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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 JUNE 30, 2009                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   | 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 June 30, 2009 and      December 31, 2008 (unaudited)                                                                                 | 3      |
|                               |          | Condensed Consolidated Statements of Operations for the three      and six months ended June 30, 2009 and 2008(unaudited)                                                        | 4      |
|                               |          | Condensed Consolidated Statements of Changes in      Stockholders’ Equity and Comprehensive Income for the three months      ended June 30, 2009 and 2008 (unaudited) | 5      |
|                               |          | Condensed Consolidated Statements of Changes in      Stockholders’ Equity and Comprehensive Income for the six months      ended June 30, 2009 and 2008 (unaudited)   | 6      |
|                               |          | Condensed Consolidated Statements of Cash Flows for the six      months ended June 30, 2009 and 2008 (unaudited)                                                            | 7      |
|                               |          | Notes to Condensed Consolidated Financial Statements      (unaudited)                                                                                                            | 8      |
|                               | Item      2.  | Management’s Discussion and Analysis of Financial Condition      and Results of Operations                                                                                 | 18     |
|                               | Item      3.  | Quantitative and Qualitative Disclosures About Market      Risk                                                                                                                  | 26     |
|                               | Item      4.  | Controls and Procedures                                                                                                                                                          | 27     |
|                               |          |
| Part      II. Other Information    |          |
|                               | Item      1.  | Legal Proceedings                                                                                                                                                                | 27     |
|                               | Item      1A. | Risk Factors                                                                                                                                                                     | 27     |
|                               | Item      2.  | Unregistered Sales of Equity Securities and Use of      Proceeds                                                                                                                 | 28     |
|                               | Item      4.  | Submission of Matters to a Vote of Security      Holders                                                                                                                         | 28     |
|                               | Item      6.  | Exhibits                                                                                                                                                                         | 29     |

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Table of Contents

DYNAMICS RESEARCH CORPORATION

|                                                                                                                                                                                   |   | June      30, |    |   | December      31, |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------|---------|--------|-------------------|--------|
|                                                                                                                                                                                   |   | 2009          |    |   | 2008              |   |
| Assets                                                                                                                                                                                 |   |          |    |   |              |   |
| Current      assets                                                                                                                                                                    |   |          |    |   |              |   |
| Cash      and cash equivalents                                                                                                                                                         |   | $             | 6,622   |   |              | $      | 7,111 |   |
| Contract      receivables, net                                                                                                                                                         |   |          | 73,044  |   |              |   | 71,438 |   |
| Prepaid      expenses and other current assets                                                                                                                                         |   |          | 3,326   |   |              |   | 2,491 |   |
| Total      current assets                                                                                                                                                              |   |          | 82,992  |   |              |   | 81,040 |   |
| Noncurrent      assets                                                                                                                                                                 |   |          |    |   |              |   |   |   |
| Property      and equipment, net                                                                                                                                                       |   |          | 8,596   |   |              |   | 9,349 |   |
| Goodwill                                                                                                                                                                               |   |          | 97,641  |   |              |   | 97,641 |   |
| Intangible      assets, net                                                                                                                                                            |   |          | 5,434   |   |              |   | 7,379 |   |
| Deferred      tax asset                                                                                                                                                                |   |          | 10,298  |   |              |   | 10,396 |   |
| Other      noncurrent assets                                                                                                                                                           |   |          | 3,028   |   |              |   | 3,125 |   |
| Total      noncurrent assets                                                                                                                                                           |   |          | 124,997 |   |              |   | 127,890 |   |
| Total      assets                                                                                                                                                                      |   | $             | 207,989 |   |              | $      | 208,930 |   |
|                                                                                                                                                                                   |   |          |    |   |              |   |   |   |
| Liabilities      and stockholders' equity                                                                                                                                              |   |          |    |   |              |   |   |   |
| Current      liabilities                                                                                                                                                               |   |          |    |   |              |   |   |   |
| Current      portion of long-term debt                                                                                                                                                 |   | $             | 8,000   |   |              | $      | 8,000 |   |
| Accounts      payable                                                                                                                                                                  |   |          | 16,611  |   |              |   | 18,095 |   |
| Accrued      compensation and employee benefits                                                                                                                                        |   |          | 16,082  |   |              |   | 13,644 |   |
| Deferred      taxes                                                                                                                                                                    |   |          | 3,248   |   |              |   | 2,670 |   |
| Other      accrued expenses                                                                                                                                                            |   |          | 22,384  |   |              |   | 24,760 |   |
| Total      current liabilities                                                                                                                                                         |   |          | 66,325  |   |              |   | 67,169 |   |
| Long-term      liabilities                                                                                                                                                             |   |          |    |   |              |   |   |   |
| Long-term      debt                                                                                                                                                                    |   |          | 26,000  |   |              |   | 30,000 |   |
| Other      long-term liabilities                                                                                                                                                       |   |          | 29,695  |   |              |   | 30,286 |   |
| Total      long-term liabilities                                                                                                                                                       |   |          | 55,695  |   |              |   | 60,286 |   |
| Total      liabilities                                                                                                                                                                 |   |          | 122,020 |   |              |   | 127,455 |   |
| 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; 9,761,807 and      9,674,512 shares issued and outstanding at June 30, 2009 and December 31,      2008, respectively |   |          | 976     |   |              |   | 967 |   |
| Capital      in excess of par value                                                                                                                                                    |   |          | 52,433  |   |              |   | 51,919 |   |
| Accumulated      other comprehensive loss, net of taxes                                                                                                                                |   |          | (22,118 | )      |              |   | (22,268 | ) |
| Retained      earnings                                                                                                                                                                 |   |          | 54,678  |   |              |   | 50,857 |   |
| Total      stockholders' equity                                                                                                                                                        |   |          | 85,969  |   |              |   | 81,475 |   |
| Total      liabilities and stockholders' equity                                                                                                                                        |   | $             | 207,989 |   |              | $      | 208,930 |   |

