----

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| R      | QUARTERLY REPORT PURSUANT TO      SECTION 13 OR 15(d) OF THE SECURITIESEXCHANGE ACT OF      1934                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   | FOR      THE QUARTERLY PERIOD ENDED MARCH 31, 2010                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   | OR                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| £ | TRANSITION REPORT PURSUANT TO      SECTION 13 OR 15(d) OF THE SECURITIESEXCHANGE ACT OF      1934                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   | FOR      THE TRANSITION PERIOD      FROM                                                                                                TO                  |

| MASSACHUSETTS                                                       | 04-2211809                                |
|---------------------------------------------------------------------|-------------------------------------------|
| (State      or other jurisdiction of Incorporation or organization) | (I.R.S.      Employer Identification No.) |

| Large      accelerated filer | £                                                    | Accelerated      filer  R              |
|------------------------------|-----------------------------------------------------------|--------------------------------------------------|
| Non-accelerated      filer   | £ (Do not      check if a smaller reporting company) | Smaller      reporting company  £ |

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DYNAMICS RESEARCH CORPORATION

|                               |          |                                                                                                                                                                         | Page   |
|------------------------------------|---------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
| Part      I. Financial Information |          |
|                               | Item      1.  | Financial      Statements                                                                                                                                                    |   |
|                               |          | Condensed Consolidated Balance Sheets as of March 31, 2010      (unaudited) and December 31, 2009                                                                            | 3      |
|                               |          | Condensed Consolidated Statements of Operations for the three      months ended March 31, 2010 and 2009 (unaudited)                                                          | 4      |
|                               |          | Condensed Consolidated Statements of Changes in Stockholders’      Equity and Comprehensive Income for the three months ended March 31, 2010      and 2009 (unaudited) | 5      |
|                               |          | Condensed Consolidated Statements of Cash Flows for the three      months ended March 31, 2010 and 2009 (unaudited)                                                          | 6      |
|                               |          | Notes to Condensed Consolidated Financial Statements      (unaudited)                                                                                                        | 7      |
|                               | Item      2.  | Management’s Discussion and Analysis of Financial Condition      and Results of Operations                                                                             | 15     |
|                               | Item      3.  | Quantitative and Qualitative Disclosures About Market      Risk                                                                                                              | 21     |
|                               | Item      4.  | Controls and Procedures                                                                                                                                                      | 21     |
|                               |          |
| Part      II. Other Information    | 22            |
|                               | Item      1.  | Legal Proceedings                                                                                                                                                            | 22     |
|                               | Item      1A. | Risk Factors                                                                                                                                                                 | 22     |
|                               | Item      2.  | Unregistered Sales of Equity Securities and Use of      Proceeds                                                                                                             | 22     |
|                               | Item      6.  | Exhibits                                                                                                                                                                     | 23     |

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DYNAMICS RESEARCH CORPORATION

|                                                                                                                                                                                    | March      31, |    | December      31, |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------|---------|-------------------|--------|
|                                                                                                                                                                                    | 2010           |    | 2009              |   |
|                                                                                                                                                                                    | (unaudited)    |    |              |   |
| Assets                                                                                                                                                                                  |           |    |              |   |
| Current      assets                                                                                                                                                                     |           |    |              |   |
| Cash      and cash equivalents                                                                                                                                                          | $              | 6,947   |              | $      | 55 |   |
| Contract      receivables, net                                                                                                                                                          |           | 66,936  |              |   | 72,569 |   |
| Prepaid      expenses and other current assets                                                                                                                                          |           | 3,520   |              |   | 5,702 |   |
| Discontinued      operations                                                                                                                                                            |           | 2,390   |              |   | 2,058 |   |
| Total      current assets                                                                                                                                                               |           | 79,793  |              |   | 80,384 |   |
| Noncurrent      assets                                                                                                                                                                  |           |    |              |   |   |   |
| Property      and equipment, net                                                                                                                                                        |           | 13,349  |              |   | 13,915 |   |
| Goodwill                                                                                                                                                                                |           | 97,641  |              |   | 97,641 |   |
| Intangible      assets, net                                                                                                                                                             |           | 3,689   |              |   | 4,074 |   |
| Deferred      tax asset                                                                                                                                                                 |           | 4,153   |              |   | 4,252 |   |
| Other      noncurrent assets                                                                                                                                                            |           | 3,335   |              |   | 3,335 |   |
| Total      noncurrent assets                                                                                                                                                            |           | 122,167 |              |   | 123,217 |   |
| Total      assets                                                                                                                                                                       | $              | 201,960 |              | $      | 203,601 |   |
|                                                                                                                                                                                    |           |    |              |   |   |   |
| Liabilities      and stockholders' equity                                                                                                                                               |           |    |              |   |   |   |
| Current      liabilities                                                                                                                                                                |           |    |              |   |   |   |
| Current      portion of long-term debt                                                                                                                                                  | $              | 8,000   |              | $      | 8,000 |   |
| Accounts      payable                                                                                                                                                                   |           | 18,674  |              |   | 18,299 |   |
| Accrued      compensation and employee benefits                                                                                                                                         |           | 15,276  |              |   | 16,357 |   |
| Deferred      taxes                                                                                                                                                                     |           | 5,498   |              |   | 7,046 |   |
| Other      accrued expenses                                                                                                                                                             |           | 4,932   |              |   | 3,708 |   |
| Discontinued      operations                                                                                                                                                            |           | 308     |              |   | 186 |   |
| Total      current liabilities                                                                                                                                                          |           | 52,688  |              |   | 53,596 |   |
| Long-term      liabilities                                                                                                                                                              |           |    |              |   |   |   |
| Long-term      debt                                                                                                                                                                     |           | 20,000  |              |   | 23,973 |   |
| Other      long-term liabilities                                                                                                                                                        |           | 32,132  |              |   | 31,936 |   |
| Total      long-term liabilities                                                                                                                                                        |           | 52,132  |              |   | 55,909 |   |
| Total      liabilities                                                                                                                                                                  |           | 104,820 |              |   | 109,505 |   |
| Commitments      and contingencies                                                                                                                                                      |           |    |              |   |   |   |
| Stockholders'      equity                                                                                                                                                               |           |    |              |   |   |   |
| Preferred      stock, $0.10 par value; 5,000,000 shares authorized; no shares issued and      outstanding                                                                               |           | -       |              |   | - |   |
| Common      stock, $0.10 par value; 30,000,000 shares authorized; 9,924,056 and      9,923,357 shares issued and outstanding at March 31, 2010 and December 31,      2009, respectively |           | 992     |              |   | 992 |   |
| Capital      in excess of par value                                                                                                                                                     |           | 52,758  |              |   | 52,580 |   |
| Accumulated      other comprehensive loss, net of taxes                                                                                                                                 |           | (20,508 | )                 |   | (20,505 | ) |
| Retained      earnings                                                                                                                                                                  |           | 63,898  |              |   | 61,029 |   |
| Total      stockholders' equity                                                                                                                                                         |           | 97,140  |              |   | 94,096 |   |
| Total      liabilities and stockholders' equity                                                                                                                                         | $              | 201,960 |              | $      | 203,601 |   |

