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 Quarterly Period Ended March 31, 1998.  

                                         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 (978) 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 April 24, 1998 was 6,314,454 shares.




                            DYNAMICS RESEARCH CORPORATION


INDEX

                                                                Page
Part I     Financial Information                               Number


     Item 1.     Financial Statements

          Consolidated Balance Sheets -
               March 31, 1998 and December 31, 1997 . . .         3
                
          Consolidated Statements of Income -
               Three Months Ended March 31, 1998 and
               March 31, 1997 . . . . . . . . . . . . . .         4          

          Consolidated Statements of Cash Flows -
               Three Months Ended March 31, 1998 and
               March 31, 1997 . . . . . . . . . . . . . .         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                                  March 31, 1998     December 31, 1997
CURRENT ASSETS:
  Cash and cash equivalents               $   2,108            $     542
  Receivables, less allowances
   of $223 in 1998 and $217 in 1997          28,937               17,397
  Unbilled expenditures and fees
   on contracts in process                   35,451               32,175
  Inventories                                 2,624                3,377
  Refundable income taxes                       876                  878
  Prepaid expenses and other
   current assets                             1,642                1,668
       Total current assets                  71,638               56,037

Property, plant and equipment, at cost
  Land                                        1,126                1,126
  Building                                    7,774                7,774
  Machinery and equipment                    42,387               41,426
  Less accumulated depreciation
   and amortization                         (29,662)             (28,098)
    Net property, plant and equipment        21,625               22,228
  Excess of purchase price over net assets                    
    of business acquired, net                   332                  594
       Total assets                      $   93,595            $  78,859
          
LIABILITIES AND SHAREHOLDERS' INVESTMENT          
CURRENT LIABILITIES:          
  Accounts and drafts payable                11,085                8,355
  Accrued payroll and employee benefits       8,370                8,032
  Other accrued expenses                      1,810                4,251
  Accrued and current deferred
   income taxes                               9,398                8,999
       Total current liabilities             30,663               29,637

Long-term debt                               23,150               10,000
Deferred income taxes                            75                   75     
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 -  7,433,728 shares in 1998
    and 7,366,484 in 1997                       744                 737
  Less: Treasury stock - 1,115,726 in 1998
   and 1,077,612 in 1997, at par value         (111)               (108)
  Capital in excess of par value             14,425              14,506
  Retained earnings                          24,649              24,012
       Total shareholders' investment        39,707              39,147
       Total liabilities and 
        shareholders' investment         $   93,595            $ 78,859

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)


                    
                                                 Three              Three
                                              Months Ended       Months Ended
                                             March 31, 1998     March 31, 1997

Product sales and contract revenue:
   Contract revenue                           $   35,073         $   26,874
   Product sales                                   7,882              6,134
Total revenue                                     42,955             33,008

Costs and expenses:
   Cost of contract revenue                       31,327             23,771
   Cost of goods                                   5,886              5,169
   Selling, engineering and
    administrative expenses                        4,303              3,304
Total costs and expenses                          41,516             32,244

Operating income                                   1,439                764

Interest expense, net                                343                205

Income before provision for income taxes           1,096                559

Provision for income taxes                           459                233

Net income                                    $      637         $      326


Net income per common share - Basic *         $      .08         $      .04  
                                                                     
Net income per common share - Diluted *       $      .08         $      .04

Weighted average common shares
 outstanding - Basic *                         7,558,686          7,519,237

Weighted average common shares
 outstanding - Diluted *                       7,854,074          7,803,799


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

Retroactively adjusted for the April 1997 10% stock dividend and the May
1998 20% stock dividend.



