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

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


For the quarterly period ended                 April 2, 1998
                              

                                                         OR

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


For the transition period from     to
                             

Commission file number 1-3879


DynCorp                
(Exact name of registrant as specified in its charter)


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


2000 Edmund Halley Drive, Reston, VA                20191-3436
(Address of principal executive offices)            (Zip Code)


(703)264-0330
(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. Yes X  No

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock, as of the latest  practicable  date.  10,169,304  shares of common
stock having a par value of $0.10 per share were outstanding at May 13, 1998.




                                 DYNCORP
                                  INDEX




                                                                            



PART I.  FINANCIAL INFORMATION

     Consolidated Condensed Balance Sheets -
         April 2, 1998 and December 31, 1997                             

     Consolidated Condensed Statements of Operations -
         Three Months Ended April 2, 1998 and March 27, 1997

     Consolidated Condensed Statements of Cash Flows -
         Three Months Ended April 2, 1998 and March 27, 1997

    Consolidated Statement of Permanent Stockholders' Equity       

     Notes to Consolidated Condensed Financial Statements

     Management's Discussion and Analysis of Financial Condition
         and Results of Operations                                     

PART II.  OTHER INFORMATION

     Item 1.  Legal Proceedings                                  

     Item 6.  Exhibits and Reports on Form 8-K                          

     Signatures                                                    



<PAGE>



                          PART I. FINANCIAL INFORMATION

                            DYNCORP AND SUBSIDIARIES
                      CONSOLIDATED CONDENSED BALANCE SHEETS
                       APRIL 2, 1998 AND DECEMBER 31, 1997
                             (Dollars in thousands)




                                                        April 2,
                                                          1998     December 31,
                                                       Unaudited        1997
Assets
Current Assets:
 Cash and cash equivalents                             $  17,706      $ 24,602
 Accounts receivable and contracts in process (Note 2)   224,165       202,758
 Inventories of purchased products and supplies,
     at lower of cost (first-in, first-out) or market        822         1,090
 Other current assets                                     12,607        11,133
     Total current assets                                255,300       239,583

Property and Equipment (net of accumulated depreciation
 and amortization of $24,157 in 1998 and $22,412 in 1997) 19,496        19,620

Goodwill and Contracts Acquired (net of accumulated amortization
 of $45,898 in 1998 and $43,577 in 1997) (Note 7)         53,894        46,750

Other Assets (Notes 2 and 9)                              77,948        76,631

Total Assets                                            $406,638      $382,584




See accompanying notes to consolidated condensed financial statements.




<PAGE>


                            DYNCORP AND SUBSIDIARIES
                      CONSOLIDATED CONDENSED BALANCE SHEETS
                       APRIL 2, 1998 AND DECEMBER 31, 1997
                (Dollars in thousands, except per share amounts)

                                                        April 2,
                                                         1998      December 31,
                                                       Unaudited        1997
Liabilities and Stockholders' Equity
Current Liabilities:
 Notes payable and current portion of long-term debt  $      339      $    450
 Accounts payable                                         39,300        46,109
 Deferred revenue and customer advances                    2,941         2,947
 Accrued liabilities                                     112,722       105,833
     Total current liabilities                           155,302       155,339

Long-Term Debt  (Note 2)                                 172,198       152,239

Other Liabilities and Deferred Credits  (Note 9)          77,670        77,780

Contingencies and Litigation  (Note 9)                       -             -

Temporary Equity (Note 3):
 Redeemable Common Stock -
   ESOP Shares, 6,967,930 and 6,887,119
     shares issued and outstanding in 1998 and 1997,
     respectively, subject to restrictions               159,527       151,823
   Other, 125,714 shares issued and outstanding in
     1998 and 1997, respectively                           3,111         3,017

Permanent Stockholders' Equity (Note 4):
 Common Stock, par value ten cents per share, authorized
   20,000,000 shares; issued 4,738,412 shares in 1998
   and 4,784,770 shares in 1997                              474           478
 Common Stock Warrants                                     1,252         1,259
 Paid-in Surplus                                         125,300       125,412
 Reclassification to temporary equity for redemption value
   greater than par value                               (161,929)     (154,138)
 Deficit                                                 (91,174)      (93,837)
 Common Stock Held in Treasury,  at cost;  1,675,676 shares and 170,716 warrants
   in 1998 and 1,677,511 shares and
   170,716 warrants in 1997                              (28,667)      (28,703)
 Unearned ESOP Shares                                     (6,426)       (8,085)
                                                                 
Total Liabilities and Stockholders' Equity              $406,638      $382,584
                                                                 
See accompanying notes to consolidated condensed financial statements.


