FORM 10-Q

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549


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

For the quarterly period ended September 26, 2002  Commission file number 1-3879

                                     DynCorp

             (Exact name of registrant as specified in its charter)

            Delaware                                        36-2408747
(State of incorporation or organization)    (I.R.S. Employer Identification No.)

11710 Plaza America Drive, Reston, Virginia                   20190
(Address of principal executive offices)                    (Zip Code)

                                 (703) 261-5000
              (Registrant's telephone number, including area code)


(Former  name,  former  address and former  fiscal year,  if changed  since last
                                    report)

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. |X| Yes |_| No

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock, as of the latest practicable date.

          Class                               Outstanding as of November 8, 2002
          -----                               ----------------------------------
Common Stock, $0.10 par value                             10,695,324

<PAGE>





                            DYNCORP AND SUBSIDIARIES
                                    FORM 10-Q
                    FOR THE QUARTER ENDED SEPTEMBER 26, 2002

                                      INDEX




                                                                       Page
                                                                       ----

PART I.  FINANCIAL INFORMATION
------------------------------

   Item 1.  Financial Statements

     Consolidated Condensed Balance Sheets at
         September 26, 2002 and December 27, 2001                         3-4

     Consolidated Condensed Statements of Operations for
         Three and Nine Months Ended September 26, 2002 and
         September 27, 2001                                               5

     Consolidated Condensed Statements of Cash Flows for
         Nine Months Ended September 26, 2002 and
         September 27, 2001                                               6

     Consolidated Statement of Stockholders' Equity for
         Nine Months Ended September 26, 2002                             7

     Notes to Consolidated Condensed Financial Statements                 8-15

   Item 2.  Management's Discussion and Analysis of Financial Condition
                     and Results of Operations                            16-25

   Item 3.  Quantitative and Qualitative Disclosures About Market Risk    25-26

   Item 4.  Controls and Procedures                                       26

PART II.  OTHER INFORMATION

   Item 1.  Legal Proceedings                                             26-28

   Item 4.  Submission of Matters to a Vote of Security Holders           28

   Item 6.  Exhibits and Reports on Form 8-K                              28-29

   Signatures                                                             30

   Certification of the Chief Executive Officer                           31

   Certification of the Chief Financial Officer                           32

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

<PAGE>


                            DYNCORP AND SUBSIDIARIES
                      CONSOLIDATED CONDENSED BALANCE SHEETS
                    SEPTEMBER 26, 2002 AND DECEMBER 27, 2001
                                 (In thousands)


<TABLE>
<CAPTION>


                                                                         September 26,
                                                                             2002              December 27,
                                                                         (Unaudited)               2001
                                                                         -----------               ----
<S>                                                                      <C>                    <C>
Assets
------
Current Assets:
 Cash and cash equivalents                                                $  32,441              $  15,078
 Accounts receivable (net of allowance for doubtful accounts
     of $8,133 in 2002 and $6,637 in 2001)                                  353,975                345,358
 Other current assets                                                        44,218                 37,933
                                                                          ---------              ---------
     Total current assets                                                   430,634                398,369

Property and Equipment (net of accumulated depreciation
 and amortization of $28,866 in 2002 and $26,599 in 2001)                    20,857                 20,959

Goodwill                                                                    107,814                103,185

Intangible Assets (net of accumulated amortization of
 $24,900 in 2002 and $24,454 in 2001)                                        20,244                 27,240

Other Assets                                                                 26,203                 48,687
                                                                          ---------              ---------

Total Assets                                                              $ 605,752              $ 598,440
                                                                          =========              =========

</TABLE>

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

<PAGE>



                            DYNCORP AND SUBSIDIARIES
                      CONSOLIDATED CONDENSED BALANCE SHEETS
                    SEPTEMBER 26, 2002 AND DECEMBER 27, 2001
                      (In thousands, except share amounts)

<TABLE>
<CAPTION>

                                                                                September 26,
                                                                                    2002                December 27,
                                                                                 (Unaudited)                2001
                                                                                 -----------                ----
<S>                                                                             <C>                        <C>
Liabilities and Stockholders' Equity
------------------------------------
Current Liabilities:
 Notes payable and current portion of long-term debt                             $  25,027                  $  20,123
 Accounts payable                                                                   27,197                     19,420
 Deferred revenue and customer advances                                              6,225                      6,195
 Accrued liabilities                                                               208,245                    207,961
                                                                                 ----------                 ----------
     Total current liabilities                                                     266,694                    253,699

Long-Term Debt                                                                     243,012                    264,482

Other Liabilities and Deferred Credits                                              47,578                     44,768

Contingencies and Litigation                                                             -                          -

Temporary Equity:
 Redeemable common stock at redemption value -
   ESOP shares, 6,967,946 and 7,142,510
     shares issued and outstanding in 2002 and 2001,
     respectively, subject to restrictions                                         373,002                    326,368
   Other redeemable common stock, 286,217 shares issued
            and outstanding in 2002 and 2001                                         8,492                      6,967

Stockholders' Equity:
 Common stock, par value ten cents per share, authorized
   20,000,000 shares; issued 5,474,136 and 5,296,146 shares
   in 2002 and 2001, respectively                                                      547                        530
 Paid-in surplus                                                                   139,271                    138,542
 Accumulated other comprehensive loss                                                 (617)                    (1,081)
 Reclassification to temporary equity for redemption value
   greater than par value                                                         (380,767)                  (332,596)
 Deficit                                                                           (48,360)                   (59,681)
 Common stock held in treasury, at cost; 2,159,758 and
   2,196,853 shares in 2002 and 2001, respectively                                 (43,100)                   (43,558)
                                                                                 ----------                 ----------

Total Liabilities and Stockholders' Equity                                       $ 605,752                  $ 598,440
                                                                                 ==========                 ==========
</TABLE>


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


<PAGE>


                            DYNCORP AND SUBSIDIARIES
                 CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
                    (In thousands, except per share amounts)

                                    UNAUDITED

<TABLE>
<CAPTION>

                                                                    Three Months Ended                Nine Months Ended
                                                                    ------------------                -----------------
                                                                                September 27,                      September 27,
                                                             September 26,     2001 (Revised -   September 26,    2001 (Revised -
                                                                 2002           See Note 2)          2002           See Note 2)
                                                                 ----           -----------          ----           -----------
<S>                                                          <C>                <C>              <C>              <C>
Revenues                                                      $ 607,539         $ 502,856         $ 1,744,276       $ 1,418,446

Costs and expenses:
   Costs of services                                            564,967           429,000           1,640,974         1,293,920
   Corporate general and administrative                           8,337             7,297              23,171            21,326
   Interest income                                                 (179)             (105)               (420)             (558)
   Interest expense                                               7,021             7,805              21,177            24,215
   Amortization of intangibles of acquired companies                519               801               1,556             4,451
   Other expense (other income)                                  12,210              (152)             33,777              (213)
                                                              ----------        ----------        ------------      ------------
         Total costs and expenses                               592,875           444,646           1,720,235         1,343,141

Earnings before income taxes and minority interest               14,664            58,210              24,041            75,305
       Provision for income taxes                                 3,871            20,060               6,738            26,933
                                                              ----------        ----------        ------------      ------------

Earnings before minority interest                                10,793            38,150              17,303            48,372
       Minority interest                                            871               532               4,456             1,643
                                                              ----------        ----------        ------------      ------------

Net earnings                                                  $   9,922         $  37,618         $    12,847       $    46,729
                                                              ==========        ==========        ============      ============

  Accretion of other redeemable common stock to
      redemption value                                              549               628               1,526             1,748

Common stockholders' share of net earnings                    $   9,373         $  36,990         $    11,321       $    44,981
                                                              ==========        ==========        ============      ============

Basic earnings per share                                      $    0.88         $    3.50         $      1.06       $      4.26

Diluted earnings per share                                    $    0.80         $    3.33         $      0.98       $      4.06

Weighted average number of shares
   outstanding for basic earnings per share                      10,677            10,555              10,661            10,552

Weighted average number of shares
   outstanding for diluted earnings per share                    11,683            11,110              11,601            11,075

</TABLE>

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

<PAGE>



                            DYNCORP AND SUBSIDIARIES
                 CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
                                 (In thousands)
                                    UNAUDITED

<TABLE>
<CAPTION>
                                                                                           Nine Months Ended
                                                                                           -----------------
                                                                                                         September 27,
                                                                                 September 26,          2001 (Revised -
                                                                                     2002                 See Note 2)
                                                                                     ----                 -----------
<S>                                                                              <C>                     <C>
Cash Flows from Operating Activities:
Common stockholders' share of net earnings                                        $  11,321                $  44,981
Adjustments to reconcile common stockholders' share of net earnings to
net cash provided by operating activities:
   Depreciation and amortization                                                     11,850                   13,913
   Accretion of other redeemable common stock to redemption value                     1,526                    1,748
   Gain on sale of assets of DynServices.com                                           (130)                       -
   Deferred income taxes                                                                581                      121
   Reversal of preacquistion contingency reserves                                         -                  (42,744)
   Non-cash net losses of unconsolidated affiliates                                   3,670                        -
   Change in minority interest                                                        4,456                    1,643
   Changes in pension asset and other postretirement benefit obligations              3,881                    2,340
   Non-cash write-off of investment in unconsolidated affiliate                      15,812                        -
   Other                                                                               (633)                     215
Changes in current assets and liabilities, net of acquisitions and
   dispositions:
   Increase in current assets and certain other assets except cash and cash
   equivalents                                                                      (17,361)                 (16,468)
   Increase in current liabilities and certain other liabilities
      excluding notes payable and current portion of long-term debt                   7,151                    2,209
                                                                                  ----------               ----------
         Cash provided by operating activities                                       42,124                    7,958
                                                                                  ----------               ----------
Cash Flows from Investing Activities:
Proceeds from sale of property and equipment                                            253                    3,028
Purchases of property and equipment                                                  (5,373)                  (4,945)
Proceeds from investments in unconsolidated affiliates                                  307                      563
Dividends paid to joint venture partners                                             (1,115)                  (1,205)
Proceeds from the sale of assets of DynServices.com                                     400                        -
Capitalized software costs                                                           (2,667)                  (2,997)
                                                                                  ----------               ----------
         Cash used in investing activities                                           (8,195)                  (5,556)
                                                                                  ----------               ----------

Cash Flows from Financing Activities:
Payments on indebtedness                                                            (88,292)                (200,800)
Proceeds from debt issuance                                                          71,250                  200,800
Other                                                                                   476                     (841)
                                                                                  ----------               ----------
         Cash used in financing activities                                          (16,566)                    (841)
                                                                                  ----------               ----------

Net Increase in Cash and Cash Equivalents                                            17,363                    1,561
Cash and Cash Equivalents at Beginning of the Period                                 15,078                   12,954
                                                                                  ----------               ----------
Cash and Cash Equivalents at End of the Period                                    $  32,441                $  14,515
                                                                                  ==========               ==========

Supplemental Cash Flow Information:
Cash paid for income taxes                                                        $  10,038                $   8,028
                                                                                  ==========               ==========
Cash paid for interest                                                            $  20,069                $  25,523
                                                                                  ==========               ==========

</TABLE>

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

<PAGE>


                            DYNCORP AND SUBSIDIARIES
                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
                                 (In thousands)

                                    UNAUDITED
<TABLE>
<CAPTION>

                                                               Reclassification for                             Accumulated
                                                                 Redemption Value                                  Other
                                      Common        Paid-in      Greater than Par               Treasury       Comprehensive
                                      Stock         Surplus           Value         Deficit      Stock          Income (Loss)
                                      -----         -------           -----         -------      -----          -------------
<S>                                   <C>           <C>            <C>            <C>           <C>             <C>
Balance, December 27, 2001            $ 530         $ 138,542       $(332,596)     $(59,681)    $(43,558)        $ (1,081)