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

                                                Three               Three
                                             Months Ended       Months Ended
                                            March 31, 1998     March 31, 1997

Cash provided by operations:
  Net income                                  $    637            $    326
  Depreciation and amortization                  1,826               1,199
  Deferred income taxes                              -                (254)
  Provision for receivable reserves                  2                 (14)
                                                 2,465               1,257

Cash provided by (used for) working capital:          
  Receivables                                  (11,542)               (322)
  Unbilled expenditures and fees
   on contracts in process                      (3,276)              4,403
  Inventories                                      753                 308
  Refundable income taxes                            2                   -
  Prepaid expenses and other current assets         26                  (7)
  Accounts and drafts payable                    2,730              (6,166)
  Accrued payroll and employee benefits            338                 792
  Other accrued expenses                        (2,441)                205
  Accrued and current deferred income taxes        399                 476   
                                               (13,011)               (311)

  Net cash provided by (used for) operations   (10,546)                946

Cash used for investing activities:
  Additions to property, plant and
   equipment, net                                 (961)             (1,197)
  Acquisition payment                                -                (125)
  Net cash used for investing activities:         (961)             (1,322)

Cash provided by (used for) financing activities:
  Net borrowings under line of credit agreements     -                 650
  Principal payments under long-term borrowings      -                (300)
  Borrowing (payments) under revolving
   Long-term credit agreement, net              13,150                   -     
  Proceeds from the exercise of stock options      145                  74
  Purchase of treasury shares                     (222)               (117)
  Net cash provided by (used for)
   financing activities                         13,073                 307

Net increase (decrease) in cash
 and cash equivalents                            1,566                 (69)
Cash and cash equivalents at the
 beginning of the year                             542                 234
Cash and cash equivalents at the
 end of the period                            $  2,108            $    165

Supplemental disclosures of cash flow information:
Cash paid during the quarterly period for:
   Interest                                   $    235            $    173
   Income taxes                               $     62            $     16

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 quarterly period ended March 31,
         1998 may not be indicative of the results that may be expected for
         the fiscal year ending December 31, 1998.

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

                                         March 31, 1998     December 31, 1997
     Work in process                         $   349              $ 1,364
     Raw materials and subassemblies           2,275                2,013
               Total inventories             $ 2,624              $ 3,377

Note 3. Subsequent Event - On April 28, 1998, the Company's Board of
        Directors declared a 20% stock dividend to be distributed on May 26,
        1998 to shareholders of record on May 11, 1998.  Shares outstanding
        and per share information have been adjusted accordingly.

        Also, On April 28, 1998, the shareholders of the Company voted to
        increase the authorized shares to 30,000,000 from 15,000,000.



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


Results of Operations
 
     Total revenue for the first quarter of 1998 increased $9,947,000 or
     30.5% to $42,955,000, compared to $33,008,000 for the first quarter of
     1997.  Commercial, state and non-defense federal business amounted to
     41.3% of the Company's total revenue in the first quarter of 1998,
     compared to 24.0% in the first quarter of 1997.

     Contract revenue increased $6,199,000 or 30.5% for the first quarter of
     1998 compared to the same period in 1997.  The growth was principally
     attributable to major contracts with the State of Ohio for statewide
     infrastructure for Human Services systems and with the State of Colorado
     for similar network infrastructure as well as software system
     implementation services.  The Company's defense revenue related to the
     development and operation of computer-based management information and
     logistics support systems, as well as other information technology
     services, increased $1,500,000, or 4.7% compared to the first quarter
     of 1997.

     Product sales increased $1,748,000 or 28.5% for the first quarter of
     1998 compared to the first quarter of 1997.  This growth was the result
     of increased sales of electroformed components for a line of ink-jet
     printers and of a line of custom encoders for a customer in the
     automotive industry.

     Cost of contract revenue as a percentage of contract revenue increased
     to 89.3% for the first quarter of 1998 from 88.5% for the first quarter
     of 1997.  The increased contribution from higher revenue was offset by
     a higher level of costs arributable to the Company's telecommunication
     fraud control market initiative.

     Cost of goods as a percentage of product sales for the first quarter of
     1998 was 74.7%, down from 84.3% for the first quarter of 1997.  The
     significant decrease in the cost of goods percentage was principally
     the result of the substantial increase in production levels for certain
     key customers, as mentioned above, without a corresponding increase in
     overhead costs.