<PAGE>


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

                                    UNAUDITED

                                                     Three Months Ended
                                                 April 2,           March 27,
                                                   1998               1997
Revenues:
 Information and Engineering Technology          $  74,158         $  62,565
 Aerospace Technology                              116,497           104,594
 Enterprise Management                             107,218           103,978
     Total revenues                                297,873           271,137

Costs and expenses:
 Cost of services                                  283,936           259,794
 Corporate selling and administrative                5,267             4,439
     Interest income                                  (349)             (361)
 Interest expense                                    3,794             2,983
 Other                                                 366               277
     Total costs and expenses                      293,014           267,132
                                                          
Earnings before income taxes and minority interest   4,859             4,005
   Provision for income taxes (Note 5)               1,776             1,286
                                                           
Earnings before minority interest                    3,083             2,719
   Minority interest                                   420               408
                                 
Net earnings                                    $    2,663         $   2,311
                                                           
Weighted average number of  shares
outstanding  for basic earnings per share (Note 6)  10,000             8,628

Weighted average number of  shares
outstanding for diluted earnings per share (Note 6) 10,463            11,078

Basic earnings per share                       $      0.27          $   0.27

Diluted earnings per share                     $      0.25          $   0.21


See accompanying notes to consolidated condensed financial statements.

<PAGE>





<TABLE>
<CAPTION>

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

                                                                    Three Months Ended
<S>                                                             <C>                 <C>

                                                                    April 2,          March 27,
                                                                      1998                1997
                                                                   
Cash Flows from Operating Activities:
Net earnings                                                     $    2,663           $   2,311
Adjustments to reconcile net earnings from operations
  to net cash used:
Depreciation and amortization                                         2,088               2,650
Other                                                                   536                 163
Changes in current assets and liabilities, net of acquisitions:
  Increase in current assets except
    cash, cash equivalents and notes receivable                     (19,280)             (4,912)
  Decrease in current liabilities except notes payable
    and current portion of long-term debt                            (1,320)             (8,195)
     Cash used by operating activities                              (15,313)             (7,983)
                                                                                            
Cash Flows from Investing Activities:
Sale of property and equipment                                            4                  23
Purchase of property and equipment                                     (832)             (1,360)
Assets and liabilities of acquired businesses                       (10,000)                  -
Increase in investment in unconsolidated affiliates                    (478)               (154)
Other                                                                (1,645)               (116)
Cash used by investing activities                                   (12,951)             (1,607)
                                                     
Cash Flows from Financing Activities:
Treasury stock issued (purchased)                                        54                (268)
Payment on indebtedness                                                (161)               (595)
Proceeds from Contract Receivable Collateralized Notes 1997-1        20,000                   -
Proceeds from issuance of Senior Notes                                    -              99,484
Stock released to Employee Stock Ownership Plan                       1,659               1,297
Loan to Employee Stock Ownership Plan (Note 4)                            -             (10,379)
Deferred financing expenses                                                              (3,502)
Common stock and warrants purchased from investors                        -             (37,819)
Other                                                                  (184)               (367  
  Cash provided from financing activities                            21,368              47,851
                                                                           

Net (Decrease) Increase in Cash and Cash Equivalents                 (6,896)             38,261
Cash and Cash Equivalents at Beginning of the Period                 24,602              25,877
Cash and Cash Equivalents at End of the Period                    $  17,706        $     64,138
                                                                                          

Supplemental Cash Flow Information:
  Cash paid for income taxes                                      $     730        $       804
   Cash paid for interest                                         $   7,438        $     4,169
                                                     
</TABLE>

See accompanying notes to consolidated condensed financial statements.


<PAGE>


                                                                







<TABLE>
<CAPTION>

  DYNCORP AND SUBSIDIARIES
  CONSOLIDATED STATEMENT OF PERMANENT STOCKHOLDERS' EQUITY
  (Dollars in thousands)




                                UNAUDITED


<S>                                        <C>        <C>       <C>       <C>              <C>          <C>         <C> 
  
                                                                           Adjustment for
                                                         Common             Redemption Value                         Unearned
                                              Common      Stock     Paid-in   Greater than              Treasury       ESOP
                                               Stock   Warrants     Surplus      Par Value  Deficit     Stock          Shares


Balance, December 31, 1997                  $  478     $1,259    $125,412    $(154,138)    $(93,837) $ (28,703)$    (8,085)

     Stock issued under
        Restricted Stock Plan                      2                    170
     Treasury stock issued                                                                                    86
     Treasury stock purchased                                                     (288)                      (50)
     Stock warrants and options exercised          1         (7)          6
     Payment received on Employee Stock
        Ownership Plan note                                                                                           1,659
     Common stock and warrants
          purchased (Note 4)
     Net earnings                                                                                   2,663
     Reclassification to Redeemable
       Common Stock                               (7)                                (7,791)


  Balance, April 2, 1998                    $    474     $1,252    $125,300    $(161,929)    $(91,174)  $(28,667)   $(6,426)

</TABLE>


  See accompanying notes to consolidated condensed financial statements.



<PAGE>



                            DYNCORP AND SUBSIDIARIES
              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                                  April 2, 1998

                                    UNAUDITED

1.    The unaudited  consolidated  condensed  financial  statements  included 
      herein have been prepared by the Company pursuant to the rules and 
      regulations  of the  Securities  and  Exchange  Commission.  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,  although  the Company  believes  that the  disclosures  are
      adequate to make the information  presented not misleading.  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 latest annual report on Form 10-K.  In the
      opinion of the Company, the unaudited consolidated condensed  financial
      statements included herein reflect all  adjustments  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. Prior year financial statements have been reclassified to conform to
      1998 presentation. Prior year earnings per share have been restated in
      accordance with SFAS No.128 "Earnings Per Share," which was adopted by the
      Company on December 31, 1997.  (See Note 6)

2.    At April 2, 1998,  $75.7 million of accounts  receivable are restricted as
      collateral  for  the  Contract  Receivable  Collateralized  Notes,  Series
      1997-1. Additionally, $1.5 million of cash is restricted as collateral for
      the Notes and has been  included in Other  Assets on the balance  sheet at
      April 2, 1998 and December 31, 1997.

