SECURITIES AND EXCHANGE COMMISSION
                             
                             WASHINGTON, D.C. 20549

                                 ---------------

                                    FORM 10-Q

(Mark  One)

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

For the quarterly period ended January 31, 1997

                                       OR

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

For the transition period from   _____________  to _____________

Commission file number 0-15067

                             FLUOR DANIEL GTI, INC.

             (Exact Name of Registrant as Specified in its Charter)

             Delaware                                
  (State or Other Jurisdiction                          02-0324047
of Incorporation or Organization)           (I.R.S. Employer Identification No.)

                    100 River Ridge Drive, Norwood, MA 02062
               (Address of Principal Executive Offices) (Zip Code)

Registrant's Telephone Number, Including Area Code: (617) 769-7600


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by  Sections  13 or 15(d)  of the  Securities  Exchange  Act of 1934
during the preceding 12 months (or for such shorter  period that the  registrant
was  required  to file such  reports),  and (2) has been  subject to such filing
requirements for the past 90 days. Yes [x] No

At March 10, 1997 the  registrant  had issued and  outstanding  an  aggregate of
8,212,656 shares of its common stock.








                             FLUOR DANIEL GTI, INC.

                                    FORM 10-Q

                                TABLE OF CONTENTS




<TABLE>
<CAPTION>

PART I     FINANCIAL INFORMATION                                                          PAGE NUMBER
------     ---------------------                                                          -----------
<S>       <C>                                                                             <C>
Item 1   Financial Statements 1

          Condensed Consolidated Balance Sheets
              January 31, 1997 (Unaudited) and October 31, 1996 ...............................   1-2

          Condensed Consolidated Statements of Operations
              Quarter ended January 31, 1997 (Unaudited) and January 31, 1996 (Unaudited).......    3

          Condensed Consolidated Statements of Cash Flows
              Quarter ended January 31, 1997 (Unaudited) and January 31, 1996 (Unaudited).........  4

          Notes to Condensed Consolidated Financial Statements (Unaudited).......................   5

Item 2    Management's Discussion and Analysis of Financial Condition and Results of Operations.. 6-7


PART II   OTHER INFORMATION
-------   -----------------

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

          Signatures............................................................................    9

</TABLE>







1 Prior year comparative  financial statements reflect the historical results of
Fluor Daniel  Environmental  Services,  Inc. (FDESI), the predecessor entity for
accounting purposes.











Item 1.    Financial Statements

                             FLUOR DANIEL GTI, INC.

                      CONDENSED CONSOLIDATED BALANCE SHEETS

                                 (In thousands)

<TABLE>
<CAPTION>

                                                                     January 31,         October 31,
Assets                                                                      1997                1996
------                                                                      ----                ----
                                                                     (unaudited)
<S>                                                                 <C>                 <C>  
   Current assets:
   Cash and cash equivalents                                          $    5,181          $    2,552
   Marketable securities                                                   3,951               4,101
   Accounts receivable, less allowance of $1,755 at
      January 31, 1997 and $1,740 at October 31, 1996                     44,639              46,438
   Unbilled revenues                                                      18,562              18,917
   Deferred income taxes                                                     937                 937
   Other current assets                                                    2,437               2,525
                                                                       ---------           ---------

Total current assets                                                      75,707              75,470

Deferred income taxes                                                      2,967               2,967
Property, plant and equipment, net                                         7,303               7,776
Goodwill, net of accumulated amortization of $1,001 at
      January 31, 1997 and $860 at October 31, 1996                       10,293              10,218
Other assets                                                               4,064               3,962
                                                                        --------           ---------

Total assets                                                            $100,334            $100,393
                                                                        ========            ========
</TABLE>

    The accompanying notes are an integral part of the financial statements.



                                       -1-








                             FLUOR DANIEL GTI, INC.