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Table of Contents

DYNAMICS RESEARCH CORPORATION

|                                                 |   | Three      Months Ended |      |   | Six      Months Ended |   |
|------------------------------------------------------|--------|-------------------------|-----------|--------|-----------------------|--------|
|                                                 |   | June      30,           |      |   | June      30,         |   |
|                                                 |   | 2009                    |      |   | 2008                  |   |   | 2009 |   |   | 2008 |   |
| Contract      revenue                                |   | $                       | 68,128    |   |                  | $      | 53,708 |   |   | $ | 135,331 |   |   | $ | 108,481 |   |
| Product      sales                                   |   |                    | 1,520     |   |                  |   | 1,585 |   |   |   | 2,856 |   |   |   | 3,290 |   |
| Total      revenue                                   |   |                    | 69,648    |   |                  |   | 55,293 |   |   |   | 138,187 |   |   |   | 111,771 |   |
|                                                 |   |                    |      |   |                  |   |   |   |   |   |   |   |   |   |   |   |
| Cost      of contract revenue                        |   |                    | 57,015    |   |                  |   | 45,599 |   |   |   | 112,958 |   |   |   | 91,811 |   |
| Cost      of product sales                           |   |                    | 1,572     |   |                  |   | 1,393 |   |   |   | 3,090 |   |   |   | 2,998 |   |
| Total      cost of revenue                      |   |                    | 58,587    |   |                  |   | 46,992 |   |   |   | 116,048 |   |   |   | 94,809 |   |
|                                                 |   |                    |      |   |                  |   |   |   |   |   |   |   |   |   |   |   |
| Gross      profit on contract revenue                |   |                    | 11,113    |   |                  |   | 8,109 |   |   |   | 22,373 |   |   |   | 16,670 |   |
| Gross      profit (loss) on product sales            |   |                    | (52       | )      |                  |   | 192 |   |   |   | (234 | ) |   |   | 292 |   |
| Total      gross profit                              |   |                    | 11,061    |   |                  |   | 8,301 |   |   |   | 22,139 |   |   |   | 16,962 |   |
|                                                 |   |                    |      |   |                  |   |   |   |   |   |   |   |   |   |   |   |
| Selling,      general and administrative expenses    |   |                    | 6,388     |   |                  |   | 5,147 |   |   |   | 12,845 |   |   |   | 10,548 |   |
| Provision      for litigation                        |   |                    | -         |   |                  |   | - |   |   |   | - |   |   |   | 8,819 |   |
| Amortization      of intangible assets               |   |                    | 972       |   |                  |   | 510 |   |   |   | 1,945 |   |   |   | 1,019 |   |
| Operating      income (loss)                         |   |                    | 3,701     |   |                  |   | 2,644 |   |   |   | 7,349 |   |   |   | (3,424 | ) |
| Interest      expense, net                           |   |                    | (477      | )      |                  |   | (142 | ) |   |   | (1,096 | ) |   |   | (281 | ) |
| Other      income, net                               |   |                    | 282       |   |                  |   | 239 |   |   |   | 321 |   |   |   | 168 |   |
| Income      (loss) before provision for income taxes |   |                    | 3,506     |   |                  |   | 2,741 |   |   |   | 6,574 |   |   |   | (3,537 | ) |
| Provision      for income taxes                      |   |                    | 1,456     |   |                  |   | 1,112 |   |   |   | 2,753 |   |   |   | 90 |   |
| Net      income (loss)                               |   | $                       | 2,050     |   |                  | $      | 1,629 |   |   | $ | 3,821 |   |   | $ | (3,627 | ) |
|                                                 |   |                    |      |   |                  |   |   |   |   |   |   |   |   |   |   |   |
| Earnings      (loss) per common share                |   |                    |      |   |                  |   |   |   |   |   |   |   |   |   |   |   |
| Basic                                                |   | $                       | 0.21      |   |                  | $      | 0.17 |   |   | $ | 0.40 |   |   | $ | (0.38 | ) |
| Diluted                                              |   | $                       | 0.21      |   |                  | $      | 0.17 |   |   | $ | 0.39 |   |   | $ | (0.38 | ) |
|                                                 |   |                    |      |   |                  |   |   |   |   |   |   |   |   |   |   |   |
| Weighted      average shares outstanding             |   |                    |      |   |                  |   |   |   |   |   |   |   |   |   |   |   |
| Basic                                                |   |                    | 9,610,428 |   |                  |   | 9,443,347 |   |   |   | 9,611,783 |   |   |   | 9,430,607 |   |
| Diluted                                              |   |                    | 9,729,721 |   |                  |   | 9,724,839 |   |   |   | 9,727,387 |   |   |   | 9,430,607 |   |

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Table of Contents

DYNAMICS RESEARCH CORPORATION

|                                                          |   |              |   |   |           |   |   | Capital       |   |    | Accumulated |   |        |     |    |   |   |   |
|---------------------------------------------------------------|--------|-------------------|--------|--------|----------------|--------|--------|---------------|--------|---------|-------------|--------|-------------|----------|---------|--------|--------|--------|
|                                                          |   | Common      Stock |   |   | in      Excess |   |   | Other         |   |    |        |   |        |     |    |
|                                                          |   | Issued            |   |   | of      Par    |   |   | Comprehensive |   |    | Retained    |   |        |     |    |
|                                                          |   | Shares            |   |   | Par      value |   |   | Value         |   |    | Loss        |   |        | Earnings |    |   | Total  |   |
| Balance      at March 31, 2009                                |   |              | 9,729  |   |           | $      | 973    |          |   | $       | 52,102      |   |        | $        | (22,227 | )      |   | $      | 52,628 |   |   | $ | 83,476 |   |
| Comprehensive      income:                                    |   |              |   |   |           |   |   |          |   |    |        |   |        |     |    |   |   |   |   |   |   |   |   |   |
| Net      income                                               |   |              | -      |   |           |   | -      |          |   |    | -           |   |        |     | -       |   |   |   | 2,050 |   |   |   | 2,050 |   |
| Other      comprehensive income, net of tax:                  |   |              |   |   |           |   |   |          |   |    |        |   |        |     |    |   |   |   |   |   |   |   |   |   |
| Changes      in unrealized loss on derivative instruments     |   |              | -      |   |           |   | -      |          |   |    | -           |   |        |     | 109     |   |   |   | - |   |   |   | 109 |   |
| Comprehensive      income                                     |   |              | -      |   |           |   | -      |          |   |    | -           |   |        |     | -       |   |   |   | - |   |   |   | 2,159 |   |
| Issuance      of common stock through stock plan transactions |   |              | 24     |   |           |   | 2      |          |   |    | 182         |   |        |     | -       |   |   |   | - |   |   |   | 184 |   |
| Issuance      of restricted stock                             |   |              | 22     |   |           |   | 2      |          |   |    | (2          | )      |        |     | -       |   |   |   | - |   |   |   | - |   |
| Forfeiture      of restricted stock                           |   |              | (10    | )      |           |   | (1     | )             |   |    | 1           |   |        |     | -       |   |   |   | - |   |   |   | - |   |
| Release      of restricted stock                              |   |              | (3     | )      |           |   | -      |          |   |    | (22         | )      |        |     | -       |   |   |   | - |   |   |   | (22 | ) |
| Share-based      compensation                                 |   |              | -      |   |           |   | -      |          |   |    | 163         |   |        |     | -       |   |   |   | - |   |   |   | 163 |   |
| Tax      benefit from stock plan transactions                 |   |              | -      |   |           |   | -      |          |   |    | 9           |   |        |     | -       |   |   |   | - |   |   |   | 9 |   |
| Balance      at June 30, 2009                                 |   |              | 9,762  |   |           | $      | 976    |          |   | $       | 52,433      |   |        | $        | (22,118 | )      |   | $      | 54,678 |   |   | $ | 85,969 |   |
|                                                          |   |              |   |   |           |   |   |          |   |    |        |   |        |     |    |   |   |   |   |   |   |   |   |   |
|                                                          |   |              |   |   |           |   |   |          |   | Capital |        |   | Accumulated |     |    |   |   |   |   |   |   |   |
|                                                          |   | Common      Stock |   |   | in      Excess |   |   | Other         |   |    |        |   |        |     |    |   |   |
|                                                          |   | Issued            |   |   | of      Par    |   |   | Comprehensive |   |    | Retained    |   |        |     |    |   |
|                                                          |   | Shares            |   |   | Par      value |   |   | Value         |   |    | Loss        |   |        | Earnings |    |   | Total  |   |
| Balance      at March 31, 2008                                |   |              | 9,558  |   |           | $      | 956    |          |   | $       | 50,775      |   |        | $        | (6,853  | )      |   | $      | 46,791 |   |   | $ | 91,669 |   |
| Comprehensive      income:                                    |   |              |   |   |           |   |   |          |   |    |        |   |        |     |    |   |   |   |   |   |   |   |   |   |
| Net      income                                               |   |              | -      |   |           |   | -      |          |   |    | -           |   |        |     | -       |   |   |   | 1,629 |   |   |   | 1,629 |   |
| Comprehensive      income                                     |   |              | -      |   |           |   | -      |          |   |    | -           |   |        |     | -       |   |   |   | - |   |   |   | 1,629 |   |
| Issuance      of common stock through stock plan transactions |   |              | 22     |   |           |   | 2      |          |   |    | 178         |   |        |     | -       |   |   |   | - |   |   |   | 180 |   |
| Issuance      of restricted stock                             |   |              | 14     |   |           |   | 2      |          |   |    | (2          | )      |        |     | -       |   |   |   | - |   |   |   | - |   |
| Forfeiture      of restricted stock                           |   |              | (3     | )      |           |   | (1     | )             |   |    | 1           |   |        |     | -       |   |   |   | - |   |   |   | - |   |
| Release      of restricted stock                              |   |              | (29    | )      |           |   | (3     | )             |   |    | (292        | )      |        |     | -       |   |   |   | - |   |   |   | (295 | ) |
| Share-based      compensation                                 |   |              | -      |   |           |   | -      |          |   |    | 322         |   |        |     | -       |   |   |   | - |   |   |   | 322 |   |
| Tax      benefit from stock plan transactions                 |   |              | -      |   |           |   | -      |          |   |    | 13          |   |        |     | -       |   |   |   | - |   |   |   | 13 |   |
| Balance      at June 30, 2008                                 |   |              | 9,562  |   |           | $      | 956    |          |   | $       | 50,995      |   |        | $        | (6,853  | )      |   | $      | 48,420 |   |   | $ | 93,518 |   |