      At April 2,  1998,  the  Company's  wholly-owned  subsidiary  Dyn  Funding
      Corporation  ("DFC")  had drawn  $20.0  million  under the  Floating  Rate
      Contract Receivable  Collateralized  Rates Notes,  Series 1997-1,  Class B
      (the  "Class B Notes").  This  amount  was  utilized  to fund a  temporary
      increase in the Company's  working  capital.  Subsequent to April 2, 1998,
      DFC  reduced  the  balance  outstanding  under  the Class B Notes by $15.0
      million.

      Accounts  receivable are net of an allowance for doubtful accounts of 
      $316,000 as of April 2, 1998 and  $476,000 as of December 31, 1997.

3.    Common stock which is redeemable has been reflected as Temporary Equity at
      each balance sheet date and consists of the following:
                                 Balance at                          Balance at
                     Redeemable    April 2,           Redeemable    December 31,
              Shares    Value        1998      Shares    Value          1997

ESOP Shares 3,520,037  $24.75    $ 87,120,916 3,520,037  $24.00    $ 84,480,888
            3,447,893  $21.00      72,405,753 3,367,082  $20.00      67,341,640
            6,967,930            $159,526,669 6,887,119            $151,822,528

Other Shares  125,714  $24.75    $  3,111,422   125,714  $24.00    $  3,017,136
            

      In accordance with ERISA regulations and the Employee Stock Ownership Plan
      documents,  the ESOP Trust or the Company is obligated to purchase  vested
      common  stock shares from ESOP  participants  at the fair value as long as
      the  Company's  common stock is not publicly  traded.  However,  under the
      Subscription  Agreement with the ESOP 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.

      In conjunction  with the acquisition of Technology  Applications,  Inc. in
      1993,  the Company  issued put options on 125,714  shares of common stock.
      The holder may, at any time  commencing on December 31, 1998 and ending on
      December 31,  2000,  sell these shares to the Company at a price per share
      equal to the greater of $17.50;  or, if the stock is publicly traded,  the
      market  value at a  specified  date;  or,  if the  Company's  stock is not
      publicly traded, the fair value at the time of exercise.

4.    The Company made loans to the Employee Stock  Ownership  Trust during 1997
      to purchase  shares and warrants as well as to pay off expiring  loans. At
      April  2,  1998,  the  unpaid  balance  on  these  loans,  $6.426  million
      representing  308,060 shares, is reflected as a reduction in stockholders'
      equity.

5.    The provision for income taxes in 1998 and 1997 is based upon an estimated
      annual effective tax rate, including the impact of differences between the
      book value of assets and  liabilities  recognized for financial  reporting
      purposes and the basis recognized for tax purposes.

6.    The Company has adopted SFAS No. 128  "Earnings  Per Share,"  which became
      effective for financial  statements  for periods ended after  December 15,
      1997. The statement establishes new standards for computing and presenting
      earnings per share  ("EPS") and  requires  restatement  of prior  periods.
      Specifically, the statement replaces the presentation of primary and fully
      diluted EPS with a  presentation  of basic and diluted EPS and  requires a
      dual presentation on the face of the income statement and a reconciliation
      of basic EPS to diluted EPS.

      Basic EPS is computed by dividing  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  ESOP  shares.
      Shares earned and vested but unissued under the Restricted  Stock Plan are
      considered contingently issuable and 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  warrants and
      options outstanding, assuming the treasury stock method.


<PAGE>



      The reconciliation of basic EPS to diluted EPS is as follows:


                                                      3 Months Ended
                                               April 2, 1998   March 27, 1997
                                               Earnings  Per   Earnings   Per
                                                         Share            Share
      Basic Earnings Per Share
      Income for basic earnings per share        $2,663  $0.27    $2,311  $0.27
      Weighted average shares outstanding     9,999,612        8,628,228

      Diluted Earnings Per Share
      Income for diluted earnings per share      $2,663  $0.25   $ 2,311  $0.21
      Weighted average shares outstanding     9,999,612        8,628,228
          Effect of dilutive securities:
             Warrants                           341,867        2,321,176
             Stock Options                      121,912          128,749
      Shares for diluted earnings per share  10,463,391       11,078,153
                            


7.    On February 2, 1998, the Company  acquired a majority of the net assets of
      FMAS  Corporation   ("FMAS"),  a  medical  outcome  measurement  and  data
      abstraction  services  company  headquartered  in  Rockville,  MD, for $10
      million  in  cash.  FMAS is a  leading  provider  of  proprietary  outcome
      performance measurement systems to all DoD treatment facilities as well as
      a number of other  facilities under contract with the DoD. The acquisition
      has been  accounted for as a purchase and $7.8 million of goodwill,  which
      will be amortized over 20 years,  has been recorded based on a preliminary
      allocation of the purchase price.

