SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

              [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
                  For the quarterly period ended June 30, 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: 1-6081

                              COMFORCE Corporation
             (Exact name of registrant as specified in its charter)

             Delaware                                  36-2262248
--------------------------------            ---------------------------------
(State or other jurisdiction of             (IRS Employer Identification No.)
 incorporation or organization)

        415 Crossways Park Drive, P.O. Box 9006, Woodbury, New York 11797
--------------------------------------------------------------------------------
(Address of principal executive offices)                          (Zip Code)

Registrant's telephone number, including area code:       (516) 437-3300
                                                   -----------------------------

Not                                                                   Applicable
--------------------------------------------------------------------------------
Former name, former address and former fiscal year, if changed since last report

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

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock, as of the latest practicable date.

             Class                             Outstanding at August 8, 2002
----------------------------------             -----------------------------
   Common stock, $.01 par value                     16,659,330 shares


<PAGE>

                              COMFORCE Corporation

                                      INDEX

                                                                           Page
                                                                          Number

PART I   FINANCIAL INFORMATION.................................................3

Item 1.  Financial Statements..................................................3

         Consolidated Balance Sheets at June 30, 2002 (unaudited)
             and December 30, 2001.............................................3

         Consolidated Statements of Operations for the three
             and six months ended June 30, 2002 and July 1, 2001 (unaudited)...4

         Consolidated Statements of Cash Flows for the six months
             ended June 30, 2002 and July 1, 2001 (unaudited)..................5

         Notes to Unaudited Consolidated Financial Statements..................6

Item 2.  Management's Discussion and Analysis of
           Financial Condition and Results of Operations......................12

Item 3.  Quantitative and Qualitative Disclosure about Market Risk............18

PART II  OTHER INFORMATION....................................................18

Item 1.  Legal Proceedings (not applicable)...................................18

Item 2.  Changes in Securities and Use of Proceeds (not applicable)...........18

Item 3.  Defaults Upon Senior Securities (not applicable).....................18

Item 4.  Submission of Matters to a Vote of Security Holders..................18

Item 5.  Other Information (not applicable)...................................19

Item 6.  Exhibits and Reports on Form 8-K   ..................................19


SIGNATURES....................................................................20











<PAGE>

                         PART I - FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

                      COMFORCE CORPORATION AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
               (in thousands, except share and per share amounts)
<TABLE>
<CAPTION>

                                                                                      June 30,             December 30,
                                                                                        2002                   2001
                                                                                  ------------------      ---------------
    ASSETS:                                                                          (unaudited)

    Current assets:
<S>                                                                                     <C>                    <C>
         Cash and cash equivalents                                                      $     5,031            $   4,067
         Accounts receivable, net                                                            46,799               44,091
         Funding and service fees receivable, net                                            28,809               35,938
         Prepaid expenses and other current assets                                            3,235                5,733
                                                                                  ------------------      ---------------
                  Total current assets                                                       83,874               89,829

    Deferred income taxes, net                                                                1,619                   --
    Property and equipment, net                                                              12,958               12,590
    Intangible assets, net                                                                      231                   --
    Goodwill, net                                                                            79,242              134,283
    Deferred financing costs, net                                                             2,882                3,307
                                                                                  ------------------      ---------------
                  Total assets                                                         $    180,806           $  240,009
                                                                                  ==================      ===============

    LIABILITIES AND STOCKHOLDERS' EQUITY:

    Current liabilities:
         Accounts payable                                                               $     1,995            $   3,440
         Accrued expenses                                                                    29,743               28,487
                                                                                  ------------------      ---------------
                  Total current liabilities                                                  31,738               31,927

    Long-term debt                                                                          150,609              154,720
    Deferred income taxes, net                                                                   --                  581
    Other liabilities                                                                           425                  244
                                                                                  ------------------      ---------------
                  Total liabilities                                                         182,772              187,472
                                                                                  ------------------      ---------------

    Commitments and contingencies
    Stockholders' (deficit) equity:
          Common stock, $.01 par value; 100,000,000 shares authorized;
                 16,659,334 shares and 16,659,173 shares issued and outstanding
                 at June 30, 2002 and December 30, 2001, respectively
                                                                                                167                  167
         Additional paid-in capital                                                          49,589               49,581
         Accumulated other comprehensive loss                                                  (94)                (309)
         (Accumulated deficit) retained earnings                                           (51,628)                3,098
                                                                                  ------------------      ---------------
                  Total stockholders' (deficit) equity                                      (1,966)               52,537
                                                                                  ------------------      ---------------
                  Total liabilities and stockholders' (deficit) equity                 $    180,806           $  240,009
                                                                                  ==================      ===============
</TABLE>

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


<PAGE>
                      COMFORCE CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                     (in thousands except per share amounts)
                                   (unaudited)
<TABLE>
<CAPTION>
                                                                      Three Months Ended                   Six Months Ended
                                                                  June 30,           July 1,          June 30,           July 1,
                                                                    2002              2001              2002              2001
                                                                -------------     --------------    -------------     --------------
Revenue:
<S>                                                                 <C>               <C>               <C>               <C>
      Net sales of service                                          $ 94,387          $ 112,207         $188,225          $ 235,559

Costs and expenses:
      Cost of services                                                76,355             88,237          153,042            185,117
      Selling, general and administrative expenses                    13,840             16,736           27,680             34,495
      Depreciation and amortization                                    1,092              1,955            1,981              3,873
                                                                -------------     --------------    -------------     --------------
              Total costs and expenses                                91,287            106,928          182,703            223,485
                                                                -------------     --------------    -------------     --------------

Operating income                                                       3,100              5,279            5,522             12,074
                                                                -------------     --------------    -------------     --------------

Other income (expense):
     Interest expense                                                 (4,043)            (5,129)          (8,040)           (10,822)
     Gain on debt extinguishment                                          --                 --               --              6,536
     Other income, net                                                   158                 27              163                 29
                                                                -------------     --------------    -------------     --------------
                                                                      (3,885)            (5,102)          (7,877)            (4,257)
                                                                -------------     --------------    -------------     --------------

Income (loss) before tax                                                (785)               177           (2,355)             7,817
Provision (benefit) for income taxes                                     153                578             (429)             4,199
                                                                -------------     --------------    -------------     --------------

            Income (loss) before a cumulative effect of a
                change in accounting principle                          (938)              (401)          (1,926)             3,618
Cumulative effect of a change in accounting principle --
     goodwill impairment, net of tax benefit of $2,200                    --                 --          (52,800)                --
                                                                -------------     --------------    -------------     --------------
            Net income (loss)                                        $  (938)           $  (401)       $ (54,726)          $  3,618
                                                                -------------     --------------    -------------     --------------

Basic income (loss) per common share:
     Income (loss) before a cumulative effect of a change in
         accounting principle                                      $   (0.06)          $  (0.02)        $  (0.12)           $  0.22
     Cumulative effect of a change in accounting principle
         -goodwill impairment                                             --                 --            (3.17)                --
                                                                -------------     --------------    -------------     --------------
     Net income (loss)                                             $   (0.06)          $  (0.02)        $  (3.29)          $   0.22
                                                                =============     ==============    =============     ==============

Diluted income (loss) per common share:
     Income (loss) before a cumulative effect of a change in                                                           0
         accounting principle                                      $   (0.06)          $  (0.02)        $  (0.12)           $  0.21
     Cumulative effect of a change in accounting principle
         goodwill impairment                                              --                 --            (3.17)                --
                                                                -------------     --------------    -------------     --------------
     Net income (loss)                                             $   (0.06)          $  (0.02)        $  (3.29)          $   0.21
                                                                =============     ==============    =============     ==============

Weighted average common shares outstanding, basic                     16,659             16,659           16,659             16,659
                                                                =============     ==============    =============     ==============
Weighted average common shares outstanding, diluted                   16,659             16,659           16,659             16,867
                                                                =============     ==============    =============     ==============
</TABLE>
The  accompanying  notes  are an  integral  part of the  unaudited  consolidated
financial statements.