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Table of Contents

DYNAMICS RESEARCH CORPORATION

|                                                                      |   |              |   |   |           |   |   | Capital       |   |    | Accumulated |   |        |     |    |   |   |   |
|---------------------------------------------------------------------------|--------|-------------------|--------|--------|----------------|--------|--------|---------------|--------|---------|-------------|--------|-------------|----------|---------|--------|--------|--------|
|                                                                      |   | Common      Stock |   |   | in      Excess |   |   | Other         |   |    |        |   |        |     |    |
|                                                                      |   | Issued            |   |   | of      Par    |   |   | Comprehensive |   |    | Retained    |   |        |     |    |
|                                                                      |   | Shares            |   |   | Par      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                                                           |   |              | -      |   |           |   | -      |          |   |    | -           |   |        |     | -       |   |   |   | 3,821 |   |   |   | 3,821 |   |
| Other      comprehensive income, net of tax:                              |   |              |   |   |           |   |   |          |   |    |        |   |        |     |    |   |   |   |   |   |   |   |   |   |
| Changes      in unrealized loss on derivative instruments                 |   |              | -      |   |           |   | -      |          |   |    | -           |   |        |     | 150     |   |   |   | - |   |   |   | 150 |   |
| Comprehensive      income                                                 |   |              | -      |   |           |   | -      |          |   |    | -           |   |        |     | -       |   |   |   | - |   |   |   | 3,971 |   |
| Issuance      of common stock through stock plan transactions             |   |              | 36     |   |           |   | 3      |          |   |    | 262         |   |        |     | -       |   |   |   | - |   |   |   | 265 |   |
| Issuance      of restricted stock                                         |   |              | 77     |   |           |   | 8      |          |   |    | (8          | )      |        |     | -       |   |   |   | - |   |   |   | - |   |
| Forfeiture      of restricted stock                                       |   |              | (12    | )      |           |   | (1     | )             |   |    | 1           |   |        |     | -       |   |   |   | - |   |   |   | - |   |
| Release      of restricted stock                                          |   |              | (14    | )      |           |   | (1     | )             |   |    | (104        | )      |        |     | -       |   |   |   | - |   |   |   | (105 | ) |
| Share-based      compensation                                             |   |              | -      |   |           |   | -      |          |   |    | 354         |   |        |     | -       |   |   |   | - |   |   |   | 354 |   |
| Tax      benefit from stock plan transactions                             |   |              | -      |   |           |   | -      |          |   |    | 9           |   |        |     | -       |   |   |   | - |   |   |   | 9 |   |
| Balance      at June 30, 2009                                             |   |              | 9,762  |   |           | $      | 976    |          |   | $       | 52,433      |   |        | $        | (22,118 | )      |   | $      | 54,678 |   |   | $ | 85,969 |   |
|                                                                      |   |              |   |   |           |   |   |          |   |    |        |   |        |     |    |   |   |   |   |   |   |   |   |   |
|                                                                      |   |              |   |   |           |   |   |          |   | Capital |        |   | Accumulated |     |    |   |   |   |   |   |   |   |
|                                                                      |   | Common      Stock |   |   | in      Excess |   |   | Other         |   |    |        |   |        |     |    |   |   |
|                                                                      |   | Issued            |   |   | of      Par    |   |   | Comprehensive |   |    | Retained    |   |        |     |    |   |
|                                                                      |   | Shares            |   |   | Par      value |   |   | Value         |   |    | Loss        |   |        | Earnings |    |   | Total  |   |
| Balance      at December 31, 2007                                         |   |              | 9,510  |   |           | $      | 951    |          |   | $       | 50,251      |   |        | $        | (6,745  | )      |   | $      | 52,047 |   |   | $ | 96,504 |   |
| Comprehensive      loss:                                                  |   |              |   |   |           |   |   |          |   |    |        |   |        |     |    |   |   |   |   |   |   |   |   |   |
| Net      loss                                                             |   |              | -      |   |           |   | -      |          |   |    | -           |   |        |     | -       |   |   |   | (3,627 | ) |   |   | (3,627 | ) |
| Other      comprehensive loss, net of tax:                                |   |              |   |   |           |   |   |          |   |    |        |   |        |     |    |   |   |   |   |   |   |   |   |   |
| Reclassification      adjustment for realized gain on sale of investments |   |              | -      |   |           |   | -      |          |   |    | -           |   |        |     | (108    | )      |   |   | - |   |   |   | (108 | ) |
| Comprehensive      loss                                                   |   |              | -      |   |           |   | -      |          |   |    | -           |   |        |     | -       |   |   |   | - |   |   |   | (3,735 | ) |
| Issuance      of common stock through stock plan transactions             |   |              | 50     |   |           |   | 5      |          |   |    | 409         |   |        |     | -       |   |   |   | - |   |   |   | 414 |   |
| Issuance      of restricted stock                                         |   |              | 48     |   |           |   | 5      |          |   |    | (5          | )      |        |     | -       |   |   |   | - |   |   |   | - |   |
| Forfeiture      of restricted stock                                       |   |              | (5     | )      |           |   | (1     | )             |   |    | 1           |   |        |     | -       |   |   |   | - |   |   |   | - |   |
| Release      of restricted stock                                          |   |              | (41    | )      |           |   | (4     | )             |   |    | (410        | )      |        |     | -       |   |   |   | - |   |   |   | (414 | ) |
| Share-based      compensation                                             |   |              | -      |   |           |   | -      |          |   |    | 724         |   |        |     | -       |   |   |   | - |   |   |   | 724 |   |
| Tax      benefit from stock plan transactions                             |   |              | -      |   |           |   | -      |          |   |    | 25          |   |        |     | -       |   |   |   | - |   |   |   | 25 |   |
| Balance      at June 30, 2008                                             |   |              | 9,562  |   |           | $      | 956    |          |   | $       | 50,995      |   |        | $        | (6,853  | )      |   | $      | 48,420 |   |   | $ | 93,518 |   |