8.    New Accounting Pronouncements

      Statement of Financial  Accounting  Standards  ("SFAS") No. 130 "Reporting
      Comprehensive  Income" was issued in June 1997,  and became  effective for
      fiscal years beginning after December 15, 1997. The statement  establishes
      standards for the reporting  and display of  comprehensive  income and its
      components  in a full set of  general-purpose  financial  statements.  The
      Company has reviewed the  requirements  of SFAS No. 130 and at present the
      Company  does not  report  any  transactions  which  would be deemed to be
      included in comprehensive income.

      AICPA Statement of Position No. 98-5,  "Reporting on the Costs of Start-up
      Activities,"  was issued in April 1998 and is  effective  for fiscal years
      beginning after December 15, 1998. The statement  provides guidance on the
      financial reporting of start-up costs and organization costs, and requires
      costs of  start-up  activities  to be expensed  as  incurred.  The Company
      estimates that adoption of this statement will not have a material  impact
      on the Company's financial statements.

9.    Contingencies and Litigation

     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  $101.0 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.

     (a)   Asbestos Claims

     An acquired and inactive subsidiary,  Fuller-Austin, which discontinued its
     business  activities in 1986,  has been named as one of many  defendants in
     civil lawsuits  which have been filed in certain state courts  (principally
     Texas) beginning in 1986 against manufacturers, distributors and installers
     of   products   allegedly   containing   asbestos.   Fuller-Austin   was  a
     non-manufacturer  that installed and  occasionally  distributed  industrial
     insulation   products.   Fuller-Austin   had   discontinued   the   use  of
     asbestos-containing  products  prior to being  acquired  by the  Company in
     1974. These claims are not part of a class action.

     The  claimants   generally  allege  injuries  to  their  health  caused  by
     inhalation of asbestos fibers.  Many of the claimants seek punitive damages
     as well as compensatory  damages.  The amount of damages sought is impacted
     by a multitude  of  factors.  These  include  the type and  severity of the
     disease sustained by the claimant (i.e.,  mesothelioma,  lung cancer, other
     types of cancer,  asbestosis  or pleural  changes);  the  occupation of the
     claimant;  the duration of the claimant's  exposure to  asbestos-containing
     products;  the  number  and  financial  resources  of the  defendants;  the
     jurisdiction in which the claim is filed;  the presence or absence of other
     possible  causes  of the  claimant's  illness;  the  availability  of legal
     defenses,  such as the  statute of  limitations;  and whether the claim was
     made on an individual basis or as part of a group claim.

     Claim Exposure (number of plaintiffs, claims and per claim amounts not in
     thousands)

     As  of  April  17,  1998,  18,326  plaintiffs  have  filed  claims  against
     Fuller-Austin  and various other  defendants.  Of these claims,  2,239 have
     been  dismissed  and 4,717  have been  resolved  without  an  admission  of
     liability at an average cost of $3,262 per claim,  excluding  legal defense
     costs.

     The  following  is  a  summary  of  the  number  of  claims  filed  against
Fuller-Austin:

                                                  Years


                            1994
                          & Prior    1995     1996     1997     1998     Total

     Claims Filed           4,057    4,523    4,122    3,787    1,837    18,326
     Claims Dismissed        (113)     (51)  (1,116)    (931)     (28)   (2,239)
     Claims Resolved       (1,619)    (189)  (1,825)    (460)    (624)   (4,717)
     Claims Under Appeal               (13)                                 (13)
     Claims Outstanding,
     as of April 17, 1998                                                11,357


     In connection with these claims, Fuller-Austin's primary insurance carriers
     have incurred approximately $27.6 million (including $12.2 million of legal
     defense  costs) to defend  and settle the claims  and,  in  addition,  jury
     verdict judgments have been entered against  Fuller-Austin in the aggregate
     amount of $6.5  million,  partially  reduced by appeal  during 1997 by $2.0
     million,   which  have  not  been  paid  and  which  are  under  appeal  by
     Fuller-Austin.

     Fuller-Austin  has  experienced  a decline in the number of claims taken to
     trial.  During the 18-month  period  ending  April 30, 1998,  no cases were
     tried by  plaintiffs  although  approximately  904 cases were set for trial
     during  this  period.   Plaintiffs  have  instead  elected  to  enter  into
     settlements with Fuller-Austin for amounts ranging from $250 to $14,500 for
     an  average  during  the  period of  $2,658  per  claim.  In  addition,  in
     connection  with these  settlements,  a significant  number of claims filed
     against  Fuller-Austin  were dismissed with no payment by  Fuller-Austin or
     its  insurers.  Fuller-Austin  and its carriers  will  continue to evaluate
     settlement  proposals,  but will be  prepared  to try cases that  cannot be
     settled in a manner consistent with recent settlement trends.