<PAGE>

                      COMFORCE CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (in thousands)
                                   (unaudited)
<TABLE>
<CAPTION>
                                                                                        Six Months Ended
                                                                             ---------------------------------------
                                                                             June 30, 2002           July 1, 2001
                                                                             ------------------    -----------------
  Cash flows from operating activities:
<S>                                                                           <C>                    <C>
    Net income (loss)                                                         $    (54,726)          $    3,618
    Adjustments to reconcile net income (loss)
           to net cash provided by operating activities:
           Depreciation and amortization                                             1,981                3,873
           Amortization of deferred financing fees                                     505                  394
           Issuance of notes in lieu of interest                                     1,104                1,923
           Gain on repurchase of Senior Notes                                           --               (3,790)
           Gain on repurchase of PIK Debentures                                         --               (2,746)
           Write-off of goodwill, net of tax                                         52,800                  --
           Gain on sale of fixed assets                                                (156)                 --
     Changes in assets and liabilities, net of effects of acquisitions
        of businesses:
           Accounts receivable and funding service fees receivable                   4,636               14,243
           Prepaid expenses and other current assets                                 1,688                  135
           Accounts payable and accrued expenses                                      (221)              (3,381)
           Decrease in income tax receivable                                           810                   --
                                                                             ------------------    -----------------
  Net cash provided by operating activities                                          8,421               14,269
                                                                             ------------------    -----------------

  Cash flows from investing activities:
       Purchases of property and equipment                                          (2,200)              (2,037)
       Cash proceeds from sale of fixed assets                                         434                   --
       Payments of contingent consideration                                           (323)                (672)
       (Increase) in deferred costs and other assets                                    --                 (250)
                                                                             ------------------    -----------------
  Net cash used in investing activities                                             (2,089)              (2,959)
                                                                             ------------------    -----------------

  Cash flows from financing activities:
       Net repayments under capital lease obligations                                  (73)                 (58)
       Net (repayments) borrowings under line of credit agreements                  (5,215)                 761
       Repurchase of Senior Notes and PIK Debentures                                    --              (11,336)
       Debt financing costs                                                            (80)                (163)
                                                                             ------------------    -----------------
  Net cash used in financing activities                                             (5,368)             (10,796)
                                                                             ------------------    -----------------

  Net increase in cash and cash equivalents                                            964                  514
       Cash and cash equivalents at beginning of period                              4,067                4,940
                                                                             ------------------    -----------------
       Cash and cash equivalents at end of period                               $    5,031           $    5,454
                                                                             ==================    =================

  Supplemental disclosures:
       Cash paid for:
        Interest                                                                $    6,287            $   6,756
        Income taxes                                                                   269                3,584
</TABLE>

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


<PAGE>

                      COMFORCE CORPORATION AND SUBSIDIARIES
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

1.   GENERAL

     The accompanying  unaudited interim  consolidated  financial  statements of
COMFORCE  Corporation  ("COMFORCE")  and its  subsidiaries,  including  COMFORCE
Operating,  Inc.  ("COI")  (collectively,  the  "Company")  have  been  prepared
pursuant to the rules and regulations of the Securities and Exchange Commission.
Certain  information and note disclosures  normally included in annual financial
statements  have  been  condensed  or  omitted   pursuant  to  those  rules  and
regulations. In the opinion of management, all adjustments, consisting of normal
recurring  adjustments  considered necessary for a fair presentation,  have been
included. Although management believes that the disclosures made are adequate to
ensure that the information  presented is not  misleading,  it is suggested that
these financial  statements be read in conjunction with the financial statements
and notes thereto  included in the Company's  Annual Report on Form 10-K for the
fiscal year ended  December 30,  2001.  The results for the three and six months
ended June 30, 2002 are not necessarily  indicative of the results of operations
for the entire year.

2.   DEBT

     Notes  payable and  long-term  debt at June 30, 2002 and  December 30, 2001
consisted of (in thousands):

<TABLE>
<CAPTION>
                                                                                   June 30,            December 30,
                                                                                     2002                  2001
                                                                              -------------------    -----------------

<S>     <C>                   <C>                                                <C>                   <C>
        12% Senior Notes, due 2007                                               $    87,000           $   87,000
        15% Senior Secured PIK Debentures, due 2009                                   11,158               10,379
        8% Subordinated Convertible Notes due 2009                                     8,446                8,121
        Revolving line of credit, due December 14, 2003, with interest
                 payable monthly at LIBOR plus 3.0% with a weighted average rate
                 of 4.49% at June 30, 2002 and LIBOR plus 2.25% with a weighted
                 average rate of 4.33% at December 30, 2001                           44,005               49,220
                                                                              -------------------    -----------------

        Total long-term debt                                                     $   150,609           $  154,720
                                                                              ===================    =================
</TABLE>

     The debt service costs  associated  with  COMFORCE's 15% Senior Secured PIK
Debentures due 2009 (the "PIK  Debentures") may be satisfied through issuance of
new PIK  Debentures  through  December  1,  2002  and  the  debt  service  costs
associated  with  COMFORCE's  8%  Subordinated  Convertible  Notes due 2009 (the
"Convertible  Notes") may be satisfied through issuance of new Convertible Notes
through December 1, 2003.  Beginning with the interest payment due June 1, 2003,
COMFORCE  will be required to pay interest on the PIK  Debentures  in cash,  and
beginning with the interest payment due June 1, 2004,  COMFORCE will be required
to pay interest on the  Convertible  Notes in cash. Its ability to do so will be
dependent on the ability of COI to borrow  funds for this purpose  under the IBJ
Credit  Facility and to upstream  funds under the  restricted  payments test. In
addition,  COMFORCE's  ability to repay the PIK Debentures  and the  Convertible
Notes at their  respective  maturity  dates in December  2009, or on any earlier
required repayment or repurchase dates, will also be dependent on the ability of
COI to upstream funds for these  purposes  under the  restricted  payments test,
unless  COMFORCE  separately  obtains a loan or sells its capital stock or other
securities to provide funds therefor.

     Effective as of May 10, 2002, the Company  entered into an amendment to the
IBJ  Credit   Facility  to,   among  other   things  (i)  waive  the   Company's
non-compliance  with the fixed-charge  coverage ratio for the period ended March
31, 2002, (ii) reduce the  fixed-charge  coverage ratio in future  periods,  and
(iii) increase each level of the applicable rate and LIBOR margins by 0.25%.



<PAGE>

3.       FISCAL YEAR

     On March 22, 2001, the Company's Board of Directors adopted a resolution to
change  the  Company's  fiscal  year,  which was  previously  a  calendar  year.
Beginning in 2001,  the fiscal year consists of the 52 or 53 weeks ending on the
last Sunday in December. Accordingly, the Company's current fiscal year will end
on Sunday, December 29, 2002.