Employee compensation plans
   (option exercises, restricted
    stock plan, incentive bonus)          3              (797)                                       458
Reclassification to redeemable
   common stock                          14                           (46,645)
Accretion of other redeemable
common stock to redemption
 value                                                  1,526          (1,526)       (1,526)
Adjustment to fair value of
 derivative financial instrument                                                                                      531
Translation adjustment and other                                                                                      (67)
Net earnings                                                                         12,847
                                     -----------------------------------------------------------------------------------------
Balance, September 26, 2002           $ 547         $ 139,271       $(380,767)     $(48,360)    $(43,100)        $   (617)
                                      =====         =========       ==========     =========    =========        =========
</TABLE>

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

<PAGE>



                            DYNCORP AND SUBSIDIARIES
              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                               SEPTEMBER 26, 2002
    (Dollars in thousands, except per share amounts or where otherwise noted)
                                    UNAUDITED

Note 1.  Basis of Presentation

The  Company  has  prepared  the  unaudited   consolidated  condensed  financial
statements  included  herein  pursuant  to  the  rules  and  regulations  of the
Securities and Exchange  Commission  ("SEC").  Certain  information and footnote
disclosures  normally  included in financial  statements  prepared in accordance
with generally  accepted  accounting  principles  have been condensed or omitted
pursuant to such rules and  regulations.  It is recommended that these condensed
financial  statements be read in conjunction  with the financial  statements and
the notes  thereto  included  in the  Company's  annual  report on Form  10-K/A,
Amendment  No. 2 for the fiscal year ended  December 27, 2001. In the opinion of
the Company, the unaudited  consolidated condensed financial statements included
herein reflect all adjustments  (consisting of normal recurring  adjustments and
some non-recurring  adjustments discussed elsewhere in this Form 10-Q) necessary
to present fairly the financial position, the results of operations and the cash
flows for such  interim  periods.  The results of  operations  for such  interim
periods are not necessarily indicative of the results for the full year. Certain
amounts  presented  for prior periods have been  reclassified  to conform to the
2002 presentation.

Contract Accounting

Revenues for cost-reimbursement contracts are recorded as reimbursable costs are
incurred,   including   a  pro-rata   share  of  the   contractual   fees.   For
time-and-material  contracts,  revenue is  recognized  to the extent of billable
rates times hours delivered plus material and other reimbursable costs incurred.
For long-term fixed price production contracts,  revenue is recognized at a rate
per unit as the units are delivered.  Revenue from other  long-term  fixed price
contracts is recognized ratably over the contract period or by other appropriate
methods to measure  services  provided.  Contract costs are expensed as incurred
except for certain  limited  long-term  contracts  noted  below.  For  long-term
contracts  which are  specifically  described  in the scope  section of American
Institute  of  Certified  Public  Accountants  ("AICPA")  Statement  of Position
("SOP") No. 81-1,  "Accounting for Performance of Construction  Type and Certain
Production-Type  Contracts," or other  appropriate  accounting  literature,  the
Company  applies the  percentage of completion  method.  Under the percentage of
completion  method,  income is recognized at a consistent profit margin over the
period of  performance  based on estimated  profit  margins at completion of the
contract.  This method of accounting  requires estimating the total revenues and
total  contract cost at completion of the contract.  During the  performance  of
long-term contracts, these estimates are periodically reviewed and revisions are
made as required. The impact on revenue and contract profit as a result of these
revisions  is  included  in the periods in which the  revisions  are made.  This
method can result in the deferral of costs,  including  start-up  costs,  or the
deferral of profit on these  contracts.  Because the Company assumes the risk of
performing  a fixed  price  contract at a set price,  the failure to  accurately
estimate ultimate costs or to control costs during performance of the work could
result,  and in some  instances has resulted,  in reduced  profits or losses for
such contracts.  Estimated losses on contracts at completion are recognized when
identified.

Disputes arise in the normal course of the Company's  business on projects where
the Company is  contesting  with  customers  for  collection of funds because of
events such as delays, changes in contract  specifications and questions of cost
allowability  or  collectibility.  Such  disputes  are recorded at the lesser of
their  estimated net realizable  value or actual costs  incurred,  and only when
realization  is  probable  and can be  reliably  estimated.  Claims  against the
Company  are  recognized  when a loss  is  considered  probable  and  reasonably
determinable in amount.  Because there are estimates and judgments involved, the
actual  results could be different  from those  estimates.  Accounts  receivable
balances  related to such disputed  items were  immaterial at September 26, 2002
and December 27, 2001.

Investment Recoverability

The Company periodically evaluates the recoverability of its equity investments,
in accordance  with  Accounting  Principles  Board No. 18, "The Equity Method of
Accounting for Investments in Common Stock," and if circumstances arise in which
a loss in value is  considered  to be other than  temporary,  the  Company  will
record a write-down of the investment to its estimated fair value. The Company's
recoverability analysis is based on the projected undiscounted cash flows of the
investments,  which is the lowest level of cash flow information  available,  or
other appropriate methods. During the second quarter of

<PAGE>


2002, the Company  recorded a write-off of  approximately  $15.8 million,  which
represented the net balance of a certain investment,  which was stated in excess
of its net  realizable  value.  The total charge was  included in Other  Expense
(Other Income) on the Consolidated Condensed Statement of Operations.

Comprehensive Income

For the three and nine months  ended  September  26, 2002,  total  comprehensive
income was $10.0 million and $13.3 million,  respectively. The $10.0 million for
the three months ended September 26, 2002 includes net earnings of $9.9 million,
translation  adjustment and other of ($0.1) million,  and the adjustment to fair
value of derivative financial instruments of $0.2 million. The $13.3 million for
the nine months ended  September 26, 2002 includes,  in addition to net earnings
of $12.8  million,  translation  adjustment  and other of ($0.1) million and the
adjustment to fair value of derivative  financial  instruments  of $0.5 million.
The components of accumulated other  comprehensive loss as of September 26, 2002
consist of translation  adjustment and other of ($0.1) million, an adjustment to
fair  value of  derivative  financial  instruments  of ($0.4)  million,  and the
cumulative effect of a change in accounting  principle of ($0.1) million for the
adoption of the  Financial  Accounting  Standards  Board  ("FASB")  Statement of
Financial  Accounting  Standards  ("SFAS") No. 133,  "Accounting  for Derivative
Instruments and Hedging Activities."

Note 2.  Revision of Financial Statements

As reported  in the  previously  filed 2001 Form  10-K/A,  Amendment  No. 2, the
Company has revised certain information in the Consolidated  Condensed Financial
Statements  for the three and nine months  ended  September  27, 2001  following
discussions  with  the  staff  of  the  SEC  regarding   accounting   principles
articulated  in  Statement of Financial  Accounting  Standards  ("SFAS") No. 38,
"Accounting  for  Preacquisition  Contingencies  of Purchased  Enterprises"  and
Accounting  Principles Board Opinion ("APB") No. 16, "Business  Combinations" as
they related to the Company's  acquisition  of DynCorp  Information  Systems LLC
("DIS") from GTE  Corporation  in December 1999 and also regarding its method of
accounting on certain long-term service contracts and the related  applicability
of the  percentage of completion  method on these  contracts.  See the 2001 Form
10-K/A,  Amendment  No. 2 filed on November 1, 2002 for further  information  on
these revisions.

The  impact  on the  Statement  of  Operations  data for the nine  months  ended
September 27, 2001 for the revisions  discussed above are presented in the table
below.  The "As Reported"  numbers are taken from the previously filed Form 10-Q
for the quarterly  period ended  September 27, 2001.  The financial data for the
quarter ended  September 27, 2001 was previously  reported in Note 2 to the 2001
Form 10-K/A, Amendment No. 2.


<TABLE>
<CAPTION>


                                                   Nine Months Ended (Unaudited)
                                                   -----------------------------
                                                 September 27,        September 27,
                                                     2001                 2001
Statement of Operations Data:                    As Reported           As Revised
-----------------------------                    -----------           ----------
<S>                                              <C>                  <C>
Revenues                                          $1,421,085           $1,418,446
Cost of services                                   1,339,406            1,293,920
Earnings before income taxes and
minority interest                                     31,288               75,305
Provision for income taxes                            11,527               26,933
Minority interest                                      2,470                1,643
Net earnings                                          17,291               46,729
Common stockholders' share of net
earnings                                              15,543               44,981
Common stockholders' share of net
earnings per common share:
Basic earnings per share                          $     1.47           $     4.26
Diluted earnings per share                        $     1.40           $     4.06

</TABLE>

<PAGE>

Note 3.  Other Current Assets

Other  current  assets as of September  26, 2002 and December 27, 2001  included
$18.2  million  and  $8.8  million  of  inventories   on  long-term   contracts,
respectively.

Note 4.  Redeemable Common Stock

Effective  January 1, 2001, the Company  established two new plans:  the Savings
and  Retirement   Plan  and  the  Capital   Accumulation   and  Retirement  Plan
(collectively,  the  "Savings  Plans").  At the same time,  the  Employee  Stock
Ownership  Plan  ("ESOP")  was merged  into the two  plans.  The  Company  stock
accounts of participants in the ESOP were transferred to one or the other of the
Savings Plans, and the Savings Plans participants have the same distribution and
put  rights  for  these  ESOP  shares as they had in the ESOP.  All  rights  and
obligations of the ESOP remain intact in the new plans.  In accordance  with the
Employee  Retirement  Income  Security Act  regulations  and the Savings  Plans'
documents,  the Company is obligated,  unless the Savings Plans' Trust purchases
the shares,  to purchase certain  distributed  common stock shares,  transferred
from the former ESOP,  from former  participants  in the ESOP on  retirement  or
termination at fair value as long as the Company's  common stock is not publicly
traded.  However,  the  Company is  permitted  to defer put  options  if,  under
Delaware  law, the capital of the Company  would be impaired as a result of such
repurchase.

On December  10,  1999,  the Company  entered  into an  agreement  with  various
financial institutions for the sale of 426,217 shares of the Company's stock and
Subordinated Notes. Under a contemporaneous  registration rights agreement,  the
holders of these shares of stock will have a put right to the Company commencing
on  December  10,  2003,  at a price of  $40.53  per  share,  unless  one of the
following  events has  occurred  prior to such date or the  exercise  of the put
right:  (1) an initial  public  offering of the Company's  common stock has been
consummated;  (2) all the  Company's  common  stock has been  sold;  (3) all the
Company's  assets have been sold in such a manner that the holders have received
cash payments;  or (4) the Company's  common stock has been listed on a national
securities  exchange or authorized for quotation on the Nasdaq  National  Market
System  for which  there is a public  market of at least  $100  million  for the
Company's  common  stock.  If, at the time of the  holders'  exercise of the put
right the Company is unable to pay the put price because of financial  covenants
in loan  agreements  or other  provisions of law, the Company will not honor the
put at that  time,  and the put price will  escalate  for a period of up to four
years,  at which time the put must be honored.  The  escalation  rate  increases
during  such  period  until  the put is  honored,  and the rate  varies  from an
annualized  factor of 22% for the first  quarter after the put is not honored up
to 52% during the sixteenth  quarter.  The annual accretion in the fair value of
these shares is reflected  as a reduction of common  stockholders'  share of net
earnings on the consolidated statements of operations.