     During the first  quarter of 1998,  Fuller-Austin  agreed in  principle  to
     settle with  approximately 660 non-Texas  claimants who were threatening to
     amend  pending  law  suits  to  add  Fuller-Austin  as  a  defendant.   The
     settlement,  if concluded,  will aggregate approximately $4.0 million which
     is included in the estimate of future claims set forth below. Fuller-Austin
     considers the entire settlement to be covered by insurance.

     The number of claims filed  against  Fuller-Austin  has become  significant
     only since  1992,  and  therefore,  Fuller-Austin  has a  relatively  brief
     history  (compared to  manufacturers  and suppliers) of claims volume and a
     limited data file upon which to estimate the number or costs of claims that
     may be received in the future. Also, effective September 1, 1995, the State
     of Texas (where most of these  claims have been filed)  enacted tort reform
     legislation  which  Fuller-Austin  believes  has  curtailed  the  number of
     unsubstantiated asbestos claims filed against the subsidiary in Texas.

     Fuller-Austin's  defense counsel has analyzed the 11,357 claims outstanding
     as of April 17,  1998.  Based on this  analysis and  consultation  with its
     other  professional   advisors,   Fuller-Austin  has  estimated  its  cost,
     including  legal  defense  costs,  to be $11.2 million for claims filed and
     still  unsettled and $38.7 million as its minimum  estimate of future costs
     of claims and settlements, including legal defense costs. No upper limit of
     exposure can presently be reasonably  estimated.  The Company cautions that
     these  estimates are subject to  significant  uncertainties,  including the
     future effect of tort reform legislation enacted in Texas and other states,
     the  success  of  Fuller-Austin's  litigation  strategy,  the  size of jury
     verdicts, success of appeals in process, the number and financial resources
     of future  plaintiffs,  and the  actions  of other  defendants.  Therefore,
     actual  claim  experience  may  vary  significantly  from  such  estimates,
     especially   if  certain   Texas   appeals  are  decided   unfavorably   to
     Fuller-Austin  and/or the level of claims filed in other states  increases.
     At April 2, 1998 and December 31, 1997, Fuller-Austin recorded an estimated
     liability  for future  indemnity  payments  and  defense  costs  related to
     currently  unsettled  claims and minimum  estimated  future claims of $49.9
     million and $50.2 million, respectively (recorded as long-term liability).

     Insurance Coverage

     Defense  has been  tendered  to and  accepted  by  Fuller-Austin's  primary
     insurance  carriers,  and by certain  of the  Company's  primary  insurance
     carriers  that issued  policies  under which  Fuller-Austin  is named as an
     additional  insured;  however,  only one such primary carrier has partially
     accepted defense without a reservation of rights. The Company believes that
     Fuller-Austin  has at least $4.4 million in  unexhausted  primary  coverage
     (net of deductibles and  self-insured  retentions,  but including  disputed
     coverage)  under its  liability  insurance  policies to cover the unsettled
     claims,  verdicts  and future  unasserted  claims and  defense  costs.  The
     primary carriers also have unlimited liability for defense costs (presently
     running at an average annual rate of approximately $1.3 million) until such
     time as the primary  limits under these  policies are  exhausted.  When the
     primary  limits  are  exhausted,  liability  for both  indemnity  and legal
     defense will be tendered to the excess coverage carriers, all of which have
     been  notified of the  pendency  of the  asbestos  claims.  The Company and
     Fuller-Austin  have  approximately  $390.0 million of additional excess and
     umbrella  insurance that is generally  responsive to asbestos  claims after
     taking into  consideration  certain  pending carrier  settlements  that are
     discussed  below.  This  amount  excludes  approximately  $92.0  million of
     coverage  issued  by  insolvent   carriers.   After  the  $4.4  million  of
     unexhausted primary coverage, the Company has first tier excess coverage of
     $39.0  million  excluding  a $40.0  million  first tier  excess  segment of
     insolvent  coverage  for policy  years 1979  through  1984 (the  "Insolvent
     Segment").  All of the Company's and  Fuller-Austin's  liability  insurance
     policies cover indemnity  payments and defense fees and expenses subject to
     applicable policy terms and conditions.

     Coverage Litigation

     The Company and  Fuller-Austin  have  instituted  litigation in Los Angeles
     Superior  Court,  California,  against their  primary and excess  insurance
     carriers  to obtain  declaratory  judgments  from the court  regarding  the
     obligations of the various carriers to defend and pay asbestos claims.  The
     issues in this litigation include the aggregate  liability of the carriers,
     the  triggering  and  drop-down of excess  coverage to cover the  Insolvent
     Segment  and  allocation  of  losses  among  multiple  carriers   including
     insolvent  carriers and various other issues related to the  interpretation
     of the policy contracts.  All of the carrier  defendants have filed general
     denial answers.

     Although  there can be no assurances as to the outcome of this  litigation,
     management  believes that it is probable that Fuller-Austin will prevail in
     obtaining  judicial  rulings  confirming the  availability of a substantial
     portion of the coverage.  Based on a review of the  independent  ratings of
     these carriers,  the Company and  Fuller-Austin  believe that a substantial
     portion of this  coverage will continue to be available to meet the claims.
     Fuller-Austin  recorded in Other Assets $49.9  million and $50.2 million at
     April 2, 1998 and December 31, 1997  respectively,  representing the amount
     that it expects to recover from its  insurance  carriers for the payment of
     currently unsettled and estimated future claims.

