UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                               -------------------

                                   FORM 10-K/A
                               -------------------


                                   (Mark One)

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

                    For the fiscal year ended March 31, 2002

                                       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:

                               DIGITALTHINK, INC.
             (Exact name of registrant as specified in its charter)

     Delaware                                                   94-3244366
 (State or other jurisdiction of                             (I.R.S. Employer
 Incorporation or organization)                             Identification No.)

  601 Brannan Street, San Francisco, California                   94107
     (Address of principal executive offices)                   (Zip code)

                                 (415) 625-4000
              (Registrant's telephone number, including area code)

           Securities registered pursuant to Section 12(b) of the Act:

 Title of each class                      Name of Exchange on which registered
      None                                              None

           Securities registered pursuant to Section 12(g) of the Act:
                          Common Stock, $.001 par value
                                (Title of Class)

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

    Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]

    The aggregate market value of registrant's voting stock held by
non-affiliates of registrant, based upon the closing sale price of the common
stock on May 23, 2002, as reported on the Nasdaq National Market, was
approximately $55.7 million. Shares of common stock held by each officer and
director have been excluded in that such persons may be deemed to be affiliates.
This determination of affiliate status is not necessarily a conclusive
determination for other purposes.

Outstanding shares of registrant's  common stock, $.001 par value, as of May 23,
2002: 40,987,547


<PAGE>



EXPLANATORY  NOTE:

PURSUANT  TO THIS FORM  10-K/A,  THE  REGISTRANT  AMENDS  "ITEM 8.  CONSOLIDATED
FINANCIAL  STATEMENTS AND SUPPLEMENTARY  DATA" OF PART I OF ITS ANNUAL REPORT ON
FORM 10-K FOR THE YEAR ENDED  MARCH 31,  2002 TO CORRECT  NOTE 8,  STOCKHOLDER'S
EQUITY (DEFICIT), TO THE CONSOLIDATED FINANCIAL STATEMENTS. THESE CHANGES, WHICH
ARE  DESCRIBED  IN THE  FOLLOWING  PARAGRAPH  AND NOTE 14,  DID NOT  IMPACT  THE
REGISTRANT'S  CONSOLIDATED BALANCE SHEET, INCOME STATEMENT,  OR NET OR PER SHARE
LOSS FOR ANY OF THE PERIODS PRESENTED.

THE COMPANY HAS CORRECTED CERTAIN PRO FORMA CALCULATIONS  COMPUTED IN ACCORDANCE
WITH  STATEMENT  OF  FINANCIAL  ACCOUNTING  STANDARDS  NO. 123,  ACCOUNTING  FOR
STOCK-BASED COMPENSATION.  THESE CHANGES RELATE TO THE COMPUTATIONS OF PRO FORMA
TOTAL AND PER SHARE NET LOSS FOR THE YEARS ENDED MARCH 31, 2000,  2001, AND 2002
AND THE EXPECTED  LIFE AFTER  VESTING FOR FISCAL 2000 TO REFLECT THE ACTUAL LIFE
USED IN SUCH COMPUTATIONS.  OTHER THAN THE CHANGES INDICATED IN NOTE 14, AND THE
CORRECTION  OF THE PRO FORMA  AMOUNTS IN NOTE 8, NO OTHER CHANGES HAVE BEEN MADE
TO THE  REGISTRANT'S  ANNUAL  REPORT ON FORM 10-K FOR THE YEAR  ENDED  MARCH 31,
2002.

Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

                          INDEPENDENT AUDITORS' REPORT

The Board of Directors and Stockholders
DigitalThink, Inc.

We have audited the  accompanying  consolidated  balance sheets of DigitalThink,
Inc.  and  subsidiaries  as  of  March  31,  2001  and  2002,  and  the  related
consolidated statements of operations,  stockholders' equity (deficit), and cash
flows for each of the three  years in the period  ended  March 31,  2002.  These
financial  statements are the  responsibility of the Company's  management.  Our
responsibility  is to express an opinion on these financial  statements based on
our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the  United  States of  America.  Those  standards  require  that we plan and
perform the audit to obtain  reasonable  assurance  about  whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test basis,  evidence  supporting  the amounts and  disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made by  management,  as well as evaluating  the overall
financial  statement  presentation.   We  believe  that  our  audits  provide  a
reasonable basis for our opinion.

In our opinion,  such consolidated  financial  statements present fairly, in all
material respects, the financial position of DigitalThink, Inc. and subsidiaries
at March 31,  2001 and 2002, and the results of their  operations and their cash
flows  for  each of the  three  years  in the  period  ended  March 31,  2002 in
conformity with accounting principles generally accepted in the United States of
America.

                                                    /s/ DELOITTE & TOUCHE LLP

San Jose, California
April 23, 2002 (August 12, 2002 as to Note 14)


<PAGE>



                       DIGITALTHINK, INC. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS
                      (in thousands, except per share data)

                                     ASSETS
<TABLE>
<CAPTION>


                                                             As of March 31,
                                                           2001          2002
                                                        ------------  --------
<S>                                                     <C>           <C>

Current assets:
  Cash and cash equivalents........................   $    30,512   $    29,470
  Marketable securities............................        33,526         1,640
  Accounts receivable, net of allowance for doubtful
    accounts of $247 and $484, respectively.........        9,027         5,779
  Prepaid expenses and other current assets.........        4,118         1,675
                                                       -----------   ----------
    Total current assets...............................    77,183        38,564
  Restricted cash and deposits.........................     3,833         4,083
  Property and equipment, net..........................    15,061        18,325
  Goodwill and other intangible assets.................    15,610        75,300
                                                       -----------   ----------
    Total assets......................................$   111,687    $  136,272
                                                       ===========   ==========

                      LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
   Accounts payable.................................. $     4,471   $     3,569
   Accrued liabilities...............................       6,524        13,238
   Borrowings under line of credit...................          --         2,577
   Deferred revenues..................................     11,548         7,043
                                                       -----------   -----------
     Total current liabilities........................     22,543        26,427
   Long-term liabilities..............................         17           119
   Commitments and contingencies (Note 12)
     Stockholders' equity:
     Common stock-- $0.001 per share value; 250,000
      shares authorized; issued and outstanding
      34,999 in 2001 and 40,452 in 2002...............    187,583       267,814
     Deferred stock compensation......................     (3,099)         (631)
     Stockholders' notes receivable...................         (9)           --
     Accumulated other comprehensive income...........        204          (264)
     Accumulated deficit..............................    (95,552)     (157,193)
                                                       -----------   -----------
     Total stockholders' equity.......................     89,127       109,726
                                                       -----------   -----------
     Total liabilities and stockholders' equity.......$   111,687   $   136,272
                                                       ===========   ===========

     See accompanying notes to consolidated financial statements.

</TABLE>


<PAGE>

<TABLE>
<CAPTION>


                       DIGITALTHINK, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                      (in thousands, except per share data)

                                                       Year Ended March 31,
                                                  2000         2001        2002
                                                ----------  ----------- --------
<S>                                             <C>          <C>        <C>

 Revenues:
   Delivered Learning fees....................$  4,994   $   17,978  $   20,401
   Learning Solution services................    5,821       20,680      22,955
                                              ---------   ----------  ----------
     Total revenues..........................   10,815       38,658      43,356
                                              ---------   ----------  ----------
 Costs and expenses:
   Cost of Delivered Learning fees...........    2,409        5,509       6,619
   Cost of Learning Solution services........    3,337       11,211      11,934
   Content research and development............  4,082        6,092       7,094
   Technology research and development.........  3,687       11,791      11,318
   Selling and marketing....................... 11,596       23,105      21,208
   General and administrative................... 2,342        6,046       7,355
   Depreciation.................................   915        3,190       5,274
   Amortization of warrants.....................    --       13,131      11,003
   Stock-based compensation*.................... 3,663        5,432       1,888
   Amortization of goodwill and other
        intangibles.............................    --        3,602       7,208
   Write-off of in-process research and
         development............................    --        7,118          --
   Impairment of goodwill.......................    --           --      10,437
   Acquisition related charges..........            --           --       5,792
   Restructuring charge.........................    --           --       9,778
                                              ---------   ----------   ---------
     Total costs and expenses..............     32,031       96,227     116,908
                                              ---------   ----------  ----------
     Loss from operations. ................... (21,216)     (57,569)    (73,552)
     Penalty income recognized (Note 13)..          --           --      10,000
     Interest and other income...........        1,055        5,344       1,911
                                              ---------   ----------  ----------
      Net loss...........................    $ (20,161)  $  (52,225) $  (61,641)
                                              =========   ==========  ==========