Common stock which is redeemable has been  reflected as Temporary  Equity at the
redemption value at each balance sheet date and consists of the following:

<TABLE>
<CAPTION>

                                                         Balance at                                          Balance at
                                     Redeemable         September 26,                     Redeemable        December 27,
                        Shares          Value               2002             Shares         Value               2001
                        ------          -----               ----             ------         -----               ----
<S>                  <C>              <C>                <C>              <C>              <C>               <C>
ESOP Shares          2,873,969         $55.00             $158,068         2,995,783         $47.00            $140,802
                     4,093,977         $52.50              214,934         4,146,727         $44.75             185,566
                     ---------         ------             --------         ---------         ------            --------
                     6,967,946                            $373,002         7,142,510                           $326,368
                     =========                            ========         =========                           ========

Other Shares           286,217         $29.67             $  8,492           286,217         $24.34            $  6,967
                     =========                            ========         =========                           ========
</TABLE>

<PAGE>

Note 5.  Income Taxes

The  provisions  for  income  taxes in 2002 and 2001 are  based  upon  estimated
effective  tax rates.  These rates  include the impact of permanent  differences
between  the book  bases of assets  and  liabilities  recognized  for  financial
reporting purposes and the bases recognized for tax purposes.


Note 6.  Earnings Per Share ("EPS")

The following table sets forth (in thousands) the  reconciliation  of shares for
basic EPS to shares for diluted  EPS.  Basic EPS is computed by dividing  common
stockholders'  share of net  earnings by the weighted  average  number of common
shares outstanding and contingently issuable shares. The weighted average number
of common shares outstanding includes issued shares less shares held in treasury
and any unallocated Savings' Plans shares. Shares earned and vested but unissued
under  the  Restricted  Stock  Plan  are  contingently   issuable  shares  whose
conditions  for issuance  have been  satisfied and as such have been included in
the  calculation  of basic EPS.  Diluted  EPS is computed  similarly  except the
denominator is increased to include the weighted average number of stock options
outstanding, assuming the treasury stock method.

<TABLE>
<CAPTION>

                                                                Three Months Ended              Nine Months Ended
                                                                ------------------              -----------------
                                                         September 26,    September 27,    September 26,    September 27,
                                                            2002              2001             2002             2001
                                                            ----              ----             ----             ----
<S>                                                       <C>               <C>              <C>             <C>
Weighted average shares outstanding for basic EPS          10,677            10,555           10,661           10,552
   Effect of dilutive securities:
      Stock options                                         1,006               555              940              523
                                                           ------            ------           ------           ------
Weighted average shares outstanding for diluted EPS        11,683            11,110           11,601           11,075
                                                           ======            ======           ======           ======
</TABLE>


Note 7.  Goodwill and Other Intangible Assets - Adoption of Statement 142

The Company has adopted SFAS No. 142,  "Goodwill and Other  Intangible  Assets,"
beginning  December 28, 2001,  the first day of fiscal 2002.  The  provisions of
SFAS No. 142  eliminate  amortization  of  goodwill  and  require an  impairment
assessment at least annually by applying a fair-value  based test.  Accordingly,
the Company has  eliminated  amortization  in 2002 for goodwill,  which includes
assembled  workforce  of $4.6  million  as of  September  26,  2002,  previously
classified as an intangible  asset as of December 27, 2001.  The total  carrying
amount for goodwill is $107.8  million and $103.2  million as of  September  26,
2002 and  December  27,  2001,  respectively.  The  Company has  identified  the
reporting  units to be tested for the goodwill  impairment  test,  which will be
measured as of the  beginning of the fiscal year.  The Company has completed the
first step of the transitional impairment test in accordance with the provisions
of SFAS No. 142. The Company has concluded  that there has been no impairment of
such assets as of the beginning of fiscal year 2002.

The Company's contract backlog and core development  intangible assets are still
subject to  amortization  under SFAS No.  142.  Amortization  for the first nine
months of 2002 for these  intangible  assets  totaled  $1.6  million.  Estimated
aggregate  amortization  expense for these  intangible  assets for the next five
years totals:  $2.1 million in each of 2002 and 2003,  $2.0 million in 2004, and
$0.5 million in 2005 and 2006, respectively.  The following table presents these
intangible  assets,  net of accumulated  amortization,  as of September 26, 2002
that are required to continue to be amortized under SFAS No. 142:

Intangible Assets, Net of                Gross                     Accumulated
Accumulated Amortization            Carrying Amount                Amortization
------------------------            ---------------                ------------
Contracts acquired                     $  1,703                      $ 1,572
Core and developed technology            14,800                        6,289
                                       --------                      -------
                                       $ 16,503                      $ 7,861
                                       ========                      =======

<PAGE>


The following table presents  adjusted net income and earnings per share for the
three and nine months ended September 27, 2001, in comparison to the results for
the three and nine months  ended  September  26,  2002,  to show what the impact
would have been if SFAS No.  142 had been  adopted  at the  beginning  of fiscal
2001. The adjusted results presented below are net of taxes.

<TABLE>
<CAPTION>

                                                            Three Months Ended                   Nine Months Ended
                                                            ------------------                   -----------------
                                                                           September 27,                       September 27,
                                                                               2001                                2001
                                                       September 26,        (Revised -      September 26,       (Revised -
                                                           2002             See Note 2)         2002            See Note 2)
                                                           ----             -----------         ----            -----------
<S>                                                     <C>                 <C>              <C>                <C>
Common stockholders' share of net earnings               $ 9,373             $ 36,990         $11,321            $ 44,981
Add back: Goodwill amortization, net of tax                    -                   14               -               1,200
Add back: Assembled workforce
amortization, net of tax                                       -                  153               -                 450
                                                         -------             --------         -------            --------
Adjusted common stockholders' share of net
earnings                                                 $ 9,373             $ 37,157         $11,321            $ 46,631
                                                         =======             ========         =======            ========

Basic earnings per share:
Common stockholders' share of net earnings               $  0.88             $   3.50         $  1.06            $   4.26
Goodwill amortization, net of tax                              -                    -               -                0.11
Assembled workforce amortization, net of
tax                                                            -                 0.02               -                0.05
                                                         -------             --------         -------            --------
Adjusted common stockholders' share of net
earnings                                                 $  0.88             $   3.52         $  1.06            $   4.42
                                                         =======             ========         =======            ========



Diluted earnings per share:
Common stockholders' share of net earnings               $  0.80             $   3.33         $  0.98            $   4.06
Goodwill amortization, net of tax                              -                    -               -                0.11
Assembled workforce amortization, net of
tax                                                            -                 0.01               -                0.04
                                                         -------             --------         -------            --------
Adjusted common stockholders' share of net
earnings                                                 $  0.80             $   3.34         $  0.98            $   4.21
                                                         =======             ========         =======            ========
</TABLE>


The tables above excludes  capitalized  software that is not covered by SFAS No.
142. Capitalized software, net of accumulated amortization, totals $12.0 million
and $12.4 million as of September 26, 2002 and December 2001, respectively.  The
balance at September 26, 2002  reflects a third quarter 2002  adjustment of $0.5
million to  write-down  to the net  realizable  value the  capitalized  software
balance  related to a software  product  being sold by the  AdvanceMed  business
segment.

Note 8.  Business Segments

Effective  January  2002,  the Company  realigned  its five  strategic  business
segments into four  segments.  DynCorp  Information  and  Enterprise  Technology
("DI&ET")  (except for a contract  which  provides  maintenance  and  operations
support  to the  Strategic  Petroleum  Reserve  ("SPR  Contract"))  and DIS were
combined  into one strategic  business  segment,  DynCorp  Systems and Solutions
("DSS"),  in  order to  structure  one  business  segment  providing  integrated
information  technology  and  business  functional  outsourcing  to the  federal
government.  The business segment  information for 2001 has been revised to give
effect to this  change.  DSS  provides  a wide range of  information  technology
services and other  professional  services  including network and communications
engineering,  government  operational  outsourcing,  security  and  intelligence
programs.  DynCorp  International  LLC ("DI")  operates the  Company's  overseas
business,  including information  technology solutions,  technical services, and
worldwide  maintenance  support to U.S. military aircraft.  The SPR Contract was
incorporated  into DynCorp  Technical  Services  ("DTS"),  which provides a wide
variety of specialized  technical services  including  aviation services,  range
technical  services,   base  operations,   and  logistics  support.   AdvanceMed
("ADVMED") is structured as a  business-to-business,  eHealth  decision  support
solution  organization  and provides an integrated set of decision support tools
to meet the needs of healthcare payers and providers.
<PAGE>

Revenues,  operating  profit  and  identifiable  assets for the  Company's  four
business  segments for 2002 and the  comparable  periods for 2001 are  presented
below:

<TABLE>
<CAPTION>


                                                            Three Months Ended                        Nine Months Ended
                                                            ------------------                        -----------------
                                                                        September 27,                                September 27,
                                                  September 26,        2001 (Revised -         September 26,        2001 (Revised -
                                                      2002             See Note 2) (d)              2002            See Note 2) (d)
                                                      ----             ---------------              ----            ---------------
<S>                                             <C>                    <C>                      <C>                <C>
Revenues
--------
   DSS                                              $245,855               $216,784             $  713,055           $  608,050
   DI                                                176,235                136,736                519,370              386,821
   DTS                                               173,503                134,592                472,759              377,882
   ADVMED                                             11,946                 14,744                 39,092               45,693
                                                    ---------              --------             -----------          ----------
                                                    $607,539               $502,856             $1,744,276           $1,418,446
                                                    =========              ========             ===========          ==========

Operating Profit (Loss) (a)
---------------------------
   DSS (b)                                          $ 21,581               $ 58,355             $   54,239           $   81,924
   DI                                                 11,673                  9,876                 29,688               26,940
   DTS                                                 9,019                  5,436                 17,685               12,636
   ADVMED                                             (1,394)                   515                 (2,014)               2,209
                                                    ---------              --------             -----------          ----------
                                                      40,879                 74,182                 99,598              123,709

 Corporate general and administrative                  8,337                  7,297                 23,171               21,326
 Interest income                                        (179)                  (105)                  (420)                (558)
 Interest expense                                      7,021                  7,805                 21,177               24,215
 Goodwill amortization                                     -                     22                      -                1,872
 Amortization of other intangibles of acquired
   companies                                             519                    779                  1,556                2,579
</TABLE>

<PAGE>


<TABLE>
<S>                                             <C>                    <C>                      <C>                <C>
 Other miscellaneous (c)                              11,388                    706                 34,529                  613
                                                    ---------              --------             -----------          ----------
      Subtotal                                        27,086                 16,504                 80,013               50,047
                                                    ---------              --------             -----------          ----------
Earnings before income taxes                          13,793                 57,678                 19,585               73,662
Add back minority interest deducted from
  operating profit                                       871                    532                  4,456                1,643
                                                    ---------              --------             -----------          ----------
Earnings before income taxes and minority
  interest                                          $ 14,664               $ 58,210             $   24,041           $   75,305
                                                    =========              ========             ===========          ==========


                                                    September 26,                                December 27,
                                                       2002                                        2001 (d)
                                                       ----                                        --------
  Identifiable Assets
  -------------------
     DSS                                            $289,317                                    $  290,733
     DI                                               96,039                                        94,464
     DTS                                             115,175                                       100,573
     ADVMED                                           22,855                                        26,880
     Corporate                                        82,366                                        85,790
                                                    --------                                    ----------
                                                    $605,752                                    $  598,440
                                                    ========                                    ==========
</TABLE>


(a)  Defined as the excess of  revenues  over  operating  expenses  and  certain
     non-operating expenses.
(b)  Third quarter 2001 includes $42.7 million of income (a reduction of cost of
     services)   primarily   from  revised  loss   estimates   due  to  contract
     modifications  in 2001 on a contract  acquired  with the purchase of DIS in
     December 1999.
(c)  Other  miscellaneous  includes  $15.8  million  for  the  write-off  of  an
     investment  in an  unconsolidated  affiliate in the second  quarter of 2002
     (see Note 1). Also regarding the same  investment that was written off, the
     Company,  in the third quarter of 2002,  entered into an agreement with the
     investee  pursuant to which the Company and its  investee  agreed to settle
     all disputes between them. As part of this agreement, the Company sold back
     to the investee 8 million shares of the investee's common stock in exchange
     for a $5.0 million note, which was fully reserved. In addition, the Company
     paid $4.0 million of the  investee's  operating  expenses  during the third
     quarter of 2002 and forgave a $1.0 million loan to the investee,  which was
     made  and  fully  reserved  during  the  second  quarter  of  2002.   Other
     miscellaneous  also  includes $6.0 million in the third quarter of 2002 for
     the  reimbursement  of  out-of -pocket  due  diligence  expenses  that were
     incurred  by an  unrelated  party that had  expressed  an  interest  in the
     possible  acquisition  of the  Company.  The $6.0  million  was paid to the
     unrelated party in the fourth quarter of 2002.
(d)  Data has been revised to give recognition to the current reportable segment
     structure.