                      CONDENSED CONSOLIDATED BALANCE SHEETS

                      (In thousands, except share amounts)
<TABLE>
<CAPTION>

                                                                          January 31,         October 31,
Liabilities and Stockholders' Equity                                             1997                1996
------------------------------------                                             ----                ----
                                                                          (unaudited)
Current liabilities:
<S>                                                                       <C>                 <C>          
   Accounts payable                                                         $  7,720             $  8,034
   Accrued salaries and benefits                                               3,350                4,023
   Advance billings on contracts                                                 355                  452
   Other accrued liabilities                                                   6,661                5,905
   Income taxes payable                                                          (45)                 101
                                                                            --------             --------

Total current liabilities                                                     18,041               18,515

Stockholders' equity:
   Preferred stock, $.01 par value, 1,000,000 shares authorized,
      none issued                                                                --                  --
   Common stock, $.001 par value, 25,000,000 shares
      authorized, 8,212,656 issued and outstanding at January 31, 1997;
      8,155,832 issued and outstanding at October 31, 1996                         8                    8
   Capital in excess of par value                                             81,430               81,003
   Retained earnings                                                             887                  825
   Cumulative currency translation adjustment                                    (32)                  42
                                                                            --------             --------

Total stockholders' equity                                                    82,293               81,878
                                                                            --------             --------

Total liabilities and stockholders' equity                                  $100,334             $100,393
                                                                            ========             ========
</TABLE>


    The accompanying notes are an integral part of the financial statements.



                                       -2-









                             FLUOR DANIEL GTI, INC.

                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

                                   (Unaudited)
                    (In thousands, except per share amounts)

<TABLE>
<CAPTION>

                                                                          Quarter ended
                                                                          -------------
                                                                  January 31,         January 31,
                                                                         1997             1996(1)
                                                                         ----             -------
<S>                                                                  <C>                 <C>
Revenues                                                              $47,594             $8,308
Cost of revenues                                                       38,341              7,018
                                                                      -------             ------

Gross profit                                                            9,253              1,290

Selling, general and administrative expenses                            9,398                 --
Indirect expenses                                                          --              1,519
License and other income                                                  170                 --
                                                                      -------             ------

Income (loss) before investment and interest income                        25               (229)
Investment and interest income, net                                        89                 --
                                                                      -------             -------

Income (loss) before income taxes                                         114               (229)
Provision for (benefit from) income taxes                                  52                (89)
                                                                      -------             -------

Net income (loss)                                                     $    62             $ (140)
                                                                      =======             =======

Earnings per common share                                             $   .01             $  N/A
                                                                      =======             ======

Shares used to compute earnings per common share                        8,213                N/A
                                                                      =======             ======
</TABLE>


    The accompanying notes are an integral part of the financial statements.



                                      




1 Prior year comparative  financial statements reflect the historical results of
Fluor Daniel  Environmental  Services,  Inc. (FDESI), the predecessor entity for
accounting purposes.



                                       -3-









                             FLUOR DANIEL GTI, INC.

                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)
                                 (In thousands)

<TABLE>
<CAPTION>

                                                                                        Quarter ended
                                                                                        -------------
                                                                               January 31,         January 31,
                                                                                      1997             1996(1)
                                                                                      ----             -------
<S>                                                                              <C>                 <C>                         
Cash Flows From Operating Activities
   Net income                                                                    $     62              $ (140)
   Adjustments to reconcile net income  to net cash provided by operating
     activities:
       Depreciation and amortization                                                1,188                  --

      Changes in operating assets and liabilities:
         Accounts receivable and unbilled revenues                                  2,154              (1,245)
         Other current assets                                                          88                  --
         Other assets                                                                 (99)                 --
         Accounts payable                                                            (315)                 --
         Accrued salaries and benefits                                               (673)                486
         Other accrued liabilities                                                    756                  --
         Advanced billing on contracts                                                (97)                 --
         Income taxes payable                                                        (146)                 --
      Advances from parent                                                             --                 899
                                                                              -----------             -------

Net Cash provided by Operating Activities                                           2,918                  --

Cash Flows From Investing Activities
      Purchase of marketable securities                                            (3,500)                 --
      Sale of marketable securities                                                 3,650                  --
      Expenditures for property, plant and equipment                                 (641)                 --
      Sale of property, plant and equipment                                            69                  --
      Other                                                                          (219)                 --
                                                                                 ---------         ----------

Net Cash used in Investing Activities                                                (641)                 --

Cash Flows From Financing Activities
      Proceeds from sale of stock under employee stock purchase plans                 427                  --
                                                                                 --------          ----------

Net Cash provided by Financing Activities                                             427                  --

Effect of Exchange Rate Changes on Cash and Cash Equivalents                          (75)                 --
                                                                                ----------         ----------

Net Increase in Cash and Cash Equivalents                                           2,629                  --

Cash and Cash Equivalents at Beginning of Fiscal Year                               2,552                  --
                                                                                  -------          ----------

Cash and Cash Equivalents at End of Period                                         $5,181           $      --
                                                                                   ======           =========
</TABLE>


    The accompanying notes are an integral part of the financial statements.