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DYNAMICS RESEARCH CORPORATION

|                                                                     |   | Six      Months Ended |    |
|--------------------------------------------------------------------------|--------|-----------------------|---------|
|                                                                     |   | June      30,         |    |
|                                                                     |   | 2009                  |    |   | 2008 |   |
| Cash      flows from operating activities:                               |   |                  |    |   |   |   |
| Net      income (loss)                                                   |   | $                     | 3,821   |   |   | $ | (3,627 | ) |
| Adjustments      to reconcile net cash provided by operating activities: |   |                  |    |   |   |   |   |   |
| Depreciation                                                             |   |                  | 1,536   |   |   |   | 1,419 |   |
| Amortization      of intangible assets                                   |   |                  | 1,945   |   |   |   | 1,019 |   |
| Share-based      compensation                                            |   |                  | 354     |   |   |   | 724 |   |
| Investment      income from equity interest                              |   |                  | (223    | ) |   |   | (171 | ) |
| Tax      benefit from stock plan transactions                            |   |                  | (9      | ) |   |   | (25 | ) |
| Provision      for litigation                                            |   |                  | -       |   |   |   | 8,819 |   |
| Deferred      income taxes                                               |   |                  | 578     |   |   |   | (2,719 | ) |
| Other                                                                    |   |                  | (391    | ) |   |   | (380 | ) |
| Change      in operating assets and liabilities:                         |   |                  |    |   |   |   | - |   |
| Contract      receivables, net                                           |   |                  | (1,606  | ) |   |   | (669 | ) |
| Prepaid      expenses and other current assets                           |   |                  | (552    | ) |   |   | (549 | ) |
| Accounts      payable                                                    |   |                  | (1,484  | ) |   |   | 1,463 |   |
| Accrued      compensation and employee benefits                          |   |                  | 2,438   |   |   |   | 24 |   |
| Other      accrued expenses                                              |   |                  | 1,778   |   |   |   | 476 |   |
| Other      long-term liabilities                                         |   |                  | (77     | ) |   |   | (307 | ) |
| Net      cash provided by operating activities                           |   |                  | 8,108   |   |   |   | 5,497 |   |
| Cash      flows from investing activities:                               |   |                  |    |   |   |   |   |   |
| Purchase      of business                                                |   |                  | (4,250  | ) |   |   | - |   |
| Additions      to property and equipment                                 |   |                  | (827    | ) |   |   | (813 | ) |
| Proceeds      from sale of investments and long-lived assets             |   |                  | 3       |   |   |   | 275 |   |
| Dividends      from equity investment                                    |   |                  | 289     |   |   |   | 311 |   |
| Payments      related to the sale of building                            |   |                  | -       |   |   |   | (35 | ) |
| Increase      in other assets                                            |   |                  | (86     | ) |   |   | (427 | ) |
| Net      cash used in investing activities                               |   |                  | (4,871  | ) |   |   | (689 | ) |
| Cash      flow from financing activities:                                |   |                  |    |   |   |   |   |   |
| Repayments      under term loan                                          |   |                  | (4,000  | ) |   |   | - |   |
| Borrowings      under revolving credit agreement                         |   |                  | 28,024  |   |   |   | 55,037 |   |
| Repayments      under revolving credit agreement                         |   |                  | (28,024 | ) |   |   | (62,167 | ) |
| Proceeds      from the exercise of stock plan transactions               |   |                  | 265     |   |   |   | 414 |   |
| Tax      benefit from stock plan transactions                            |   |                  | 9       |   |   |   | 25 |   |
| Payments      of deferred financing costs                                |   |                  | -       |   |   |   | (15 | ) |
| Net      cash used in financing activities                               |   |                  | (3,726  | ) |   |   | (6,706 | ) |
| Net      decrease in cash and cash equivalents                           |   |                  | (489    | ) |   |   | (1,898 | ) |
| Cash      and cash equivalents, beginning of period                      |   |                  | 7,111   |   |   |   | 2,006 |   |
| Cash      and cash equivalents, end of period                            |   | $                     | 6,622   |   |   | $ | 108 |   |

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NOTE 1. BASIS OF PRESENTATION

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|                                   |   | Three              |   |   | Six                |   |
|----------------------------------------|--------|--------------------|--------|--------|--------------------|--------|
|                                   |   | Months             |   |   | Months             |   |
|                                   |   | Ended              |   |   | Ended              |   |
|                                   |   | June      30, 2008 |   |   | June      30, 2008 |   |
| Revenue                                |   | $                  | 66,863 |   |               | $      | 132,380 |   |
| Gross      profit                      |   | $                  | 12,615 |   |               | $      | 24,673 |   |
| Operating      income                  |   | $                  | 4,987  |   |               | $      | 432 |   |
| Net      income (loss)                 |   | $                  | 2,378  |   |               | $      | (2,683 | ) |
|                                   |   |               |   |   |               |   |   |   |
| Earnings      (loss) per common share: |   |               |   |   |               |   |   |   |
| Basic                                  |   | $                  | 0.25   |   |               | $      | (0.28 | ) |
| Diluted                                |   | $                  | 0.24   |   |               | $      | (0.28 | ) |

|                                                                                                                       |   | June      30, |    |   | December 31, |   |
|----------------------------------------------------------------------------------------------------------------------------|--------|---------------|---------|--------|-------------------|--------|
|                                                                                                                       |   | 2009          |    |   | 2008              |   |
| Contract      receivables, net                                                                                             |   |          |    |   |              |   |
| Billed      receivables                                                                                                    |   | $             | 30,688  |   |              | $      | 35,423 |   |
| Unbilled      receivables(1):                                                                                              |   |          |    |   |              |   |   |   |
| Revenues      recorded in excess of milestone billings on fixed price contracts with the      States of Ohio and Tennessee |   |          | 14,439  |   |              |   | 8,907 |   |
| Retainages      and fee withholdings                                                                                       |   |          | 991     |   |              |   | 1,179 |   |
| Other      unbilled receivables                                                                                            |   |          | 27,824  |   |              |   | 26,858 |   |
| Total      unbilled receivables                                                                                            |   |          | 43,254  |   |              |   | 36,944 |   |
| Allowance      for doubtful accounts                                                                                       |   |          | (898    | )      |              |   | (929 | ) |
| Contract      receivables, net                                                                                             |   | $             | 73,044  |   |              | $      | 71,438 |   |
|                                                                                                                       |   |          |    |   |              |   |   |   |
| Prepaid      expenses and other current assets:                                                                            |   |          |    |   |              |   |   |   |
| Inventory                                                                                                                  |   | $             | 909     |   |              | $      | 766 |   |
| Restricted      cash                                                                                                       |   |          | 34      |   |              |   | 150 |   |
| Other                                                                                                                      |   |          | 2,383   |   |              |   | 1,575 |   |
| Prepaid      expenses and other current assets                                                                             |   | $             | 3,326   |   |              | $      | 2,491 |   |
|                                                                                                                       |   |          |    |   |              |   |   |   |
| Property      and equipment, net:                                                                                          |   |          |    |   |              |   |   |   |
| Production      equipment                                                                                                  |   | $             | 11,588  |   |              | $      | 11,530 |   |
| Software                                                                                                                   |   |          | 11,616  |   |              |   | 11,602 |   |
| Furniture      and other equipment                                                                                         |   |          | 8,123   |   |              |   | 7,644 |   |
| Leasehold      improvements                                                                                                |   |          | 3,054   |   |              |   | 2,949 |   |
| Property      and equipment                                                                                                |   |          | 34,381  |   |              |   | 33,725 |   |
| Less      accumulated depreciation                                                                                         |   |          | (25,785 | )      |              |   | (24,376 | ) |
| Property      and equipment, net                                                                                           |   | $             | 8,596   |   |              | $      | 9,349 |   |