Accretion of redeemable convertible
        preferred stock..................... $   7,593   $       --  $       --
                                              ---------   ----------  ----------
 Loss attributable to common stockholders... $ (27,754)  $  (52,225) $  (61,641)
                                              ---------   ----------  ----------
 Basic and diluted loss per common share.... $   (3.87)  $    (1.51) $    (1.61)
                                              ---------   ----------  ----------
 Shares used in basic and diluted loss per
        common share......................       7,164       34,524      38,176
                                              ---------   ----------  ----------
 Pro forma basic and diluted loss per
        common share.....................    $   (1.09)  $    (1.51) $    (1.61)
                                              =========   ==========  ==========
 Shares used in pro forma basic and diluted
        net loss per common share..........      25,412       34,524      38,176
                                              =========   ==========  ==========

 (*) Stock-based compensation:
       Cost of Delivered Learning fees....... $     143   $      121  $       28
       Cost of Learning Solution services....       318          500         165
       Content research and development......        72           76          34
       Technology research and development...       473        1,329         555
       Selling and marketing.................     1,042        1,391         451
       General and administrative............     1,615        2,015         655
                                              ---------   ----------  ----------
          Total...............................$   3,663   $    5,432  $    1,888
                                               ========   ==========  ==========

     See accompanying notes to consolidated financial statements.

</TABLE>

<PAGE>

<TABLE>
<CAPTION>

                       DIGITALTHINK, INC. AND SUBSIDIARIES

            CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
                    Years ended March 31, 2000, 2001 and 2002
                                 (in thousands)


                                                Common stock
                                               ----------------   Deferred Stock
                                               Shares    Amount    Compensation
                                              -------- ---------  --------------
<S>                                           <C>      <C>        <C>
Balances, March 31, 1999..................        4,131  $     400  $      (332)
 Components of comprehensive income:
  Net loss................................           --         --           --
    Total comprehensive income
  Exercise of stock options...............          707        506           --
  Accretion for redemption value on
    Series A, B, C and D preferred stock             --         --           --
  Conversion of preferred stock to
    common stock                                 22,815     58,242           --
  Common stock issued for cash in
    initial public offering and
    concurrent private placement, net
    of issuance costs....................         6,135     78,728           --
  Deferred stock compensation.............           --     11,284      (11,284)
  Amortization of deferred stock
    compensation                                     --         --        3,663
                                               --------   --------- ------------
Balances, March 31, 2000..................       33,788    149,160       (7,953)
 Components of comprehensive income:
  Net loss................................           --         --           --
  Change in unrealized gain on
    available-for-sale investments.........          --         --           --
  Translation adjustment..................           --         --           --
     Total comprehensive income
  Exercise of stock options...............          525        480           --
  Employee stock purchase plan............          100      1,187           --
  Stockholders' notes receivable..........           --         --           --
  Forfeited and unvested options..........           --       (974)         974
  Amortization of deferred stock
     compensation.............................       --         --        5,432
  Amortization of warrants................           --     13,131           --
  Issuance of common stock and
     assumption of stock options in
     connection with acquisition                    586     24,599       (1,552)
                                               --------  ----------  -----------
Balances, March 31, 2001..................       34,999    187,583       (3,099)
 Components of comprehensive income:
  Net loss................................           --         --           --
  Change in unrealized gain on
    available-for-sale investments.........          --         --           --
  Translation adjustment..................           --         --           --
      Total comprehensive income
  Exercise of stock options and warrants..          516        993           --
  Employee stock purchase plan............          228      1,629           --
  Repayment of stockholders' notes
    receivable................................       --         --           --
  Forfeited and unvested options..........           --       (580)         580
  Amortization of deferred stock
    compensation.............................        --         --        1,888
  Amortization of warrants................           --     11,003           --
  Issuance of common stock and
    assumption of warrants in connection
    with acquisition                              4,709     67,186           --
                                               ---------  --------   -----------
Balances, March 31, 2002..................       40,452  $ 267,814  $      (631)
                                               ========= =========  ============

See accompanying notes to consolidated financial statements.

<CAPTION>
                                            Accumulated
                              Stockholders'    Other
                                 Notes      Comprehensive  Accumulated
                               Receivable     Income          Deficit   Total
                              ------------- ------------  ------------ ---------
<S>                            <C>           <C>           <C>          <C>

Balances, March 31, 1999......$      --      $      --    $ (15,573)  $ (15,505)
 Components of comprehensive
   income:
  Net loss....................       --             --      (20,161)    (20,161)
                                                                     -----------
    Total comprehensive income                                          (20,161)
                                                                     -----------
  Exercise of stock options....      --             --           --         506
  Accretion for redemption
    value on Series A, B, C
    and D preferred stock
    stock.......................     --             --       (7,593)     (7,593)
  Conversion of preferred stock
    to common stock..............    --             --           --      58,242
  Common stock issued for cash in
    initial public offering and
    concurrent private placement,
    net of issuance costs........    --             --           --      78,728
  Deferred stock compensation......  --             --           --         --
  Amortization of deferred stock
    compensation                     --             --           --       3,663
                               --------       ---------    --------   ----------
Balances, March 31, 2000........     --             --      (43,327)     97,880
 Components of comprehensive
   income:
  Net loss....................       --             --      (52,225)    (52,225)
  Change in unrealized gain on
    available-for-sale investments.. --            177           --         177
  Translation adjustment.........    --             27           --          27
                                                                      ----------
   Total comprehensive income                                           (52,021)
                                                                      ----------
  Exercise of stock options........  --             --           --         480
  Employee stock purchase plan.....  --             --           --       1,187
  Stockholders' notes receivable...  (9)            --           --          (9)
  Forfeited and unvested options...  --             --           --          --
  Amortization of deferred stock
    compensation                     --             --           --       5,432
  Amortization of warrants.........  --             --           --      13,131
  Issuance of common stock and
    assumption of stock options in
    connection with acquisition      --             --           --      23,047
                               ---------      ---------    ---------   ---------

Balances, March 31, 2001......       (9)           204      (95,552)     89,127
 Components of comprehensive income:
   Net loss......................    --            --       (61,641)    (61,641)
   Change in unrealized gain on
     available-for-sale investments  --          (165)           --        (165)
   Translation adjustment..........  --          (303)           --        (303)
                                                                      ----------
      Total comprehensive income                                        (62,109)
                                                                      ----------
   Exercise of stock options
     and warrants                    --            --             --        993
   Employee stock purchase plan..... --            --             --      1,629
   Repayment of stockholders' notes
     receivable.....................  9            --             --          9
   Forfeited and unvested options... --            --             --         --
   Amortization of deferred stock
      compensation.................. --            --             --      1,888
   Amortization of warrants.......   --            --             --     11,003
   Issuance of common stock and
      assumption of warrants in
      connection with acquistion     --            --             --     67,186
                              ---------      ---------      ---------   --------
Balances, March 31, 2002..... $      --     $    (264)     $(157,193) $ 109,726
                              =========      =========      =========  =========

See accompanying notes to consolidated financial statements.

</TABLE>

<PAGE>

                       DIGITALTHINK, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (in thousands)

<TABLE>
<CAPTION>


                                                     Year Ended March 31,
                                               2000          2001        2002
                                             ----------   ----------   --------
<S>                                          <C>          <C>          <C>

Cash flows from operating activities:
  Net loss.................................$  (20,161)  $  (52,225) $   (61,641)
  Adjustments to reconcile net loss to
    net cash used in operating activities:
   Depreciation............................       915        3,190        5,274
   Amortization of deferred stock
        compensation.......................     3,663        5,432        1,888
   Amortization of warrants................        --       13,131       11,003
   Amortization of goodwill and other
        intangibles........................        --        3,602        7,208
   Impairment of goodwill.....................     --           --       10,437
   Restructuring charges......................     --           --        2,333
   Acquisition related charges................     --           --        5,328
   Write-off of in-process research and
         development..............                 --        7,118           --
     Changes in assets and liabilities:
       Accounts receivable.................... (4,207)      (3,705)       4,078
       Prepaid expenses and other current
          assets...................              (758)      (1,705)       2,427
       Accounts payable........................ 1,868        1,868       (2,433)
       Accrued liabilities..................... 2,307          652        1,397
       Deferred revenues....................... 5,869        4,456       (6,294)
                                           ----------   ----------  ------------
   Net cash used in operating activities...   (10,504)     (18,186)     (18,995)
                                           ----------   ----------  ------------
Cash flows from investing activities:
   Restricted cash.........................        --       (2,033)        (250)
   Purchases of property and equipment.....    (5,781)     (12,404)     (14,402)
   Net cash paid in acquisition............        --       (1,732)        (169)
   Purchases of marketable securities......   (43,644)     (52,799)     (17,300)
   Proceeds from maturities of marketable
         securities................                --       61,117       49,186
   Other assets........................            27           --            9
                                           ----------   ----------  -----------
   Net cash (used in) provided by
         investing activities......           (49,398)      (7,851)      17,074
                                           ----------   ----------  -----------
Cash flows from financing activities:
   Proceeds from sale of preferred stock.      26,067           --           --
   Payments of notes payable.............          --           --       (1,440)
   Proceeds from sale of common stock.....     79,234        1,668        2,622
                                           ----------   ----------  -----------
  Net cash provided by financing activities   105,301        1,668        1,182
                                           ----------   ----------  -----------
  Effect of exchange rate changes on
         cash and cash equivalents.......         --            27         (303)
  Net increase(decrease) in cash and cash
         equivalents................           45,399      (24,342)      (1,042)
  Cash and cash equivalents, beginning
        of year.......................          9,455       54,854       30,512
                                           ----------   ----------  -----------
  Cash and cash equivalents, end of year   $   54,854   $   30,512  $    29,470
                                           ==========   ==========  ===========