     The Company cautions, however, that even though the existence and aggregate
     dollar  amounts  of  insurance  are  not  generally  being  disputed,  such
     insurance coverage is subject to interpretation by the court and the timing
     of the availability of insurance payments could, depending upon the outcome
     of the litigation and/or carrier settlement negotiations, delay the receipt
     of  insurance   company  payments  and  require   Fuller-Austin  to  assume
     responsibility for making interim payment of asbestos defense and indemnity
     costs at a time when it may not have adequate cash funds.

     While the Company  believes  that  Fuller-Austin  has  recorded  sufficient
     liability  to  satisfy  Fuller-Austin's  reasonably  anticipated  costs  of
     present and future asbestos claimants' suits, it is not possible to predict
     the  amount  or  timing  of  future   suits  or  the  future   solvency  of
     Fuller-Austin's insurers. In the event that currently unresolved and future
     claims  exceed the  recorded  liability of $49.9  million,  the Company and
     Fuller-Austin  believe that the  judicially  determined  and /or negotiated
     amounts of excess and umbrella insurance coverage that will be available to
     cover additional claims will be significant;  however,  it is impossible to
     predict  whether  or not  such  amounts  will  be  adequate  to  cover  all
     additional claims without further contribution by Fuller-Austin.


<PAGE>


     Possible Global Settlement/Bankruptcy Filing

     Representatives   of  Fuller-Austin   are  currently  in  discussions  with
     representatives of more than 75% of the asbestos claimants and a designated
     but not confirmed  representative  of potential  future asbestos  claimants
     regarding the possibility of a global  settlement of all present and future
     asbestos claims against  Fuller-Austin.  If successful,  these  discussions
     could lead to the preparation and filing by  Fuller-Austin  of a bankruptcy
     proceeding  under  the U.S.  Bankruptcy  Code  (the  "Code")  that has been
     previously  approved by the asbestos  claimants.  It is  contemplated  that
     presently negotiated  settlements with certain of the carrier-defendants in
     the   coverage   litigation   would  also  be  achieved  by   Fuller-Austin
     concurrently with the confirmation of the Fuller-Austin reorganization plan
     as part of the bankruptcy proceeding.  The contemplated plan would call for
     Fuller-Austin and certain of its insurance proceeds and rights to be placed
     in a  bankruptcy  trust to be  administered  by  unrelated  parties for the
     benefit of present and future asbestos claimants.

     In  furtherance  of the  proposed  global  settlement,  representatives  of
     Fuller-Austin,  its parent and sole stockholder,  the Company,  the present
     asbestos claimants,  and the representative of the future unknown claimants
     have  reached a separate  agreement  in  principle  ("Release  Agreement"),
     contingent on approval of the Plan by the Bankruptcy Court, under which the
     Company would be released from any and all present and future liability for
     Fuller-Austin  asbestos  liability  in  consideration  of the  transfer  of
     certain  Company  property  and  insurance  rights  to  the   Fuller-Austin
     bankruptcy   trust,   and  the  payment  to  the  trust  of  certain   cash
     consideration.  The total amount reserved for this purpose is approximately
     $14.0  million,  a portion  of which was  recorded  in prior  years and the
     balance, $7.8 million, was reserved by the Company in the fourth quarter of
     1997 in anticipation of the settlement under the Release Agreement.

     In the event  Fuller-Austin is unsuccessful in concluding such negotiations
     for a global  settlement  of all present and future  asbestos  claims,  and
     depending on the progress of the coverage  litigation,  the extent to which
     carriers agree to voluntarily pay Fuller-Austin asbestos claims pending the
     resolution  of the  coverage  litigation,  and the interim  cash demands on
     Fuller-Austin  in  connection  with  pending  and future  asbestos  claims,
     Fuller-Austin  may seek protection under the Code without a global or other
     settlement with the asbestos  claimants.  Fuller-Austin has been advised by
     its  bankruptcy  counsel that,  upon filing for such  protection  under the
     Code,  all pending  claims  against  Fuller-Austin  (including all asbestos
     claims)  would  be  stayed,  and the  disposition  of such  claims  and all
     Fuller-Austin  assets,  including its insurance assets, would be subject to
     the  jurisdiction  of the U.S.  Bankruptcy  Court in which  Fuller-Austin's
     petition is filed.

     There can be no assurance at this time that the global  settlement  will be
     concluded. Also, it is impossible to determine whether it will be necessary
     for   Fuller-Austin   to  otherwise  seek  protection  from  its  creditors
     (including asbestos claimants) under the Code.