Note 9.  Contingencies and Litigation

The Company is a guarantor on a fixed price services  contract for non-emergency
transportation  brokerage services that ends in June 2003.  Management perceives
the exposure to financial losses on this guarantee could possibly be up to $12.5
million over the next nine months.  At this time,  management does not believe a
reserve is required because no claim has been asserted and one is not considered
probable.

<PAGE>



Item 2.

           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS

General
-------

The following  discussion  and analysis  provides  information  that  management
believes is relevant to an  assessment  and  understanding  of the  consolidated
results of operations  and financial  condition of DynCorp and its  subsidiaries
(collectively, the "Company"). The discussion should be read in conjunction with
the interim condensed  consolidated  financial  statements and notes thereto and
the Company's  annual report on Form 10-K/A,  Amendment No. 2 for the year ended
December 27, 2001.

Results of Operations
---------------------

The  Company  provides  diversified  management,   technical,   engineering  and
professional  services  primarily to U.S.  Government  customers  throughout the
United States and  internationally.  The  Company's  customers  include  various
branches  of the U.S.  Departments  of  Defense,  Energy,  State,  Justice,  and
Treasury,  the National Aeronautics and Space Administration,  and various other
U.S.  state and local  government  agencies,  commercial  clients,  and  foreign
governments.  Generally,  these services are provided under both prime contracts
and  subcontracts,   which  may  be  fixed  price,   time-and-material  or  cost
reimbursement  contracts depending on the work requirements and other individual
circumstances.  The following  discusses the Company's results of operations and
financial  condition  (as  revised  - see  "Revision  of  Financial  Statements"
discussion)  for the three and nine  months  ended  September  26,  2002 and the
comparable periods for 2001.

Revision of Financial Statements
--------------------------------

As reported  in the  previously  filed 2001 Form  10-K/A,  Amendment  No. 2, the
Company has revised certain information in the Consolidated  Condensed Financial
Statements  for the three and nine months  ended  September  27, 2001  following
discussions  with the staff of the  Securities and Exchange  Commission  ("SEC")
regarding accounting principles articulated in Statement of Financial Accounting
Standards  ("SFAS") No. 38,  "Accounting  for  Preacquisition  Contingencies  of
Purchased Enterprises" and Accounting Principles Board Opinion ("APB")

<PAGE>


No. 16, "Business  Combinations" as they related to the Company's acquisition of
DynCorp  Information  Systems LLC ("DIS") from GTE  Corporation in December 1999
and also  regarding  its  method of  accounting  on  certain  long-term  service
contracts and the related  applicability of the percentage of completion  method
on these contracts.  See the 2001 Form 10-K/A, Amendment No. 2 filed on November
1, 2002 for further information on these revisions.

Revenues and Operating Profit
-----------------------------

For the three and nine months ended September 26, 2002,  revenue increased 20.8%
and 23.0% to $607.5 million and $1.7 billion,  respectively,  compared to $502.9
million and $1.4 billion for the comparable  periods in 2001.  Operating  profit
decreased  44.9% and 19.5% to $40.9  million  and $99.6  million,  respectively,
compared to $74.2 million and $123.7 million for the comparable periods in 2001.
Operating  profit is defined as the excess of revenues over cost of services and
certain  non-operating income and expenses,  which are included in Other Expense
(Other Income) on the Consolidated Condensed Statements of Operations. Exclusive
of the DIS revised loss estimates which were part of the revisions  discussed in
the  "Revision of  Financial  Statements"  discussion  above,  operating  profit
increased for the three and nine months ended September 26, 2002, as compared to
the respective prior periods. The increase in both revenues and operating profit
(exclusive  of the DIS revised loss  estimates)  was  attributable  primarily to
several new  contract  wins and  increased  tasking on existing  contracts.  The
overall decrease in operating profit was due to a revised loss estimate on a DIS
contract  that added $42.7  million to operating  profit in the third quarter of
2001.

DynCorp Systems and Solutions  ("DSS") had revenues of $245.9 million and $713.1
million in the three and nine  months  ended  September  26,  2002,  compared to
revenues of $216.8  million and $608.1  million in the same periods in 2001. The
increases in revenue in the third quarter and first nine months of 2002 of $29.1
million, or 13.4%, and $105.0 million, or 17.3%, respectively resulted primarily
from the  start-up  of two new  contracts  and  increased  tasking  on  existing
contracts.  The two new  contracts  consisted of one which  started in the third
quarter  of 2001  for the  implementation  of a  nationwide  network,  including
desktop  computers and other peripherals for the Federal Bureau of Investigation
("FBI") and which  provided the  majority of the  increase in revenues,  and the
other to manage and operate the infrastructure  facilities,  hardware,  software
and systems relating to non-EDGAR  systems at the SEC. Also  contributing to the
revenue  growth was the program  expansion of the government  emergency  telecom
services  contract.  These three contracts  provided  combined revenues of $57.3
million and $153.9  million in the three and nine  months  ended  September  26,
2002. Other contracts contributing to the revenue growth were the expansion of a
Department of Defense  ("DoD")  program for vaccine  production  and growth in a
contract  that  provides  battlefield  simulation  and virtual  training  system
support services and maintenance for the U.S. Army.  Partially  offsetting these
increases in revenue was the  completion of a subcontract  providing  operations
management to the Department of Energy ("DoE") in September  2001.  Revenues for
the three and nine months ended  September  27, 2001 for this  subcontract  were
$26.5 million and $74.9 million,  respectively.  Also offsetting these increases
in revenues for DSS was the  divesture  of DynCorp  Management  Resources,  Inc.
("DMR") in December 2001, which provided $13.9 million and $28.3 million for the
three and nine months ended September 27, 2001.

For the third quarter and nine months ended September 26, 2002, operating profit
for DSS  decreased by $36.8  million,  or 63.0%,  and $27.7  million,  or 33.8%,
respectively, to $21.6 million and $54.2 million, respectively. Exclusive of the
revised loss estimates  discussed above for DIS, the operating  profit increases
for DSS resulted  primarily  from the new FBI contract and, to a lesser  extent,
the new SEC contract and the  government  emergency  telecom  services  contract
noted above.  These three contracts  provided combined operating profits of $1.6
million and $6.9 million for the three and nine months ended September 26, 2002.
In addition,  operating profit  increased due to increased  tasking and a larger
award fee pool on the vaccine  production and battlefield  simulation  contracts
that are noted above.  Also  contributing  to the increase in operating  profits
were the  losses  on  several  contracts  in the  three  and nine  months  ended
September  27, 2001 that did not continue in 2002.  Partially  offsetting  these
increases to operating  profit was the completion of the DoE  subcontract in the
third  quarter  of 2001,  which is noted  above.  Operating  profit  on this DoE
subcontract  for the three and nine  months  ended  September  27, 2001 was $0.8
million and $2.2 million, respectively.

<PAGE>


DynCorp  International's  ("DI") third quarter and nine-month 2002 revenues grew
by 28.9%  and 34.3% to $176.2  million  and  $519.4  million,  respectively,  as
compared to the same prior year  periods of $136.7  million and $386.8  million,
respectively.  The  increase in  revenues  resulted  primarily  from growth in a
contract that provides maintenance, storage, and security support of war reserve
materials to the United States Central Command Air Forces,  growth on a contract
with the U.S.  Armed  Forces  that  started up in the  second  half of 2000 that
provides  maintenance  and parts to military  aircraft,  increased  tasking on a
contract with the  Department  of State  ("DoS") in support of the  government's
drug eradication program, primarily in South America, and increased tasking on a
contract which provides combat service support  augmentation  and Force Provided
Training Modules primarily to the U.S. Army. DI also commenced  performance on a
new commercial  subcontract in Saudi Arabia  involving repair and maintenance of
Saudi  military  aircraft,  which was awarded in the fourth  quarter of 2001 and
became  fully  operational  in 2002.  This  contract  provided  revenues of $6.6
million and $18.7 million in the three and nine months ended September 26, 2002.
In addition, DI was also awarded a new contract with the U.S. Air Force in March
2002  supporting  aerial  counter-drug  surveillance  missions in central  South
America and the Caribbean and includes  providing  base  operations  support for
personnel and aircraft.  This contract  provided revenues of $8.7 million in the
first nine months of 2002.  Partially  offsetting  the increases in revenues was
the decreased manning  requirements on the DoS  international  police task force
contract in the second and third quarters of 2002.

DI's third quarter and nine-month 2002 operating profits grew by 18.2% and 10.2%
to $11.7 million and $29.7 million,  respectively, as compared to the same prior
year periods of $9.9 million and $26.9 million,  respectively.  The increases in
operating  profits resulted from the increased  tasking on several contracts and
the new contracts as mentioned above.  DI's operating profit was also positively
impacted due to additional  revenue on contract costs that were  recognized in a
prior period.  Partially  offsetting the increases in operating  profits was the
decreased  manning  requirements  on the DoS  international  police  task  force
contract in the second and third quarters of 2002. The contract,  which provides
combat  service  support   augmentation  and  Force  Provided  Training  Modules
primarily to the U.S. Army, is expected to be substantially  complete by the end
of 2002. This contract  provided  revenues of $6.9 million and $29.0 million and
operating profits of $0.8 million and $1.9 million,  respectively,  in the three
and nine months  ended  September  27,  2001.  Management  expects  that the new
contracts discussed above will offset the lost revenue and operating profit.

DynCorp  Technology  Services'  ("DTS")  revenues  for the three and nine months
ended September 26, 2002, grew 28.9% and 25.1%, respectively,  to $173.5 million
and $472.8 million, respectively,  compared to $134.6 million and $377.9 million
for the comparable  periods in 2001. The increases in the DTS revenues  resulted
from new contracts and increased tasking on existing contracts.  DTS was awarded
a new contract in the second quarter of 2002 with the National  Aeronautics  and
Space  Administration  ("NASA"),  which provides base operations and maintenance
support for the Johnson Space Center.  This contract  provided  $18.7 million in
revenues  in the first nine months of 2002.  DTS was also  awarded a contract to
provide  repair  and  maintenance  to  the  California  Department  of  Forestry
helicopters  in the first  quarter  of 2002,  which  provided  $10.4  million in
revenues in the first nine months of 2002. In addition,  revenues  increased due
to  increased  tasking  on two  U.S.  Air  Force  contracts  providing  aircraft
maintenance  and base operations  support.  One of these contracts is at Andrews
AFB and was  awarded in the first  quarter of 2001 and the other is at Vance AFB
and was  awarded in October  2000.  Revenues  also  increased  due to  increased
tasking on a U.S.  Military Sealift Command contract,  which manages,  operates,
and  maintains  non-combat  oceangoing  U.S.  Navy ships and on a contract  that
provides range operations and maintenance support to the U.S. Navy. DTS reported
revenue  increases at Fort Rucker due to increased  contract  requirements  that
have resulted in additional  personnel and the  negotiation  of a new collective
bargaining  agreement  that resulted in a higher wage and fringe package for the
employees.  This contract provided $16.8 million and $18.7 million for the third
quarter and nine-month  revenue  increases in 2002.  Management  expects further
revenue  growth on a U.S. Air Force  contract that provides base  operations and
support  services at Maxwell  AFB,  which will became fully  operational  in the
third quarter of 2002.  This contract  provided $4.1 million in revenues for the
nine months ended September 26, 2002.