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DYNAMICS RESEARCH CORPORATION

|                                                                                                                       | Three      Months Ended |      |
|----------------------------------------------------------------------------------------------------------------------------|-------------------------|-----------|
|                                                                                                                       | March      31,          |      |
|                                                                                                                       | 2010                    |      | 2009 |   |
| Revenue                                                                                                                    | $                       | 68,584    |   | $ | 67,203 |   |
| Cost      of revenue                                                                                                       |                    | 57,827    |   |   | 55,943 |   |
| Gross      profit                                                                                                          |                    | 10,757    |   |   | 11,260 |   |
|                                                                                                                       |                    |      |   |   |   |   |
| Selling,      general and administrative expenses                                                                          |                    | 5,956     |   |   | 6,311 |   |
| Amortization      of intangible assets                                                                                     |                    | 385       |   |   | 973 |   |
| Operating      income                                                                                                      |                    | 4,416     |   |   | 3,976 |   |
| Interest      expense, net                                                                                                 |                    | (376      | ) |   | (619 | ) |
| Other      income, net                                                                                                     |                    | 113       |   |   | 39 |   |
| Income      from continuing operations before provision for income    taxes                                                |                    | 4,153     |   |   | 3,396 |   |
| Provision      for income taxes                                                                                            |                    | 1,416     |   |   | 1,439 |   |
| Income      from continuing operations                                                                                     |                    | 2,737     |   |   | 1,957 |   |
| Income      (loss) from discontinued operations, net of tax provision of $88 in 2010      and tax benefit of $142 in 2009. |                    | 132       |   |   | (186 | ) |
| Net      income                                                                                                            | $                       | 2,869     |   | $ | 1,771 |   |
|                                                                                                                       |                    |      |   |   |   |   |
| Earnings      per share                                                                                                    |                    |      |   |   |   |   |
| Basic                                                                                                                      |                    |      |   |   |   |   |
| Income      from continuing operations                                                                                     | $                       | 0.28      |   | $ | 0.20 |   |
| Income      (loss) from discontinued operations                                                                            |                    | 0.01      |   |   | (0.02 | ) |
| Net      Income                                                                                                            | $                       | 0.29      |   | $ | 0.18 |   |
| Diluted                                                                                                                    |                    |      |   |   |   |   |
| Income      from continuing operations                                                                                     | $                       | 0.27      |   | $ | 0.20 |   |
| Income      (loss) from discontinued operations                                                                            |                    | 0.01      |   |   | (0.02 | ) |
| Net      Income                                                                                                            | $                       | 0.29      | (1) | $ | 0.18 |   |
|                                                                                                                       |                    |      |   |   |   |   |
| Weighted      average shares outstanding                                                                                   |                    |      |   |   |   |   |
| Basic                                                                                                                      |                    | 9,807,706 |   |   | 9,604,895 |   |
| Diluted                                                                                                                    |                    | 9,993,079 |   |   | 9,711,084 |   |

| (1) | Total      does not add due to rounding. |
|-----|------------------------------------------|