4.   INCOME (LOSS) PER SHARE

     Basic  income  (loss) per common  share is computed by dividing  net income
(loss) by the  weighted  average  number of shares of common  stock  outstanding
during each period.  Diluted  income  (loss) per share is computed  assuming the
conversion  of stock  options and warrants  with a market value greater than the
exercise  price to the  extent  such  conversion  assumption  is  dilutive.  The
following  represents a  reconciliation  of the numerators and  denominators for
basic and diluted  income  (loss) per share for the three and six month  periods
ended June 30, 2002 and July 1, 2001 (in thousands):

<TABLE>
<CAPTION>


                                                  Three Months Ended                        Six Months Ended
                                          ------------------------------------    -------------------------------------
                                           June 30, 2002        July 1, 2001      June 30, 2002         July 1, 2001
                                          -----------------    ---------------    -----------------    ----------------
Numerator:
Income (loss) before  a cumulative
     effect of a change in accounting
<S>                                           <C>                <C>                <C>                   <C>
     principle                                $   (938)          $   (401)          $   (1,926)           $   3,618
     Cumulative effect of a change in
          accounting principle --
          goodwill impairment, net of
          tax benefit                                --                 --             (52,800)                  --
                                          -----------------    ---------------    -----------------    ----------------
     Net income (loss)                        $   (938)          $   (401)          $  (54,726)          $    3,618
                                          =================    ===============    =================    ================

 Denominator:
     Weighted average shares -- basic           16,659             16,659               16,659              16,659

 Effect of dilutive securities:
     Warrants and Employee stock options
                                                    --                 --                   --                 208
                                          -----------------    ---------------    -----------------    ----------------

 Denominator for diluted income (loss)
     per share - adjusted weighted
     average shares and assumed
     conversions                                16,659             16,659               16,659              16,867
                                          =================    ===============    =================    ================
</TABLE>

     Outstanding  options  and  warrants  to  purchase  shares of common  stock,
representing approximately 3.6 million shares of common stock, were not included
in the computations of diluted net income (loss) per share for the three and six
months ended June 30, 2002 because their effect would be anti-dilutive.

5.       STOCK OPTIONS

     During  the first six  months  of 2002,  the  Company  granted  options  to
purchase in  aggregate  of 60,000  shares of the  Company's  common  stock at an
exercise  price of $1.10 per share and 535,000  shares of the  Company's  common
stock at an exercise price of $1.45, which was equal to or greater than the fair
market  value of the  common  stock on the date of  grant.  These  options  were
granted to 23 individuals  who are officers,  directors,  employees or agents of
the Company.  These  options were granted under the  Company's  Long-Term  Stock
Investment  Plan.  The options  granted to directors  provide for vesting on the
first  anniversary  of the date of grant and the remaining  options  provide for
vesting 6, 18 and 30 months after the date of grant in equal increments.

     At the annual  meeting of  stockholders  of the Company held June 13, 2002,
the stockholders  approved the COMFORCE Corporation 2002 Stock Option Plan under
which options to purchase up to 1,000,000  shares of the Company's  common stock
may be granted by the Company to officers,  directors,  employees  and agents of
the Company at exercise prices not less than market prices at the date of grant.
To date, no options have been issued under this plan.
<PAGE>

6.   INDUSTRY SEGMENT INFORMATION

     COMFORCE has determined that its reportable  segments can be  distinguished
principally by the types of services offered to the Company's clients.

     The Company reports its results  through three operating  segments -- Staff
Augmentation,  Human  Capital  Management  Services  and  Financial  Outsourcing
Services.  The Staff Augmentation segment provides information  technology (IT),
telecom,  healthcare support, and technical and engineering services.  The Human
Capital Management  Services segment provides  contingent  workforce  management
services.  The Financial  Outsourcing Services segment provides funding and back
office support services to independent consulting and staffing companies.

     The accounting  policies of the segments are the same as those described in
Note 2 to the consolidated  financial  statements of the Company included in the
Company's  Annual  Report on Form 10-K for the year  ended  December  30,  2001.
COMFORCE  evaluates the  performance of its segments and allocates  resources to
them based on operating  contribution,  which  represents  segment revenues less
direct costs of operations,  excluding the  allocation of corporate  general and
administrative expenses.  Assets of the operating segments reflect primarily net
accounts receivable and goodwill  associated with segment activities;  all other
assets are  included  as  corporate  assets.  The  Company  does not account for
expenditures for long-lived assets on a segment basis.

     The  table  below  presents  information  on  the  revenues  and  operating
contribution  for each  segment for the three and six months ended June 30, 2002
and July 1, 2001, and items which reconcile  segment  operating  contribution to
COMFORCE's reported pre-tax income (loss) (in thousands):

<TABLE>
<CAPTION>


                                                     Three Months Ended                                  Six Months Ended
                                        ----------------------------------------------     -----------------------------------------
                                            June 30, 2002            July 1, 2001          June 30, 2002                July 1, 2001
                                        ----------------------    --------------------     ---------------------    ----------------
Net sales of services:
<S>                                         <C>                      <C>                      <C>                      <C>
     Staff Augmentation                     $      51,259            $     77,786             $     105,800            $     165,149
     Human Capital Management Services             40,718                  31,237                    77,767                   63,934
     Financial Outsourcing Services                 2,410                   3,184                     4,658                    6,476
                                        ----------------------    --------------------     ---------------------    ----------------
                                            $      94,387            $    112,207             $     188,225            $     235,559
                                        ----------------------    --------------------     ---------------------    ----------------

Operating contribution:
    Staff Augmentation                      $       4,755            $      8,387             $       9,352            $      18,525
    Human Capital Management Services               1,554                     772                     2,907                    1,203
    Financial Outsourcing Services                  1,700                   2,472                     2,780                    5,068
                                        ---------------------    --------------------     ---------------------    -----------------
                                                    8,009                  11,631                    15,039                   24,796
                                        ----------------------    --------------------     ---------------------    ----------------

Consolidated expenses(income):
    Interest and other, net                         3,885                   5,102                     7,877                   10,793
    Depreciation and amortization                   1,092                   1,955                     1,981                    3,873
    Gain on debt extinguishment                        --                      --                        --                  (6,536)
    Corporate general and
         administrative expenses                    3,817                   4,397                     7,536                    8,849
                                        ----------------------    --------------------     ---------------------    ----------------
                                                    8,794                  11,454                    17,394                   16,979
Income (loss) before taxes                   $       (785)           $        177             $      (2,355)           $       7,817
                                        ======================    ====================     =====================    ================
</TABLE>


                                        At June 30, 2002     At Dec. 30, 2001
                                        -----------------    -----------------
Total assets:
    Staff Augmentation                   $      99,427          $    143,009
    Human Capital Management Services           26,614                25,965
    Financial Outsourcing Services              28,809                45,338
    Corporate                                   25,956                25,697
                                        ----------------     ----------------
                                         $     180,806          $    240,009
                                        ================     ================

<PAGE>

7. ACCOUNTING FOR BUSINESS COMBINATIONS, GOODWILL AND OTHER INTANGIBLE ASSETS

     In July 2001, the Financial  Accounting  Standards  Board  ("FASB")  issued
Statement  No. 141,  Business  Combinations  ("SFAS  141"),  Statement  No. 142,
Goodwill and Other  Intangible  Assets  ("SFAS 142") and in August 2001 the FASB
issued  Statement  No.  144,  Accounting  for  the  Impairment  or  Disposal  of
Long-Lived  Assets ("SFAS 144").  SFAS 141  specifies  criteria that  intangible
assets  acquired  in a  purchase  method  business  combination  must meet to be
recognized and reported apart from goodwill. SFAS 142 eliminates the requirement
to amortize  goodwill  and  intangible  assets  with  indefinite  useful  lives.
Instead, they will be tested for impairment at least annually in accordance with
the provisions of SFAS 142. SFAS 142 also requires that  intangible  assets with
definite useful lives be amortized over their respective  estimated useful lives
and  to  their  estimated  residual  values,  and  reviewed  for  impairment  in
accordance with SFAS 144.