DTS  operating  profits for the three and nine months ended  September 26, 2002,
grew  65.9%  and  40.0%,  respectively,  to  $9.0  million  and  $17.7  million,
respectively,  compared  to $5.4  million and $12.6  million for the  comparable
periods in 2001.  DTS operating  profits  increased due to the new contracts and
increased tasking on

<PAGE>


the contracts  discussed above.  Operating profits grew faster than revenues due
to improved profit margins on some of DTS' base operations and aviation  support
services contracts.

AdvanceMed  ("ADVMED")  reported  revenues of $11.9 million and $39.1 million in
the three and nine months ended September 26, 2002, respectively, as compared to
$14.7  million  and $45.7  million  in the same  prior  year  periods.  ADVMED's
reported  operating losses of ($1.4) million and ($2.0) million in the three and
nine months ended  September  26, 2002,  respectively,  as compared to operating
profits of $0.5 million and $2.2 million in the comparable  periods of 2001. The
decrease  in revenues  resulted  mostly  from the  reduction  in work scope on a
contract that provides  external quality review to health care  organizations in
the State of Texas  and the  successful  completion  of two  tasks  that  review
Medicaid and Medicare claims data.  These lost revenues will be replaced in part
by two task awards, which will provide support services to Medicaid and Medicare
and one task award to provide  help desk  support to the center for Medicaid and
Medicare services. The two task awards that provide support services to Medicaid
and Medicare began operations in the third quarter of 2002 and the task award to
provide help desk support will begin  operations in the fourth  quarter of 2002.
The decrease in operating  profit  resulted from increased costs on a commercial
product  introduction  and the  addition  of a sales  team for  this  commercial
product,  neither of which occurred in the prior year. Also  contributing to the
decrease in  operating  profit and the loss for the three and nine months  ended
September  26, 2002 was the  write-down of $0.5 million of capitalized  software
costs to the net  realizable  value and  increases  to  allowances  for doubtful
accounts receivable of $0.8 million.

Cost of Services
----------------

Cost of services as a percentage of revenue  remained  relatively  consistent in
the  three  and nine  months  ended  September  26,  2002  and was  lower in the
comparable  periods in 2001 due to the revised loss  estimates of $42.7  million
for DIS as discussed above.  Cost of services was 93.0% and 94.1% of revenue for
the three and nine months ended September 26, 2002, respectively, as compared to
85.3% and 91.2%,  respectively,  for the  comparable  periods  in 2001.  Cost of
services was $565.0 million and $1.6 billion,  respectively,  compared to $429.0
million and $1.3 billion for the comparable periods in 2001, increases of $136.0
million and $347.1 million, respectively.  Offsetting these increases in cost of
services as a percentage  of revenue as compared to 2001 were lower  percentages
due to DTS operating  profits  growing faster than revenues from improved profit
margins on some of its base operations and aviation support services  contracts.
Cost of services for the Company includes mainly direct labor,  direct overhead,
and direct facility costs.

Corporate General and Administrative Expense
--------------------------------------------

Corporate general and administrative  expense was $8.3 million and $23.2 million
for the third  quarter and nine months ended  September 26, 2002, as compared to
$7.3 million and $21.3  million in the same periods of 2001.  Corporate  general
and administrative  expense as a percentage of revenue was 1.4% and 1.3% for the
three and nine months ended  September 26, 2002 and 1.5% for the same periods in
2001.  The  increases in corporate  general and  administrative  expenses in the
three and nine months ended September 26, 2002 are primarily attributable to the
audit fees related to the re-audit of the Company's financial statements for the
three fiscal years ended  December  27, 2001,  which were  expensed in the third
quarter of 2002.

Interest Expense
----------------

Interest expense was $7.0 million and $21.2 million, respectively, for the three
and nine months ended  September  26,  2002,  compared to $7.8 million and $24.2
million for the comparable periods in 2001.  Interest expense as a percentage of
revenue was 1.2% for the three and nine months  ended  September  26,  2002,  as
compared to 1.6% and 1.7% for the  comparable  periods in 2001.  The decrease in
interest expense was attributable to lower average debt levels and lower average
interest  rates in the three and nine  months  of 2002 as  compared  to the same
periods in 2001. The average levels of indebtedness  were  approximately  $277.7
million  and $285.3  million in the nine  months  ended  September  26, 2002 and
September 27, 2001, respectively.

<PAGE>


Amortization of Intangibles of Acquired Companies
-------------------------------------------------

Amortization  of  intangibles  of acquired  companies  was $0.5 million and $1.6
million for the third  quarter and first nine months of 2002,  respectively,  as
compared to $0.8  million and $4.5 million for the  comparable  periods of 2001.
The decrease in 2002 as compared to 2001 resulted from the Company's adoption on
December 28, 2001, the first day of fiscal year 2002, of SFAS No. 142, "Goodwill
and  Other  Intangible  Assets".  The  provisions  of SFAS  No.  142  eliminated
amortization of goodwill, including assembled workforce, which is now considered
goodwill,  and  accordingly,  the Company  eliminated  amortization  of goodwill
beginning   December  28,  2001.  The  provisions  also  require  an  impairment
assessment at least annually by applying a fair-value  based test. See Note 7 to
the  Consolidated  Condensed  Financial  Statements  included in this  Quarterly
Report on Form 10-Q to show what the impact would have been on the third quarter
and first nine months of 2001 financial results if SFAS No. 142 had been adopted
at the beginning of fiscal 2001.

Other Expense (Other Income)
----------------------------

Other expense  (other  income) was $12.2 million and $33.8 million for the three
and nine months ended  September 26, 2002 and consists  mainly of the write-down
of an  investment  in an  unconsolidated  affiliate  for the nine  months  ended
September 26, 2002.

The Company periodically evaluates the recoverability of its equity investments,
in accordance  with  Accounting  Principles  Board No. 18, "The Equity Method of
Accounting for Investments in Common Stock," and if circumstances  arise where a
loss in value is considered to be other than temporary,  the Company will record
a write-down  of the  investment  to its  estimated  fair value.  The  Company's
recoverability analysis is based on the projected undiscounted cash flows of the
investments,  which is the lowest level of cash flow information  available,  or
other  appropriate  methods.  During the second  quarter  of 2002,  the  Company
recorded a  non-recurring,  write-off  of  approximately  $15.8  million,  which
represented the net balance of a certain investment,  which was stated in excess
of its net  realizable  value.  The total charge was  included in Other  Expense
(Other Income) on the Consolidated Condensed Statement of Operations.

Also  regarding the same  investment  that was written off, the Company,  in the
third quarter of 2002,  entered into an agreement with the investee  pursuant to
which the Company and its investee  agreed to settle all disputes  between them.
As part of this  agreement,  the  Company  sold back to the  investee  8 million
shares of the investee's common stock in exchange for a $5.0 million note, which
was fully reserved. In addition, the Company paid $4.0 million of the investee's
operating  expenses  during the third quarter of 2002 and forgave a $1.0 million
loan to the  investee,  which  was made and fully  reserved  during  the  second
quarter of 2002.  These  reserves  have also been  included in the Other Expense
(Other Income) on the Consolidated Condensed Statement of Operations.

In addition, other expense (other income) includes $6.9 million and $8.6 million
for the three and nine months ended September 26, 2002,  respectively,  of costs
associated  with the  management  efforts to explore the  potential  sale of the
Company to or its merger with a third party.  In the first quarter of 2002,  the
Board of Directors authorized  management to consider interests of third parties
in a merger or sale of the Company (see "Recent Developments" discussion below).

Income Taxes
------------

The  provisions  for  income  taxes in 2002 and 2001 are  based  upon  estimated
effective tax rates,  including the impact of permanent  differences between the
book bases of assets and liabilities recognized for financial reporting purposes
and the bases  recognized  for tax  purposes.  The  provision  for income  taxes
decreased by $16.2 million and $20.2 million for the three and nine months ended
September  26, 2002,  respectively,  from the  comparable  periods in 2001.  The
decreases  were due  primarily to lower pretax income in both the three and nine
months ended  September 26, 2002 and lower  effective tax rates in the three and
nine months ended September 26, 2002,  compared to the same periods in 2001. The
Company's  effective  tax rates  approximated  28.1% and 34.4% for the three and
nine months ended September 26, 2002, respectively,  compared to 34.8% and 36.6%
in the  comparable  periods in 2001,  after  taking  into  account the effect of
minority interests.

<PAGE>



Backlog
-------

The  Company's  backlog of  business,  which  includes  awards  under both prime
contracts and  subcontracts  as well as the  estimated  value of option years on
government  contracts,  was $8.5 billion at September  26, 2002 compared to $6.8
billion at December 27, 2001,  a net  increase of $1.7  billion.  The backlog at
September 26, 2002  consisted of $3.0 billion for DSS, $2.3 billion for DI, $3.1
billion  for DTS,  and $0.1  billion for ADVMED  compared  to December  27, 2001
backlog of $2.4 billion for DSS,  $2.2 billion for DI, $2.0 billion for DTS, and
$0.2 billion for ADVMED.  A large part of the increase was  attributable  to the
$1.1 billion win on a fifteen - year DTS contract with the U.S. Air Force in the
second quarter of 2002.  This cost plus contract begins in the fourth quarter of
2002 and will provide  support to the Air Force  Command and Air Combat  Command
operations at the Nevada Test and Training Range.

Working Capital
---------------

Working capital, defined as current assets less current liabilities,  was $163.9
million at September 26, 2002  compared to $144.7  million at December 27, 2001,
an increase of $19.3 million,  or 13.3%.  The ratio of current assets to current
liabilities at September 26, 2002 and December 27, 2001 was 1.6. The increase in
working capital was primarily a result of higher  revenues,  which resulted in a
higher  accounts  receivable  balance at September 26, 2002 compared to December
27, 2001,  and increases in the other current  asset  balance,  which was due to
increased inventory on a FBI contract.  Partially  offsetting these increases in
cash and cash  equivalents and other current assets was a larger current portion
of the Senior Secured Credit  Agreement Term A debt as of September 26, 2002 and
increases in accounts  payable on a contract with the  government  for emergency
telecom service.

Cash Flows from Operating Activities
------------------------------------

Cash provided by operations  was $42.1 million in the first nine months of 2002,
an increase of $34.2 million from the comparable period in 2001. The increase in
cash provided by operations compared to the same period a year ago resulted from
lower  outflows for accounts  payable in the nine months ended 2002  compared to
the first nine months of 2001.  Also  contributing  to the increase  were higher
collections of accounts  receivable,  and higher  operating  profits,  excluding
non-cash net losses of unconsolidated  affiliates of $3.7 million and a non-cash
write-off of an  investment in an  unconsolidated  affiliate of $15.8 million in
the second quarter of 2002.

Cash Flows from Investing Activities
------------------------------------

Investing  activities  used  funds  of $8.2  million  in the nine  months  ended
September  26, 2002,  as compared to cash used by investing  activities  of $5.6
million in the nine months ended  September  27,  2001.  The use of funds in the
first nine  months of 2002  resulted  mostly from the  purchase of property  and
equipment of $5.4 million,  purchases of software of $2.7 million, and dividends
paid to joint  venture  partners of $1.1  million  compared  to the  purchase of
property and equipment of $4.9  million,  purchases of software of $3.0 million,
and dividends paid to joint venture  partners of $1.2 million in the same period
of 2001.