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DYNAMICS RESEARCH CORPORATION

|                                                               |              |   |   |   | Capital     |        |          |          |     |     |    |   |
|--------------------------------------------------------------------|-------------------|--------|--------|--------|-------------|-------------|---------------|---------------|----------|----------|---------|--------|
|                                                               | Common      Stock |   | in     |   | Accumulated |        |          |          |     |     |
|                                                               | Issued            |   | Excess |   | Other       |        |          |          |     |     |
|                                                               |              |   | Par    |   | of      Par |        | Comprehensive |          | Retained |     |    |   |
|                                                               | Shares            |   | Value  |   | Value       |        | Loss          |          | Earnings |     | Total   |   |
| Balance      at December 31, 2009                                  |              | 9,923  |   | $      | 992         |        | $             | 52,580        |     | $        | (20,505 | )      | $ | 61,029 |   | $ | 94,096 |   |
| Comprehensive      income:                                         |              |   |   |   |        |        |          |          |     |     |    |   |   |   |   |   |   |   |
| Net      income                                                    |              | -      |   |   | -           |        |          | -             |     |     | -       |   |   | 2,869 |   |   | 2,869 |   |
| Other      comprehensive income, net of tax:                       |              |   |   |   |        |        |          |          |     |     |    |   |   |   |   |   |   |   |
| Change      in unrealized loss on derivative instruments           |              | -      |   |   | -           |        |          | -             |     |     | (3      | )      |   | - |   |   | (3 | ) |
| Comprehensive      income                                          |              |   |   |   |        |        |          |          |     |     |    |   |   |   |   |   | 2,866 |   |
| Issuance      of common stock through stock plan transactions, net |              | 17     |   |   | 1           |        |          | 119           |     |     | -       |   |   | - |   |   | 120 |   |
| Issuance      of restricted stock                                  |              | 6      |   |   | 1           |        |          | (1            | )        |     | -       |   |   | - |   |   | - |   |
| Forfeiture      of restricted stock                                |              | (9     | )      |   | (1          | )           |          | 1             |     |     | -       |   |   | - |   |   | - |   |
| Release      of restricted stock                                   |              | (13    | )      |   | (1          | )           |          | (133          | )        |     | -       |   |   | - |   |   | (134 | ) |
| Share-based      compensation                                      |              | -      |   |   | -           |        |          | 163           |     |     | -       |   |   | - |   |   | 163 |   |
| Tax      benefit from stock plan transactions                      |              | -      |   |   | -           |        |          | 29            |     |     | -       |   |   | - |   |   | 29 |   |
| Balance      at March 31, 2010                                     |              | 9,924  |   | $      | 992         |        | $             | 52,758        |     | $        | (20,508 | )      | $ | 63,898 |   | $ | 97,140 |   |
|                                                               |              |   |   |   |        |        |          |          |     |     |    |   |   |   |   |   |   |   |
|                                                               |              |   |   |   |        |        | Capital       |          |     |     |    |   |   |   |   |   |   |
|                                                               | Common      Stock |   | in     |   | Accumulated |        |          |          |     |     |    |   |
|                                                               | Issued            |   | Excess |   | Other       |        |          |          |     |     |    |   |
|                                                               |              |   |   | Par    |        | of      Par |          | Comprehensive |     | Retained |    |   |   |   |
|                                                               | Shares            |   | Value  |   | Value       |        | Loss          |          | Earnings |     | Total   |   |
| Balance      at December 31, 2008                                  |              | 9,675  |   | $      | 967         |        | $             | 51,919        |     | $        | (22,268 | )      | $ | 50,857 |   | $ | 81,475 |   |
| Comprehensive      income:                                         |              |   |   |   |        |        |          |          |     |     |    |   |   |   |   |   |   |   |
| Net      income                                                    |              | -      |   |   | -           |        |          | -             |     |     | -       |   |   | 1,771 |   |   | 1,771 |   |
| Other      comprehensive income, net of tax:                       |              |   |   |   |        |        |          |          |     |     |    |   |   |   |   |   |   |   |
| Change      in unrealized loss on derivative instruments           |              | -      |   |   | -           |        |          | -             |     |     | 41      |   |   | - |   |   | 41 |   |
| Comprehensive      income                                          |              |   |   |   |        |        |          |          |     |     |    |   |   |   |   |   | 1,812 |   |
| Issuance      of common stock through stock plan transactions      |              | 12     |   |   | 1           |        |          | 80            |     |     | -       |   |   | - |   |   | 81 |   |
| Issuance      of restricted stock                                  |              | 55     |   |   | 6           |        |          | (6            | )        |     | -       |   |   | - |   |   | - |   |
| Forfeiture      of restricted stock                                |              | (2     | )      |   | -           |        |          | -             |     |     | -       |   |   | - |   |   | - |   |
| Release      of restricted stock                                   |              | (11    | )      |   | (1          | )           |          | (82           | )        |     | -       |   |   | - |   |   | (83 | ) |
| Share-based      compensation                                      |              | -      |   |   | -           |        |          | 191           |     |     | -       |   |   | - |   |   | 191 |   |
| Balance      at March 31, 2009                                     |              | 9,729  |   | $      | 973         |        | $             | 52,102        |     | $        | (22,227 | )      | $ | 52,628 |   | $ | 83,476 |   |

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DYNAMICS RESEARCH CORPORATION