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|                                                   |   | June      30, |   |   | December 31, |   |
|--------------------------------------------------------|--------|---------------|--------|--------|-------------------|--------|
|                                                   |   | 2009          |   |   | 2008              |   |
| Other      noncurrent assets:                          |   |          |   |   |              |   |
| Deferred      compensation plan investments            |   | $             | 1,182  |   |              | $      | 1,107 |   |
| Equity      investments                                |   |          | 1,030  |   |              |   | 1,180 |   |
| Other                                                  |   |          | 816    |   |              |   | 838 |   |
| Other      noncurrent assets                           |   | $             | 3,028  |   |              | $      | 3,125 |   |
|                                                   |   |          |   |   |              |   |   |   |
| Accrued      compensation and employee benefits:       |   |          |   |   |              |   |   |   |
| Accrued      compensation and related  taxes |   | $             | 7,407  |   |              | $      | 7,504 |   |
| Accrued      vacation                                  |   |          | 5,481  |   |              |   | 4,391 |   |
| Accrued      pension liability                         |   |          | 626    |   |              |   | - |   |
| Other                                                  |   |          | 2,568  |   |              |   | 1,749 |   |
| Accrued      compensation and employee benefits        |   | $             | 16,082 |   |              | $      | 13,644 |   |
|                                                   |   |          |   |   |              |   |   |   |
| Other      accrued expenses:                           |   |          |   |   |              |   |   |   |
| Accrued      litigation reserve                        |   | $             | 15,000 |   |              | $      | 15,000 |   |
| Accrued      acquisition costs                         |   |          | -      |   |              |   | 4,265 |   |
| Accrued      income taxes                              |   |          | 3,901  |   |              |   | 2,042 |   |
| Deferred      gain on sale of building                 |   |          | 676    |   |              |   | 676 |   |
| Other                                                  |   |          | 2,807  |   |              |   | 2,777 |   |
| Other      accrued expenses                            |   | $             | 22,384 |   |              | $      | 24,760 |   |
|                                                   |   |          |   |   |              |   |   |   |
| Other      long-term liabilities:                      |   |          |   |   |              |   |   |   |
| Accrued      pension liability                         |   | $             | 22,755 |   |              | $      | 22,570 |   |
| Deferred      gain on sale of building                 |   |          | 3,719  |   |              |   | 4,057 |   |
| Deferred      compensation plan liability              |   |          | 1,182  |   |              |   | 1,107 |   |
| Other                                                  |   |          | 2,039  |   |              |   | 2,552 |   |
| Other      long-term liabilities                       |   | $             | 29,695 |   |              | $      | 30,286 |   |

| (1) | At      June 30, 2009 and December 31, 2008, $531 and $495, respectively, of      unbilled retainages and fee withholdings are not anticipated to be billed      within one year.  Additionally, at June 30, 2009 and December      31, 2008, $9,585 and $4,557, respectively, of the unbilled balance under      the Company’s contract with the State of Tennessee is not scheduled to be      invoiced within one year. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                            |   | June      30, 2009 |   |   | December      31, 2008 |   |
|---------------------------------|--------|--------------------|--------|--------|------------------------|--------|
|                            |   |               |   |   | Accumulated            |   |   |   |   |   |   |   |   | Accumulated |   |   |   |   |
|                            |   | Cost               |   |   | Amortization           |   |   | Net |   |   | Cost |   |   | Amortization |   |   | Net |   |
| Customer      relationships     |   | $                  | 13,400 |   |                   | $      | (11,314 | ) |   | $ | 2,086 |   |   | $ | 14,700 |   |   | $ | (11,769 | ) |   | $ | 2,931 |   |
| Customer      contracts         |   |               | 3,500  |   |                   |   | (1,378 | ) |   |   | 2,122 |   |   |   | 3,500 |   |   |   | (522 | ) |   |   | 2,978 |   |
| Non-competition      agreements |   |               | 1,400  |   |                   |   | (174 | ) |   |   | 1,226 |   |   |   | 1,400 |   |   |   | - |   |   |   | 1,400 |   |
| 8(a)      contract transition   |   |               | 130    |   |                   |   | (130 | ) |   |   | - |   |   |   | 130 |   |   |   | (60 | ) |   |   | 70 |   |
| Total                           |   | $                  | 18,430 |   |                   | $      | (12,996 | ) |   | $ | 5,434 |   |   | $ | 19,730 |   |   | $ | (12,351 | ) |   | $ | 7,379 |   |

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| Remainder      of 2009   |   | $ | 1,360 |   |
|--------------------------|--------|---|-------|--------|
| 2010                     |   | $ | 1,542 |   |
| 2011                     |   | $ | 1,188 |   |
| 2012                     |   | $ | 492   |   |
| 2013                     |   | $ | 349   |   |
| 2014      and thereafter |   | $ | 503   |   |

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|                                  |                             |   | Fair      Value Measurements    |   |   |         |   |
|---------------------------------------|----------------------------------|--------|---------------------------------|--------|--------|--------------|--------|
|                                  |                             |   | At      June 30, 2009 Using     |   |   |         |   |
|                                  | Balance      Sheet Location      |   | Level      1                    |   |   | Level      2 |   |   | Level      3 |   |   | Total |   |
| Assets:                               |                             |   |                            |   |   |         |   |   |   |   |   |   |   |
| Investments      held in Rabbi Trusts | Other      noncurrent assets     |   | $                               | 1,182  |   |         | $      | - |   |   | $ | - |   |   | $ | 1,182 |   |
|                                  |                             |   |                            |   |   |         |   |   |   |   |   |   |   |   |   |   |   |
| Liabilities:                          |                             |   |                            |   |   |         |   |   |   |   |   |   |   |   |   |   |   |
| Interest      rate swap               | Other      long-term liabilities |   | $                               | -      |   |         | $      | 612 |   |   | $ | - |   |   | $ | 612 |   |
|                                  |                             |   |                            |   |   |         |   |   |   |   |   |   |   |   |   |   |   |
|                                  |                             |   |                            |   |   |         |   |   |   |   |   |   |   |   |   |   |   |
|                                  |                             |   | Fair      Value Measurements    |   |   |         |   |   |
|                                  |                             |   | At      December 31, 2008 Using |   |   |         |   |   |
|                                  | Balance      Sheet Location      |   | Level      1                    |   |   | Level      2 |   |   | Level      3 |   |   | Total |   |
| Assets:                               |                             |   |                            |   |   |         |   |   |   |   |   |   |   |   |   |   |   |
| Investments      held in Rabbi Trusts | Other      noncurrent assets     |   | $                               | 1,107  |   |         | $      | - |   |   | $ | - |   |   | $ | 1,107 |   |
|                                  |                             |   |                            |   |   |         |   |   |   |   |   |   |   |   |   |   |   |
| Liabilities:                          |                             |   |                            |   |   |         |   |   |   |   |   |   |   |   |   |   |   |
| Interest      rate swap               | Other      long-term liabilities |   | $                               | -      |   |         | $      | 860 |   |   | $ | - |   |   | $ | 860 |   |

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|                                                           |   | June      30,2009 |   |   | December      31,2008 |   |   | Three      MonthsEndedJune      30, 2009 |   |   | Six      MonthsEndedJune      30, 2009 |   |
|----------------------------------------------------------------|--------|-------------------|--------|--------|-----------------------|--------|--------|------------------------------------------|--------|--------|----------------------------------------|--------|
| Other      long-term liabilities                               |   | $                 | 612    |   |                  | $      | 860    |                                     |   |   |                                   |   |   |   |
| Gain      recognized in other comprehensive income, net of tax |   |              |   |   |                  |   |   |                                     |   | $      | 109                                    |   |   | $ | 150 |   |

|                                               |   | Three      Months Ended |   |   | Six      Months Ended |   |
|----------------------------------------------------|--------|-------------------------|--------|--------|-----------------------|--------|
|                                               |   | June      30,           |   |   | June      30,         |   |
|                                               |   | 2009                    |   |   | 2008                  |   |   | 2009 |   |   | 2008 |   |
| Interest      cost on projected benefit obligation |   | $                       | 1,066  |   |                  | $      | 959 |   |   | $ | 2,133 |   |   | $ | 1,918 |   |
| Expected      return on plan assets                |   |                    | (964   | )      |                  |   | (1,396 | ) |   |   | (1,928 | ) |   |   | (2,792 | ) |
| Recognized      actuarial loss                     |   |                    | 303    |   |                  |   | 137 |   |   |   | 606 |   |   |   | 274 |   |
| Net      periodic pension expense (income)         |   | $                       | 405    |   |                  | $      | (300 | ) |   | $ | 811 |   |   | $ | (600 | ) |

|                                        |   | Three      Months Ended |   |   | Six      Months Ended |   |
|---------------------------------------------|--------|-------------------------|--------|--------|-----------------------|--------|
|                                        |   | June      30,           |   |   | June      30,         |   |
|                                        |   | 2009                    |   |   | 2008                  |   |   | 2009 |   |   | 2008 |   |
| Cost      of products and services          |   | $                       | 67     |   |                  | $      | 133 |   |   | $ | 147 |   |   | $ | 296 |   |
| Selling,      general and administrative    |   |                    | 96     |   |                  |   | 189 |   |   |   | 207 |   |   |   | 428 |   |
| Total      share-based compensation expense |   | $                       | 163    |   |                  | $      | 322 |   |   | $ | 354 |   |   | $ | 724 |   |