     The Company has adopted the  provisions  of SFAS 141 upon  issuance and the
provisions of SFAS 142 as of the beginning of fiscal year 2002.  The Company has
evaluated  its existing  intangible  assets and goodwill  that were  acquired in
prior purchase business  combinations and has reclassified $264,000 net carrying
value of goodwill to  intangible  assets in order to conform to the new criteria
in SFAS 141 for recognition apart from goodwill.  The Company has reassessed the
useful lives and residual  values of the  intangible  assets  acquired,  and has
determined that no amortization period adjustments were necessary.

     The intangible assets with definite useful lives are comprised of covenants
not to compete (being  amortized over periods ranging from 8 to 10 years) with a
gross carrying amount of $558,000 and accumulated amortization of $327,000 as of
June 30, 2002. The amortization expense for the three months ended June 30, 2002
was $17,000 and generated a tax benefit of $6,900. The amortization  expense for
the six months  ended June 30, 2002 was  $33,000 and  generated a tax benefit of
$13,000.  The  estimated  amortization  expense  for the  following  years is as
follows (in thousands):

         For year ended 12/29/02                              $  66
         For year ended 12/28/03                                 41
         For year ended 12/26/04                                 41
         For year ended 12/25/05                                 41
         For year ended 12/31/06                                 20


     The Company has tested  goodwill  for  impairment  in  accordance  with the
provisions  of SFAS 142 as of the  beginning of fiscal year 2002.  In connection
with the goodwill test, the Company engaged an independent firm to determine the
fair  values  of  its  reporting   units  (as  defined  by  SFAS  142).  In  its
determination  of the fair  values,  the firm  engaged by the  Company  utilized
various valuation approaches,  including (a) discounted cash flow analysis,  (b)
recent  values paid by investors  and  purchasers  of  companies  in  businesses
similar to that of the Company,  (c) capitalization  multiples of companies with
investment  characteristics  resembling  those of the reporting  units,  (d) the
enterprise value of the Company, and (e) asset and liability structure. Based on
management's  assessment of the circumstances,  considering the firm's findings,
the Company  recognized an impairment  loss of $55.0 million  ($43.7 million for
Staff  Augmentation,  $9.4 million for Financial  Outsourcing  Services and $1.9
million for Human  Capital  Management  Services)  as a  cumulative  effect of a
change in accounting principle in the accompanying  financial statements.  These
impairment  losses  relate  primarily to the goodwill  attributable  to staffing
companies  acquired  by the  Company  in 1996 and 1997,  during  which  time (i)
staffing  companies were customarily valued at higher levels than they currently
command  and  (ii)  the  market  price  of  the   Company's   common  stock  was
substantially higher than the current market price.
<PAGE>

     The changes in the  carrying  amount of goodwill  for the six months  ended
June 30, 2002 is as follows (in thousands):

<TABLE>
<CAPTION>
                                                              Human
                                           Staff             Capital            Financial
                                        Augmentation        Management         Outsourcing            Total
                                       ---------------     --------------    ----------------    ----------------
<S>                    <C> <C>         <C>                  <C>                  <C>                <C>
Balance as of December 30, 2001        $    113,783         $  11,100            $   9,400          $ 134,283
Goodwill acquired during year                   223                --                   --                223
Impairment losses                           (43,700)           (1,900)              (9,400)           (55,000)
Amounts reclassified to
intangible assets, net                         (264)               --                   --               (264)
                                       ---------------     --------------    ----------------    ----------------
Balance as of June 30, 2002            $     70,042         $   9,200            $      --          $  79,242
                                       ===============     ==============    ================    ================
</TABLE>


     Goodwill  amortization  for the three and six months ended July 1, 2001 was
$1.1 million and $2.1,  respectively,  and generated tax benefits of $69,000 and
$139,000,  respectively.  The following table shows the results of operations as
if SFAS 142 was  applied  to prior  periods  (in  thousands,  except  per  share
amounts):

<TABLE>
<CAPTION>


                                                        Three Months Ended                       Six Months Ended
                                                ------------------------------------ -- ------------------------------------
                                                 June 30, 2002        July 1, 2001       June 30, 2002       July 1, 2001
                                                ----------------     ---------------    ----------------   ----------------
Income (loss) before a cumulative effect of a
<S>                                               <C>                  <C>                 <C>                  <C>
   change in accounting principle, as reported    $    (938)           $   (401)           $  (1,926)           $   3,618
   Plus:
   Goodwill amortization, net of tax                     --                 981                   --                1,961
                                                ----------------     ---------------    ----------------    ----------------
   Adjusted income (loss) before a cumulative
     effect of a change in accounting
     principle                                    $    (938)           $    580            $  (1,926)           $   5,579
                                                ================     ===============    ================    ================

Basic income (loss) per common share:
   Income (loss) before a cumulative effect
     of a change in accounting principle, as
     reported                                     $    (0.06)          $   (0.02)          $   (0.12)           $    0.22
   Goodwill amortization, net of tax                      --                0.06                  --                 0.12
                                                ----------------     ---------------    ----------------    ----------------
   Adjusted income (loss) before a cumulative
     effect of a change in accounting
     principle                                    $    (0.06)          $    0.04           $   (0.12)           $    0.34
                                                ================     ===============    ================    ================

Diluted income (loss) per common share:
   Income (loss) before a cumulative effect
     of a change in accounting principle, as
     reported                                     $    (0.06)          $   (0.02)          $   (0.12)           $    0.21
   Goodwill amortization, net of tax                      --                0.06                  --                 0.12
                                                ----------------     ---------------    ----------------    ----------------
   Adjusted income (loss) before a
     cumulative effect of a change in
     accounting principle                         $    (0.06)          $    0.04           $   (0.12)           $    0.33
                                                ================     ===============    ================    ================
</TABLE>

<PAGE>

8.       ACCOUNTING FOR EXTINGUISHMENT OF DEBT

     The Financial  Accounting Standard Board ("FASB") issued Statement No. 145,
Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB Statement No.
13, and Technical Corrections ("SFAS 145"). SFAS 145 rescinds Statement 4, which
required all gains and losses from  extinguishment of debt to be aggregated and,
if material,  classified as an  extraordinary  item,  net of related  income tax
effect.  As a result,  the  criteria  in Opinion 30 will now be used to classify
those  gains and losses  both on a  prospective  and  retrospective  basis.  The
provisions of SFAS 145 are effective  for fiscal years  beginning  after May 15,
2002,  with  early  adoption  of the  provisions  related to the  rescission  of
Statement 4  encouraged.  As a result,  the Company  adopted SFAS 145 during the
second fiscal quarter of 2002.