  Supplemental disclosure of cash flow
  information:
    Cash paid for interest                 $      --    $       --  $        41
  Supplemental disclosure of noncash
  investing and financing activities:
    Unrealized gain/(loss) on marketable
       securities                          $      --    $      177  $      (165)

</TABLE>

See accompanying notes to consolidated financial statements.


<PAGE>



                       DIGITALTHINK, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Summary of Significant Accounting Policies

Organization

DigitalThink, Inc. (the "Company"), was incorporated in California on April
22, 1996 to provide Web-based training courses and training delivery technology.
The Company completed the development of its delivery technology and initial
content, and began substantial sales and marketing efforts in fiscal year 1998.
In November 1999, the Company reincorporated in Delaware.

Principles of Consolidation

The consolidated financial statements include the accounts of DigitalThink Inc.,
and its wholly-owned  subsidiaries.  All significant  intercompany  balances and
transactions  have been  eliminated in  consolidation.  Accounts  denominated in
foreign  currencies have been translated using the U.S. dollar as the functional
currency.

Estimates

The  preparation  of  consolidated   financial  statements  in  conformity  with
generally accepted  accounting  principles requires management to make estimates
and assumptions  that affect reported amounts of assets,  liabilities,  revenues
and expenses as of the dates and for the periods presented. Actual results could
differ from those estimates.

Cash and Cash Equivalents

The Company  considers  all highly  liquid  debt  instruments  purchased  with a
remaining maturity of three months or less to be cash equivalents.

Marketable Securities

At March 31, 2002 all short-term  marketable  securities were due in one year or
less and consisted of the following (in thousands):

<TABLE>
<CAPTION>

                                   Gross                   Gross      Estimated
                        Cost   Unrealized Gains   Unrealized Losses   Fair Value
                       ------  ---------------    ----------------    ----------
<S>                    <C>     <C>                <C>                 <C>
Short-Term Investments
 Government agencies  $ 1,652       $  --                 $ (12)        $ 1,640
</TABLE>


At March 31, 2001 all short-term  marketable  securities were due in one year or
less and consisted of the following (in thousands):

<TABLE>
<CAPTION>

                                        Gross            Gross        Estimated
                           Cost   Unrealized Gains Unrealized Losses Fair Value
                          ------- ---------------- ----------------- -----------
<S>                       <C>     <C>              <C>               <C>
Short-Term Investments
 Commercial paper........$ 18,015       $ 47                $--        $ 18,062
 Government agencies.....  15,334        130                 --          15,464
                         --------       ----              -----       ----------
                         $ 33,349       $177                $--        $ 33,526
                          =======       ====              =====        ========
</TABLE>


The Company classifies these investments as available for sale. Unrealized gains
or losses are included in a separate component of stockholders' equity. Realized
gains and losses are  computed  based on the specific  determination  method and
were not material during any of the periods presented.

Restricted Cash and Deposits

Restricted cash and deposits represent  deposits held as collateral  relating to
operating leases and letters of credit.

<PAGE>

Concentration of Credit Risk

Financial  instruments  potentially  subjecting the Company to concentrations of
credit risk consist primarily of cash, cash equivalents,  short term investments
and accounts  receivable.  The Company  invests its excess cash in deposits with
major banks, in U.S. Treasury and U.S. agency obligations and in debt securities
of corporations  with strong credit ratings.  No losses have been experienced on
such investments.

Accounts receivable are unsecured, and the Company is at risk to the extent that
such amounts become uncollectible.  The Company closely monitors its outstanding
receivable  balances  on an  on-going  basis.  At March 31,  2001,  one  account
represented  21% of  gross  accounts  receivable,  although  less  than  30 days
outstanding.  At March 31, 2002, one account  represented  23% of gross accounts
receivable, although less than 30 days outstanding.

In fiscal 2000,  one customer  accounted  for 32% of total  revenues.  In fiscal
2001,  one customer  accounted for 10% of total  revenues.  In fiscal 2002,  our
largest  customer,  EDS,  accounted for 8.8% and another customer  accounted for
15.5% of our total revenues of $43.4 million, or 25.9% and 12.6%,  respectively,
when excluding the  forgiveness  of a $10 million  penalty  associated  with the
restructuring of an agreement with EDS.

Property and Equipment

Property and  equipment is stated at cost.  Depreciation  is computed  using the
straight-line  method  over  estimated  useful  lives of  three  to four  years.
Leasehold  improvements  are amortized using the  straight-line  method over the
shorter of the estimated useful lives or the remaining lease terms.

Long-Lived Assets

The Company reviews long-lived assets for impairment  whenever events or changes
in  circumstances  indicate  that the  carrying  amount of that asset may not be
recoverable.  An  impairment  loss  would  be  recognized  when  the  sum of the
undiscounted  future net cash flows expected to result from the use of the asset
and its eventual disposition is less than its carrying amount.

Goodwill

Goodwill is recorded when the  consideration  paid for acquisitions  exceeds the
estimated  fair  value  of  identifiable  net  tangible  and  intangible  assets
acquired.  Goodwill related to acquisitions  occurring prior to July 1, 2001 and
other acquisition-related  intangibles are amortized on a straight-line basis up
to four years. Goodwill and other  acquisition-related  intangibles are reviewed
for  recoverability  periodically or whenever events or changes in circumstances
indicate that the carrying amount may not be recoverable.

As  part  of our  ongoing  review  of the  Company's  operations  and  financial
performance,  we  performed  an  assessment  of the  carrying  value  of the our
long-lived  assets to be held for use  including  goodwill and other  intangible
assets recorded in connection with our various acquisitions.  The assessment was
performed  pursuant to SFAS 121,  Accounting  for the  Impairment  of Long-Lived
Assets and for  Long-Lived  Assets to Be  Disposed  Of. The  conclusion  of that
assessment was that the value of the technology  purchased  associated  with the
Arista acquisition was no longer being used in the current product offerings and
was not part of the product  roadmap for the  future.  As a result,  we recorded
charges  of $10.4  million to write off the  Arista  goodwill  during the fourth
quarter of fiscal 2002 as it no longer had any recoverable value.

Revenue Recognition

Delivered learning fees allow access to training systems,  courses hosted by the
Company,  tutor  support,  and  other  learning  materials  for a fixed  period,
typically six months.  Delivered  Learning fees are recognized ratably over this
access  period.   Revenues  for  Learning   Solution   services  (custom  course
development or consulting  services) are recognized as earned in accordance with
Statement   of   Position   (SOP)   81-1,    Accounting   for   Performance   of
Construction/Production-Type  Contracts,  as development progresses based on the
percentage of completion  method.  The  percentage of completion is based on the
ratio of actual custom  development  or service costs incurred to date, to total
estimated  costs to  complete  the  custom  course or  service.  Provisions  for
estimated losses on incomplete  contracts will be made on a contract by contract
basis and recognized in the period in which such losses become  probable and can
be  reasonably  estimated.  To date,  there  have  been no such  losses.  Custom
contracts  typically call for  non-refundable  payments due upon  achievement of
certain  milestones  in  production  of the courses or in  consulting  services.
Deferred revenues  represent  customer  prepayments for both Delivered  Learning
fees and Learning Solution services.

<PAGE>


Content research and development

Expenses charged to operations as incurred include course development  personnel
related costs. Course development expenses and subject matter expert payments to
course authors are expensed as incurred,  in accordance with SFAS No. 86, as the
recoverability of such costs against future revenues is uncertain.