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|                                                  |   |           |    |   |     |   |   | Weighted        |   |   |      |   |
|-------------------------------------------------------|--------|----------------|---------|--------|----------|--------|--------|-----------------|--------|--------|-----------|--------|
|                                                  |   |           |    |   |     |   |   | Average         |   |   |      |   |
|                                                  |   |           |    |   | Weighted |   |   | Remaining       |   |   |      |   |
|                                                  |   |           |    |   | Average  |   |   | Contractual     |   |   | Aggregate |   |
|                                                  |   | Number      of |    |   | Exercise |   |   | Term            |   |   | Intrinsic |   |
|                                                  |   | Shares         |    |   | Price    |   |   | (in      years) |   |   | Value     |   |
| Outstanding      and exercisable at December 31, 2008 |   |           | 889,108 |   |     | $      | 8.42   |            |   |   | 2.1       |   |   | $ | 729 |   |
| Granted                                               |   |           | -       |   |     | $      | -      |            |   |   |      |   |   |   |   |   |
| Exercised                                             |   |           | (13,214 | )      |     | $      | 7.47   |            |   |   |      |   |   |   |   |   |
| Cancelled                                             |   |           | (5,884  | )      |     | $      | 12.38  |            |   |   |      |   |   |   |   |   |
| Outstanding      and exercisable at June 30, 2009     |   |           | 870,010 |   |     | $      | 8.40   |            |   |   | 1.6       |   |   | $ | 1,841 |   |

|                                                           |   | Three      Months Ended |   |   | Six      Months Ended |   |
|----------------------------------------------------------------|--------|-------------------------|--------|--------|-----------------------|--------|
|                                                           |   | June      30,           |   |   | June      30,         |   |
|                                                           |   | 2009                    |   |   | 2008                  |   |   | 2009 |   |   | 2008 |   |
| Amounts      realized or received from stock option exercises: |   |                    |   |   |                  |   |   |   |   |   |   |   |
| Cash      proceeds received                                    |   | $                       | 99     |   |                  | $      | 73 |   |   | $ | 99 |   |   | $ | 186 |   |
| Intrinsic      value realized                                  |   | $                       | 23     |   |                  | $      | 36 |   |   | $ | 23 |   |   | $ | 70 |   |
| Income      tax benefit realized                               |   | $                       | 8      |   |                  | $      | 13 |   |   | $ | 8 |   |   | $ | 24 |   |

|                                |   |           |    |   | Weighted        |   |
|-------------------------------------|--------|----------------|---------|--------|-----------------|--------|
|                                |   |           |    |   | Average         |   |
|                                |   | Number      of |    |   | Grant-Date      |   |
|                                |   | Shares         |    |   | Fair      Value |   |
| Nonvested      at December 31, 2008 |   |           | 158,476 |   |            | $      | 10.61 |   |
| Granted                             |   |           | 77,272  |   |            | $      | 7.92 |   |
| Vested                              |   |           | (53,301 | )      |            | $      | 11.99 |   |
| Cancelled                           |   |           | (12,000 | )      |            | $      | 9.08 |   |
| Nonvested      at June 30, 2009     |   |           | 170,447 |   |            | $      | 9.06 |   |

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|                                                                   |   | Three      Months Ended |      |   | Six      Months Ended |   |
|------------------------------------------------------------------------|--------|-------------------------|-----------|--------|-----------------------|--------|
|                                                                   |   | June      30,           |      |   | June      30,         |   |
|                                                                   |   | 2009                    |      |   | 2008                  |   |   | 2009 |   |   | 2008 |   |
|  Weighted      average shares outstanding - Basic                 |   |                    | 9,610,428 |   |                  |   | 9,443,347 |   |   |   | 9,611,783 |   |   |   | 9,430,607 |   |
|  Diluted      effect of stock options and restricted stock grants |   |                    | 119,293   |   |                  |   | 281,492 |   |   |   | 115,604 |   |   |   | - |   |
|  Weighted      average shares outstanding - Diluted               |   |                    | 9,729,721 |   |                  |   | 9,724,839 |   |   |   | 9,727,387 |   |   |   | 9,430,607 |   |

|                                  |   | Three      Months Ended |   |   | Six      Months Ended |   |
|---------------------------------------|--------|-------------------------|--------|--------|-----------------------|--------|
|                                  |   | June      30,           |   |   | June      30,         |   |
|                                  |   | 2009                    |   |   | 2008                  |   |   | 2009 |   |   | 2008 |   |
| Revenues      from external customers |   |                    |   |   |                  |   |   |   |   |   |   |   |
| Systems      and Services             |   | $                       | 68,128 |   |                  | $      | 53,708 |   |   | $ | 135,331 |   |   | $ | 108,481 |   |
| Metrigraphics                         |   |                    | 1,520  |   |                  |   | 1,585 |   |   |   | 2,856 |   |   |   | 3,290 |   |
|                                  |   | $                       | 69,648 |   |                  | $      | 55,293 |   |   | $ | 138,187 |   |   | $ | 111,771 |   |
| Gross      profit (loss)              |   |                    |   |   |                  |   |   |   |   |   |   |   |   |   |   |   |
| Systems      and Services             |   | $                       | 11,113 |   |                  | $      | 8,109 |   |   | $ | 22,373 |   |   | $ | 16,670 |   |
| Metrigraphics                         |   |                    | (52    | )      |                  |   | 192 |   |   |   | (234 | ) |   |   | 292 |   |
|                                  |   | $                       | 11,061 |   |                  | $      | 8,301 |   |   | $ | 22,139 |   |   | $ | 16,962 |   |
| Operating      income (loss)          |   |                    |   |   |                  |   |   |   |   |   |   |   |   |   |   |   |
| Systems      and Services             |   | $                       | 4,073  |   |                  | $      | 2,755 |   |   | $ | 8,190 |   |   | $ | (3,086 | ) |
| Metrigraphics                         |   |                    | (372   | )      |                  |   | (111 | ) |   |   | (841 | ) |   |   | (338 | ) |
|                                  |   | $                       | 3,701  |   |                  | $      | 2,644 |   |   | $ | 7,349 |   |   | $ | (3,424 | ) |

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

|   | • |   | the      ability to make more meaningful period-to-period comparisons of our      ongoing operating results;                      |
|--------|---------|--------|-----------------------------------------------------------------------------------------------------------------------------------|
|   |    |   |                                                                                                                              |
|   | • |   | the      ability to better identify trends in our underlying business and perform      related trend analysis;                    |
|   |    |   |                                                                                                                              |
|   | • |   | a      higher degree of transparency for certain expenses (particularly when a      specific charge impacts multiple line items); |
|   |    |   |                                                                                                                              |
|   | • |   | a      better understanding of how management plans and measures our underlying      business; and                                |
|   |    |   |                                                                                                                              |
|   | • |   | an      easier way to compare our most recent results of operations against      investor and analyst financialmodels.            |