|                                                                     | Three      Months Ended |    |
|--------------------------------------------------------------------------|-------------------------|---------|
|                                                                     | March      31,          |    |
|                                                                     | 2010                    |    | 2009 |   |
| Cash      flows from operating activities:                               |                    |    |   |   |
| Net      income                                                          | $                       | 2,869   |   | $ | 1,771 |   |
| Income      (loss) from discontinued operations                          |                    | 132     |   |   | (186 | ) |
| Income      from continuing operations                                   |                    | 2,737   |   |   | 1,957 |   |
| Adjustments      to reconcile net cash provided by operating activities: |                    |    |   |   |   |   |
| Depreciation                                                             |                    | 886     |   |   | 737 |   |
| Amortization      of intangible assets                                   |                    | 385     |   |   | 973 |   |
| Share-based      compensation                                            |                    | 163     |   |   | 191 |   |
| Investment      income from equity interest                              |                    | (45     | ) |   | (96 | ) |
| Tax      benefit from stock plan transactions                            |                    | (29     | ) |   | - |   |
| Deferred      income taxes                                               |                    | (1,447  | ) |   | 821 |   |
| Other                                                                    |                    | (129    | ) |   | (106 | ) |
| Change      in operating assets and liabilities:                         |                    |    |   |   |   |   |
| Contract      receivables, net                                           |                    | 5,633   |   |   | (430 | ) |
| Prepaid      expenses and other current assets                           |                    | 2,182   |   |   | (807 | ) |
| Accounts      payable                                                    |                    | 2,513   |   |   | (433 | ) |
| Accrued      compensation and employee benefits                          |                    | (1,081  | ) |   | (225 | ) |
| Other      accrued expenses                                              |                    | 1,119   |   |   | 308 |   |
| Other      long-term liabilities                                         |                    | 200     |   |   | 556 |   |
| Net      cash provided by continuing operations                          |                    | 13,087  |   |   | 3,446 |   |
| Net      cash used in discontinued operations                            |                    | (24     | ) |   | (80 | ) |
| Net      cash provided by operating activities                           |                    | 13,063  |   |   | 3,366 |   |
| Cash      flows from investing activities:                               |                    |    |   |   |   |   |
| Purchase      of business                                                |                    | -       |   |   | (4,250 | ) |
| Additions      to property and equipment                                 |                    | (2,470  | ) |   | (223 | ) |
| Proceeds      from sale of investments and long-lived assets             |                    | 19      |   |   | 1 |   |
| Dividends      from equity investment                                    |                    | 37      |   |   | 44 |   |
| Increase      in other assets                                            |                    | 121     |   |   | - |   |
| Net      cash used in continuing operations                              |                    | (2,293  | ) |   | (4,428 | ) |
| Net      cash used in discontinued operations                            |                    | (54     | ) |   | (43 | ) |
| Net      cash used in investing activities                               |                    | (2,347  | ) |   | (4,471 | ) |
| Cash      flow from financing activities:                                |                    |    |   |   |   |   |
| Repayments      under term loan                                          |                    | (2,000  | ) |   | (2,000 | ) |
| Borrowings      under revolving credit agreement                         |                    | 34,156  |   |   | 11,570 |   |
| Repayments      under revolving credit agreement                         |                    | (36,129 | ) |   | (11,274 | ) |
| Proceeds      from the exercise of stock plan transactions               |                    | 120     |   |   | 81 |   |
| Tax      benefit from stock plan transactions                            |                    | 29      |   |   | - |   |
| Net      cash used in financing activities                               |                    | (3,824  | ) |   | (1,623 | ) |
| Net      increase (decrease) in cash and cash equivalents                |                    | 6,892   |   |   | (2,728 | ) |
| Cash      and cash equivalents, beginning of period                      |                    | 55      |   |   | 7,111 |   |
| Cash      and cash equivalents, end of period                            | $                       | 6,947   |   | $ | 4,383 |   |

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NOTE 1. BASIS OF PRESENTATION

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Table of Contents

|                                                        | Three      Months Ended |   |
|-------------------------------------------------------------|-------------------------|--------|
|                                                        | March      31,          |   |
|                                                        | 2010                    |   | 2009 |   |
| Product      revenue                                        | $                       | 2,169  |   | $ | 1,336 |   |
|                                                        |                    |   |   |   |   |   |
| Income      (loss) before income taxes                      | $                       | 220    |   | $ | (328 | ) |
| (Provision)      benefit for income taxes                   |                    | (88    | ) |   | 142 |   |
| Income      (loss) from discontinued operations, net of tax | $                       | 132    |   | $ | (186 | ) |

|                                           | March      31, |   | December      31, |   |
|------------------------------------------------|----------------|--------|-------------------|--------|
|                                           | 2010           |   | 2009              |   |
| Accounts      receivable                       | $              | 1,035  |              | $      | 946 |   |
| Inventory                                      |           | 1,119  |              |   | 864 |   |
| Prepaid      expenses and other current assets |           | 10     |              |   | 22 |   |
| Property      and equipment, net               |           | 226    |              |   | 226 |   |
| Total      current assets                      | $              | 2,390  |              | $      | 2,058 |   |
|                                           |           |   |              |   |   |   |
| Accounts      payable                          | $              | 296    |              | $      | 186 |   |
| Other      accrued expenses                    |           | 12     |              |   | - |   |
| Total      current liabilities                 | $              | 308    |              | $      | 186 |   |