     The  adoption  of SFAS 145 had no impact  upon the  Company's  consolidated
balance sheet or net income in its consolidated  statement of operations for any
period,  but required a  reclassification  of the gain on the  extinguishment of
debt,  net of  related  income  tax  effect,  for  fiscal  2000 and 2001 and the
quarterly periods during such years in which the Company repurchased its debt at
a  discount.  For these  periods,  the gain,  before  any tax  effect,  has been
recorded as other income and the income  (loss) before tax and the provision for
income  taxes  line  items  have  been  adjusted   accordingly.   The  Company's
consolidated  statement of operations  for the six months ended July 1, 2001 has
been reclassified as described, and the reclassifications for other periods will
be  reflected  in future  quarterly  and annual  reports of the Company in which
statements for the relevant periods are required to be included.

9.       NEW ACCOUNTING STANDARDS

     In August  2001,  the FASB issued  Statement  No. 144,  Accounting  for the
Impairment  or Disposal of Long-Lived  Assets  ("SFAS 144").  SFAS 144 addresses
financial  accounting and reporting for the impairment or disposal of long-lived
assets and  supersedes  SFAS 121,  Accounting  for the  Impairment of Long-Lived
Assets and for Long-Lived  Assets to Be Disposed Of.  However,  SFAS 144 retains
the  fundamental  provisions of SFAS 121 for (a)  recognition and measurement of
the impairment of long-lived  assets to be held and used and (b)  measurement of
long-lived  assets to be disposed of by sale. SFAS 144 supersedes the accounting
and  reporting  provisions  of APB  Opinion  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,  for
the  disposal  of a  segment  of a  business.  However,  SFAS  144  retains  the
requirement  of Opinion 30 to report  discontinued  operations  separately  from
continuing  operations  and extends  that  reporting to a component of an entity
that either has been disposed of (by sale, by abandonment, or in distribution to
owners)  or is  classified  as held for sale.  SFAS 144 also  amends ARB No. 51,
Consolidated  Financial  Statement,  to eliminate the exception to consolidation
for a temporarily controlled subsidiary.  The Company adopted SFAS 144 effective
for  calendar  year  2002.  The impact of the  adoption  did not have a material
impact on its consolidated  financial statements since the impairment assessment
under  SFAS 144 is  largely  unchanged  from SFAS 121.  The  provisions  of this
statement for assets held for use or other disposal generally are required to be
applied prospectively to newly initiated disposal activities and therefore, will
depend on future  actions  initiated  by  management.  As a result,  the Company
cannot  determine the potential  effects that the adoption of SFAS 144 will have
on its financial statements with respect to future disposal decisions, if any.

     In July 2002,  the FASB  issued  Statement  No. 146,  Accounting  for Costs
Associated  with Exit or Disposal  Activities  ("SFAS  146").  SFAS 146 requires
companies to recognize costs  associated  with exit or disposal  activities when
they are incurred rather than at the date of a commitment to an exit or disposal
plan. SFAS 146 will be applied to exit or disposal activities after December 31,
2002 and is not expected to have a material effect on the Company.

10.      RECLASSIFICATIONS

     Certain reclassifications have been made to conform prior period amounts to
the current period presentation. See also notes 7 and 8.



<PAGE>



11.      CONTINGENCIES

     The Company is  currently  undergoing  a payroll tax audit by the  Internal
Revenue  Service for the fiscal year 1999. The results of this audit are not yet
known.



ITEM 2. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

     The discussion set forth below  supplements  the  information  found in the
unaudited  consolidated  financial  statements  and  related  notes of  COMFORCE
Corporation  ("COMFORCE") and its subsidiaries,  including  COMFORCE  Operating,
Inc. ("COI") (collectively, the "Company").

Overview

     From the time it entered  the  staffing  business in October  1995  through
January  1998,  the Company  completed 10  acquisitions.  In February  2000,  it
completed  one  additional  acquisition.  Each of  these  acquisitions  has been
accounted  for on a purchase  basis and the results of operations of each of the
businesses acquired have been included in the Company's historical  consolidated
financial statements from the date of acquisition. Certain of these acquisitions
provide  for  contingent  payments  by the  Company  as a part  of the  purchase
consideration  based upon the operating  results of the acquired  businesses for
specified  future  periods.  The  acquisitions  were  financed  by  the  Company
principally  through the issuance of debt and equity  securities  and borrowings
under credit facilities.

     Staffing personnel placed by the Company are employees of the Company.  The
Company  is  responsible  for  employee  related  expenses  for  its  employees,
including workers' compensation,  unemployment compensation insurance,  Medicare
and Social  Security  taxes and general  payroll  expenses.  The Company  offers
health,  dental,   disability  and  life  insurance  to  its  eligible  billable
employees.  Staffing and consulting companies,  including the Company, typically
pay their billable  employees for their services before  receiving  payment from
their customers, often resulting in significant outstanding receivables.  To the
extent the Company  grows,  these  receivables  will  increase and there will be
greater  requirements  for borrowing  availability  under its credit facility to
fund current operations.

     The Company reports its results  through three operating  segments -- Staff
Augmentation,  Human  Capital  Management  Services  and  Financial  Outsourcing
Services (formerly known as Financial Services).  The Staff Augmentation segment
provides information technology (IT), telecom, healthcare support, technical and
other staffing services.  The Human Capital Management Services segment provides
contingent  workforce management  services.  The Financial  Outsourcing Services
segment  provides   payroll,   funding  and  back  office  support  services  to
independent consulting and staffing companies.
<PAGE>

Results of Operations

  Three Months Ended June 30, 2002 Compared to Three Months Ended July 1, 2001


     Net sales of services  for the three  months ended June 30, 2002 were $94.4
million,  a decrease  of 15.9% from net sales of services  for the three  months
ended July 1, 2001 of $112.2  million.  The  Company  suffered a decrease in net
sales of services  in Staff  Augmentation  and  Financial  Outsourcing  Services
segments,  offset  by an  increase  in the  Human  Capital  Management  Services
segment. Due to an increase in the Human Capital Management segment client base,
net  sales  of  services  increased  $9.5  million,   or  30.4%.  In  the  Staff
Augmentation  segment,  the  decrease of $26.5  million or 34.1% is  principally
attributable  to a decline in the telecom  industry  resulting in lower sales to
telecom customers,  and the continued economic slowdown within IT, technical and
other staffing  services.  Also, as a result of the current economic  recession,
net sales of services decreased  $774,000 or 24.3% in the Financial  Outsourcing
Services segment.

     Cost of services  for the three months ended June 30, 2002 was 80.9% of net
sales of services as compared to cost of services of 78.6% for the three  months
ended July 1, 2001.  The cost of services as a  percentage  of net sales for the
second quarter of 2002 increased from the comparable  period in 2001 principally
as a result of a decrease in permanent placement fees and a higher growth in the
Human Capital Management Services segment which has a higher cost of services as
a percentage of net sales of services.

     Selling,  general and administrative  expenses as a percentage of net sales
of services  were 14.7% for the three months  ended June 30,  2002,  compared to
14.9% for the three months ended July 1, 2001. Due to lower sales,  as discussed
above, management continued to undertake initiatives to reduce selling,  general
and administrative  costs, and has been successful in controlling costs as sales
decreased.  These costs were further reduced by lower commissions as a result of
the decrease of sales discussed above.