     (b)   General Litigation

     The Company has  retained  certain  liability in  connection  with its 1989
     divestiture  of its  major  electrical  contracting  business,  Dynalectric
     Company  ("Dynalectric").  The Company and Dynalectric were sued in 1988 in
     Bergen County Superior Court,  New Jersey,  by a former  Dynalectric  joint
     venture  partner/subcontractor   (subcontractor).   The  subcontractor  has
     alleged that its  subcontract to furnish  certain  software and services in
     connection  with  a  major  municipal  traffic  signalization  project  was
     improperly  terminated by  Dynalectric  and that  Dynalectric  fraudulently
     diverted  funds due,  misappropriated  its trade  secrets  and  proprietary
     information,  fraudulently  induced  it to enter  the  joint  venture,  and
     conspired  with other  defendants  to commit acts in  violation  of the New
     Jersey Racketeering  Influenced and Corrupt Organization Act. The aggregate
     dollar  amount  of  these  claims  has not  been  formally  recited  in the
     subcontractor's complaint. Dynalectric has also filed certain counterclaims
     against the former subcontractor.  The Company and Dynalectric believe that
     they have valid  defenses,  and/or  that any  liability  would be offset by
     recoveries under the counterclaims.  The Company and Dynalectric were found
     by a Special  Master to have committed  certain  discovery  abuses,  but no
     monetary  amount  of  sanctions  has yet been  assessed.  The  Company  and
     Dynalectric expect to file an appeal with respect to this finding.  In late
     1997, the state court granted  Dynalectric's  Motion to Compel  Arbitration
     that  originally  had been  filed in 1988.  Arbitration  will take place in
     Washington,   D.C.  later  in  1998.  The  Company  believes  that  it  has
     established  adequate  ($1.3  million  at April 2, 1998)  reserves  for the
     contemplated  defense  costs and for the cost of obtaining  enforcement  of
     arbitration provisions contained in the contract.

     In November,  1994, the Company acquired an information technology business
     which was involved in various  disputes  with  federal and state  agencies,
     including  two  contract  default  actions  and a qui tam  suit by a former
     employee alleging improper billing of a federal government agency customer.
     The Company has contractual rights to indemnification from the former owner
     of the acquired  subsidiary  with respect to the defense of all such claims
     and litigation, as well as all liability for damages when and if proven. In
     October,  1995,  one of the federal  agencies  asserted a claim against the
     subsidiary  and  gave the  Company  notice  that it  intended  to  withhold
     payments  against the contract  under which the claim arose.  To date,  the
     agency has withheld approximately $3.0 million due the Company under one of
     the  aforementioned  disputes.  This  subsidiary has submitted a demand for
     indemnification  to the  former  owner  of the  subsidiary  which  has been
     denied.  The subsidiary  recently  received an arbitration award confirming
     that it is entitled to indemnification.

     As  to  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, tanks, etc., that existed prior
     to the sale of the Commercial Aviation Business.

     The Company is a party to other civil and  contractual  lawsuits which have
     arisen in the normal  course of  business  for which  potential  liability,
     including costs of defense,  constitute the remainder of the $101.0 million
     discussed  above.  The  estimated  probable  liability  for these issues is
     approximately $10.0 million and is substantially covered by insurance.  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 (Other  Assets) and  liability  (long-term  liability) of
     $10.0 million at April 2, 1998 and December 31, 1997 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 position 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.  Audits  have  been  completed  on  the
     Company's  incurred  contract  costs  through 1986 and are  continuing  for
     subsequent  periods.  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  the  Department  of  Justice  and  other  investigative
     organizations,  resulting  from  employee and other  allegations  regarding
     business  practices.  In  management's  opinion,  there are no  outstanding
     issues of this  nature at April 2, 1998 that will have a  material  adverse
     effect  on  the  Company's  consolidated  financial  position,  results  of
     operations or liquidity.


<PAGE>



10.  The Company has three  reportable  segments:  Information  and  Engineering
     Technology  (I&ET),  Aerospace  Technology  (AT) and Enterprise  Management
     (EM).

     Revenues, operating profit and identifiable assets by segment are presented
below:

                                   April 2,                March 27,
                                    1998                     1997
            
Revenue
I&ET                              $  74,158               $  62,565
AT                                  116,497                 104,594
                                    107,218                 103,978
                                   $297,873                $217,137

Operating Profit
I&ET                              $   4,412               $   3,788
AT                                    4,040                   3,080
EM                                    5,047                   4,915
                                     13,499                $ 11,783
Corporate selling and 
Administrative                        5,267                   4,440
Interest (net expense)                3,445                   2,622
Goodwill amortization                   539                     394
Minority interest included in
  operating profit                     (420)                   (408)
Acquisition costs                       178                     897
Other miscellaneous                    (369)                   (167)
Earnings (loss) from continuing
  operations before income taxes
  and minority interest           $   4,859               $   4,005
                         

                                                  As of
                                                                   
                                     April 2,               December 31, 
                                       1998                     1997
                      
Identifiable Assets
I&ET                             $  129,039                   $118,016
AT                                   76,639                     75,239
EM                                   84,708                     70,026
Other (a)                            50,321                     51,575
Corporate                            65,931                     67,728
            
                                   $406,638                   $382,584
            

(a)  Includes assets related to probable  insurance  indemnification  recoveries
     pertaining to a former subsidiary (See Note 9).

<PAGE>




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

The following discussion of financial condition and results of operations should
be read in conjunction with the 1997 Form 10-K.

