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, 1999.  

                                         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 May 7, 1999 was 7,353,590 shares.








                         DYNAMICS RESEARCH CORPORATION


                                      INDEX

                                                                    Page
Part I     Financial Information                                   Number


     Item 1.     Financial Statements

          Consolidated Balance Sheets -
               March 31, 1999 and December 31, 1998 . . . . . .       3
                
          Consolidated Statements of Income -
               Three Months Ended March 31, 1999 and
               March 31, 1998 . . . . . . . . . . . . . . . . .       4         

          Consolidated Statements of Cash Flows -
               Three Months Ended March 31, 1999 and
               March 31, 1998 . . . . . . . . . . . . . . . . .       5

          Notes to Consolidated Financial Statements  . . . . .       6


     Item 2.  Management's Discussion and Analysis 

              Financial Condition and Results of Operations  . .      8


Part II.  Other Information

     Item 6.     Exhibits and Reports on Form 8-K  . . . . . . .     12

     
Signature  . . . . . . . . . . . . . . . . . . . . . . . . . . .     13


PART I.  FINANCIAL INFORMATION

DYNAMICS RESEARCH CORPORATION
CONSOLIDATED BALANCE SHEETS
(in thousands of dollars except share data)

                                           (unaudited)
ASSETS                                    March 31, 1999    December 31, 1998
CURRENT ASSETS:
  Cash and cash equivalents                 $    178            $     97
  Receivables, less allowances of $318
   in 1999 and $316 in 1998                   29,865              33,016
  Unbilled expenditures and fees
   on contracts in process                    35,138              32,169
  Inventories                                  2,471               2,647
  Refundable income taxes                          9                   9
  Prepaid expenses and
   other current assets                        1,099                 958
       Total current assets                   68,760              68,896

Property, plant and equipment, at cost
  Land                                         1,126               1,126
  Building                                     7,774               7,774
  Machinery and equipment                     42,900              42,271
  Less accumulated depreciation
   and amortization                          (34,294)            (32,742)
    Net property, plant and equipment         17,506              18,429
  Other non-current assets                     1,111                 742
       Total assets                         $ 87,377            $ 88,067
          
LIABILITIES AND SHAREHOLDERS' INVESTMENT          
CURRENT LIABILITIES:          
  Accounts and drafts payable               $  9,673            $ 10,300
  Accrued payroll and employee benefits        9,631               7,782
  Other accrued expenses                       2,736               2,630
  Accrued and current deferred
   income taxes                                7,481               7,189
  Net liabilities of
   discontinued operations                     2,292               1,772
       Total current liabilities              31,813              29,673

  Long-term debt                              22,850              26,800
  Deferred income taxes                          345                 348     

SHAREHOLDERS' INVESTMENT:          
  Preferred stock, par value $.10 per share           
     5,000,000 shares authorized, none issued          
  Common stock, par value $.10 per share -          
     Authorized - 30,000,000 shares          
     Issued -  8,733,016 shares in 1999
      and 8,733,016 in 1998                      873                 873
  Less: Treasury stock - 1,379,426 in
     1999 and 1,363,826 in 1998,
      at par value                              (138)               (136)
  Capital in excess of par value              27,417              27,474
  Retained earnings                            4,217               3,035
      Total shareholders' investment          32,369              31,246
      Total liabilities and
       shareholders' investment             $ 87,377            $ 88,067

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, 1999      March 31, 1998

Revenue                                     $ 46,549            $ 41,988

Costs and expenses:
   Cost of revenue                            39,890              35,889
   Selling, engineering and
    administrative expenses                    4,096               3,691
Total costs and expenses                      43,986              39,580

Operating income                               2,563               2,408
Interest expense, net                            526                 343
Income from continuing operations before
   provision for income taxes                  2,037               2,065        
Provision for income taxes                       855                 862
Income from continuing operations              1,182               1,203
Loss from discontinued operations,
 net of applicable tax benefit
 of $400 in 1998                                   -                 566
Net income                                  $  1,182            $    637

Per share data

Per common share - basic
   Income from continuing operations*       $    .16            $    .16
   Net income (loss)*                       $    .16            $    .08