|                                                                                                                   | March 31, |    | December 31, |   |
|------------------------------------------------------------------------------------------------------------------------|----------------|---------|-------------------|--------|
|                                                                                                                   | 2010           |    | 2009              |   |
| Contract      receivables, net                                                                                         |           |    |              |   |
| Billed      receivables                                                                                                | $              | 22,900  |              | $      | 28,203 |   |
| Unbilled      receivables(1):                                                                                          |           |    |              |   |   |   |
| Revenues      recorded in excess of milestone billings on a fixed price contract      with the State of Tennessee |           | 13,199  |              |   | 18,004 |   |
| Retainages      and fee withholdings                                                                                   |           | 195     |              |   | 689 |   |
| Other      unbilled receivables                                                                                        |           | 31,613  |              |   | 26,256 |   |
| Total      unbilled receivables                                                                                        |           | 45,007  |              |   | 44,949 |   |
| Allowance      for doubtful accounts                                                                                   |           | (971    | )                 |   | (583 | ) |
| Contract      receivables, net                                                                                         | $              | 66,936  |              | $      | 72,569 |   |
|                                                                                                                   |           |    |              |   |   |   |
| Prepaid      expenses and other current assets:                                                                        |           |    |              |   |   |   |
| Refundable      income taxes                                                                                           | $              | -       |              | $      | 1,604 |   |
| Restricted      cash                                                                                                   |           | 289     |              |   | 262 |   |
| Other                                                                                                                  |           | 3,231   |              |   | 3,836 |   |
| Prepaid      expenses and other current assets                                                                         | $              | 3,520   |              | $      | 5,702 |   |
|                                                                                                                   |           |    |              |   |   |   |
| Property      and equipment, net:                                                                                      |           |    |              |   |   |   |
| Software                                                                                                               | $              | 12,153  |              | $      | 12,107 |   |
| Furniture      and other equipment                                                                                     |           | 9,730   |              |   | 9,679 |   |
| Leasehold      improvements                                                                                            |           | 6,571   |              |   | 6,445 |   |
| Production      equipment                                                                                              |           | 440     |              |   | 440 |   |
| Property      and equipment                                                                                            |           | 28,894  |              |   | 28,671 |   |
| Less      accumulated depreciation                                                                                     |           | (15,545 | )                 |   | (14,756 | ) |
| Property      and equipment, net                                                                                       | $              | 13,349  |              | $      | 13,915 |   |

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|                                             | March 31, |   | December 31, |   |
|--------------------------------------------------|----------------|--------|-------------------|--------|
|                                             | 2010           |   | 2009              |   |
| Other      noncurrent assets:                    |           |   |              |   |
| Deferred      compensation plan investments      | $              | 1,538  |              | $      | 1,378 |   |
| Equity      investments                          |           | 986    |              |   | 978 |   |
| Other                                            |           | 811    |              |   | 979 |   |
| Other      noncurrent assets                     | $              | 3,335  |              | $      | 3,335 |   |
|                                             |           |   |              |   |   |   |
| Accrued      compensation and employee benefits: |           |   |              |   |   |   |
| Accrued      compensation and related taxes      | $              | 7,774  |              | $      | 9,029 |   |
| Accrued      vacation                            |           | 5,537  |              |   | 4,724 |   |
| Accrued      pension liability                   |           | 952    |              |   | 840 |   |
| Other                                            |           | 1,013  |              |   | 1,764 |   |
| Accrued      compensation and employee benefits  | $              | 15,276 |              | $      | 16,357 |   |
|                                             |           |   |              |   |   |   |
| Other      accrued expenses:                     |           |   |              |   |   |   |
| Accrued      income taxes                        | $              | 1,037  |              | $      | - |   |
| Deferred      gain on sale of building           |           | 676    |              |   | 676 |   |
| Other                                            |           | 3,219  |              |   | 3,032 |   |
| Other      accrued expenses                      | $              | 4,932  |              | $      | 3,708 |   |
|                                             |           |   |              |   |   |   |
| Other      long-term liabilities:                |           |   |              |   |   |   |
| Accrued      pension liability                   | $              | 20,775 |              | $      | 20,666 |   |
| Deferred      gain on sale of building           |           | 3,212  |              |   | 3,381 |   |
| Deferred      compensation plan liability        |           | 1,538  |              |   | 1,378 |   |
| Other                                            |           | 6,607  |              |   | 6,511 |   |
| Other      long-term liabilities                 | $              | 32,132 |              | $      | 31,936 |   |

| (1) | At      March 31, 2010 and December 31, 2009, $173 and $503, respectively, of      unbilled retainages and fee withholdings are not anticipated to be billed      within one year. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                            | March      31, 2010 |   | December      31, 2009 |   |
|---------------------------------|---------------------|--------|------------------------|--------|
|                            |                |   | Accumulated            |   |   |   |   |   | Accumulated |   |   |   |
|                            | Cost                |   | Amortization           |   | Net |   | Cost |   | Amortization |   | Net |   |
| Customer      relationships     | $                   | 1,900  |                   | $      | (217 | ) | $ | 1,683 |   | $ | 13,400 |   | $ | (11,643 | ) | $ | 1,757 |   |
| Customer      contracts         |                | 3,500  |                   |   | (2,390 | ) |   | 1,110 |   |   | 3,500 |   |   | (2,234 | ) |   | 1,266 |   |
| Non-competition      agreements |                | 1,400  |                   |   | (504 | ) |   | 896 |   |   | 1,400 |   |   | (349 | ) |   | 1,051 |   |
| 8(a)      contract transition   |                | 130    |                   |   | (130 | ) |   | - |   |   | 130 |   |   | (130 | ) |   | - |   |
| Total                           | $                   | 6,930  |                   | $      | (3,241 | ) | $ | 3,689 |   | $ | 18,430 |   | $ | (14,356 | ) | $ | 4,074 |   |

| Remainder      of 2010   | $ | 1,157 |   |
|--------------------------|---|-------|--------|
| 2011                     | $ | 1,188 |   |
| 2012                     | $ | 492   |   |
| 2013                     | $ | 349   |   |
| 2014                     | $ | 299   |   |
| 2015      and thereafter | $ | 204   |   |