     Operating  income for the three months ended June 30, 2002 was $3.1 million
as compared to operating  income of $5.3 million for the three months ended July
1, 2001. This 41.3% decrease in operating income for the three months ended June
30, 2002  resulted  principally  from a decrease  in sales and gross  margins in
Staff Augmentation and Financial Outsourcing Services segments, partially offset
by a reduction of $1.1 million in goodwill amortization.

     The Company's  interest expense for the three months ended June 30, 2002 is
attributable to the revolving credit facility agented by IBJ Whitehall  Business
Credit Corporation (the "IBJ Credit  Facility"),  the Convertible Notes, the 12%
Senior Notes due 2007 (the "Senior Notes") and the PIK Debentures. The Company's
interest  expense for the three months ended July 1, 2001 is attributable to the
IBJ Credit Facility,  the Senior Notes and the PIK Debentures.  During the first
quarter of 2001,  the Company  repurchased  $13.0  million  principal  amount of
Senior  Notes  for  $8.9  million  and  $5.2  million  principal  amount  of PIK
Debentures for $2.5 million (including accrued and unpaid interest of $340,000),
the  repurchase  prices of which were paid from lower  interest rate  borrowings
under the IBJ Credit  Facility.  In September  2001,  the Company  completed the
exchange of $18.0 million principal amount of PIK Debentures for its Convertible
Note in the original  principal amount of $8.0 million (bearing  interest at the
per annum rate of 8%), plus $1.0 million in cash. The interest expense was lower
for the three  months  ended June 30, 2002 as compared to the three months ended
July 1, 2001 due to lower market interest rates and lower borrowing levels under
the IBJ  Credit  Facility  as well as the  reduction  of  Senior  Notes  and PIK
Debentures through the transactions described above.
<PAGE>

     The income  tax  provision  for the three  months  ended June 30,  2002 was
$153,000  on a loss before tax of  $785,000.  The income tax  provision  for the
three months  ended July 1, 2001 was $578,000 on income  before tax of $177,000.
The Company  provides for income taxes based upon the estimated  effective  rate
(on a year-to-date basis). As a result of the Company's revised forecasts in the
second  quarter of 2002,  the  expected  tax rate was  reduced.  The  difference
between the federal  statutory  income tax rate and the Company's  effective tax
rate  relates  primarily  to the  nondeductibility  of a portion of the interest
expense  associated  with the PIK  Debentures  and state  income  taxes for both
periods as well as  amortization  expense  associated with goodwill that was not
deductible in 2001.

Six Months Ended June 30, 2002 Compared to Six Months Ended July 1, 2001

     Net sales of  services  for the six months  ended June 30, 2002 were $188.2
million, a decrease of 20.1% from net sales of services for the six months ended
July 1, 2001 of $235.6 million.  The Company suffered a decrease in net sales of
services in Staff  Augmentation  and Financial  Outsourcing  Services  segments,
partially  offset  by an  increase  in the  Human  Capital  Management  Services
segment.  Net of sales of  services  in the Human  Capital  Management  Services
segment  increased  by $13.8  million or 21.6% due to an  increase in its client
base. In the Staff Augmentation  segment,  the decrease of $59.4 million (35.9%)
is principally attributable to a sharp decline in the telecom industry resulting
in lower sales to telecom customers,  and the continued economic slowdown within
IT,  technical  and other  staffing  services.  Also, as a result of the current
economic recession,  net sales of services were lower by $1.8 million (28.1%) in
the Financial Outsourcing Services segment.

     Cost of  services  for the six months  ended June 30, 2002 was 81.3% of net
sales of  services  as  compared to cost of services of 78.6% for the six months
ended July 1, 2001.  The cost of services as a  percentage  of net sales for the
six months  ended June 30, 2002  increased  from the  comparable  period in 2001
principally  as a result of lower sales (and gross margin  percentages on sales)
to telecom customers, a decrease in permanent placement fees and a higher growth
in Human Capital  Management  Services  which has a higher cost of services as a
percentage of net sales of services.

     Selling,  general and administrative  expenses as a percentage of net sales
of services were 14.7% for the six months ended June 30, 2002, compared to 14.6%
for the six months ended July 1, 2001. This percentage increase is principally a
result of significantly  lower net sales of services during the first six months
of 2002. Due to these lower sales, as discussed above,  management  continues to
undertake initiatives to reduce selling, general and administrative costs. These
costs were further  reduced by lower  commissions as a result of the decrease of
sales discussed above.

     Operating income for the six months ended June 30, 2002 was $5.5 million as
compared to operating  income of $12.1  million for the six months ended July 1,
2001. This 54.3% decrease in operating  income for the six months ended June 30,
2002  resulted  principally  from a decrease in sales and gross margins in Staff
Augmentation and Financial Outsourcing Services segments,  partially offset by a
reduction of $2.1 million in goodwill amortization.

     The  Company's  interest  expense for the six months ended June 30, 2002 is
attributable to the revolving credit facility agented by IBJ Whitehall  Business
Credit Corporation (the "IBJ Credit  Facility"),  the Convertible Notes, the 12%
Senior Notes due 2007 (the "Senior Notes") and the PIK Debentures. The Company's
interest  expense for the six months ended July 1, 2001 is  attributable  to the
IBJ Credit Facility,  the Senior Notes and the PIK Debentures.  During the first
quarter of 2001,  the Company  repurchased  $13.0  million  principal  amount of
Senior  Notes  for  $8.9  million  and  $5.2  million  principal  amount  of PIK
Debentures for $2.5 million (including accrued and unpaid interest of $340,000),
the  repurchase  prices of which were paid from lower  interest rate  borrowings
under the IBJ Credit  Facility.  In September  2001,  the Company  completed the
exchange of $18.0 million principal amount of PIK Debentures for its Convertible
Note in the original  principal amount of $8.0 million (bearing  interest at the
per annum rate of 8%), plus $1.0 million in cash. The interest expense was lower
for the six months  ended June 30, 2002 as compared to the six months ended July
1, 2001 due to lower market interest rates and lower borrowing  levels under the
IBJ Credit  Facility as well as the reduction of Senior Notes and PIK Debentures
through the transactions described above.
<PAGE>

     The income tax benefit for the six months  ended June 30, 2002 was $429,000
on a loss  before tax of $2.4  million.  The income  tax  provision  for the six
months ended July 1, 2001 was $4.2 million on income before tax of $7.8 million.
Applying SFAS 145 (in accordance  with the criteria in APB Opinion 30), the gain
on the  extinguishment  of debt, net of related  income tax effect,  for the six
months ended July 1, 2001 was recorded as other income  (before any tax effect),
which in turn  required  that the income before tax and the provision for income
taxes line items be adjusted accordingly.  The Company provides for income taxes
based upon the estimated  effective rate (on a year-to-date  basis). As a result
of the Company's  revised  forecasts in the second quarter of 2002, the expected
tax rate was reduced.  The difference  between the federal  statutory income tax
rate  and  the   Company's   effective   tax  rate  relates   primarily  to  the
nondeductibility  of a portion of the interest  expense  associated with the PIK
Debentures  and state  income  taxes for both  periods  as well as  amortization
expense associated with goodwill that was not deductible in 2001.