Per common share - diluted
   Income from continuing operations*       $    .16            $    .15
   Net income (loss)*                       $    .16            $    .08

Weighted average common
 shares outstanding - Basic *              7,365,290           7,558,686

Weighted average common
 shares outstanding - Diluted *            7,441,150           7,900,324     

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

*  Retroactively adjusted for 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, 1999        March 31, 1998

Cash provided by operations:
  Net income                                $  1,182            $    637
Adjustments to reconcile net income to cash
 Provided by operating activities: 
  Loss from discontinued operations                -                 566
  Depreciation and amortization                1,552               1,762
  Deferred income taxes                           (3)                 (7)
  Provision for receivable reserves                2                   6
                                               2,733               2,964

Cash provided by (used for) working capital:          
  Receivables                                  3,149             (11,231)
  Unbilled expenditures and fees
   on contracts in process                    (2,969)             (3,875)
  Inventories                                    176                 753
  Refundable income taxes                          -                   2
  Prepaid expenses and other current assets     (141)                 26
  Accounts and drafts payable                   (627)              2,696
  Accrued payroll and employee benefits        1,849                 308
  Other accrued expenses                         106              (2,452)
  Accrued and current deferred income taxes      292                 638
                                               1,835             (13,135)

  Net cash provided by (used for)
   continuing operations                       4,568             (10,171)
  Net cash provided by (used for)
   discontinued operations                       528                (375)
  Cash provided by (used for)
   operating activities                        5,096             (10,546)

Cash used for investing activities:
  Additions to property and equipment
   related to continuing operations, net        (629)               (888)
 Additions to property and equipment
  related to discontinued operations, net         (8)                (73)
  Investments                                   (369)                  -
  Net cash used for investing activities:     (1,006)               (961)

Cash provided by (used for)
 financing activities:
 Borrowing (payments) under revolving
    long-term credit agreement, net           (3,950)             13,150     
 Proceeds from the exercise of stock options       -                 145
 Purchase of treasury shares                     (59)               (222)
 Net cash provided by (used for)
  financing activities                        (4,009)             13,073

Net increase (decrease) in cash
 and cash equivalents                             81               1,566
Cash and cash equivalents at the
 beginning of the year                            97                 542
Cash and cash equivalents at the
 end of the period                          $    178            $  2,108

Supplemental disclosures of cash
 flow information:

Cash paid during the quarterly period for:
     Interest                               $    440            $    235
     Income taxes                           $    164            $     62

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



DYNAMICS RESEARCH CORPORATION

Notes to Consolidated Financial Statements



Note 1.  Basis of Presentation

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.

Note 2.  Inventories

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

                                          March 31, 1999    December 31, 1998
     Work in process                        $    512            $    475
     Raw materials and subassemblies           1,959               2,172
               Total inventories            $  2,471            $  2,647

Note 3.  Discontinued Operations

In the fourth quarter of 1998, the Company adopted a plan to sell the 
telecommunications fraud control business unit. Accordingly, the revenues, 
costs, expenses, assets and liabilities and cash flows of the 
telecommunications business have been excluded from the respective captions 
in the Consolidated Statements of Income, Consolidated Balance Sheets and 
Consolidated Statements of Cash Flows and have been reported as "Loss from 
discontinued operations, net of applicable income taxes," as "Net 
liabilities of discontinued operations," and as "Net cash used for 
discontinued operations" for all periods presented. The results of 
discontinued operations do not reflect any interest expense or any allocation 
of corporate general and administrative expense.  Revenues for the 
telecommunications business unit for the quarters ended March 31, 1999 and 
1998 were $455,000 and $967,000, respectively.  Net operating losses of the 
telecommunications business were $703,000 and $969,000 for the quarters ended 
March 31, 1999 and 1998, respectively.  The results for the quarter ended 
March 31, 1999 have been charged against the accrual established at the date 
the plan of disposal was adopted.



Note 4.  Segment Information.

Identifiable assets by business segment include both assets directly 
identified with those operations and an allocable share of jointly used 
assets.