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|                                  |                             |   | Fair      Value Measurements |   |         |   |
|---------------------------------------|----------------------------------|--------|------------------------------|--------|--------------|--------|
|                                  |                             |   | At      March 31, 2010 Using |   |         |   |
|                                  | Balance      Sheet Location      |   | Level      1                 |   | Level      2 |   | Level      3 |   | Total |   |
| Assets:                               |                             |   |                         |   |         |   |   |   |   |   |
| Money      market funds               | Cash      and cash equivalents   |   | $                            | 6,842  |         | $      | - |   | $ | - |   | $ | 6,842 |   |
| Investments      held in Rabbi Trusts | Other      noncurrent assets     |   |                         | 1,538  |         |   | - |   |   | - |   |   | 1,538 |   |
| Total                                 |                             |   | $                            | 8,380  |         | $      | - |   | $ | - |   | $ | 8,380 |   |
|                                  |                             |   |                         |   |         |   |   |   |   |   |   |   |   |   |
| Liabilities:                          |                             |   |                         |   |         |   |   |   |   |   |   |   |   |   |
| Interest      rate swap               | Other      long-term liabilities |   | $                            | -      |         | $      | 574 |   | $ | - |   | $ | 574 |   |

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|                                  |                             |   | Fair      Value Measurements    |   |         |   |
|---------------------------------------|----------------------------------|--------|---------------------------------|--------|--------------|--------|
|                                  |                             |   | At      December 31, 2009 Using |   |         |   |
|                                  | Balance      Sheet Location      |   | Level      1                    |   | Level      2 |   | Level      3 |   | Total |   |
| Assets:                               |                             |   |                            |   |         |   |   |   |   |   |
| Investments      held in Rabbi Trusts | Other      noncurrent assets     |   | $                               | 1,378  |         | $      | - |   | $ | - |   | $ | 1,378 |   |
|                                  |                             |   |                            |   |         |   |   |   |   |   |   |   |   |   |
| Liabilities:                          |                             |   |                            |   |         |   |   |   |   |   |   |   |   |   |
| Interest      rate swap               | Other      long-term liabilities |   | $                               | -      |         | $      | 569 |   | $ | - |   | $ | 569 |   |

|                                                                 | March      31, |   | December      31, |   | Three      Months Ended March 31, |   |
|----------------------------------------------------------------------|----------------|--------|-------------------|--------|-----------------------------------|--------|
|                                                                 | 2010           |   | 2009              |   | 2010                              |   | 2009 |   |
| Other      long-term liabilities                                     | $              | 574    |              | $      | 569                               |   |   |   |   |   |
| Gain      (loss) recognized in other comprehensive income, net oftax |           |   |              |   |                              |   | $ | (3 | ) | $ | 41 |   |

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|                                               | Three      Months Ended |   |
|----------------------------------------------------|-------------------------|--------|
|                                               | March      31,          |   |
|                                               | 2010                    |   | 2009 |   |
| Interest      cost on projected benefit obligation | $                       | 1,054  |   | $ | 1,067 |   |
| Expected      return on plan assets                |                    | (1,108 | ) |   | (964 | ) |
| Recognized      actuarial loss                     |                    | 275    |   |   | 303 |   |
| Net      periodic pension expense (income)         | $                       | 221    |   | $ | 406 |   |

|                                        | Three      Months Ended |   |
|---------------------------------------------|-------------------------|--------|
|                                        | March      31,          |   |
|                                        | 2010                    |   | 2009 |   |
| Cost      of products and services          | $                       | 73     |   | $ | 80 |   |
| Selling,      general and administrative    |                    | 90     |   |   | 111 |   |
| Total      share-based compensation expense | $                       | 163    |   | $ | 191 |   |

|                                                  |           |    |     |   | Weighted    |   |      |   |
|-------------------------------------------------------|----------------|---------|----------|--------|-------------|--------|-----------|--------|
|                                                  |           |    |     |   | Average     |   |      |   |
|                                                  |           |    | Weighted |   | Remaining   |   |      |   |
|                                                  |           |    | Average  |   | Contractual |   | Aggregate |   |
|                                                  | Number      of |    | Exercise |   | Term        |   | Intrinsic |   |
|                                                  | Shares         |    | Price    |   | (in years)  |   | Value     |   |
| Outstanding      and exercisable at December 31, 2009 |           | 606,843 |     | $      | 9.62        |   |      | 1.5    |   | $ | 981 |   |
| Granted                                               |           | -       |     | $      | -           |   |      |   |   |   |   |   |
| Exercised                                             |           | (20,100 | )        | $      | 7.59        |   |      |   |   |   |   |   |
| Cancelled                                             |           | -       |     | $      | -           |   |      |   |   |   |   |   |
| Outstanding      and exercisable at March 31, 2010    |           | 586,743 |     | $      | 9.69        |   |      | 1.3    |   | $ | 1,266 |   |

|                                                           | Three      Months Ended |   |
|----------------------------------------------------------------|-------------------------|--------|
|                                                           | March      31,          |   |
|                                                           | 2010                    |   | 2009 |   |
| Amounts      realized or received from stock option exercises: |                    |   |   |   |
| Cash      proceeds received                                    | $                       | 21     |   | $ | - |   |
| Intrinsic      value realized                                  | $                       | 61     |   | $ | - |   |
| Income      tax benefit realized                               | $                       | 2      |   | $ | - |   |