Technology research and development

Expenses are charged to operations as incurred.  Such expenses  include Web site
development  costs.  Web site  development  costs which meet the  capitalization
criteria of SOP 98-1, Accounting for the Costs of Computer Software Developed or
Obtained for Internal Use are capitalized and amortized over the useful economic
life.

Income Taxes

The Company  accounts  for income taxes using an asset and  liability  approach.
Deferred tax  liabilities are recognized for future taxable amounts and deferred
tax  assets  are   recognized   for  future   deductions   and  operating   loss
carryforwards, net of a valuation allowance to reduce net deferred tax assets to
amounts that are more likely than not to be realized.

Stock-Based Awards

The Company accounts for stock-based  awards to employees under its stock option
plan and employee  stock  purchase plan as  noncompensatory  in accordance  with
Accounting  Principles  Board  Opinion No. 25,  Accounting  for Stock  Issued to
Employees.

Translation of Foreign Currency

The Company's  foreign  operations  are measured  using local  currencies as the
functional currency.  Assets and liabilities are translated into U.S. dollars at
year-end rates of exchange,  and results of operations are translated at average
rates for the year.

Loss per Common Share

Basic loss per common share  excludes  dilution and is computed by dividing loss
attributable  to common  stockholders  by the weighted  average number of common
shares outstanding during the period. Diluted loss per common share reflects the
potential  dilution that could occur if  securities or other  contracts to issue
common  stock were  exercised  or  converted  into common  stock.  Common  share
equivalents  are excluded from the  computation  in loss periods as their effect
would be anti-dilutive.

Pro Forma Net Loss per Common Share

Pro forma basic and diluted  loss per share is computed by dividing  net loss by
the  weighted  average  number  of shares  outstanding  for the  period  and the
weighted average number of common shares  resulting from the assumed  conversion
of outstanding shares of redeemable convertible preferred stock.
<PAGE>

Recently Issued Accounting Standards

In June 1998, the Financial  Accounting  Standards  Board (FASB) issued SFAS No.
133, Accounting for Derivative Instruments and Hedging Activities.  SFAS No. 133
establishes a new model for accounting for  derivatives  and hedging  activities
and supercedes and amends a number of existing  accounting  standards.  SFAS No.
133 requires  that all  derivatives  be recognized in the balance sheet at their
fair market  value and the  corresponding  derivative  gains or losses be either
reported in the statement of  operations or as a deferred item  depending on the
type of hedge relationship that exists with respect of such derivatives. In July
1999, the FASB issued SFAS No. 137,  Accounting for Derivative  Instruments  and
Hedging  Activities--Deferral  of the Effective  Date of FASB Statement No. 133.
SFAS No. 137 deferred the effective  date until years  beginning  after June 30,
2000.  In June 2000,  the FASB issued SFAS No. 138,  Accounting  for  Derivative
Instruments and Hedging Activities--An Amendment of FASB Statement No. 133. SFAS
No. 138 amends the  accounting and reporting  standards for certain  derivatives
and  hedging  activities  such as net  settlement  contracts,  foreign  currency
transactions and intercompany derivatives.  The Company has adopted SFAS No. 133
in its quarter  ending June 30,  2001.  To date,  the Company has not engaged in
derivative or hedging activities, and accordingly,  the adoption of SFAS No. 133
had no impact on the financial statements.

In June 2001,  the FASB  issued  SFAS No. 141,  Business  Combinations  and SFAS
No.142,  Goodwill and Other  Intangible  Assets.  SFAS No. 141 requires that all
business  combinations  initiated after June 30, 2001 be accounted for under the
purchase  method and  addresses  the  initial  recognition  and  measurement  of
goodwill and other intangible  assets acquired in a business  combination.  SFAS
No. 142 addresses the initial  recognition and measurement of intangible  assets
acquired  outside of a business  combination and the accounting for goodwill and
other intangible assets subsequent to their  acquisition.  SFAS No. 142 provides
that  intangible  assets with finite useful lives be amortized and that goodwill
and  intangible  assets with  indefinite  lives will not be amortized,  but will
rather be tested at least annually for  impairment.  The Company will adopt SFAS
No. 142 for its fiscal year  beginning  April 1, 2002.  During the first half of
fiscal year 2003, we will perform the first of the required  impairment tests of
goodwill  and  indefinite-lived  intangible  assets as of April 1, 2002.  We are
currently  assessing the impact,  if any, of SFAS 142 on our financial  position
and results of operations.

In August 2001, the FASB issued SFAS No. 143,  Accounting  for Asset  Retirement
Obligations.  SFAS No.  143  requires  businesses  to record the fair value of a
liability  for an  asset  retirement  obligation  in the  period  in which it is
incurred.  When the liability is initially  recorded,  the entity  capitalizes a
cost by increasing the carrying  amount of the related  long-lived  asset.  Over
time,  the  liability  is  accreted to its present  value each  period,  and the
capitalized cost is depreciated over the useful life of the related asset.  Upon
settlement of the  liability,  an entity either  settles the  obligation for its
recorded  amount or incurs a gain or loss upon  settlement.  We are  required to
adopt SFAS No. 143 for our fiscal year beginning April 1, 2003. We are currently
assessing  the impact,  if any, of SFAS No. 143 on our  financial  position  and
results of operations.

In October 2001, the FASB issued SFAS No. 144,  Accounting for the Impairment or
Disposal of Long-Lived Assets which supersedes SFAS No. 121,  Accounting for the
Impairment of Long-Lived  Assets and for Long-Lived Assets to Be Disposed Of and
APB No. 30,  Reporting  the  Results  of  Operations--Reporting  the  Effects of
Disposal of a Segment of a Business, and Extraordinary, Unusual and Infrequently
Occurring Events and Transactions.  SFAS No. 144 also amends Accounting Research
Bulletin No. 51,  Consolidated  Financial  Statements.  SFAS 144  requires  that
long-lived assets that are to be disposed of by sale be measured at the lower of
book value or fair value less cost to sell.  The  statement  also  significantly
changes  the   criteria   required  to  classify  an  asset  as   held-for-sale.
Additionally,  SFAS 144 expands the scope of discontinued  operations to include
all components of an entity with operations that (1) can be  distinguished  from
the rest of the entity and (2) will be eliminated from the ongoing operations of
the entity in a disposal transaction.  We are required to adopt SFAS 144 for our
fiscal year beginning April 1, 2002. We are currently  assessing the impact,  if
any, of SFAS 144 on our financial position and results of operations.

Comprehensive Income

The  Company  is  required  to  report  comprehensive  income  in the  financial
statements,  in  addition to net income.  The  primary  differences  between net
income and comprehensive income are foreign currency translation adjustments and
net unrealized gains or losses on securities available for sale.

Reclassification

Certain prior year amounts in the  consolidated  financial  statements and notes
thereto have been reclassified to conform to the current year presentation.
<PAGE>

2. Business Combinations

On July 6, 2000  DigitalThink,  Inc.  acquired Arista  Knowledge  Systems,  Inc.
("Arista"),  a company providing  Internet-based  learning  management  systems.
DigitalThink issued approximately 746,000 shares of DigitalThink common stock in
exchange for outstanding  stock,  options and warrants of Arista. The total cost
of  the  acquisition,  including  transaction  costs,  was  approximately  $26.3
million.  The acquisition was accounted for as a purchase business  combination;
accordingly  the results of  operations  of Arista have been  included  with the
Company's  results of operations since July 6, 2000. The purchase price paid for
the Arista  acquisition  was allocated based on the estimated fair values of the
net assets acquired as follows (in thousands):
<TABLE>
<S>                                                                <C>
In-process research and development..........................     $  7,118
Acquired  technology,   workforce  intangible and goodwill...       19,212
Intrinsic  value of unvested  Arista  options assumed........        1,552
Tangible assets acquired.....................................        1,718
Liabilities assumed..........................................       (3,269)
                                                                  --------
Net assets acquired..........................................     $ 26,331
                                                                  ========
</TABLE>



The consideration given in the acquisition of Arista was as follows:
<TABLE>
<S>                                                               <C>
DigitalThink common stock........................                 $ 20,523
Stock options assumed............................                    3,976
Net cash paid....................................                    1,732
Transaction costs................................                      100
                                                                  --------
Total purchase price.............................                 $ 26,331
                                                                  ========
</TABLE>


Of the purchase price, $7.1 million represents purchased  in-process  technology
that had not yet reached technological feasibility and had no alternative future
use.  Accordingly,  this amount was  immediately  expensed  in the  consolidated
statement of operations upon consummation of the acquisition. The value assigned
to  purchased  in-process  technology  was based on a  valuation  prepared by an
independent third-party appraiser.  Intangible assets acquired will be amortized
on a straight-line basis over a period of four years.