Cash Flows from Financing Activities
------------------------------------

Financing  activities  used funds of $16.6 million  during the nine months ended
September 26, 2002 and included  several  short-term  borrowings  and subsequent
payments of a cumulated  sum of $71.3 million  under the Senior  Secured  Credit
Agreement  Revolving  Credit Facility,  maturing  December 9, 2004. In the first
half of 2002,  the Company  made  installment  payments of $1.3 million and $6.3
million on the Senior Secured Credit Agreement Term A Loan, maturing December 9,
2004, in February and May  respectively,  and prepaid $3.2 million on the Senior
Secured Credit Agreement Term B Loan, maturing December 9, 2006. In August 2002,
the Company made an additional installment payment of $6.3 million on the Term A
Loan. During the first nine months of 2001,  financing  activities used funds of
$0.8 million and included several short-term borrowing and subsequent

<PAGE>


payments of a cumulated sum of $200.8  million under the Senior  Secured  Credit
Agreement Revolving Credit Facility.

Earnings before Interest, Taxes, Depreciation, and Amortization
---------------------------------------------------------------

Earnings before Interest,  Taxes,  Depreciation,  and Amortization ("EBITDA") as
defined by  management,  consists of net earnings  before  income tax  provision
(benefit),  net interest  expense,  and  depreciation and  amortization.  EBITDA
represents a measure of the Company's ability to generate cash flow and does not
represent  net  income or cash  flow from  operating,  investing  and  financing
activities  as defined by generally  accepted  accounting  principles  ("GAAP").
EBITDA is not a measure of performance or financial condition under GAAP, but is
presented  to provide  additional  information  about the Company to the reader.
EBITDA  should be  considered  in addition to, but not as a  substitute  for, or
superior to, measures of financial performance reported in accordance with GAAP.
EBITDA has been adjusted for the  amortization of deferred debt expense and debt
issue  discount  which are  included in "interest  expense" in the  Consolidated
Statements of Operations and included in "amortization  and depreciation" in the
Consolidated  Statements  of Cash  Flows.  EBITDA has not been  adjusted to give
effect to the depreciation and  amortization  attributable to minority  interest
shareholders.  Readers are cautioned that the Company's definition of EBITDA may
not  necessarily  be  comparable  to  similarly  titled  captions  used by other
companies due to the potential inconsistencies in the method of calculation. The
following represents the Company's computation of EBITDA (in thousands):

<TABLE>
<CAPTION>

                                                                    Three Months Ended                  Nine Months Ended
                                                                    ------------------                  -----------------
                                                                              September 27,                      September 27,
                                                             September 26,   2001 (Revised -    September 26,    2001 (Revised
                                                                 2002          See Note 2)          2002         - See Note 2)
                                                                 ----          -----------          ----         -------------
<S>                                                           <C>              <C>                <C>             <C>
Net earnings                                                   $ 9,922          $ 37,618           $12,847          $ 46,729
   Depreciation and amortization                                 4,094             3,590            11,850            13,913
   Interest expense, net                                         6,842             7,700            20,757            23,657
   Provision for income taxes                                    3,871            20,060             6,738            26,933
   Amortization of deferred debt expense                          (506)             (621)           (1,554)           (1,985)
   Debt issue discount                                            (147)              (13)             (439)              (35)
                                                               --------         ---------          --------         ---------
EBITDA                                                         $24,076          $ 68,334           $50,199          $109,212
                                                               =======          ========           =======          ========
</TABLE>


EBITDA (as defined above) decreased by $44.3 million, or 64.8%, to $24.1 million
for the third quarter of 2002 as compared to the comparable  period in 2001. For
the first nine months of 2002,  EBITDA decreased by $59.0 million,  or 54.0%, to
$50.2  million as compared to the first nine months of 2001.  The  decreases  in
EBITDA in the three and nine month  periods in 2002,  as compared to the similar
periods in 2001, are primarily  attributable to the  non-recurring  write-off of
the  investment  in an  unconsolidated  affiliate of $15.8 million in the second
quarter of 2002 and also the revised loss estimates in 2001 for DIS as discussed
above,  offset partially by the higher operating profits in 2002, also discussed
above.

Recent Developments
-------------------

The Board of Directors  authorized  management  in the first  quarter of 2002 to
consider interests of third parties in a merger or sale of the Company. There is
the potential for a merger or sale of the Company in the short-term  future, but
no formal  agreement has been  negotiated or executed at this time.  The Company
has notified its  stockholders  and  participants  in its Savings and Retirement
Plan,  Capital  Accumulation  and  Retirement  Plan,  and former  Employee Stock
Ownership Plan of this  potential  change in owners of the Company and merger or
sale of the Company.

<PAGE>


Liquidity and Capital Resources
-------------------------------

The carrying amounts  reflected in the Consolidated  Condensed Balance Sheets of
cash and cash  equivalents,  accounts  receivable and contracts in process,  and
accounts  payable  approximate fair value at September 26, 2002 due to the short
maturities of these instruments.

As of September 26, 2002 the Company's total debt was $268.0 million, a decrease
of $16.6 million from $284.6  million as of December 27, 2001,  primarily due to
the  February  and  May  2002   payments  of  $1.3  million  and  $6.3  million,
respectively,  made on the Term A Loan and the  April  2002  prepayment  of $3.2
million  on the  Term B  Loan.  These  payments  were  partially  offset  by the
amortization  of the discounts on the  Subordinated  Notes and the 9 1/2% Senior
Subordinated Notes discussed below.

The Company has a Senior Secured Credit Agreement (the "Credit  Agreement") with
a group of financial institutions.  Under the Credit Agreement,  the Company has
outstanding  borrowings of $56.3 million under Term A Loans maturing December 9,
2004,  $73.7 million  under Term B Loans  maturing  December 9, 2006,  and has a
$90.0 million  revolving  line of credit,  which,  at September 26, 2002, had no
borrowings.  Installment  payments of $1.3 million and $6.3 million were paid on
the Term A Loans in February and May 2002, respectively. The Term A Loans are to
be repaid in eleven quarterly  installments of $6.3 million,  which began in May
2002.  A  prepayment  of $3.2 million was paid on the Term B Loan in April 2002.
The Term B Loans are scheduled to be repaid in an installment of $5.7 million in
May 2005 and then six  quarterly  installments  of $11.9  million  beginning  in
August 2005. The Company is charged a commitment fee of 0.5% per annum on unused
commitments  under the revolving line of credit.  Letters of credit  outstanding
were $13.9  million and $11.1  million at  September  26, 2002 and  December 27,
2001,  respectively,  under the line of credit.  The amount  available was $76.1
million and $78.9 million,  respectively,  as of September 26, 2002 and December
27, 2001.

The  Company  has $99.7  million of 9 1/2% Senior  Subordinated  Notes  ("Senior
Subordinated  Notes")  outstanding  as of  September  26,  2002 with a scheduled
maturity in 2007. Interest is payable semi-annually,  in arrears, on March 1 and
September 1 of each year. The Company has  outstanding  $40.0 million face value
of the Company's subordinated pay-in-kind notes due 2007, with an estimated fair
value of $38.3  million  ("Subordinated  Notes").  The  Subordinated  Notes bear
interest at 15.0% per annum,  payable  semi-annually.  The  Company  may, at its
option,  prior to December 15, 2004,  pay the interest in cash or in  additional
Subordinated Notes.

The Company is a guarantor on a fixed price services  contract for non-emergency
transportation  brokerage services that ends in June 2003.  Management perceives
the exposure to financial losses on this guarantee could possibly be up to $12.5
million over the next nine months.  At this time,  management does not believe a
reserve is required because no claim has been asserted and one is not considered
probable.


<PAGE>




Chart Outlining Future Financial Commitments
--------------------------------------------

The following table sets forth the Company's total  contractual cash obligations
for the  remaining  three  months  of 2002  and over the  next  four  years  and
thereafter (in thousands):

<TABLE>
<CAPTION>

                                                               Cash Obligations Due by Year
                                                               ----------------------------
                                              October -
Contractual                                   December
Cash Obligation                  Total          2002           2003         2004          2005         2006       Thereafter
---------------                  -----          ----           ----         ----          ----         ----       ----------
<S>                           <C>             <C>           <C>            <C>        <C>            <C>          <C>
Long-term Debt                $268,039         $ 6,277       $ 25,001      $28,083      $26,228       $47,500      $134,950
Operating Leases               217,517          14,698         42,968       36,790       27,600        25,643        69,818
Payment to Unrelated
Party                            6,000           6,000              -            -            -             -             -
Maximum Liability to
 Repurchase ESOP
 Shares                        373,002          12,514         28,639       30,936       28,508        24,560       247,845
Liability to Repurchase
 Other Redeemable
 Common Stock                   11,600               -         11,600            -            -             -             -
                              --------         -------       --------      -------      -------        ------      --------
Total Contractual Cash
 Obligations                  $876,158         $39,489       $108,208      $95,809      $82,336       $97,703      $452,613

</TABLE>


The Company has contractual cash obligations under several of its long-term debt
provisions, as discussed above.

The Company has several significant  operating leases for facilities,  furniture
and equipment. Minimum lease payments over the next 11 years are estimated to be
$217.5 million,  including  approximately  $14.7 million for the remaining three
months of 2002. Of the $14.7 million 2002 minimum lease payments,  approximately
$3.6  million  relates to DIS  leases,  $2.6  million  relates to a U.S.  Postal
Service  contract,  and  $1.7  million  relates  to the  corporate  headquarters
building.

The Company is obligated to  reimburse up to $6.0 million of  out-of-pocket  due
diligence  expenses that were incurred by an unrelated  party that has expressed
an  interest  in  the   possible   acquisition   of  the  Company  (see  "Recent
Developments"  discussion).  This payment was made to the unrelated party during
the fourth  quarter of 2002.  This amount has been recorded as an expense in the
third quarter of 2002 and is included in the Other Expense (Other Income) on the
Consolidated Condensed Statement of Operations.

The Company is  obligated to  repurchase  certain of its former  Employee  Stock
Ownership  Plan ("ESOP")  vested common stock shares (under a "put option") from
former ESOP participants upon death,  disability,  retirement and termination at
the fair value (as  determined by an independent  appraiser)  until such time as
the Company's common stock is publicly traded. Under the Subscription  Agreement
dated September 9, 1988, the Company is permitted to defer put options if, under
Delaware  law, the capital of the Company  would be impaired as a result of such
repurchase. The Company's total contractual cash obligation to repurchase former
ESOP shares will fluctuate in the future as the  independently  determined  fair
value  fluctuates.  The total  obligation  to  repurchase  former ESOP shares is
$373.0 million as of September 26, 2002, based on the  independently  determined
fair value as of May 24, 2002.

Under a  registration  rights  agreement,  the  holders of the other  redeemable
common  stock will have a put right to the Company  commencing  on December  10,
2003,  at a price of $40.53 per share,  unless one of the  following  events has
occurred  prior to such date or the  exercise  of the put right:  (1) an initial
public offering of the Company's common stock has been consummated;  (2) all the
Company's  common stock has been sold;  (3) all the  Company's  assets have been
sold in such a manner that the holders have received cash  payments;  or (4) the
Company's  common  stock has been  listed on a national  securities  exchange or
authorized for quotation on the NASDAQ National Market System for which there is
a public  market of at least $100 million for the Company's  common  stock.  The
total obligation to repurchase other redeemable shares of the Company's stock is
$11.6 million.