Financial Condition, Liquidity and Capital Resources

     The  Company  generally  pays  its  billable  employees  weekly  for  their
services,  and remits  certain  statutory  payroll and related  taxes as well as
other fringe  benefits.  Invoices are  generated to reflect these costs plus the
Company's  markup.  These bills are typically paid within 45 days.  Increases in
the  Company's  net sales of  services,  resulting  from  expansion  of existing
offices or establishment of new offices, will require additional cash resources.

     The  Company  is under  certain  contractual  commitments  associated  with
operating agreements,  obligations to financial institutions and other long-term
debt obligations and earnout  (contingent  payment)  agreements  described under
"Financial  Condition,  Liquidity  and  Capital  Resources"  in  Item  7 of  the
Company's Annual Report on Form 10-K for the year ended December 30, 2001.

     During the three months ended June 30, 2002, the Company's  primary sources
of funds to meet working capital needs were from borrowings under the IBJ Credit
Facility.  Cash and cash equivalents  increased $964,000 during the three months
ended June 30, 2002. Cash flows provided by operating activities of $8.4 million
exceeded cash flows used in financing  activities of $5.4 million and cash flows
used in investing activities of $2.1 million.

     As of June 30, 2002, the Company had  outstanding  $44.0 million  principal
amount under the IBJ Credit Facility bearing interest at a weighted average rate
of 4.5% per annum. In addition, as of June 30, 2002, the Company had outstanding
$11.2 million  principal amount of PIK Debentures  bearing interest at a rate of
15% per annum,  $87.0 million  principal amount of Senior Notes bearing interest
at a rate of 12% per  annum and $8.5  million  principal  amount of  Convertible
Notes  bearing  interest  at the rate of 8% per annum.  As more fully  described
below, interest on the PIK Debentures and the Convertible Notes may be satisfied
through the issuance of new PIK Debentures and  Convertible  Notes. To date, the
Company  has chosen to issue new PIK  Debentures  and  Convertible  Notes to pay
interest thereon.

     The  Company  entered  into the IBJ Credit  Facility  in  December  2000 to
provide greater borrowing availability and flexibility.  The IBJ Credit Facility
has been amended six times since it was entered  into,  most  recently to ensure
the Company's  compliance with financial covenants at March 31, 2002,  described
below and to lessen the  requirements  through  December,  2003.  The IBJ Credit
Facility,  as amended,  has  permitted  the  Company to execute its  strategy of
reducing  its higher  interest  rate debt and  improving  its  balance  sheet by
retiring  Senior Notes and PIK  Debentures.  The IBJ Credit  Facility  currently
provides  for  borrowing  availability  of up to  $95.0  million  based  upon  a
specified percentage of the Company's eligible accounts receivable.  At June 30,
2002,  the  Company  had  remaining  availability  based  upon then  outstanding
eligible accounts receivable of $14.0 million.

     Effective as of May 10, 2002,  the Company has entered into an amendment to
the IBJ  Credit  Facility  to,  among  other  things  (i)  waive  the  Company's
non-compliance  with the fixed-charge  coverage ratio for the period ended March
31, 2002, (ii) reduce the  fixed-charge  coverage ratio in future  periods,  and
(iii) increase each level of the applicable  rate and LIBOR margins by 0.25%. As
of June 30, 2002, the incremental rate was 3.0%.

     The  scheduled  maturity  date of the IBJ Credit  Facility is December  14,
2003. The Company  intends to seek to extend the IBJ Credit  Facility or to seek
to obtain alternative financing.
<PAGE>

     Substantially  all of the consolidated net assets of the Company are assets
of COI and all of the net income that has been generated by the Company  through
June 30, 2002 is net income attributable to the operations of COI.  Accordingly,
except for permitted  distributions,  these assets and net income are restricted
as to their use by COMFORCE.  The  indenture  governing the Senior Notes imposes
restrictions  on  COI  making  specified  payments,  which  are  referred  to as
"restricted  payments,"  including  making  distributions  or  paying  dividends
(referred to as upstreaming funds) to COMFORCE.  Under the indenture, COI is not
permitted to make cash distributions to COMFORCE other than (1) to upstream $2.0
million  annually  ($1.25 million  annually prior to 2000) to pay public company
expenses,  (2) to  upstream  up to $10.0  million to pay  income tax  related to
deemed  forgiveness  of PIK Debentures to facilitate the purchase or exchange by
COMFORCE of PIK Debentures at less than par, (3) under certain  circumstances in
connection with a disposition of assets, to upstream proceeds therefrom to repay
the PIK  Debentures,  and (4) to  upstream  funds to the  extent  COI  meets the
restricted payments test under the indenture.

     Management  believes that $2.0 million annually (if COI has funds available
for this purpose) will be sufficient  to pay  COMFORCE's  annual public  company
expenses for the foreseeable  future. As of June 30, 2002, COI had approximately
$1.6  million  remaining  available  for  distribution  to COMFORCE as permitted
restricted payments  (representing 50% of consolidated net income of COI for the
period from  January 1, 1998  through  June 30,  2002,  less the total amount of
restricted payments through such date).

     Through December 1, 2002,  interest under the PIK Debentures is payable, at
the option of COMFORCE,  in cash or in kind  through the issuance of  additional
PIK  Debentures.  In  addition,  through  December  1,  2003,  interest  on  the
Convertible  Notes is  payable,  at the option of  COMFORCE,  in cash or in kind
through the issuance of additional Convertible Notes. To date, COMFORCE has paid
all interest under the PIK Debentures and Convertible  Notes in kind.  Beginning
with the  interest  payment due June 1, 2003,  COMFORCE  will be required to pay
interest on the PIK Debentures in cash, and beginning with the interest  payment
due June 1, 2004,  COMFORCE will be required to pay interest on the  Convertible
Notes in cash.  Its ability to do so will be  dependent on the ability of COI to
borrow  funds for this  purpose  under the IBJ Credit  Facility  and to upstream
funds under the  restricted  payments test. In addition,  COMFORCE's  ability to
repay the PIK Debentures and the Convertible Notes at their respective  maturity
dates in December  2009,  or on any earlier  required  repayment  or  repurchase
dates,  will also be dependent on the ability of COI to upstream funds for these
purposes under the restricted  payments test, unless COMFORCE separately obtains
a loan or sells its capital stock or other securities to provide funds therefor.

     The Convertible  Note is convertible  into the Company's common stock based
on a price of $1.70 per share of common stock,  provided that if such conversion
would result in a change of control  occurring under the terms of the indentures
governing the PIK Debentures or the Senior Notes,  the Convertible  Note will be
convertible  into  shares  of  non-voting   preferred  stock  having  a  nominal
liquidation  preference  (but no  other  preferences),  which  in  turn  will be
convertible  into common stock at the holder's option at any time so long as the
conversion would not result in a change of control. Notice of conversion must be
given at least 61 days in advance.