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|                                                      |   | Six      Months Ended |   |   |
|-----------------------------------------------------------|--------|-----------------------|--------|--------|
|                                                      |   | June      30,         |   |   |
|                                                      |   | 2009                  |   |   |   | 2008 |   |   |
| (in      millions)                                        |   | $                     |   |   | % (2) |   |   |   | $ (1) |   |   | % (2) |   |   |
| GAAP      operating income (loss)                         |   | $                     | 7.3    |   |   |   | 5.3 | % |   |   | $ | (3.4 | ) |   |   | (3.1 | )% |   |
| Provision      for litigation                             |   |                  |   |   |   |   |   |   |   |   |   | 8.8 |   |   |   | 7.9 | % |   |
| Non-GAAP      operating income                            |   |                  |   |   |   |   |   |   |   |   | $ | 5.4 |   |   |   | 4.8 | % |   |
|                                                      |   |                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| GAAP      income (loss) before provision for income taxes |   | $                     | 6.6    |   |   |   | 4.8 | % |   |   | $ | (3.5 | ) |   |   | (3.2 | )% |   |
| Provision      for litigation                             |   |                  |   |   |   |   |   |   |   |   |   | 8.8 |   |   |   | 7.9 | % |   |
| Non-GAAP      income before provision for income taxes    |   |                  |   |   |   |   |   |   |   |   | $ | 5.3 |   |   |   | 4.7 | % |   |
|                                                      |   |                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| GAAP      provision for income taxes                      |   | $                     | 2.8    |   |   |   | 41.9 | % |  (3) |   | $ | 0.1 |   |   |   | (2.5 | )% | (3) |
| Tax      benefit for provision for litigation             |   |                  |   |   |   |   |   |   |   |   |   | 2.1 |   |   |   | 24.1 | % | (3) |
| Non-GAAP      provision for income taxes                  |   |                  |   |   |   |   |   |   |   |   | $ | 2.2 |   |   |   | 41.9 | % | (3) |
|                                                      |   |                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| GAAP      net income (loss)                               |   | $                     | 3.8    |   |   |   | 2.8 | % |   |   | $ | (3.6 | ) |   |   | (3.2 | )% |   |
| Provision      for litigation, net of tax benefit         |   |                  |   |   |   |   |   |   |   |   |   | 6.7 |   |   |   | 6.0 | % |   |
| Non-GAAP      net income                                  |   |                  |   |   |   |   |   |   |   |   | $ | 3.1 |   |   |   | 2.7 | % |   |

| (1) | Totals      may not add due to rounding.                                                                                                                                                                                                                                    |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2) | Represents      a percentage of total revenue of $138.2 million and $111.8 million for the      six months ended June 30, 2009 and 2008, respectively, excluding the      percentages for provision for income taxes and the tax benefit for      provision for litigation. |
| (3) | These      amounts represent a percentage of GAAP income (loss) before provision for      income taxes, provision for litigation and non-GAAP income before      provision for income taxes,respectively.                                                                   |

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|                                                |   | Three      Months Ended June 30, |   |   |
|-----------------------------------------------------|--------|----------------------------------|--------|--------|
|                                                |   | 2009                             |   |   |   | 2008 |   |   |
| (in      millions)                                  |   | $ (1)                            |   |   | % |   |   |   | $ (1) |   |   | % |   |   |
|  Contract      revenue                         |   | $                                | 68.1   |   |   |   | 97.8 | % |   |   | $ | 53.7 |   |   |   | 97.1 | % |   |
|  Product      sales                            |   |                             | 1.5    |   |   |   | 2.2 |   |   |   |   | 1.6 |   |   |   | 2.9 |   |   |
|  Total      revenue                            |   | $                                | 69.6   |   |   |   | 100.0 | % |   |   | $ | 55.3 |   |   |   | 100.0 | % |   |
|                                                |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  Gross      profit on contract revenue (3)     |   | $                                | 11.1   |   |   |   | 16.3 | % |   |   | $ | 8.1 |   |   |   | 15.1 | % |   |
|  Gross      profit (loss) on product sales (3) |   |                             | (0.1   | )      |   |   | (3.4 | )% |   |   |   | 0.2 |   |   |   | 12.1 | % |   |
|  Total      gross profit (3)                   |   |                             | 11.1   |   |   |   | 15.9 | % |   |   |   | 8.3 |   |   |   | 15.0 | % |   |
|                                                |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  Selling,      general and administrative      |   |                             | 6.4    |   |   |   | 9.2 | % |   |   |   | 5.1 |   |   |   | 9.3 | % |   |
|  Amortization      of intangible assets        |   |                             | 1.0    |   |   |   | 1.4 | % |   |   |   | 0.5 |   |   |   | 0.9 | % |   |
|  Operating      income                         |   |                             | 3.7    |   |   |   | 5.3 | % |   |   |   | 2.6 |   |   |   | 4.8 | % |   |
|  Interest      expense, net                    |   |                             | (0.5   | )      |   |   | (0.7 | )% |   |   |   | (0.1 | ) |   |   | (0.3 | )% |   |
|  Other      income, net                        |   |                             | 0.3    |   |   |   | 0.4 | % |   |   |   | 0.2 |   |   |   | 0.4 | % |   |
|  Provision      for income taxes               |   |                             | 1.5    |   |   |   | 41.5 | % | (2)  |   |   | 1.1 |   |   |   | 40.6 | % | (2) |
|  Net      income                               |   | $                                | 2.1    |   |   |   | 2.9 | % |   |   | $ | 1.6 |   |   |   | 2.9 | % |   |

|                                                |   | Six      Months Ended June 30, |   |   |
|-----------------------------------------------------|--------|--------------------------------|--------|--------|
|                                                |   | 2009                           |   |   |   | 2008 |   |   |
| (in      millions)                                  |   | $ (1)                          |   |   | % |   |   |   | $ (1) |   |   | % |   |   |
|  Contract      revenue                         |   | $                              | 135.3  |   |   |   | 97.9 | % |   |   | $ | 108.5 |   |   |   | 97.1 | % |   |
|  Product      sales                            |   |                           | 2.9    |   |   |   | 2.1 |   |   |   |   | 3.3 |   |   |   | 2.9 |   |   |
|  Total      revenue                            |   | $                              | 138.2  |   |   |   | 100.0 | % |   |   | $ | 111.8 |   |   |   | 100.0 | % |   |
|                                                |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  Gross      profit on contract revenue (3)     |   | $                              | 22.4   |   |   |   | 16.5 | % |   |   | $ | 16.7 |   |   |   | 15.4 | % |   |
|  Gross      profit (loss) on product sales (3) |   |                           | (0.2   | )      |   |   | (8.2 | )% |   |   |   | 0.3 |   |   |   | 8.9 | % |   |
|  Total      gross profit (3)                   |   |                           | 22.1   |   |   |   | 16.0 | % |   |   |   | 17.0 |   |   |   | 15.2 | % |   |
|                                                |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  Selling,      general and administrative      |   |                           | 12.8   |   |   |   | 9.3 | % |   |   |   | 10.5 |   |   |   | 9.4 | % |   |
|  Provision      for litigation                 |   |                           | -      |   |   |   | 0.0 | % |   |   |   | 8.8 |   |   |   | 7.9 | % |   |
|  Amortization      of intangible assets        |   |                           | 1.9    |   |   |   | 1.4 | % |   |   |   | 1.0 |   |   |   | 0.9 | % |   |
|  Operating      income (loss)                  |   |                           | 7.3    |   |   |   | 5.3 | % |   |   |   | (3.4 | ) |   |   | (3.1 | )% |   |
|  Interest      expense, net                    |   |                           | (1.1   | )      |   |   | (0.8 | )% |   |   |   | (0.3 | ) |   |   | (0.3 | )% |   |
|  Other      income, net                        |   |                           | 0.3    |   |   |   | 0.2 | % |   |   |   | 0.2 |   |   |   | 0.2 | % |   |
|  Provision      for income taxes               |   |                           | 2.8    |   |   |   | 41.9 | % |   (2) |   |   | 0.1 |   |   |   | (2.5 | )% |  (2) |
|  Net      income (loss)                        |   | $                              | 3.8    |   |   |   | 2.8 | % |   |   | $ | (3.6 | ) |   |   | (3.2 | )% |   |

| (1) | Totals      may not add due to rounding.                                                                             |
|-----|----------------------------------------------------------------------------------------------------------------------|
| (2) | The      percentage of provision for income taxes relates to a percentage of income      (loss) before income taxes. |
| (3) | These      amounts represent a percentage of contract revenues, product sales and      total revenues, respectively. |