The following  unaudited  pro forma  results of  operations  for the years ended
March 31, 2000 and 2001 give effect to the  acquisition as if it had occurred at
the beginning of fiscal 2000.  The pro forma  results of operations  exclude the
$7.1 million of nonrecurring  charges that were recorded in conjunction with the
acquisition (in thousands, except per share amounts):
<TABLE>
<CAPTION>

                                                  Years Ended March 31,
                                                 -----------------------
                                                    2000         2001
                                                 ----------   ----------
<S>                                              <C>           <C>
 Net revenues................................    $ 10,832     $ 38,658
 Loss from operations........................    $ 26,189     $ 62,061
 Net loss....................................    $(25,406)    $(58,353)
 Basic and diluted loss per share attributable
  to common shareholders                         $  (4.61)    $  (1.69)
</TABLE>

<PAGE>

Effective August 28, 2001, the Company acquired LearningByte International, Inc.
("LBI"),   a  provider  of  custom  e-learning   courseware,   in  exchange  for
approximately  4.7  million  shares of  DigitalThink  common  stock and  assumed
approximately  500,000  warrants  outstanding,  for a total  purchase  price  of
approximately  $68  million,   including   transaction   costs,  as  follow  (in
thousands):
<TABLE>
<S>                                                    <C>

 DigitalThink common stock......................     $  63,656
 Warrants assumed at fair value.................         3,530
 Transaction costs .............................           800
                                                     ---------
 Total purchase price                                $  67,986
                                                     =========
</TABLE>

The acquisition of LBI was accounted for by the purchase  method.  LBI's results
of operations  have been included in the Company's  results of operations  since
the  effective  date of the  acquisition.  The assets  acquired and  liabilities
assumed were  recorded at estimated  fair values as  determined by the Company's
management based on information  currently  available and on current assumptions
as to future  operations.  The Company obtained an independent  appraisal of the
fair value of the acquired tangible and identified  intangible assets, and their
remaining  useful  lives.  The  allocation  of the  purchase  price  is based on
preliminary  estimates  that are not expected to change  materially.  Intangible
assets  acquired  will be  amortized  on a  straight-line  basis over a weighted
average period of 4.6 years.  Goodwill will not be amortized in accordance  with
SFAS 141.  A summary  of the  assets  acquired  and  liabilities  assumed in the
acquisition follows (in thousands):
<TABLE>
<S>                                                        <C>

 Acquired technology and customer list................. $  6,800
 Goodwill..............................................   70,040
 Net fair value of tangible assets acquired and
   liabilities assumed.................................   (8,854)
                                                         --------

 Net assets acquired................................... $ 67,986
                                                         =======

</TABLE>

The following  table  reflects the results of operations on a pro forma basis as
if the  acquisition  had been  completed on April 1, 2001 and 2000, and does not
consider  the  effects of  synergies  and cost  reduction  initiatives  directly
related to all acquisitions.  Therefore,  the pro forma financial information is
as follows (in thousands, except per share amounts):
<TABLE>
<CAPTION>

                                                    Years Ended March 31,
                                                   -----------------------
                                                     2002           2001
                                                   -----------------------
<S>                                                  <C>           <C>
 Net revenues                                      $ 46,387       $ 32,216
 Loss from operations                              $(70,513)      $(58,781)
 Net loss                                          $(70,162)      $(54,476)
 Basic and diluted loss per share                  $  (1.75)      $  (1.39)
</TABLE>

In connection with the LBI  acquisition,  the Company  recorded a charge of $5.8
million  comprised of  approximately  $5.3 million for the write-off of internal
use  software  made  obsolete  by the  acquisition  of LBI and $0.5  million for
severance-related costs.
<PAGE>

Effective  November 16, 2001, the Company  acquired TCT Technical  Training Pvt.
Ltd.  ("TCT"),  of Kolkata,  India,  a content  developer of custom  courseware.
DigitalThink  acquired all the  outstanding  shares of TCT for $500,000 after we
received governmental approval in November 2001. TCT has been acting exclusively
as a contractor to the Company since April 2001,  when the transaction was first
announced.  Upon  acquisition,  $215,000  was  recorded as an  intangible  to be
amortized  over one year and $285,000 was the net fair value of tangible  assets
acquired and  liabilities  assumed.  The acquisition of TCT was accounted for by
the purchase  method.  TCT's  results of  operations  have been  included in the
Company's results of operations since the effective date of the acquisition. Pro
forma financial  information in connection with the TCT acquisition has not been
provided,  as results would not have differed  materially  from actual  reported
results.

3. Restructuring Charge (in thousands)
<TABLE>
<CAPTION>

                                                                    Remaining
                                                     Charged to     Liability
                   Fiscal 2002    Cash     Non-Cash    Other      Balances as of
                     Expense    Payments    Charges   Accounts    March 31, 2002
                     -------     --------   -------   ---------   --------------
<S>                    <C>          <C>        <C>        <C>            <C>

  Severance......... $  650      $(440)    $    --     $  --        $   210
  Facilities and
     equipment....... 2,365         --      (2,333)       --             32
  Lease commitments.. 6,763         --          --       864          7,627
                      -----      ------    --------    ------       -------
Total                $9,778      $(440)    $(2,333)    $ 864        $ 7,869
                     ======      ======    ========    ======       =======
</TABLE>

In March 2002 we initiated a strategic  initiative,  under which we restructured
our business in response to the current  market  environment  and as part of our
continuing  program to create  efficiencies  within our operations.  We recorded
total restructuring charges of $9.8 million as part of our strategic initiative,
which included the following:

- Reducing our  workforce  by  approximately  80  employees,  mainly  within the
learning services  organization,  resulting in a $700 thousand severance charge.
Approximately  $400  thousand  was paid in March 2002,  and  approximately  $300
thousand will be paid in the first and second quarters of fiscal 2003.

- Consolidating our sales, administrative and content and technology development
facilities  through  building and site closures,  from a total of  approximately
244,000  square feet into  approximately  100,000  square feet.  As of March 31,
2002, seven sites have been vacated: San Diego, California;  Chislom, Minnesota;
Detroit,  Michigan;  Alameda,  California;  two  facilities  in  San  Francisco,
California and our office in the United Kingdom. Property and equipment that was
disposed or removed  from  operations  resulted in a charge of $2.3  million and
consisted primarily of leasehold improvements,  computer equipment and furniture
and fixtures.  In addition, we incurred a charge of $6.8 million associated with
leases related to excess or closed  facilities,  which  represents the excess of
the remaining lease  obligations over estimated market value, net of anticipated
sublease income.  Amounts accrued (net of anticipated sublease proceeds) related
to the  consolidation of facilities will be paid over the respective lease terms
through 2016.

The Company has been recording  deferred rent for those leased  facilities  that
met the criteria in accordance  with SFAS No. 13,  Accounting  for Leases.  Nine
leased facilities were included in the restructuring  costs and for two of those
facilities;  the  Company  had  recorded  deferred  rent of  approximately  $864
thousand.  This  amount of deferred  rent was a  liability  as of March 2002 and
noted as part of the restructuring liability.
<PAGE>

4. Property and Equipment

    Property and equipment consist of the following (in thousands):

<TABLE>
<CAPTION>
                                                         March 31,
                                                     ------------------
                                                      2001       2002
                                                     --------   -------
<S>                                                  <C>         <C>


   Furniture and fixtures.....................     $     671  $     737
   Computer hardware and software.............        11,587     18,812
   Leasehold improvements.....................         2,473      8,337
   Assets in progress.........................         4,879         --
   Accumulated depreciation...................        (4,549)    (9,561)
                                                   ---------  ---------
   Property and equipment, net................     $  15,061  $  18,325
                                                   =========  =========
</TABLE>

5. Accrued Liabilities (in thousands):
<TABLE>
<CAPTION>


                                                           March 31,
                                                     --------------------
                                                        2001     2002
                                                     --------   ---------
<S>                                                  <C>        <C>

   Payroll and related expenses.................      $ 2,865  $  1,464
   Deferred rent................................          531       103
   Restructuring charge.........................           --     7,869
   Other........................................        3,128     3,802
                                                      -------  --------
   Total accrued liabilities....................      $ 6,524  $ 13,238
                                                      =======  ========