Summarized financial information by business segment for March 31, 1999 and 
March 31, 1998 are as follows:


                                                                   Identifiable
                        Systems                                      Continuing
                           and               Metri-         Corpor-  Operations
                       Services   Encoder   graphic  Other     ate      Total

March 31, 1999

Net sales (1)           $39,759    $3,490     $3,300      -        -   $46,549
Operating profit(loss)    1,433       (41)     1,171      -        -     2,563
Identifiable assets at
March 31, 1999           65,558     5,560      4,533      -   11,726    87,377

March 31, 1998

Net sales (1)           34,106      4,882      2,999      1        -    41,988
Operating profit(loss)   1,469        306      1,044   (411)       -     2,408
Identifiable assets at
March 31, 1998          65,346      6,963      6,063    214   14,054    92,640

(1) Net sales and operating profit are presented after the elimination of 
intersegment transactions which are not material.

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

Results of Operations

Three Months Ended March 31, 1999 Compared to
      Three Months Ended March 31, 1998

Total revenues increased 11% to $46,549,000 in the first quarter of 1999 
compared with $41,988,000 in the first quarter of 1998.  Contract revenue for 
the Systems and Services segment increased 17% to $39,759,000 in the first 
quarter of 1999 compared with $34,106,000 in the first quarter of 1998.  The 
growth was principally attributable to broad-based growth in the Company's 
defense business as well as increased revenue from three major state 
contracts and other information technology services.
 
First quarter 1999 Metrigraphic Division sales increased 10% to $3,300,000 
compared to $2,999,000 in the same period in 1998.  This increase was 
primarily related to higher sales of electroformed components across a broad 
range of customers, including one in the medical products industry, offset by 
reduced sales to a customer in the inkjet printer market.  The Company also 
had higher sales of prototype electroformed components to a number of 
customers in the first quarter of 1999 compared to the same period in 1998.

Encoder Division sales decreased 29% to $3,490,000 in 1999 from $4,882,000 
for the same period in 1998.  The decrease primarily relates to reductions in 
sales of custom encoders to a customer in the automotive industry as well as 
decreased sales to certain of the Company's customers who have significant 
sales in Asian markets.

Cost of revenue increased 11% to $39,890,000 in the first quarter of 1999, 
compared with $35,889,000 in the first quarter of 1998, commensurate with the 
increase in revenues.  Cost of revenue as a percentage of revenue was 86% and 
85% in the first quarters of 1999 and 1998, respectively.
 
Selling, engineering and administrative expenses increased 11% in the first 
quarter of 1999 to $4,096,000 compared to $3,691,000 in the first quarter of 
1998.  General corporate staffing-related and other administrative support 
expenses were increased to support the higher business base.

Operating income of the Systems and Services segment as a percentage of 
segment revenue decreased to 3.6% in the first quarter of 1999 compared to 
4.3% in the first quarter of 1998.  This decrease is attributable to higher 
expenses related to technology and business development efforts in the first 
quarter of 1999 compared to the same period in 1998.

The Encoder segment reported an operating loss of $41,000 in the first 
quarter of 1999 compared to operating income of $306,000 in the first quarter 
of 1998.  The decrease in operating profit is primarily the result of lower 
gross profit contributions attributable to the decrease in sales and the 
increase in selling, engineering and administrative expenses, discussed 
above.

In the fourth quarter of 1998, the Company adopted a plan to sell the 
telecommunications fraud control business unit. Accordingly, 1999 results 
from the telecommunications fraud control business unit are charged to the 
loss on disposal accrued at the date the plan was adopted.  First quarter 
1998 results have been restated to conform to this presentation.  The results 
of discontinued operations do not reflect any interest expense or any 
allocation of management expense.  Revenues for the telecommunications 
business unit for the quarters ended March 31, 1999 and 1998 were $455,000 
and $967,000, respectively.  Net operating losses of the telecommunications 
business were $703,000 and $969,000 for the quarters ended March 31, 1999 and 
1998, respectively.  These amounts are not included in sales or operating 
income as reported in the Consolidated Statements of Income. 