1 Prior year comparative  financial statements reflect the historical results of
Fluor Daniel  Environmental  Services,  Inc. (FDESI), the predecessor entity for
accounting purposes.




                                       -4-









                             FLUOR DANIEL GTI, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)



NOTE 1. Condensed Consolidated Financial Statements

     The  condensed  consolidated  balance  sheets as of  January  31,  1997 and
October 31, 1996, the related  condensed  consolidated  statements of operations
for the quarters  ended  January 31, 1997 and January 31, 1996,  and the related
condensed  consolidated  statements of cash flows for the quarters ended January
31, 1997 and January 31, 1996, have been prepared by Fluor Daniel GTI, Inc. (the
"Company")  without  audit.  In  the  opinion  of  management,  all  adjustments
(consisting  of normal  recurring  accruals)  necessary  to  present  fairly the
financial  position,  results of operations and changes in cash flows at January
31, 1997 and for all periods presented have been made.

     Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting  principles
have been  condensed or omitted.  It is suggested  this  information  be read in
conjunction  with the Annual  Report on Form 10-K for fiscal year ended  October
31, 1996 (SEC File No. 0-15067) and the Proxy  Statement/Prospectus  dated April
5, 1996, of Groundwater Technology,  Inc. ("GTI"),  relating to the May 10, 1996
Special  Meeting of  Stockholders  at which the  Change of Control  Transactions
(defined  below) were  approved.  The results of operations for the period ended
January 31, 1997 are not necessarily indicative of the operating results for the
year.

NOTE 2. Earnings Per Share

     Earnings per share for the period ended January 31, 1996 is not meaningful.

NOTE 3. Merger and Recapitalization Activities

     On May 10, 1996, the Company closed a series of  transactions  (the "Change
of  Control  Transactions")   pursuant  to  which  it  became  a  majority-owned
subsidiary  of Fluor  Daniel,  Inc.  ("Fluor  Daniel"),  a global  construction,
engineering,   maintenance   and  services   company.   The  Change  of  Control
Transactions  included a recapitalization of the Company's common stock, and the
merger  of one of the  Company's  subsidiaries  and Fluor  Daniel  Environmental
Services,  Inc.  ("FDESI"),  a  wholly-owned  subsidiary  of Fluor  Daniel  that
provides environmental services primarily to agencies of the federal government.
In exchange for FDESI and $35 million in cash,  Fluor Daniel received  4,400,000
shares of the Company's  "new" common stock and an option to purchase  1,768,970
additional  shares at $13.1274 per share that  expires on December 11, 1998.  In
the  recapitalization,  each holder of "old" common stock received $8.62 in cash
and .5274 of a share of "new"  common stock of the  Company.  In  addition,  the
Company  entered into a Marketing  Agreement with Fluor Daniel,  and the Company
changed its name from "Groundwater Technology, Inc." to "Fluor Daniel GTI, Inc."
to emphasize the new relationship.

     The merger was treated as a reverse  acquisition  for accounting  purposes,
and therefore,  the unaudited January 31, 1996 condensed consolidated statements
of operations  and condensed  consolidated  statements of cash flows reflect the
historical  results of FDESI,  which is the  predecessor  entity for  accounting
purposes.

     Pro forma  results for the quarter  ended  January 31,  1996,  presented as
though the merger of FDESI and GTI had  occurred on  November 1, 1995,  were net
income of approximately $413,000 on revenues of approximately $50.2 million.

NOTE 4. Change in Fiscal Year

     The Company changed its year end from April 30 to October 31.  Accordingly,
the Company began a new 12-month fiscal year on November 1, 1996.



                                       -5-








                             FLUOR DANIEL GTI, INC.