Working capital at April 2, 1998 was $100.0 million compared to $84.2 million at
December 31, 1997, an increase of $15.8  million,  which was primarily due to an
increase  in  accounts  receivable.  During  the  first  quarter  of  1998,  the
implementation  of a new  procedure  for  payments  by the  Defense  Finance and
Accounting  Service ("DFAS") caused significant delays in payments on certain of
the Company's contracts with the Department of Defense. These delays, along with
a phase-in of two  significant  contracts,  were primarily  responsible  for the
borrowing of $20.0 million during the first quarter under the Class B Notes.  As
the  implementation  at DFAS has progressed,  delays in payment have become less
significant,  and subsequent to April 2, 1998 the balance  outstanding under the
Class B Notes was reduced by $15.0 million.

Cash used by  operations  was $15.3  million in the first  quarter  of 1998,  as
compared to $8.0 million in the first quarter of 1997. The increase in cash used
is mainly  attributable  to a greater  demand for  working  capital in 1998,  as
described above.

Investing  activities  used funds of $13.0 million in the first quarter of 1998,
principally for the acquisition of FMAS and for the purchase of new software for
internal  use.  During  the  first  quarter  of  1997,  cash  used by  investing
activities  was $1.6  million,  principally  for the  purchase of  property  and
equipment.

Financing  activities  provided  funds of $21.4  million in the first quarter of
1998 which consisted  primarily of $20.0 million  borrowed  against the Contract
Receivable  Collateralized Class B Variable Rate Note to finance working capital
needs  described  above.  Subsequent to April 2, 1998,  the balance  outstanding
under the Class B Notes was reduced by $15.0  million.  During the first quarter
of 1997, financing  activities provided funds of $47.9 million,  which consisted
primarily of proceeds from the sale of the 9.5% Senior Notes less funds utilized
to make a loan to the Employee Stock  Ownership Plan to fund the purchase of the
Class C Preferred  Stock,  to fund the  Company's  purchase of common  stock and
warrants  from  investors  and to  pay  transaction  fees  associated  with  the
placement of the Notes.

At April 2, 1998,  $75.7  million  of  accounts  receivable  are  restricted  as
collateral for the Contract Receivable Collateralized Notes Series 1997-1.

At April 2, 1998, backlog  (including option years on government  contracts) was
$3.7  billion  compared to $3.6  billion at December 31, 1997, a net increase of
$142 million, attributable to contract wins, extensions and add-ons.

Results of Operations

Revenues for the first  quarter of 1998 were $297.9  million,  up $26.8  million
(9.9%) from $271.1 million in the first quarter of 1997.  Revenues for Aerospace
Technology  (AT),  Enterprise  Management  (EM) and  Information and Engineering
Technology (I&ET) for the first quarter were $116.5 million,  $107.2 million and
$74.2 million respectively, an increase of $11.9 million, $3.2 million and $11.6
million over the comparable period in 1997.  Increased levels of effort on State
Department contracts in support of the government's drug eradication program and
the Haitian peacekeeping initiative contributed to the increase in both revenues
and operating  profit for AT. Both EM's revenues and operating  profit increased
in the first  quarter  1998 over the first  quarter  1997  primarily  due to the
February,  1998, acquisition of FMAS Corporation,  a medical outcome measurement
and  data  abstraction  services  company.  Increased  revenues  for  I&ET  were
attributable    to   higher   levels   of   effort   on   numerous    Indefinite
Delivery/Indefinite  Quantity  ("IDIQ")  contracts and increased state and local
business.

Cost of Services was 95.3% of revenue for the first  quarter of 1998 as compared
to 95.8% of  revenue  for the  comparable  period  in 1997,  resulting  in gross
margins of $13.9 million (4.7%) and $11.3 million (4.2%), respectively. The same
contract wins and losses which affected  revenues and operating profit similarly
affected gross margin. Additionally, the Company charged $0.5 million to Cost of
Services  in the first  quarter of 1997,  representing  a partial  write-off  of
certain purchased software as the result of net realization concerns.

Interest  expense was $3.8  million in the first  quarter of 1998,  up from $3.0
million  in 1997,  principally  due to  additional  borrowings  in 1998 from the
utilization of the Class B Variable Rate Note.

The  provision  for  income  taxes in 1998 and 1997 is based  upon an  estimated
annual effective tax rate,  including the impact of differences between the book
value of assets and liabilities  recognized for financial reporting purposes and
the basis recognized for tax purposes.


<PAGE>




                           PART II - OTHER INFORMATION

ITEM 1.  Legal Proceedings

  This item is  incorporated  herein by reference to Note 9 to the  Consolidated
Condensed  Financial  Statements  included elsewhere in this quarterly Report on
Form 10-Q.

ITEM 6.  Exhibits and Reports on Form 8-K

(a)  Exhibits

         None filed

(b)  Reports on Form 8-K

   None filed


                                   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:  May 12, 1998               /s/ Patrick C. FitzPatrick
                     
                                        P.C. FitzPatrick
                                      Senior Vice President
                                   and Chief Financial Officer





Date:  May 12, 1998               /s/ John J. Fitzgerald
                    
                                        J.J. Fitzgerald
                                 Vice President and Controller