In December 1998, DRC entered into an agreement with Empresa, Inc.(Empresa), 
formerly Electronic Press Services Group, Inc., to acquire an interest in 
Empresa in exchange for a perpetual license to VisualMagic? software 
development technology, cash and certain other assets. The terms of the 
agreement provide for the Company to make its cash investment in three 
installments: one at the closing in December 1998, the second in February 
1999, with the third expected to be made in May 1999, subject to certain 
performance requirements.  First quarter 1999 and 1998 results include $0 and 
$411,000 of costs related to VisualMagic development. 

Net interest expense increased to $526,000 in the first quarter of 1999 
compared with $343,000 in the first quarter of 1998.  Revenue growth and 
working capital requirements for certain state government customers in the 
first quarter of 1999 resulted in higher average borrowings. The weighted 
average interest rate on the Company's borrowings was 7.7% and 6.9% in the 
first quarter of 1999 and 1998, respectively.

The Company's effective income tax rate for the first quarter of 1999 and 
1998 was 42%. The Company accounts for income taxes using the liability 
method as set forth in Statement of Financial Accounting Standards No. 109 
(SFAS 109).

Liquidity and Capital Resources

During the first three months of 1999, the Company's primary source 
of liquidity has been operating cash flow and its revolving credit 
facility. Working capital requirements related to the Company's 
revenue growth and state government contracts were funded with 
borrowings under the Company's credit facility. Cash generated from 
operations during the first quarter of 1999 was used to reduce 
outstanding debt  $3,950,000 to $22,850,000 at March 31, 1999.  
Working capital decreased to $36,947,000 at March 31, 1999 from 
$39,223,000 at December 31, 1998.  This decrease was primarily 
attributable to an increase accrued payroll and employee benefits, 
and increases in accrued income taxes. Capital spending for 
continuing operations during the first three months of 1999 was 
$629,000, consisting principally of office computer equipment.  The 
Company spent $59,000 during the first three months of 1999 for the 
purchase of treasury shares compared with $222,000 during the first 
three months of 1998.

At March 31, 1999, $17,150,000 was available for working capital purposes 
under the Company's revolving credit facility.  The Company believes that its 
current assets, cash flow from operations and available bank lines of credit 
will be sufficient to support its normal operating and capital requirements 
for the balance of 1999.  The Company does not have any significant capital 
commitments at March 31, 1999 outside the ordinary course of business.


Year 2000 Disclosure

Many existing computer programs use only two digits, rather than four, to 
represent a year.  Date-sensitive software or hardware written or developed 
in this fashion may not be able to distinguish between 1900 and 2000, and 
programs written in this manner that perform arithmetic operations, 
comparisons or sorting of date fields may yield incorrect results when 
processing a Year 2000 date.  This Year 2000 problem could potentially cause 
system failures or miscalculations that could disrupt operations.

The Company's State of Readiness

The Company has completed the process of identifying and is now remediating 
Year 2000 issues in four areas:  (i) information technology ("IT") and 
financial systems, (ii) non-IT systems, (iii) third-party vendors and 
suppliers and (iv) systems it has implemented and maintains for various 
customers.  The Company believes its IT and non-IT systems will be Year 2000 
compliant by the end of 1999.

The Company has completed a review of its financial and other significant IT 
systems  and is in the process of remediating identified material Year 2000 
problems.  The primary required hardware and operating system platform 
upgrade was completed in January 1999.  Necessary application upgrades or 
remediation and testing are expected to be completed by mid-1999.  The 
Company also conducted a review of all its other computers in 1998 (including 
desktops, servers and mainframes) and has addressed all material Year 2000 
problems.  All of the Company's computer and equipment vendors have been 
contacted to verify Year 2000 compliance.  Based on their responses, all 
products requiring replacement or upgrade are expected to be Year 2000 
compliant by the end of 1999.  In the case of third party licensed commercial 
off-the-shelf products, the Company has determined that they are either Year 
2000 compliant or the licensor has released a compliant version that the 
Company will migrate to by mid-1999.  While the Company expects that all 
financial and significant IT-related systems will be Year 2000 compliant by 
mid-1999, there can be no assurance that corrective actions will be completed 
in a timely manner.