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|                                            |   | Three      Months Ended |   |   | Three      Months Ended June 30, |   |
|-------------------------------------------------|--------|-------------------------|--------|--------|----------------------------------|--------|
|                                            |   | March 31, 2009 (1)      |   |   | 2009                             |   |   | 2008 |   |
| (in      millions)                              |   | $ (2)                   |   |   | % (2)                            |   |   | $ (2) |   |   | % (2) |   |   | $ (2) |   |   | % (2) |   |
| National      defense and intelligence agencies |   | $                       | 37.2   |   |                             |   | 55.3 | % |   | $ | 36.5 |   |   |   | 53.6 | % |   | $ | 37.2 |   |   |   | 69.2 | % |
| Federal      civilian agencies                  |   |                    | 10.8   |   |                             |   | 16.1 |   |   |   | 11.0 |   |   |   | 16.2 |   |   |   | 6.8 |   |   |   | 12.7 |   |
| Homeland      Security                          |   |                    | 13.1   |   |                             |   | 19.5 |   |   |   | 13.7 |   |   |   | 20.1 |   |   |   | 1.6 |   |   |   | 3.0 |   |
| State      and local government agencies        |   |                    | 5.8    |   |                             |   | 8.7 |   |   |   | 6.5 |   |   |   | 9.5 |   |   |   | 7.4 |   |   |   | 13.7 |   |
| Other                                           |   |                    | 0.3    |   |                             |   | 0.5 |   |   |   | 0.4 |   |   |   | 0.6 |   |   |   | 0.8 |   |   |   | 1.4 |   |
| Total      contract revenues                    |   | $                       | 67.2   |   |                             |   | 100.0 | % |   | $ | 68.1 |   |   |   | 100.0 | % |   | $ | 53.7 |   |   |   | 100.0 | % |

|                                            |   | Six      Months Ended June 30, |   |
|-------------------------------------------------|--------|--------------------------------|--------|
|                                            |   | 2009                           |   |   | 2008 |   |
| (in      millions)                              |   | $ (2)                          |   |   | % (2) |   |   | $ (2) |   |   | % (2) |   |
| National      defense and intelligence agencies |   | $                              | 73.7   |   |   |   | 54.5 | % |   | $ | 78.1 |   |   |   | 72.0 | % |
| Federal      civilian agencies                  |   |                           | 21.8   |   |   |   | 16.1 |   |   |   | 13.4 |   |   |   | 12.4 |   |
| Homeland      Security                          |   |                           | 26.8   |   |   |   | 19.8 |   |   |   | 2.9 |   |   |   | 2.7 |   |
| State      and local government agencies        |   |                           | 12.3   |   |   |   | 9.1 |   |   |   | 12.6 |   |   |   | 11.6 |   |
| Other                                           |   |                           | 0.7    |   |   |   | 0.5 |   |   |   | 1.4 |   |   |   | 1.3 |   |
| Total      contract revenues                    |   | $                              | 135.3  |   |   |   | 100.0 | % |   | $ | 108.5 |   |   |   | 100.0 | % |

| (1) | Amounts      for the three months ended March 31, 2009 have been reclassified to      conform to current period presentation. |
|-----|-------------------------------------------------------------------------------------------------------------------------------|
| (2) | Totals      may not add due to rounding.                                                                                      |

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|                                                     |   | Three      Months Ended |   |   | Six      Months Ended |   |
|----------------------------------------------------------|--------|-------------------------|--------|--------|-----------------------|--------|
|                                                     |   | June      30,           |   |   | June      30,         |   |
|                                                     |   | 2009                    |   |   | 2008                  |   |   | 2009 |   |   | 2008 |   |
|  Time      and materials                            |   |                    | 44     | %      |                  |   | 46 | % |   |   | 45 | % |   |   | 50 | % |
|  Cost      reimbursable                             |   |                    | 18     |   |                  |   | 21 |   |   |   | 18 |   |   |   | 20 |   |
|  Fixed      price, including service type contracts |   |                    | 38     |   |                  |   | 33 |   |   |   | 37 |   |   |   | 30 |   |
|                                                     |   |                    | 100    | %      |                  |   | 100 | % |   |   | 100 | % |   |   | 100 | % |
|                                                     |   |                    |   |   |                  |   |   |   |   |   |   |   |   |   |   |   |
|  Prime      contract                                |   |                    | 71     | %      |                  |   | 64 | % |   |   | 71 | % |   |   | 62 | % |
|  Sub-contract                                       |   |                    | 29     |   |                  |   | 36 |   |   |   | 29 |   |   |   | 38 |   |
|                                                     |   |                    | 100    | %      |                  |   | 100 | % |   |   | 100 | % |   |   | 100 | % |

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Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKETRISK

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Item 4. CONTROLS AND PROCEDURES

Item 1. LEGAL PROCEEDINGS

Item 1A. RISK FACTORS

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Item 2.  UNREGISTERED SALES OF EQUITY SECURITIES ANDUSE OF 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                 |   |
| April      1, 2009 to April 30, 2009          |   |              | 2,750  |   |               | $      | 7.70   |              |   |   | -                        |   |   | $ | - |   |
| May      1, 2009 to May 31, 2009              |   |              | 119    |   |               | $      | 9.02   |              |   |   | -                        |   |   |   | - |   |
| June      1, 2009 to  June 30, 2009 |   |              | -      |   |               | $      | -      |              |   |   | -                        |   |   |   | - |   |
| Total                                         |   |              | 2,869  |   |               | $      | 7.76   |              |   |   | -                        |   |   | $ | - |   |

Item 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITYHOLDERS

|                                                              |   | Number      of Shares Voted  For |      |   | Number      ofShares Withheld |   |
|-------------------------------------------------------------------|--------|--------------------------------------------|-----------|--------|-------------------------------|--------|
| Class      I Directors:                                           |   |                                       |      |   |                          |   |
| Lieutenant      General Charles P. McCausland (U.S.A.F., retired) |   |                                       | 4,705,760 |   |                          |   | 2,806,490 |   |
| General      George T. Babbitt (U.S.A.F., retired)                |   |                                       | 4,712,020 |   |                          |   | 2,800,230 |   |

| Class      II Directors:       |
|--------------------------------|
| Dr.      Francis J. Aguilar    |
| Mr.      John S. Anderegg, Jr. |
| Mr.      Nickolas Stavropoulos |
| Class      III Directors:      |
| Mr.      Kenneth F. Kames      |
| Mr.      James P. Regan        |
|                           |

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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.                                   |

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|                                  | DYNAMICS      RESEARCH CORPORATION                                        |
|---------------------------------------|---------------------------------------------------------------------------|
|                                  | (Registrant)                                                              |
|                                  |                                                                      |
|                                  |                                                                      |
| Date:  August      10, 2009 | /s/      David Keleher                                                    |
|                                  | Senior      Vice President, Chief Financial Officer and Treasurer         |
|                                  | (Principal      Financial Officer)                                        |
|                                  |                                                                      |
| Date:  August      10, 2009 | /s/      Shaun N. McCarthy                                                |
|                                  | Vice      President, Corporate Controller and Chief Accounting    Officer |
|                                  | (Principal      Accounting Officer)                                       |
|                                  |                                                                      |
|                                  |                                                                      |

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