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|                                |           |    | Weighted   |   |
|-------------------------------------|----------------|---------|------------|--------|
|                                |           |    | Average    |   |
|                                | Number      of |    | Grant-Date |   |
|                                | Shares         |    | Fair Value |   |
| Nonvested      at December 31, 2009 |           | 165,701 |       | $      | 9.39 |   |
| Granted                             |           | 5,500   |       | $      | 10.41 |   |
| Vested                              |           | (38,252 | )          | $      | 8.96 |   |
| Cancelled                           |           | (9,301  | )          | $      | 9.38 |   |
| Nonvested      at March 31, 2010    |           | 123,648 |       | $      | 9.57 |   |

|                                                                    | Three      Months Ended |      |
|-------------------------------------------------------------------------|-------------------------|-----------|
|                                                                    | March      31,          |      |
|                                                                    | 2010                    |      | 2009 |   |
|  Weighted      average shares outstanding - Basic                  |                    | 9,807,706 |   |   | 9,604,895 |   |
|  Dilutive      effect of stock options and restricted stock grants |                    | 185,373   |   |   | 106,189 |   |
|  Weighted      average shares outstanding - Diluted                |                    | 9,993,079 |   |   | 9,711,084 |   |

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Item 2. Management’sDiscussion and Analysis of Financial Condition and Resultsof Operations

|   | · | Our      dependency on the Federal government and changes in federal spending      priorities; |
|--------|--------|------------------------------------------------------------------------------------------------|

|   | · | Failure      to obtain new government contracts or retain existing      contracts; |
|--------|--------|------------------------------------------------------------------------------------|

|   | · | The      effect of Federal government in-sourcing on our  business; |
|--------|--------|---------------------------------------------------------------------|

|   | · | The      loss of skilled personnel; |
|--------|--------|-------------------------------------|

|   | · | The      risk of security breaches in systems we develop, install or      maintain; |
|--------|--------|-------------------------------------------------------------------------------------|

|   | · | Failure      by Congress to timely approve budgets governing spending by Federal      agencies; |
|--------|--------|-------------------------------------------------------------------------------------------------|

|   | · | Risks      due to government contract provisions providing for rights unfavorable to      us, including the ability to terminate contracts at any time for      convenience; |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Potential      systems or service failures that could result in liability to our      company; |
|--------|--------|------------------------------------------------------------------------------------------------|

|   | · | Risks      associated with various, complex Federal government procurement laws and      regulations; |
|--------|--------|-------------------------------------------------------------------------------------------------------|

|   | · | Adverse      effects in the event of an unfavorable Federal audit of our      contracts; |
|--------|--------|------------------------------------------------------------------------------------------|

|   | · | Failure      to adequately safeguard confidential  information; |
|--------|--------|-----------------------------------------------------------------|

|   | · | An      adverse outcome related to ongoing legal  proceedings; |
|--------|--------|----------------------------------------------------------------|

|   | · | Competitive      conditions in current markets and difficulties in entering new      markets; |
|--------|--------|-----------------------------------------------------------------------------------------------|

|   | · | Our      ability to maintain sufficient sources of financing and the risk that our      financing requirements shouldincrease; |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------|

|   | · | The      adverse effect on earnings should our recorded goodwill from prior      investments become impaired; and |
|--------|--------|-------------------------------------------------------------------------------------------------------------------|

|   | · | Economic      conditions in the United States and global market conditions that are      beyond our control. |
|--------|--------|--------------------------------------------------------------------------------------------------------------|

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|                                                              | Three      Months Ended March 31, |   |   |
|-------------------------------------------------------------------|-----------------------------------|--------|--------|
|                                                              | 2010                              |   |   | 2009 |   |   |
|  (in      millions)                                          | $(1)                              |   | %(1)   |   |   | $(1) |   | %(1) |   |   |
|  Revenue                                                     | $                                 | 68.6   |   |   |   |   | $ | 67.2 |   |   |   |   |
|                                                              |                              |   |   |   |   |   |   |   |   |   |   |   |
|  Gross      profit                                           | $                                 | 10.8   |   |   | 15.7 | % |   | $ | 11.3 |   |   | 16.8 | % |   |
|  Selling,      general and administrative                    |                              | 6.0    |   |   | 8.7 | % |   |   | 6.3 |   |   | 9.4 | % |   |
|  Amortization      of intangible assets                      |                              | 0.4    |   |   | 0.6 | % |   |   | 1.0 |   |   | 1.4 | % |   |
|  Operating      income                                       |                              | 4.4    |   |   | 6.4 | % |   |   | 4.0 |   |   | 5.9 | % |   |
|  Interest      expense, net                                  |                              | (0.4   | )      |   | (0.5 | )% |   |   | (0.6 | ) |   | (0.9 | )% |   |
|  Other      income, net                                      |                              | 0.1    |   |   | 0.2 | % |   |   | 0.0 |   |   | 0.1 | % |   |
|  Provision      for income taxes                             |                              | 1.4    |   |   | 34.1 | % | (2) |   | 1.4 |   |   | 42.4 | % | (2) |
| Gain      (loss) from discontinued operations, net of tax benefit |                              | 0.1    |   |   | 0.2 | % |   |   | (0.2 | ) |   | (0.3 | )% |   |
|  Net      income                                             | $                                 | 2.9    |   |   | 4.2 | % |   | $ | 1.8 |   |   | 2.6 | % |   |

| (1) | Totals      may not add due to rounding.                                                                                                |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------|
| (2) | The      percentage of provision for income taxes relates to a percentage of income      from continuing operations before incometaxes. |