     As of  June  30,  2002,  approximately  $79.2  million,  or  43.8%,  of the
Company's  total assets were goodwill  recorded in connection with the Company's
acquisitions.   Effective  December  31,  2001,  the  Company  ceased  recording
amortization  expense  relating  to goodwill  amounting  to  approximately  $4.2
million annually upon its required  adoption of a new accounting  standard (SFAS
142), as described under note 6 to the  consolidated  financial  statements.  As
also  described  under  note 6, the  Company  evaluated  the  recoverability  of
goodwill on its books under the new standards  under SFAS 142,  resulting in its
write-off of $55.0 million of goodwill in the first quarter of 2002.
<PAGE>

     The  Company  was  obligated  under  various  agreements  to make  earn-out
payments to the sellers of  companies  acquired by the Company and to sellers of
franchised businesses repurchased by the Company, subject to the sellers meeting
specified  contractual  requirements.  During  fiscal  2002,  the  Company  made
earn-out  payments  totaling  $323,000.  It has no remaining  obligation to make
earn-out payments to any person in future periods.

     Management of the Company believes that cash flow from operations and funds
anticipated to be available  under the IBJ Credit Facility will be sufficient to
service the Company's  indebtedness  and to meet currently  anticipated  working
capital requirements.

     The Company is  currently  undergoing  a payroll tax audit by the  Internal
Revenue  Service for the fiscal year 1999.  The results under this audit are not
yet known.

Seasonality

         The Company's quarterly operating results are affected primarily by the
number of billing days in the quarter and the seasonality of its customers'
businesses. Demand for technical and engineering services, IT and telecom
staffing services has historically been lower during the second half of the
fourth quarter through the following first quarter, and, generally, shows
gradual improvement until the second half of the fourth quarter; however, the
Company's revenues have declined since the first quarter of 2001 as a result of
the economic climate generally and in certain of the industries served by the
Company or other factors.

Forward Looking Statements

     Various  statements made in this Report  concerning the manner in which the
Company intends to conduct its future operations,  and potential trends that may
impact future results of operations, are forward looking statements. The Company
may be unable to  realize  its plans and  objectives  due to  various  important
factors,  including,  but not limited to the following:  a  continuation  of the
current recessionary  environment,  particularly in the aircraft  manufacturing,
telecom,  information  technology and other sectors served by the Company (which
may reflect  cyclical  conditions or fundamental  changes in these  industries),
could further  reduce demand for contingent  personnel and further  heighten the
competition for customers, resulting in lower revenues and margins and affecting
the Company's ability to continue to meet the financial  covenants under the IBJ
Credit  Facility;  the  Company's  significant  leverage  may  leave  it  with a
diminished  ability to obtain additional  financing for working capital or other
capital  expenditures,  for retiring  higher interest rate debt or for otherwise
improving the Company's  competitiveness  and capital structure or expanding its
operations;  recently  adopted SFAS 142,  which requires the Company to evaluate
annually the recoverability of goodwill on its books, could cause the Company to
write-off  goodwill in future  periods (in  addition to the  write-off  of $55.0
million in the first  quarter  of 2002),  which  could  have a material  adverse
impact on the Company's  financial  condition and results of operations;  or, if
COI fails to  generate  sufficient  consolidated  net income or have other funds
available  to upstream to COMFORCE  under the  restricted  payments  test of the
Senior  Notes  indenture  in  order  for  it to pay  cash  interest  on the  PIK
Debentures  (which is required  beginning June 1, 2003) or the Convertible  Note
(which is required beginning June 1, 2004) or to repay the PIK Debentures or the
Convertible  Note at their maturity in December 2009, or on any earlier required
repayment or repurchase date, then,  unless COMFORCE obtains a loan or sells its
capital stock or other securities to provide funds for this purpose, the Company
will default under the  indentures  governing the PIK  Debentures and the Senior
Notes and under the IBJ Credit Facility.
<PAGE>

     Additional  important  factors that could cause the Company to be unable to
realize its plans and  objectives  are  described  under  "Risk  Factors" in the
Registration  Statement on Form S-3 of the Company filed with the Securities and
Exchange  Commission  on December 21, 2000  (Registration  No.  333-52356).  The
disclosure  under "Risk Factors" in the  Registration  Statement may be accessed
through the Web site  maintained by the  Securities  and Exchange  Commission at
"www.sec.gov." In addition, the Company will provide,  without charge, a copy of
such "Risk Factors"  disclosure to each  stockholder of the Company who requests
such  information.  Requests for copies  should be directed to the  attention of
Linda Annicelli,  Vice President,  Administration at COMFORCE  Corporation,  415
Crossways  Park  Drive,  P.O.  Box 9006,  Woodbury,  New York  11797,  telephone
516-437-3300.

ITEM 3.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK


     The  information  required by Item 3 has been  disclosed  in Item 7A of the
Company's Annual Report on Form 10-K for the year ended December 30, 2001. There
has been no material change in the disclosure regarding market risk.


                           PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS.

     Since the date of the filing of the  Company's  Annual  Report on Form 10-K
for the year ended  December  30,  2001,  there have been no material  new legal
proceedings   involving  the  Company  or  any  material   developments  to  the
proceedings described in such 10-K.

Item 2.  Changes in Securities and Use of Proceeds.

     Not applicable.

Item 3.  Defaults Upon Senior Securities.

     Not applicable.

Item 4.  Submission of Matters to a Vote of Security Holders.

     On June 13, 2002, the annual meeting of the stockholders of the Company was
held. At this meeting,  the stockholders voted on (1) the election of directors,
with each to serve for a term of one year,  and (2) the approval of the COMFORCE
Corporation  2002 Stock Option Plan, and (3)  ratification of the appointment of
KPMG LLP as the Company's auditors for the year ending December 29, 2002.

     The following  individuals  were elected to the Board of Directors upon the
vote shown:

          Nominee                      For                    Withheld

John C. Fanning                     14,017,438                118,275
Harry Maccarrone                    14,056,944                  78,769
Rosemary Maniscalco                 14,056,944                  78,769
Kenneth J. Daley                    14,017,444                118,269
Daniel Raynor                       14,056,944                  78,769
Gordon Robinett                     14,056,944                  78,769

<PAGE>

     The  COMFORCE  Corporation  2002 Stock  Option Plan was  approved  upon the
following vote:

                                      Abstentions and
       For             Against        Broker non-Votes
    7,623,055          287,009           6,225,649

     The  appointment  of KPMG LLP was ratified and approved  upon the following
vote:

                                      Abstentions and
       For             Against        Broker non-Votes
    14,096,784         32,820              6,109

Item 5.  Other Information.

     Not applicable.

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

     (a)      Exhibits.

               10.1 Fourth  Amendment,  dated as of July 1, 2002,  to Employment
          Agreement dated as of January 1, 1999 and as previously  amended as of
          March 28, 2000, January 23, 2001 and September 27, 2001, among John C.
          Fanning, COMFORCE Corporation and COMFORCE Operating, Inc.

               10.2 Third  Amendment,  dated as of July 1, 2002,  to  Employment
          Agreement dated as of January 1, 1999 and as previously  amended as of
          January 23, 2001 and  September 27, 2001,  among Harry V.  Maccarrone,
          COMFORCE Corporation and COMFORCE Operating, Inc.

               10.3 Deferred Vacation Plan adopted July 17, 2002.

               99.1 Certification of Chief Executive Officer and Chief Financial
          Officer.

     (b)      Reports on Form 8-K.

               None.



<PAGE>




                                   SIGNATURES

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


COMFORCE Corporation

By:   /s/ Harry Maccarrone
     --------------------------------------------
     Harry Maccarrone, Executive Vice President
     and Chief Financial Officer

Date: August 13, 2002