales for
the third quarter of 1996 was 69%, down from 72% in 1995.
This 3% decrease in cost of goods sold as a percentage of
sales resulted from the benefit of increased production
levels of the new electroformed components for commercial
ink-jet printers.

    Selling, engineering and administrative expenses
increased 14% from the same period in 1995 principally due
to the increased research and development efforts by the
Company in connection with a software design and development
tool which was announced during the second quarter of 1996.

    Net interest expense was $114,000 in the third quarter
of 1996 compared to $45,000 for the same period in 1995.
The increase resulted from a higher level of average
borrowing during the third quarter of 1996 which was due to
increased capital expenditure levels to increase electroform
manufacturing capacity, increased unbilled and billed
receivables due to delays in the funding of government
contracts coupled with the 23% growth of this segment during
the quarter, and the Company's purchase of an Air Force
service business during the first quarter of 1996.

The effective tax rate for the third twelve weeks of 1996
was 38.5% compared to 38.1% in 1995.  The 1996 effective tax
rate reflects the additional state investment tax credit
available as a result of the Company's capital investment in
additional electroform manufacturing capacity.  The Company
accounts for income taxes in accordance with the Statement
of Financial Accounting Standards No. 109 - Accounting for
Income Taxes (SFAS 109).


     Liquidity and Capital Resources


     During the first three fiscal quarters of 1996, the
Company's cash generated by operations was $1,249,000, which
included working capital growth of $3,979,000.  The major
components of working capital are billed and unbilled
accounts receivable that increased with the growth of sales
as well as timing of the collection of government accounts.
Cash provided by net income and non-cash charges increased
to $5,228,000 in 1996 from $2,959,000 in 1995.

     Capital spending during the first three quarters of
1996 was $7,139,000 consisting principally of manufacturing
production equipment and office computer equipment.  This
increased level of capital spending was principally the
result of the Company's commitment to increase its
electroform production capacity during the first half of
1996.  Capital spending and the cost of the Company's
acquisition of a business in the first quarter have been
financed under the Company's available bank lines of credit.

     The Company's primary sources of liquidity have been
cash flow from operations and bank credit lines.  At
September 7, 1996, $9,350,000 was available under the
Company's current lines of credit.  The Company believes
that its liquid assets, cash flow from operations and
available bank lines of credit will satisfy its operating
and capital requirements for the foreseeable future.

     Forward Looking Information

     This report includes certain forward-looking statements
about the Company's business including the effect of the
federal budget on the Company's sales, anticipated capital
spending and research and development spending.  Such
forward-looking statements are subject to risk and
uncertainties that could cause the actual results to vary
materially.  These risks and uncertainties, discussed in
more detail in the Company's form 10-k for the year ended
December 30, 1995, include possible reductions in federal
funding for the Company's customers and potential customers,
concentration of customers, risks of sustaining existing
contracts and orders thereunder at the same or increasing
levels and obtaining of new contracts, high levels on
competition and difficulties of entering new markets,
government contracting issues including audit adjustments
and costs of completing fixed price contracts, supply
difficulties, warranty claims, and factors affecting the
business segments in which the Company operated and the
economy generally.

PART II.  OTHER INFORMATION




Item 6.  Exhibits and Reports on Form 8-K
              
      a)  The Registrant did not file any reports on Form 8-
        K during the twelve-week period for which this
        report is filed.


SIGNATURE



    Pursuant to 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.



               DYNAMICS RESEARCH CORPORATION
                        (Registrant)



Date:  October 21, 1996   By:  /s/ Douglas R. Potter
                               Douglas R. Potter
                               Vice President of Finance and CFO
                              (Principal financial and accounting officer)