</TABLE>
<PAGE>


6. Income Taxes:

No income  taxes  were  provided  for any of the  periods  presented  due to the
Company's  net losses.  Deferred tax assets  (liabilities)  are comprised of the
following (in thousands):
<TABLE>
<CAPTION>

                                                             March 31,
                                                        ---------------------
                                                         2001        2002
                                                        --------   ----------
<S>                                                      <C>       <C>

   Deferred tax assets:
   Accruals and reserves..........................    $      617  $      539
   Net operating losses and tax credits carried
     forward......................................        19,189      31,755
   Basis difference in fixed assets...............           400         392
                                                       ----------  ----------
   Total gross deferred tax asset before valuation
     allowance....................................        20,206      32,686
   Valuation allowance............................       (20,206)    (32,686)
                                                       ----------  ----------
   Net deferred tax asset.........................    $       --  $       --
                                                       ==========  ==========
</TABLE>


At March 31, 2002, the Company had available  federal and  California  state net
operating loss  carryforwards of approximately  $77.0 million and $74.6 million,
respectively,  to  offset  future  taxable  income.  These  net  operating  loss
carryforwards  begin to expire in 2012 and 2005 for federal and state  purposes,
respectively.  The  Company  has  federal  and  California  state  research  and
development  credit  carryforwards  of $326,000 and $271,000  respectively.  The
Company  also has  California  state  enterprise  zone credit  carryforwards  of
$613,000.  At March 31, 2002, the Company's wholly owned foreign subsidiaries in
the United  Kingdom and India had foreign net operation  loss  carryforwards  of
approximately $3.0 million to offset future foreign taxable income. At March 31,
2001 and 2002,  the net deferred tax assets have been fully  reserved due to the
uncertainty surrounding the realization of such benefits.

Internal  Revenue  Code  Section  382  places a  limitation  (the  "Section  382
Limitation")  on the  amount  of  taxable  income  which  can be  offset  by net
operating  loss  ("NOL")  carryforwards  after a change  in  control  (generally
greater than 50% change in  ownership)  of a loss  corporation.  California  has
similar rules.  Generally,  after a control change,  a loss  corporation  cannot
deduct NOL  carryforwards in excess of the Section 382 Limitation.  Due to these
"change in ownership"  provisions,  utilization of the NOL  carryforwards may be
subject to an annual  limitation  regarding  their  utilization  against taxable
income in future periods.

7. Redeemable Convertible Preferred Stock

In July 1996, the Company issued  2,910,000  shares of Series A preferred  stock
for cash at $0.50  per  share.  In  December  1996,  274,000  shares of Series A
preferred stock were issued upon conversion of $137,000 of convertible notes. In
June 1997, the Company issued  7,726,668  shares of Series B preferred stock for
$0.75 per share.  In December 1998 and March 1999, the Company issued  7,824,305
shares of Series C preferred  stock for $1.50 per share.  In November  1999, the
Company issued 3,999,617 shares of Series D preferred stock for $6.50 per share.

Beginning in 2001, the shares of each series of preferred  stock were redeemable
at the option of the holders of a majority of the outstanding  preferred  shares
of that series,  provided that the Company had not  completed a public  offering
meeting certain  criteria.  The redemption price of Series A preferred stock was
$0.50 per share plus a 25% compound annual rate of return from July 19, 1996 (as
adjusted for any stock dividends, combinations, or splits). The redemption price
of Series B preferred  stock was $0.75 per share plus a 25% compound annual rate
of return from June 1, 1997.  The redemption  price of Series C preferred  stock
was $1.50 per share plus a 25%  compound  annual rate of return from October 30,
1998. The redemption  price of Series D preferred stock was $6.50 per share plus
a 25% compound annual rate of return from November 1, 1999. The redemption value
was accreted over the  redemption  period.  Accretion for Series A was $278,000,
$468,000,   $584,000,  and  $658,000  in  fiscal  1997,  1998,  1999  and  2000,
respectively.  Accretion for Series B was $1,202,000,  $1,719,000 and $1,934,000
in  fiscal  1998,  1999  and  2000  respectively.  Accretion  for  Series  C was
$1,214,000  and $2,900,000 in fiscal 1999 and 2000  respectively.  Accretion for
Series D was $2,101,000 in fiscal 2000.

Upon the closing of the Company' initial public offering on March 1, 2000 all of
the outstanding shares of Series A, B, C and D redeemable  convertible preferred
stock were  automatically  converted into shares of common stock on a one-to-one
basis.
<PAGE>

8. Stockholders' Equity (Deficit)

   Initial Public Offering

On February 25,  2000,  the Company  completed  its initial  public  offering of
5,060,000 shares, resulting in net proceeds of $64.7 million to the Company.

   Private Placement

In February  2000,  concurrent  with its initial  public  offering,  the Company
completed a private  placement  of  1,075,269  shares,  resulting in proceeds of
$14.0 million to the Company.

   Stock Option Plan

The Company's stock option plans provide for grants of incentive or nonstatutory
stock options to officers,  employees,  directors and consultants.  Options vest
over four years and expire  over  terms up to ten  years.  One of the  Company's
stock  option  plans  provides  for  annual  increases  in the  number of shares
available  for  issuance  equal to the  lesser  of 2 million  shares,  5% of the
outstanding shares on the date of the annual increase, or a lesser amount as may
be determined by the board of directors.

The Company had 2,472,986 shares available for future grant at March 31, 2002.

A summary of the activity under the Company's stock option plans is as follows:
<TABLE>
<CAPTION>


                                                                        Weighted
                                                                        Average
                                                           Number       Exercise
                                                          of Shares       Price
                                                         -----------    --------
<S>                                                      <C>            <C>

 Balances, March 31, 1999 (397,626 exercisable at a
   weighted average exercise price of $0.074 per share).  2,185,049     $  0.23
 Granted (weighted average fair value of $3.69).........  3,709,550        4.18
 Canceled...............................................   (307,874)       0.68
 Exercised..............................................   (707,461)       0.71
                                                         -----------     -------
 Balances, March 31, 2000 (487,576 exercisable at a
   weighted average exercise price of $4.18 per share)..  4,879,264        3.13
 Granted (weighted average fair value of $14.47)........  4,627,554       17.12
 Options assumed in acquisition.........................    159,704       17.44
 Canceled............................................... (1,012,929)      15.77
 Exercised..............................................   (524,698)       0.90
                                                        ------------     -------
 Balances, March 31, 2001 (1,407,436 exercisable at a
weighted average exercise price of $3.14 per share) ....  8,128,895        9.89
 Granted (weighted average fair value of $7.99).........  1,629,519        9.63
 Canceled............................................... (2,277,736)      14.44
 Exercised..............................................   (505,066)       1.96
                                                        ------------     -------
 Balances, March 31, 2002...............................  6,975,612     $  8.89
                                                          =========      =======
</TABLE>


The  following  table  summarizes  information  as of March 31, 2002  concerning
options outstanding:
<TABLE>
<CAPTION>
                        Options Outstanding                      Vested Options
           ----------------------------------------------     ------------------
                               Weighted Average   Weighted              Weighted
     Range of                     Remaining        Average               Average
     Exercise         Number   Contractual Life   Exercise    Number    Exercise
     Prices        Outstanding     (Years)         Price      Vested     Price
    ---------      ------------   ----------     ----------   --------   -------
<S>                <C>            <C>            <C>          <C>        <C>
  $  0.05 - $0.25      704,440       6.09        $   0.14     631,287     $ 0.12
     0.50 -  1.50    1,350,117       7.47            1.37     774,806       1.38
     4.43 -  7.75    1,292,504       8.96            7.63     316,791       7.66
     7.82 - 11.00    2,618,386       8.70            9.51     771,526       9.78
    11.19 - 34.25      684,552       8.73           17.48     210,899      20.97
    34.63 - 56.00      325,613       8.37           41.00     144,288      41.08
                       -------       ----        --------     -------    -------
          Total      6,975,612       8.23         $  8.89   2,849,597     $ 7.53
                     =========       ====        ========   =========    =======
</TABLE>

<PAGE>

Additional Stock Plan Information

As discussed in Note 1, the Company  accounts for its  stock-based  awards using
the  intrinsic  value method in  accordance  with  Accounting  Principles  Board
Opinion  No. 25,  Accounting  for Stock  Issued to  Employees,  and its  related
interpretations.