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

General

     On May 10, 1996, the Company closed a series of  transactions  (the "Change
of  Control  Transactions")   pursuant  to  which  it  became  a  majority-owned
subsidiary  of Fluor  Daniel,  Inc.  ("Fluor  Daniel"),  a global  construction,
engineering,   maintenance   and  services   company.   The  Change  of  Control
Transactions  included a recapitalization of the Company's common stock, and the
merger  of one of the  Company's  subsidiaries  and Fluor  Daniel  Environmental
Services,  Inc.  ("FDESI"),  a  wholly-owned  subsidiary  of Fluor  Daniel  that
provides environmental services primarily to agencies of the federal government.
In exchange for FDESI and $35 million in cash,  Fluor Daniel received  4,400,000
shares of the Company's  "new" common stock and an option to purchase  1,768,970
additional  shares at $13.1274 per share that  expires on December 11, 1998.  In
the  recapitalization,  each holder of "old" common stock received $8.62 in cash
and .5274 of a share of "new"  common stock of the  Company.  In  addition,  the
Company  entered into a Marketing  Agreement with Fluor Daniel,  and the Company
changed its name from "Groundwater Technology, Inc." to "Fluor Daniel GTI, Inc."
to emphasize the new relationship.

     The merger was treated as a reverse  acquisition  for accounting  purposes,
and therefore,  the unaudited January 31, 1996 condensed consolidated statements
of operations  and condensed  consolidated  statements of cash flows reflect the
historical  results of FDESI,  which is the  predecessor  entity for  accounting
purposes.

     The Company changed its year end from April 30 to October 31.  Accordingly,
the Company began a new 12-month fiscal year on November 1, 1996.

Results of Operations

     Revenues for the quarter  ended  January 31, 1997 were $47.6  million.  The
Company  experienced  continued  competition  within almost all  assessment  and
remediation markets.

     Gross profit for the three months ended  January 31, 1997 was $9.3 million.
As a percentage of revenues, gross profit for the quarter ended January 31, 1997
was 19.4%.  The gross  profit for the  quarter has been  impacted  by  continued
pricing pressures for services performed.

     Selling,  general and administrative expenses for the quarter ended January
31, 1997 were $9.4 million.  There were no unusual expenses in selling,  general
and administrative during this period.

     The  provision  for income taxes at 45.6% for the quarter ended January 31,
1997 is higher  than the U.S.  statutory  rate mainly due to the impact of state
taxes.

     Pro forma results for the first  quarter ended January 31, 1996,  presented
as though the merger of FDESI and GTI had occurred on November 1, 1995, were net
income of approximately $413,000 on revenues of approximately $50.2 million.


Liquidity and Capital Resources

     At January 31, 1997,  the  Company's  primary  source of liquidity was $9.1
million in cash, cash equivalents and marketable securities.  The Company has no
long-term borrowings. At January 31, 1997, the Company had a line of credit with
a bank providing for borrowings up to $10.0 million through April 30, 1999.
There have been no borrowings under the line of credit.

     Operating activities provided $2.9 million in net cash for the three months
ended  January  31, 1997  principally  due to  improvements  in  collections  of
receivables.  At January  31,  1997,  the  Company's  working  capital was $57.7
million. Total assets were $100.3 million at the end of the same period.


                                       -6-








     Cash  flows  from  investing  activities  were  impacted  by  approximately
$641,000 of  expenditures  in property,  plant and  equipment  that were made to
upgrade the Company's computer and rental equipment. The Company had no material
commitments  for  capital  expenditures  as of January  31,  1997 and  estimates
spending for the next three months to be approximately $1.4 million.

     Funding  requirements  for  operations are expected to be met from existing
cash,  cash   equivalents,   marketable   securities  and  cash  generated  from
operations.  The Company  believes that cash provided from these sources will be
sufficient to meet its operating requirements for the near term.



                                       -7-









                             FLUOR DANIEL GTI, INC.

                                     PART II




Item 6.    Exhibits and Reports on Form 8-K

     (a)   On December 18, 1996, the  Registrant  filed a Current Report on Form
           8-K  reporting a change in  independent  accountants  from  Coopers &
           Lybrand LLP to Ernst & Young LLP.



                                       -8-









                             FLUOR DANIEL GTI, INC.

                                   SIGNATURES


     Pursuant to the  requirements  of the Securities  Exchange Act of 1934, the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.





                                                          FLUOR DANIEL GTI, INC.



Date: March 14, 1997                         /s/ Walter C. Barber
      --------------                       -------------------------------------
                                                                Walter C. Barber
                                           President and Chief Executive Officer





Date: March 14, 1997                               /s/ Robert E. Sliney, Jr.
      --------------                              ------------------------------
                                                           Robert E. Sliney, Jr.
                                                   Vice President, Treasurer and
                                                         Chief Financial Officer



                                       -9-