Critical Accounting Policies
----------------------------

Revenues for cost-reimbursement contracts are recorded as reimbursable costs are
incurred,   including   a  pro-rata   share  of  the   contractual   fees.   For
time-and-material  contracts,  revenue is  recognized  to the extent of billable
rates times hours delivered plus material and other reimbursable costs incurred.
For long-term fixed price production contracts,  revenue is recognized at a rate
per unit as the units are delivered.  Revenue from other  long-term  fixed price
contracts is recognized ratably over the contract period or by other appropriate
methods to measure  services  provided.  Contract costs are expensed as incurred
except for certain  limited  long-term  contracts  noted  below.  For  long-term
contracts,  which are  specifically  described in the scope section of AICPA SOP
No.  81-1,   "Accounting  for  Performance  of  Construction  Type  and  Certain
Production-Type  Contracts," or other  appropriate  accounting  literature,  the
Company  applies the  percentage of completion  method.  Under the percentage of
completion  method,  income is recognized at a consistent profit margin over the
period of  performance  based on estimated  profit  margins at completion of the
contract.  This method of accounting  requires estimating the total revenues and
total  contract cost at completion of the contract.  During the  performance  of
long-term contracts, these estimates are periodically reviewed and revisions are
made as required. The impact on revenue and contract profit as a result of these
revisions  is  included  in the periods in which the  revisions  are made.  This
method can result in the  deferral of costs  including  start-up  costs,  or the
deferral of profit on these  contracts.  Because the Company assumes the risk of
performing  a fixed  price  contract at a set price,  the failure to  accurately
estimate ultimate costs or to control costs during performance of the work could
result,  and in some  instances has resulted,  in reduced  profits or losses for
such contracts.  Estimated losses on contracts at completion are recognized when
identified.

Disputes arise in the normal course of the Company's  business on projects where
the Company is  contesting  with  customers  for  collection of funds because of
events such as delays, changes in contract  specifications and questions of cost
allowability  or  collectibility.  Such  disputes  are recorded at the lesser of
their  estimated net realizable  value or actual costs  incurred,  and only when
realization  is  probable  and can be  reliably  estimated.  Claims  against the
Company  are  recognized  when a loss  is  considered  probable  and  reasonably
determinable in amount.  Because there are estimates and judgments involved, the
actual  results could be different  from those  estimates.  Accounts  receivable
balances  related to such disputed  items were  immaterial at September 26, 2002
and December 27, 2001.

Forward Looking Statements
--------------------------

Certain  matters  discussed  or  incorporated  by  reference  in this report are
forward-looking  statements  within the meaning of the federal  securities laws.
Although  the  Company  believes  that  the   expectations   reflected  in  such
forward-looking  statements are based upon reasonable assumptions,  there can be
no assurance that its  expectations  will be achieved.  Factors that could cause
actual  results to differ  materially  from the Company's  current  expectations
include the early  termination  of, or failure of a customer to exercise  option
periods under, a significant contract;  the inability of the Company to generate
actual customer orders under indefinite delivery, indefinite quantity contracts;
technological  change;  the  inability of the Company to manage its growth or to
execute its internal performance plan; the inability of the Company to integrate
the  operations  of  acquisitions;  the  inability of the Company to attract and
retain  the  technical  and other  personnel  required  to perform  its  various
contracts;  general economic conditions;  and other risks discussed elsewhere in
this report and in other filings of the Company with the Securities and Exchange
Commission.

Item 3.  Quantitative and Qualitative Disclosures About Market Risk
-------------------------------------------------------------------

The Company is exposed to market risk from  changes in interest  rates and, to a
limited extent, foreign currency exchange rates that could affect its results of
operations  and  financial  condition  or cash flows.  The  Company  manages its
exposure to these market risks through normal operating and financing activities
and, when deemed  appropriate,  hedges these risks through the use of derivative
financial  instruments.  The  Company  uses  the term  hedge to mean a  strategy
designed to manage risks of  volatility  in rate  movements  on certain  assets,
liabilities or  anticipated  transactions  by creating a  relationship  in which
gains or losses on derivative instruments are expected

<PAGE>



to counterbalance the losses or gains on the assets,  liabilities or anticipated
transactions exposed to such market risks. The Company uses derivative financial
instruments  as a risk  management  tool  and not  for  trading  or  speculative
purposes.

Interest Rate Risk
------------------

The Company has minimal  exposure due to  fluctuations in market interest rates.
Had market  interest rates been 10% higher in the first nine months of 2002, the
Company's net earnings would have been approximately $173.2 thousand lower, or a
change of 1.4%. This is derived from a historical  model that  recalculates  the
interest expense incurred by the Company assuming that the market interest rates
to which the Company's  interest payments are indexed were, in all cases,  10.0%
higher,  taking into  consideration  the effect of such higher interest rates on
the interest rate swap as noted below.

From time to time,  the  Company  may enter into  various  derivative  financial
instruments,  including interest rate forwards, options and interest rate swaps,
to manage the exposure of portions of the  Company's  total debt  portfolio  and
related cash flows to  fluctuations  in market interest rates. In December 2000,
the  Company  entered  into a two year and 28-day  swap  agreement,  wherein the
Company pays  approximately  6.2%  annualized  interest on a notional  amount of
$35.0  million on a quarterly  basis  beginning on January 4, 2001 and ending on
January 6, 2003.  The objective of this  transaction  is to neutralize  the cash
flow  variability on designated  portions of the Company's Senior Secured Credit
Agreement  Term A and  Term B loans,  which  have a  floating-rate,  that may be
caused by fluctuations  in market interest rates.  The adjustments to fair value
of this  derivative  instrument  during the nine months ended September 26, 2002
resulted in additional  increases in accumulated other  comprehensive  income of
$0.5  million.   This  swap  is  perfectly  effective  at  its  objective,   and
accordingly, there are no existing gains or losses as of September 26, 2002 that
are expected to be reclassified into earnings within the next twelve months. The
Company also managed its  exposure to changes in interest  rates by  effectively
capping at 7.5% the base interest rate on a notional amount of $100.0 million of
its Senior Secured Credit Agreement Term A and Term B loans until February 2002.

Foreign Currency Risk
---------------------

The Company's cash flows are primarily denominated in U.S. dollars. With respect
to the  limited  cash  flows  that are  denominated  in  foreign  currency,  the
Company's policy is to manage exposure to fluctuations in foreign exchange rates
by netting inflows of foreign exchange with outflows of foreign  exchange.  From
time to time the Company uses foreign exchange contracts to minimize exposure to
the risk that the  eventual  net cash  inflows and  outflows  will be  adversely
affected by changes in exchange rates. The Company's exposure to fluctuations in
foreign exchange risk is immaterial.

Item 4.  Controls and Procedures
--------------------------------

Evaluation of Controls and Procedures:
--------------------------------------
Within the 90 days prior to the date of this report,  the Company carried out an
evaluation,  under the supervision and with the  participation  of the Company's
management,  including the Company's chief executive officer and chief financial
officer,  of the  effectiveness  of the design and  operation  of the  Company's
disclosure controls and procedures  pursuant to Exchange Act Rule 13a-15.  Based
upon that evaluation,  the chief executive  officer and chief financial  officer
concluded, as of the evaluation date, that the Company's disclosure controls and
procedures  are  effective  in  timely  alerting  them to  material  information
relating to the Company  (including its consolidated  subsidiaries) and ensuring
that such  material  information  required to be included in the  Company's  SEC
filings under the  Securities  Exchange Act of 1934 is reported  within the time
periods  specified by SEC rules and  regulations.

Change in Internal  Controls:
-----------------------------
There have been no significant  changes in the Company's internal controls or in
other factors that could  significantly  affect these controls subsequent to the
date of this report.
<PAGE>
PART II - OTHER INFORMATION

Item 1.  Legal Proceedings
--------------------------

The Company and its  subsidiaries  and affiliates are involved in various claims
and lawsuits,  including  contract  disputes and claims based on  allegations of
negligence and other tortuous  conduct.  The Company is also potentially  liable
for certain personal  injury,  tax,  environmental,  and contract dispute issues
related to the prior  operations of divested  businesses.  In addition,  certain
subsidiary companies are potentially liable for environmental,  personal injury,
and contract and dispute claims. In most cases, the Company and its subsidiaries
have denied, or believe they have a basis to deny, liability,  and in some cases
have  offsetting  claims against the  plaintiffs,  third  parties,  or insurance
carriers.  The total amount of damages  currently  claimed by the  plaintiffs in
these  cases  is  estimated  to  be   approximately   $5.7  million   (including
compensatory  punitive  damages and  penalties).  The Company  believes that the
amount that will actually be recovered in these cases will be substantially less
than the amount  claimed.  After taking into account  available  insurance,  the
Company  believes  it is  adequately  reserved  with  respect  to the  potential
liability for such claims.  The estimates set forth above do not reflect  claims
that may have  been  incurred  but have not yet  been  filed.  The  Company  has
recorded  such  damages  and  penalties  that  are  considered  to  be  probable
recoveries against the Company or its subsidiaries.

In  September,   2000,  the  Company  became  aware  of  significant  errors  in
preacquisition  estimates  of the  cost to  complete  a major  ten-year  federal
government telephone  installation and operation contract that was undertaken in
1998 by a  predecessor  of GTE  Information  Systems,  LLC, now known as DynCorp
Information Systems LLC, a wholly-owned  subsidiary of the Company ("DIS").  The
Company acquired GTE Information Systems LLC from Contel Federal Systems,  Inc.,
a subsidiary of GTE  Corporation,  in December 1999. See Note 2 for a discussion
of revisions concerning the accounting for such preacquisition estimates and the
impact of those revisions on the financial statements. Effective August 1, 2001,
DIS and the federal government customer entered into a bilateral modification of
the  contract  as a  consequence  of which the Company  reduced  the  previously
recorded loss reserve by $42.7 million effective in the third quarter 2001. This
reduction   resulted  from  the  government's   elimination  of  certain  future
liabilities  from the contract,  an increase in future  billing rates for calls,
and a decrease in future call  revenue  shared with the  government  agency.  On
August 10, 2001, the Company  instituted suit against GTE  Corporation  claiming
breaches of the  acquisition  agreement  representations  and warranties and for
other relief.

On September 11, 2001,  DynCorp and three of its wholly-owned  subsidiaries were
served with a civil action  filed in the United  States  District  Court for the
District  of Columbia on behalf of certain  Ecuadorian  citizens  and an alleged
class that could  consist of at least  10,000 such  unnamed  citizens,  alleging
personal  injury,  property  damage and wrongful  death as a consequence  of the
spraying of narcotic crops along the Colombian  border adjacent to Ecuador.  The
action seeks a  declaratory  judgment as well as  unspecified  compensatory  and
punitive damages.  Spraying  operations are conducted under a Company subsidiary
contract with the United  States  Department  of State in  cooperation  with the
Colombian government.  No spraying operations are conducted in Ecuador, although
the complaint  alleges that sprayed  material has drifted across the border into
Ecuador. All operations of the Company's subsidiary in Colombia are conducted in
accordance  with  specific  instructions  from the  Department  of  State  using
equipment and spray material provided by the United States government. The State
Department has publicly stated that the spray material has been demonstrated not
to be toxic  to  human  beings.  The  Company  and its  subsidiaries  intend  to
vigorously  defend  against all  allegations.  The  Company  does not expect any
losses due to this litigation.

Regarding   environmental   issues,   neither  the  Company,   nor  any  of  its
subsidiaries,  is named a  Potentially  Responsible  Party  (as  defined  in the
Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA"))
at any  site.  The  Company,  however,  did  undertake,  as  part  of  the  1988
divestiture of a petrochemical  engineering subsidiary, an obligation to install
and  operate  a soil and  water  remediation  system  at a  subsidiary  research
facility  site in New Jersey and also is required to pay the costs of  continued
operation of the remediation system. In addition,  the Company,  pursuant to the
1995 sale of its commercial  aviation business,  is responsible for the costs of
clean up of environmental conditions at certain designated sites. Such costs may
include the removal and subsequent  replacement of contaminated soil,  concrete,
and  underground  storage tanks that existed prior to the sale of the commercial
aviation business. The resolution of these matters is not expected
<PAGE>
to have a material  impact on the  Company's  results of operations or financial
condition.  The Company  believes it has adequate  accruals for any liability it
may incur arising from the designated sites.