Statement of Financial  Accounting Standards No. 123, Accounting for Stock-Based
Compensation (SFAS 123),  requires the disclosure of pro forma net income (loss)
had the Company adopted the fair value method. Under SFAS 123, the fair value of
stock-based  awards to employees is calculated through the use of option pricing
models,  even though such models were  developed  to estimate  the fair value of
freely tradable, fully transferable options without vesting restrictions,  which
significantly  differ from the Company's stock option awards.  These models also
require  subjective  assumptions,  including  expected  time to exercise,  which
greatly  affect the  calculated  values.  Until the date of the  initial  public
offering the  Company's  calculations  were made using the minimum value pricing
method.  The following  weighted average  assumptions  were used:  expected life
after vesting, 0.5 years in fiscal 2000, 3 years in fiscal 2001 and 2.5 years in
fiscal 2002;  average  risk-free  interest  rate,  6.0% in fiscal 2000,  5.3% in
fiscal  2001  and  4.5% in  fiscal  2002.  The  Company's  calculations  include
volatility of 100% in the period following the public offering through March 31,
2000,  115% in fiscal 2001 and 120% in fiscal 2002 and no  dividends  during the
expected  term.  The  Company's  calculations  are  based on a  multiple  option
valuation approach, and forfeitures are recognized as they occur.

If the computed values of the Company's stock-based awards to employees had been
amortized  to expense over the vesting  period of the awards as specified  under
SFAS No.  123,  net loss and basic and diluted net loss per share on a pro forma
basis (as compared to such items as reported) would have been:
<TABLE>
<CAPTION>

                                                     Years Ended March 31,
                                             ---------------------------------
                                               2000          2001        2002
                                             ----------   ----------- --------
<S>                                          <C>          <C>         <C>

  Net loss (in thousands):
   As reported.........................    $ (20,161)   $  (52,225) $  (61,641)
   Pro forma...........................    $ (20,560)   $  (68,141) $  (76,935)
  Basic and diluted net loss per share:
   As reported.........................    $   (3.87)   $    (1.51) $    (1.61)
   Pro forma...........................    $   (3.93)   $    (1.97) $    (2.02)
</TABLE>


Stock-Based Compensation

During  fiscal 2000,  the Company  issued  3,709,550  common stock  options at a
weighted  average  price of $4.18 per  share,  which  was less  than the  deemed
weighted  average  fair  value of $7.22  per  share.  Accordingly,  the  Company
recorded $11,284,000 as the value of such options.  Stock-based  compensation of
$3,663,000 was amortized to expense in the year ended March 31, 2000.

During fiscal 2001, the Company assumed 159,704 unvested common stock options at
a weighted average price of $17.44 per share, which was less than the fair value
of $35 per share,  related to the Arista acquisition.  Accordingly,  the Company
recorded $1.6 million as the value of such options.  Stock-based compensation of
$5.4  million  was  amortized  to expense in the year ended March 31,  2001.  In
addition,   the  Company   recorded  a  $974,000   decrease  in  deferred  stock
compensation in fiscal 2001 due to unvested options of terminated employees.

At March 31,  2002,  the Company had  $631,000  in deferred  stock  compensation
related to options, which will be amortized to expense through fiscal 2004.
<PAGE>

9. Net Loss Per Share

For fiscal 2000,  2001 and 2002,  the Company had stock options  outstanding  of
4,879,264,  8,128,895,  and  6,975,612,  respectively,  which could  potentially
dilute  basic  earnings  per  share  in the  future,  but were  excluded  in the
computation  of diluted  net loss per share in the periods  presented,  as their
effect would have been antidilutive.

10. Related Party Transactions:

During fiscal 2000, the Company  generated  revenues of approximately  $549,000,
$526,000,  $230,000, $158,000, $143,000, and $113,000 from six customers who are
investors in the Company.  Additionally,  the Company generated revenues of $3.5
million  from  one  customer  of  which  one of the  Company's  directors  is an
executive officer.

During  fiscal  2001,  the  Company  generated  revenues of  approximately  $4.0
million, $3.0 million, $831,000, $827,000, and $199,000 from 5 customers who are
investors in the Company.  Additionally,  the Company generated revenues of $2.5
million from one customer of which one of the Company's directors is a director.
Receivables at fiscal year-end relating to these six customers totaled $752,000.

During  fiscal  2002,  the  Company  generated  revenues of  approximately  $4.0
million, $1.5 million,  $335,000, and $10,000 from 4 customers who are investors
in the Company.  Additionally,  the Company  generated  revenues of $3.9 million
from one  customer  of which  one of the  Company's  directors  is an  executive
officer.  Receivables at fiscal year-end relating to these six customers totaled
$486,000.

11. Employee Benefit Plans

401(k) Plan

The Company has a 401(k)  retirement  plan (the Plan) that covers  substantially
all employees of the Company.  The Plan provides for voluntary  salary reduction
contributions of up to 20% of eligible  participants' annual  compensation.  The
Company  has  not  provided  matching  contributions  for  any  of  the  periods
presented.

Employee Stock Purchase Plan

The Company has a Qualified  Employee  Stock  Purchase  Plan (ESPP)  under which
200,000 shares of common stock were originally  reserved for issuance.  The ESPP
allows for annual increases equal to the lesser of 1% of the outstanding  shares
of common stock on the first day of the fiscal  year,  400,000  shares,  or such
lesser  amount as may be  determined  by the  board.  Under  the ESPP,  eligible
employees  may purchase  shares of the Company's  common stock  through  payroll
deductions of up to 10% of the participant's compensation.

Under this plan,  eligible employees may purchase shares of the Company's common
stock at 85% of fair market value at specific,  predetermined  dates.  In fiscal
2001, approximately 100,000 shares were purchased at an average price of $11.87.
In fiscal 2002,  approximately 228,000 shares were purchased at an average price
of $7.18.  At March 31, 2002,  approximately  227,000  shares were available for
purchase under the ESPP.
<PAGE>

12. Lease Commitments

The Company leases its principal office facilities under operating leases. As of
March 31, 2002, future minimum payments under facilities operating leases are as
follows (in thousands):
<TABLE>
<CAPTION>
Fiscal Year Ending March 31,
----------------------------
<S>                         <C>
2003...................     $   7,196
2004...................         6,677
2005...................         6,554
2006...................         6,710
2007...................         6,722
Thereafter.............        27,585
                            ---------
Total...................    $  61,444
                            =========
</TABLE>

Rent expense under operating leases was $978,  $2,730,  and $4,366 for the years
ended March 31, 2000, 2001 and 2002, respectively.

13. Strategic Alliance with Electronic Data Systems Corporation

On July 11, 2000 the Company  entered  into an  agreement  with EDS  pursuant to
which EDS was issued two  separate  performance  warrants to purchase  shares of
DigitalThink common stock. Under the terms of the first warrant,  EDS could earn
warrants  to  purchase  up  to  862,955  shares  of  DigitalThink  common  stock
exercisable  at $29 per  share.  The  warrant  could have been  earned  when EDS
delivered  third-party  customers from the United States prior to July 31, 2003,
which  generated a total of $50 million of  contractually  committed  revenue to
DigitalThink  recognizable  by July 31, 2005. The warrants  expired  October 31,
2003. This warrant contained a significant disincentive for non-performance.  If
EDS failed to deliver the full $50 million of contracted,  United States revenue
by July 31, 2003, EDS agreed to pay DigitalThink $5 million.

Under the terms of the second warrant, EDS could earn warrants for up to 690,364
shares of DigitalThink  common stock  exercisable at $29 per share.  The warrant
could have been earned when EDS delivered third-party customers from outside the
United States prior to July 31, 2003,  which generated a total of $50 million of
contractually  committed revenue to DigitalThink  recognizable by July 31, 2005.
The warrants  expired  October 31, 2003.  This warrant  contained a  significant
disincentive for non-performance.  If EDS failed to deliver the full $50 million
of  contracted,  non-United  States  revenue by July 31, 2003, EDS agreed to pay
DigitalThink $5 million.

The Company  calculated a fixed non-cash  charge of $38 million  related to this
transaction,  based on the fair value of the warrants  issued.  A portion of the
warrant vested at the date of the transaction  resulting in an immediate  charge
of $4.9 million.  Amortization of the remaining warrant expense would occur over
three years from July 2000 through  July 2003,  in  proportion  to the amount of
revenue generated under the agreement, or on a straight-line basis, whichever is
faster.  Through March 31, 2002,  amortization  was recorded on a  straight-line
basis totaling $24.1 million.