The Company has completed a full review of all process control components, 
including safety equipment, in manufacturing and production facilities.  
Currently, the Company is in the process of upgrading or replacing certain 
components of the phone, security, building access, HVAC and lighting 
systems, which is expected to be completed in early 1999.  The Company 
anticipates that all other process control components will be Year 2000 
compliant by mid-1999.  However, there can be no assurance that such upgrades 
and replacements will occur in a timely manner.

The Company has received Year 2000 compliance information from its employee 
benefit service and other critical suppliers.  The Company continues to 
monitor its major power, energy and communications service suppliers.  The 
Company has contacted its suppliers of financial services regarding computer 
interface changes and has requested the status of their Year 2000 programs, 
if this information is not readily available on their web-sites.  Any 
necessary interface upgrades are expected to be completed by mid-1999, 
although the completion of such upgrades in a timely manner depends upon the 
readiness and willingness of suppliers to cooperate and provide this 
information in a timely manner, and cannot be assured.  

The Company completed its Year 2000 remediation, validation testing and 
implementation activities for systems it had previously implemented and has 
continued to maintain for various customers in early 1999.  The Company 
previously developed and marketed commercial off-the-shelf products which are 
currently Year 2000 compliant.

The Company's Year 2000 Risk

Based on the efforts described above, the Company currently believes that its 
systems will be Year 2000 compliant in a timely manner. The Company has 
completed the process of identifying Year 2000 issues in its IT and non-IT 
systems and expects to complete any remediation efforts by mid-1999.  
However, there can be no assurance that all Year 2000 problems will be 
successfully identified, or that the necessary corrective actions will be 
completed in a timely manner.  Failure to successfully identify and remediate 
Year 2000 problems in critical systems in a timely manner could have a 
material adverse effect on the Company's results of operations, financial 
position or cash flow.

In addition, the Company believes that there is risk relating to significant 
service suppliers' failure to remediate their Year 2000 issues in a timely 
manner.  Although the Company is communicating with its suppliers regarding 
their Year 2000 compliance, the Company does not know whether these 
suppliers' systems will be Year 2000 compliant in a timely manner.  If one or 
more significant suppliers are not Year 2000 compliant, this could have a 
material adverse effect on the Company's results of operations, financial 
position or cash flow.

The Company's Contingency Plans

The Company plans by mid-year 1999 to develop contingency plans to be 
implemented in the event planned solutions prove ineffective in solving Year 
2000 compliance.  If it were to become necessary for the Company to implement 
a contingency plan, it is uncertain whether such plan would succeed in 
avoiding a Year 2000 issue which may otherwise have a material adverse effect 
on the Company's results of operations, financial position or cash flow.

The Company's Costs of Year 2000 Remediation

The Company anticipates the total identified cost of its Year 2000 effort 
will be between $430,000 and $475,000, of which it has expensed approximately 
$237,000 as of April 30, 1999.  The estimate excludes labor costs which 
predated the formal corporate Year 2000 effort and certain current labor 
costs at the divisional level which would be difficult to track.  The total 
cost estimate includes estimated and actual amounts to remediate or replace 
certain software, routers, security chips and any other items or systems 
identified in the Year 2000 effort, consulting fees for a Year 2000 review, 
and approximately $280,000 of redeployed labor expense.  The total estimated 
cost of redeployed labor within the corporate information systems department 
is equal to approximately 9% of that department's total maintenance labor 
budget through the end of the Year 2000 effort.  There can be no assurance 
that the costs associated with the Year 2000 problem will not be greater than 
anticipated.  The Company has deferred a financial and project accounting 
system upgrade due to its Year 2000 efforts, but does not believe such 
deferral will have a material adverse effect on the Company's business.

Forward-Looking Information

This report includes certain forward-looking statements about the Company's 
business including developments and intentions relating to strategic 
investment programs, cash flow requirements, research and development 
spending, cash flow expectations and Year 2000 readiness. 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, 
1998, include ability to consummate strategic transactions related to the 
Company's commercial business investments, 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, 1999                      By:  /s/ Douglas R. Potter
                                              Douglas R. Potter
                                              Vice President of Finance
                                               and Chief Financial Officer
                                              (Principal financial and
                                               accounting officer)