The  Company  has been  advised by the  purchasers  of two  former  subsidiaries
(DynAir Tech of Florida, Inc. and DynAir Services, Inc.) of environmental claims
by Dade  County,  Florida,  arising out of the former  subsidiaries'  conduct of
business at Miami International Airport ("MIA").  Claims for indemnification are
being asserted  against the Company pursuant to divestiture  agreements  entered
into in 1995. The Company has assumed defense of these  allegations  with a full
reservation  of  rights.  A lawsuit  was filed in April  2001 by Dade  County in
Florida State Court  against  DynAir  Tech's  successor-in-interest,  Sabretech,
Inc.,  and 16 other  defendants,  but  neither  Sabretech  nor any  other  named
defendant has been served.  DynAir Services is not currently a named  defendant,
although it is one of an additional 200 companies that the County has identified
as having possible  responsibility  for contamination at MIA. Under the terms of
the DynAir Tech  divestiture  agreement,  the purchaser is  responsible  for the
first $125,000 of cost incurred as a result of such claims; however, the Company
is  required to assume full  responsibility  for all costs to the extent  claims
exceed  $125,000  up to an  aggregate  maximum  amount of $2.5  million.  If the
Company  is  required  to  indemnify  under  the  DynAir  Services   divestiture
agreement, it would be responsible for all related costs. The County's complaint
specifies  $200.0  million  of  incurred  and $250.0  million of future  damages
against  the named  defendants.  Defense  has been  tendered  to  certain of the
Company's insurance carriers,  although no coverage determination has been made.
Both DynAir  Services and Sabretech are  represented  by  environmental  defense
counsel and intend to vigorously  defend against the allegations.  At this time,
the Company cannot reasonably determine the exposure, if any, to possible losses
from these claims.

The Company is a party to other civil and contractual  lawsuits that have arisen
in the normal course of business for which potential liability,  including costs
of defense,  constitutes the remainder of the $5.7 million  discussed above. The
estimated probable liability (included in Other Liabilities and Deferred Credits
on the Consolidated  Condensed  Balance Sheet) for these issues is approximately
$4.6 million and is  substantially  covered by insurance at September  26, 2002.
All of the insured claims are within policy limits and have been tendered to and
accepted by the  applicable  carriers.  The Company has  recorded an  offsetting
asset (included in Other Assets on the Consolidated  Condensed Balance Sheet) of
$4.1 million at September 26, 2002 for these items.

The Company has recorded its best estimate of the aggregate  liability that will
result from these  matters.  While it is not possible to predict with  certainty
the outcome of litigation and other matters  discussed  above, it is the opinion
of the Company's management,  based in part upon opinions of counsel,  insurance
in force,  and the facts currently  known,  that  liabilities in excess of those
recorded,  if any,  arising from such matters would not have a material  adverse
effect  on the  results  of  operations,  consolidated  financial  condition  or
liquidity of the Company over the  long-term.  However,  it is possible that the
timing of the  resolution  of  individual  issues could result in a  significant
impact  on the  operating  results  and/or  liquidity  for  one or  more  future
reporting periods.

The  major  portion  of  the  Company's   business  involves   contracting  with
departments and agencies of, and prime contractors to, the U.S. Government,  and
such contracts are subject to possible  termination  for the  convenience of the
government  and to audit and possible  adjustment to give effect to  unallowable
costs under cost-type  contracts or to other regulatory  requirements  affecting
both cost-type and fixed price contracts.  Payments  received by the Company for
allowable  direct and indirect  costs are subject to  adjustment  and  repayment
after audit by government  auditors if the payments  exceed  allowable  costs. A
majority of the audits have been  completed on the Company's  incurred  contract
costs  through 1999.  The Company has included an allowance for excess  billings
and contract  losses in its  financial  statements  that it believes is adequate
based on its  interpretation  of contracting  regulations  and past  experience.
There can be no assurance,  however,  that this allowance will be adequate.  The
Company is aware of  various  costs  questioned  by the  government,  but cannot
determine  the outcome of the audit  findings  at this time.  In  addition,  the
Company is occasionally the subject of investigations  by various  investigative
organizations,  resulting from employee and other allegations regarding business
practices.  In  management's  opinion,  there are no outstanding  issues of this
nature at  September  26, 2002 that will have a material  adverse  effect on the
Company's consolidated financial condition, results of operations, or liquidity.

<PAGE>



Item 4.  Submission of Matters to a Vote of Security Holders
------------------------------------------------------------

At the annual meeting of  stockholders,  held on July 10, 2002, at the Company's
headquarters in Reston, Virginia, the stockholders of the Company:

Elected  the  following  individuals  as  Class  II  directors  to the  Board of
Directors for the terms set forth:

<TABLE>
<CAPTION>

Director                        Term        Votes Cast For     Votes Withheld/Against
-------                         ----        --------------     ----------------------
<S>                         <C>              <C>                <C>
Michael P. Carns             Three Years      9,779,145                357,691
H. Brian Thompson            Three Years      9,759,684                377,152
Herbert S. Winokur, Jr.      Three Years      9,409,333                727,503
</TABLE>


Item 6.  Exhibits and Reports on Form 8-K
-----------------------------------------
(a)  Exhibits

3.2 Registrant's By-laws as amended through September 4, 2002 (filed herewith).

99.1  Certification by Chief Executive  Officer Pursuant to 18 USC Section 1350,
as Adopted  Pursuant  to Section  906 of the  Sarbanes-Oxley  Act of 2002 (filed
herewith).

99.2  Certification by Chief Financial  Officer Pursuant to 18 USC Section 1350,
as Adopted  Pursuant  to Section  906 of the  Sarbanes-Oxley  Act of 2002 (filed
herewith).

(b) Reports on Form 8-K

Form 8-K was filed on August 6, 2002 to note the decision  made on May 30, 2002,
by the DynCorp Savings and Retirement Plan and DynCorp Capital  Accumulation and
Retirement Plan (collectively,  the "Plans"),  to not engage Arthur Andersen LLP
as the Plans'  auditor for the plan year ending  December 31, 2001 and to engage
Ernst & Young LLP to serve as the auditor for such plan year.

Form 8-K was filed on September  23, 2002 to note the decision made on September
18,  2002,  by the Audit  Committee,  to  engage  Deloitte  & Touche  LLP as the
Company's  independent  public  accountant.  D&T has been  engaged  to audit the
Company's  financial  statements  for the fiscal years ended  December 30, 1999,
December 28, 2000,  and December 27, 2001 and to audit the  Company's  financial
statements for the fiscal year ending December 26, 2002.

On January 1, 2002, the Company  realigned its strategic  business segments from
five to four segments.  Footnote 21 to the Company's financial statements as set
forth in Item 8 of its Form 10-K/A, Amendment No. 2 has been revised accordingly
and filed as an exhibit in the Form 8-K filed on November 12, 2002.

<PAGE>









                                   SIGNATURES
                                   ----------

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.

        DYNCORP


Date: November 14, 2002                      /s/ Patrick C. FitzPatrick
                                             --------------------------

                                             Patrick C. FitzPatrick
                                             Senior Vice President
                                             and Chief Financial Officer



Date: November 14, 2002                      /s/ John J. Fitzgerald
                                             ----------------------
                                             John J. Fitzgerald
                                             Vice President
                                             and Corporate Controller

<PAGE>






         CEO/CFO Certifications under Section 302 for Quarterly Reports


                     Certificate of Chief Executive Officer

                    I, Paul V. Lombardi, hereby certify that:

1. I have reviewed this quarterly report on Form 10-Q, of DynCorp;

2. Based on my  knowledge,  this  quarterly  report  does not contain any untrue
statement of a material fact or omit to state a material fact  necessary to make
the statements made, in light of the  circumstances  under which such statements
were made, not  misleading  with respect to the period covered by this quarterly
report;

3.  Based  on my  knowledge,  the  financial  statements,  and  other  financial
information  included in this quarterly  report,  fairly present in all material
respects the financial  condition,  results of operations  and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

4.  The  registrant's  other  certifying  officers  and  I are  responsible  for
establishing and maintaining disclosure controls and procedures (as such term is
defined in Exchange Act Rules 13a-14 and 15d-14) for the Company and have:

               (a) designed such  disclosure  controls and  procedures to ensure
          that  material  information  relating to the  Company,  including  its
          consolidated  subsidiaries,  is made  known to them by  others  within
          those entities, particularly during the period in which this quarterly
          report is being prepared;

               (b)  evaluated  the  effectiveness  of the  Company's  disclosure
          controls  and  procedures  as of a date  within  90 days  prior to the
          filing date of this quarterly report (the "Evaluation Date"); and

               (c) presented in this quarterly report our conclusions  about the
          effectiveness  of the disclosure  controls and procedures based on our
          evaluation as of the Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the Company's auditors and the audit committee of the
Company's board of directors:

               (a) all  significant  deficiencies  in the design or operation of
          internal  controls which could adversely affect the Company's  ability
          to  record,  process,  summarize  and report  financial  data and have
          identified  for the  Company's  auditors  any material  weaknesses  in
          internal controls; and

               (b) any fraud, whether or not material,  that involves management
          or  other  employees  who  have a  significant  role in the  Company's
          internal controls; and

6. The  registrant's  other  certifying  officers  and I have  indicated in this
quarterly  report  whether or not there  were  significant  changes in  internal
controls or in other factors that could  significantly  affect internal controls
subsequent to the date of their most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.

Date:  November 14, 2002                    /s/ Paul V. Lombardi
                                            --------------------
                                            Paul V. Lombardi
                                            President & Chief Executive Officer

<PAGE>



                     Certificate of Chief Financial Officer

I, Patrick C. FitzPatrick, hereby certify that:

1. I have reviewed this quarterly report on Form 10-Q, of DynCorp;

2. Based on my  knowledge,  this  quarterly  report  does not contain any untrue
statement of a material fact or omit to state a material fact  necessary to make
the statements made, in light of the  circumstances  under which such statements
were made, not  misleading  with respect to the period covered by this quarterly
report;

3.  Based  on my  knowledge,  the  financial  statements,  and  other  financial
information  included in this quarterly  report,  fairly present in all material
respects the financial  condition,  results of operations  and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

4.  The  registrant's  other  certifying  officers  and  I are  responsible  for
establishing and maintaining disclosure controls and procedures (as such term is
defined in Exchange Act Rules 13a-14 and 15d-14) for the Company and have:

               (a) designed such  disclosure  controls and  procedures to ensure
          that  material  information  relating to the  Company,  including  its
          consolidated  subsidiaries,  is made  known to them by  others  within
          those entities, particularly during the period in which this quarterly
          report is being prepared;

               (b)  evaluated  the  effectiveness  of the  Company's  disclosure
          controls  and  procedures  as of a date  within  90 days  prior to the
          filing date of this quarterly report (the "Evaluation Date"); and

               (c) presented in this quarterly report our conclusions  about the
          effectiveness  of the disclosure  controls and procedures based on our
          evaluation as of the Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the Company's auditors and the audit committee of the
Company's board of directors:

               (a) all  significant  deficiencies  in the design or operation of
          internal  controls which could adversely affect the Company's  ability
          to  record,  process,  summarize  and report  financial  data and have
          identified  for the  Company's  auditors  any material  weaknesses  in
          internal controls; and

               (b) any fraud, whether or not material,  that involves management
          or  other  employees  who  have a  significant  role in the  Company's
          internal controls; and

6. The  registrant's  other  certifying  officers  and I have  indicated in this
quarterly  report  whether or not there  were  significant  changes in  internal
controls or in other factors that could  significantly  affect internal controls
subsequent to the date of their most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.

Date:  November 14, 2002                     /s/ Patrick C. FitzPatrick
                                             --------------------------
                                             Patrick C. FitzPatrick
                                             Senior Vice President &
                                             Chief Financial Officer


<PAGE>