|                                            | Three      Months Ended March 31, |   |
|-------------------------------------------------|-----------------------------------|--------|
|                                            | 2010                              |   | 2009 |   |
| (in      millions)                              | $(1)                              |   | %(1) |   | $(1) |   | %(1) |   |
| National      defense and intelligence agencies | $                                 | 41.9   |   |   | 61.1 | % | $ | 37.2 |   |   | 55.3 | % |
| Homeland      security                          |                              | 12.9   |   |   | 18.9 |   |   | 13.1 |   |   | 19.5 |   |
| Federal      civilian agencies                  |                              | 8.3    |   |   | 12.1 |   |   | 10.8 |   |   | 16.1 |   |
| Total      revenue from federal agencies        |                              | 63.2   |   |   | 92.1 |   |   | 61.1 |   |   | 90.9 |   |
| State      and local government agencies        |                              | 5.4    |   |   | 7.9 |   |   | 5.8 |   |   | 8.7 |   |
| Other                                           |                              | -      |   |   | - |   |   | 0.3 |   |   | 0.5 |   |
| Total      revenue                              | $                                 | 68.6   |   |   | 100.0 | % | $ | 67.2 |   |   | 100.0 | % |

| (1) | Totals      may not add due to rounding. |
|-----|------------------------------------------|

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|                                                     | Three      Months Ended |   |
|----------------------------------------------------------|-------------------------|--------|
|                                                     | March      31,          |   |
|                                                     | 2010                    |   | 2009 |   |
|  Fixed      price, including service type contracts |                    | 47     | % |   | 37 | % |
|  Time      and materials                            |                    | 33     |   |   | 46 |   |
|  Cost      reimbursable                             |                    | 20     |   |   | 17 |   |
|                                                     |                    | 100    | % |   | 100 | % |
|                                                     |                    |   |   |   |   |   |
|  Prime      contract                                |                    | 72     | % |   | 72 | % |
|  Sub-contract                                       |                    | 28     |   |   | 28 |   |
|                                                     |                    | 100    | % |   | 100 | % |

|               | March      31, |   | December      31, |   |
|--------------------|----------------|--------|-------------------|--------|
| (in      millions) | 2010           |   | 2009              |   |
| Backlog:           |           |   |              |   |
| Funded             | $              | 171.9  |              | $      | 158.5 |   |
| Unfunded           |           | 239.8  |              |   | 276.0 |   |
| Total              | $              | 411.7  |              | $      | 434.5 |   |

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Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET

Item 4. CONTROLS AND PROCEDURES

----

Table of Contents

Item 1. LEGAL PROCEEDINGS

Item 1A. RISK FACTORS

Item 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USEOF PROCEEDS

|                                            |   |              |   |               |   | Total Number |   | Approximate              |   |
|-------------------------------------------------|--------|-------------------|--------|--------------------|--------|-------------------|--------|--------------------------|--------|
|                                            |   |              |   |               |   | of      Shares    |   | Dollar      Value        |   |
|                                            |   |              |   |               |   | Purchased      as |   | of Shares that |   |
|                                            |   |              |   |               |   | Part      of      |   | May      Yet Be          |   |
|                                            |   | Total Number |   | Average      Price |   | Publicly          |   | Purchased                |   |
|                                            |   | of      Shares    |   | Paid      Per      |   | Announced         |   | Under      the           |   |
| Period                                          |   | Purchased         |   | Share              |   | Programs          |   | Programs                 |   |
| January      1, 2010 to January 31, 2010        |   |              | 832    |               | $      | 10.39             |   |                     | -      |   | $ | - |   |
| February      1, 2010 to February 29, 2010      |   |              | -      |               | $      | -                 |   |                     | -      |   |   | - |   |
| March      1, 2010 to  March 31, 2010 |   |              | 24,118 |               | $      | 11.12             |   |                     | -      |   |   | - |   |
| Total                                           |   |              | 24,950 |               | $      | 11.10             |   |                     | -      |   | $ | - |   |

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Item 6. EXHIBITS

| 31.1   | Certification      of the Chief Executive Officer pursuant to Rule 13a-14(a) under the      Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the      Sarbanes-Oxley Act of 2002. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                    |
| 31.2   | Certification      of the Chief Financial Officer pursuant to Rule 13a-14(a) under the      Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the      Sarbanes-Oxley Act of 2002. |
|   |                                                                                                                                                                                                    |
| 32.1   | Certification      of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as      adopted pursuant to Section 906 of the Sarbanes-Oxley Act of      2002.                                   |
|   |                                                                                                                                                                                                    |
| 32.2   | Certification      of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as      adopted pursuant to Section 906 of the Sarbanes-Oxley Act of      2002.                                   |

|                              | DYNAMICS      RESEARCH CORPORATION                                        |
|-----------------------------------|---------------------------------------------------------------------------|
|                              | (Registrant)                                                              |
|                              |                                                                      |
|                              |                                                                      |
| Date:  May      4, 2010 | /s/      David Keleher                                                    |
|                              | Senior      Vice President, Chief Financial Officer and Treasurer         |
|                              | (Principal      Financial Officer)                                        |
|                              |                                                                      |
| Date:  May      4, 2010 | /s/      Shaun N. McCarthy                                                |
|                              | Vice      President, Corporate Controller and Chief Accounting    Officer |
|                              | (Principal      Accounting Officer)                                       |
|                              |                                                                      |
|                              |                                                                      |

----