     Selling, engineering and administrative expenses increased $1,000,000
     or 30.2%, from 1997 due to increased selling and marketing costs
     associated with the Company's developing telecommunications fraud
     control business as well as administrative costs to support overall
     revenue growth.  These expenses represent 10.0% of revenue for both
     years.

     Interest expense, net was $343,000 for the first quarter of 1998
     compared to $205,000 for the same period in 1997.  This increase
     resulted from a higher level of borrowing during the first quarter of
     1998 which was required to support increased working capital
     requirements attributable to the Company's substantial revenue growth
     as well as delays in billing of certain government customers.  Billing
     and collections are expected to improve during the second and third
     quarter of 1998.

     The Company's effective income tax rate for the first quarter of 1998
     was 41.9% compared to 41.7% in 1997.  The Company accounts for income
     taxes in accordance with Statement of Financial Accounting Standards
     No. 109 - Accounting for Income Taxes (SFAS 109).

 
Liquidity and Capital Resources

     The Company's primary sources of liquidity have been cash flow from
     operations and bank credit lines.  The principal drivers of cash flow
     are earnings, adjusted for depreciation and amortization, aggregate
     billed and unbilled receivables in the Company's government and state
     businesses, and capital expenditures.  At March 31, 1998, the Company
     had $6,850,000 available under its working capital lines of credit as
     well as an additional $15,000,000 of credit available for potential
     acquisitions.  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.

     The Company's cash, and cash equivalents increased by $1,566,000 during
     the first quarter of 1998.  Receivables increased $11,540,000 to
     $28,937,000 at March 31, 1998 from $17,397,000 at December 31, 1997
     while unbilled expenditures and fees on contracts in progress increased
     $3,276,000 to $35,451,000 from $32,175,000 at December 31, 1997.  The
     increase in billed receivables was due to the final billing of retained
     costs and fees on several large fixed-price contracts as well as
     invoicing on various other contracts that had been delayed early in the
     quarter.  These delays are not an indication of contractual or collection
     problems.  The March 1998 billed and unbilled receivables balance is
     comparable to the December 1997 balance when measured in terms of day's
     sales.

     The Company's capital expenditures during the first quarter of 1998 were
     $961,000, consisting principally of computer equipment.

 Year 2000

     The Company has established a steering committee to coordinate the
     identification, evaluation and implementation of changes to its entire
     computer infrastructure necessary to achieve year 2000 data conversion
     with no disruption to its business operations or customers.  The Company
     is also communicating with its suppliers and others with whom it does
     business to coordinate year 2000 conversions.  These actions are
     necessary to ensure that the systems and applications the Company
     utilizes will recognize and process year 2000 and beyond data.  The cost
     of compliance and its effect on the Company's future results of operations
     has not yet been determined.

  Impact of Inflation and Changing Prices

     Overall, inflation has not had a material impact on the Company's
     operations.  The terms of the Company's Defense contract, which accounted
     for approximately 66% of the Company's revenues in 1997, are generally for
     one year and include salary increase factors for future years, thus
     reducing the potential impact of inflation on the Company.

    
   Forward Looking Information

     This report includes certain forward-looking statements about the Company's
     business including the effect of federal and state budgets on the Company's
     sales, response to the Company's product and services offerings, growth in
     revenues, capital spending, research and development spending and customer
     mix.  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 31,1997, 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 of obtaining new contracts, high levels
     of 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 operates and the
     economy generally.




PART II.  OTHER INFORMATION


Item 6.  (a)  Exhibits

             (27.1)  Financial Data Schedule

Item 6.  (b)  Reports on Form 8-K

             The Registrant did not file any reports on Form 8-K during the
             quarterly 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:  May 13, 1998                 By:       /s/ Douglas R. Potter
                                                  Douglas R. Potter
                                                  Vice President of Finance
                                                  and Chief Financial Officer
                                                  (Principal financial and
                                                  accounting officer)