On March 27, 2002,  DigitalThink  restructured  the agreement  entered into with
EDS,  whereby EDS has surrendered  its vested and unvested  warrants to purchase
shares of  DigitalThink  common  stock and  DigitalThink  has  forgiven  the $10
million total non-performance penalty associated with these warrants. Therefore,
a charge of approximately $10 million was recorded as a reduction of revenue and
a credit of approximately $10 million was recorded as other income.
<PAGE>

14. Revision of SFAS No. 123 Pro Forma Information

Subsequent to the issuance of the Company's fiscal 2002  consolidated  financial
statements, the Company's management determined that the pro forma total and per
share net loss (which  assume the use of SFAS 123 for the  purposes of recording
compensation   for   stock-based   awards  to  employees)  had  been  improperly
calculated.  As a result,  the pro forma  total and per share net loss have been
revised in Note 8 from the amounts previously reported.

A summary of the effects of this revision are as follows:

<TABLE>
<CAPTION>

                                  Years Ended March 31,
              2000        2000         2001        2001     2002          2002
               As                       As                   As
           Previously      As        Previously     As    Previously       As
            Reported     Revised     Reported    Revised   Reported     Revised
           ------------  --------   -----------  --------  --------    ---------
<S>        <C>           <C>        <C>          <C>       <C>         <C>

Net
loss        $(20,161)   $(20,161)  $(52,225)    $(52,225) $(61,641)    $(61,641)

Pro forma
net loss    $(20,407)   $(20,560)  $(53,411)    $(68,141) $(62,222)    $(76,935)

Pro forma
basic and
diluted loss
per
share       $  (3.91)   $  (3.93)  $  (1.55)    $  (1.98) $  (1.63)    $  (2.02)

</TABLE>

In addition,  the  assumption  disclosed  in Note 8 for the expected  life after
vesting for fiscal 2000 was corrected to be 0.5 years,  rather than 2.5 years as
previously stated.


                                    * * * * *
<PAGE>

                                     PART IV

Item 14. Exhibits, Financial Statement Schedule, and Reports on Form 8-K

(a)1. Consolidated Financial Statements

The following Consolidated Financial Statements of DigitalThink, Inc. and Report
of Deloitte & Touche LLP, have been filed as part of this Form 10-K/A. See Index
to Consolidated Financial Statements under Item 8, above:

                   Index to Consolidated Financial Statements

    Independent Auditors' Report
    Consolidated Balance Sheets as of March 31, 2001 and 2002
    Consolidated Statements of Operations for the years ended March 31, 2000,
      2001 and 2002
    Consolidated Statement of Stockholders' Equity (Deficit) for the years
      ended March 31, 2000, 2001 and 2002 Consolidated Statements of
    Cash Flows for the years ended March 31, 2000, 2001 and 2002
    Notes to Consolidated Financial Statements

(a)2. Financial Statement Schedule

The following financial statement schedule of DigitalThink,  Inc. for the fiscal
years ended March 31, 2000,  2001,  and 2002 is filed as part of this Report and
should be read in  conjunction  with the  Consolidated  Financial  Statements of
DigitalThink, Inc.

                 Schedule II - Valuation and Qualifying Accounts

Schedules not listed above have been omitted  because they are not applicable or
are not required or the information required to be set forth therein is included
in the Consolidated Financial Statements or Note thereto.

(a)3. Exhibits

    Refer to (C) below.

(b) Reports on Form 8-K

The  Company  filed an 8-K on August 22,  2001,  amended on  October  26,  2001,
describing the LearningByte acquisition.

The Company  filed an 8-K on April 5, 2002,  press  release  dated April 2, 2002
announcing  DigitalThink's  Preliminary  Results  for  Fourth  Quarter;  Revises
Outlook  and  a  press  release  dated  April  2,  2002   announcing   Executive
Appointments naming Jon Madonna as Chairman and Michael Pope, President and CEO.
<PAGE>

(c) Exhibits
<TABLE>
<CAPTION>
Exhibit
 Number     Description of Document
---------   --------------------------------------
<S>         <C>
   ^2.1     Agreement and Plan of Reorganization among and between DigitalThink,
            LearningByte International and Merger Sub, dated August 14, 2001
  **3.1     Amended and Restated Certificate of Incorporation
   #3.2     Bylaws of DigitalThink, Inc.
   *5.1     Opinion of Wilson Sonsini Goodrich & Rosati, Professional
            Corporation
**10.15     Restated 1996 ISO Stock Plan
**10.16     Change of Control Severance Agreement between DigitalThink and Jon
            C. Madonna dated September 14, 2001
**10.17     Change of Control Severance Agreement between DigitalThink and
            Michael W. Pope dated September 14, 2001
**10.18     Standard Industrial/Commercial Single Tenant Lease dated July 17,
            2000 between Thomas A. Price and Gwendolyn L.Price, as trustees of
            the Price Trust UTD October 5, 1984 and DigitalThink, for office
            space located at 601 Brannan Street, San Francisco, California, and
            addenda and inserts thereto
 **21.1     DigitalThink subsidiaries
 **23.1     Independent Auditors' Consent and Report on Schedule
   23.2     Independent Auditors' Consent and Report on Schedule
 **24.1     Power of Attorney (included in Form 10K filed on June 4, 2002 on
            page 58)

</TABLE>
----------

^ Incorporated by reference to exhibit 99.1 filed with our Report on Form 8-K
   (File No. 000-28687).

# Incorporated by reference to exhibit 4.2(b) filed with our Registration
    Statement on Form S-1 (File No. 333-92429), as amended.

* Incorporated by reference to the same number exhibit filed with our
Registration Statement on Form S-1 (File No. 333-92429), as amended.

**  Incorporated by reference to the same number exhibit filed with our Form 10K
on June 4, 2002 (File No. 000-28687).


<PAGE>

                                   SIGNATURES

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

                          DIGITALTHINK, INC.
                             (Registrant)
August 28, 2002

                     By: /s/ MICHAEL W. POPE
                         -------------------------------------
                         Michael W. Pope
                         President and Chief Executive Officer

August 28, 2002

                     By: /s/ ROBERT J. KROLIK
                         ----------------------------------------
                         Robert J. Krolik
                         Chief Financial Officer

<PAGE>


                                        Schedule II


                       DigitalThink, Inc. and Subsidiaries
                        Valuation and Qualifying Accounts
                 For the Years Ended March 31, 2000, 2001, 2002
<TABLE>
<CAPTION>

                               Balance at Charges to         Charged  Balance at
                               Beginning  Costs and          To Other   End of
                               of Period  Expenses Deductions Accounts (1)Period
                               ---------- -------- ---------- -------- --------
<S>                              <C>         <C>      <C>        <C>      <C>

Year ended March 31, 2000:
Allowance for doubtful accounts $ 75,000 $170,000  $ (40,000) $   --   $205,000
Year ended March 31, 2001:
Allowance for doubtful accounts $205,000 $170,000  $(128,000) $   --   $247,000
Year ended March 31, 2002:
Allowance for doubtful accounts $247,000  $96,000  $(342,000) $483,000 $484,000
</TABLE>

(1) Recorded on the books of acquired company

<PAGE>



                                  EXHIBIT LIST


Exhibit
Number     Description of Document
   ^2.1    Agreement and Plan of Reorganization among and between DigitalThink,
           LearningByte International and Merger Sub, dated August 14, 2001
  **3.1    Amended and Restated Certificate of Incorporation
   #3.2    Bylaws of DigitalThink, Inc.
   *5.1    Opinion of Wilson Sonsini Goodrich & Rosati, Professional Corporation
**10.15    Restated 1996 ISO Stock Plan
**10.16    Change of Control Severance Agreement between DigitalThink and Jon C.
           Madonna dated September 14, 2001
**10.17    Change of Control Severance Agreement between DigitalThink and
           Michael W. Pope dated September 14, 2001
**10.18    Standard Industrial/Commercial Single Tenant Lease dated July 17,
           2000 between Thomas A. Price and Gwendolyn L. Price, as trustees of
           the Price Trust UTD October 5, 1984 and DigitalThink, for office
           space located at 601 Brannan Street, San Francisco, California, and
           addenda and inserts thereto
 **21.1    DigitalThink subsidiaries
 **23.1    Independent Auditors' Consent and Report on Schedule
   23.2    Independent Auditors' Consent and Report on Schedule
 **24.1    Power of Attorney (included in Form 10K filed on June 4, 2002 on
           page 58)
__________

^  Incorporated  by  reference to exhibit 99.1 filed with our Report on Form 8-K
(File No. 000-28687).

#  Incorporated  by  reference  to exhibit  4.2(b)  filed with our  Registration
Statement on Form S-1 (File No. 333-92429), as amended.

*  Incorporated  by  reference  to  the  same  number  exhibit  filed  with  our
Registration Statement on Form S-1 (File No. 333-92429), as amended.

**  Incorporated by reference to the same number exhibit filed with our Form 10K
on June 4, 2002 (File No. 000-28687).


<PAGE>