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 September 30, 1999
                                       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
                          COMFORCE Corporation: 1-6081
                       COMFORCE Operating, Inc.: 333-43341

                            COMFORCE Corporation and
                            COMFORCE Operating, Inc.
             (Exact name of registrant as specified in its charter)

                                        COMFORCE Corporation:       36-23262248
          Delaware                      COMFORCE Operating, Inc.:    11-3407855
 (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 October 27, 1999
--------------------                             -------------------------------
COMFORCE Corporation:
   Common stock, $.01 par value                        16,395,493 shares
COMFORCE Operating, Inc.:
   Common stock, $.01 par value   100 shares (all owned by COMFORCE Corporation)


<PAGE>


                            COMFORCE Corporation and
                            COMFORCE Operating, Inc.



                                      INDEX

<TABLE>
<CAPTION>
                                                                                                             Page
                                                                                                             Number
                                                                                                             ------

<S>                                                                                                              <C>
PART I   FINANCIAL INFORMATION....................................................................................3

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

     Consolidated Balance Sheets September 30, 1999
        and December 31, 1998 (unaudited).........................................................................3

     Consolidated Statements of Operations for the three and
        nine months ended September 30, 1999 and 1998 (unaudited).................................................4

     Consolidated Statements of Cash Flows for the nine months
        ended September 30, 1999 and 1998 (unaudited).............................................................5

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

Item 2.       Management's Discussion and Analysis of
              Financial Condition and Results of Operations......................................................10

Item 3.       Quantitative and Qualitative Disclosure about Market Risk..........................................14

PART II       OTHER INFORMATION..................................................................................15

Item 1.       Legal Proceedings..................................................................................15

Item 2.       Changes in Securities and Use of Proceeds (not applicable).........................................15

Item 3.       Defaults Upon Senior Securities (not applicable)...................................................15

Item 4.       Submission of Matters to a Vote of Security Holders (not applicable)...............................15

Item 5.       Other Information (not applicable).................................................................15

Item 6.       Exhibits and Reports on Form 8-K   ................................................................15


SIGNATURES.......................................................................................................16

</TABLE>


                                       2
<PAGE>


                         PART I - FINANCIAL INFORMATION

Item 1.       Financial Statements

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

                                                                    September 30,           December 31,
                                                                        1999                    1998
                                                                        ----                    ----
<S>                                                                 <C>                    <C>
ASSETS:
Current assets:
   Cash and cash equivalents                                        $   4,911              $   4,599
   Accounts receivable, net                                            53,415                 47,727
   Funding and service fee receivable, net                             35,903                 33,953
   Prepaid expenses and other current assets                            3,174                  3,342
   Deferred income taxes                                                2,306                  2,306
                                                                    ---------              ---------
               Total current assets                                    99,709                 91,927

   Property and equipment, net                                         11,254                  9,256
   Intangible assets, net                                             139,018                138,847
   Deferred financing costs                                             5,427                  6,052
                                                                    ---------              ---------
               Total assets                                         $ 255,408              $ 246,082
                                                                    =========              =========

LIABILITIES AND STOCKHOLDERS' EQUITY:

Current liabilities:

   Borrowings under revolving line of credit                        $   4,000              $   4,000
   Accounts payable                                                     3,264                  4,296
   Accrued expenses                                                    26,412                 18,068
                                                                    ---------              ---------
               Total current liabilities                               33,676                 26,364

   Long-term debt                                                     177,445                174,579
   Deferred income taxes                                                  224                    224
   Other liabilities                                                      380                    581
                                                                    ---------              ---------
               Total liabilities                                      211,725                201,748
                                                                    ---------              ---------

 Commitments and contingencies
 Stockholders' equity:
   Common stock, $.01 par value; 100,000,000 shares
     authorized; 16,395,457 shares and 16,129,322 shares
     issued and outstanding at September 30, 1999 and
     December 31, 1998, respectively                                      164                    161
   Additional paid-in capital                                          48,328                 47,464
   Accumulated deficit since January 1, 1996                           (4,809)                (3,291)
                                                                    ---------              ---------
                  Total stockholders' equity                           43,683                 44,334
                                                                    ---------              ---------
                  Total liabilities and stockholders' equity        $ 255,408              $ 246,082
                                                                    =========              =========
</TABLE>

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


                                       3
<PAGE>


                      COMFORCE CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                     (in thousands except per share amounts)
                                   (unaudited)


<TABLE>
<CAPTION>

                                                          Three Months Ended               Nine Months Ended
                                                               September 30,                    September 30,
                                                               -------------                    -------------
                                                          1999               1998          1999              1998
                                                          ----               ----          ----              ----

<S>                                                       <C>              <C>              <C>              <C>
Revenue:
   Net sales of services                                  $ 109,394        $ 117,230        $ 327,588        $ 347,347
                                                          ---------        ---------        ---------        ---------
Costs and expenses:
   Cost of services                                          87,957           94,764          264,882          282,644
   Selling, general and administrative                       13,640           14,136           42,002           42,458
   Depreciation and amortization                              1,632            1,320            5,037            4,017
                                                          ---------        ---------        ---------        ---------

Total costs and expenses                                    103,229          110,220          311,921          329,119
                                                          ---------        ---------        ---------        ---------

Operating income                                              6,165            7,010           15,667           18,228
                                                          ---------        ---------        ---------        ---------

Other income (expense):
   Interest expense                                          (5,537)          (5,419)         (16,294)         (16,020)
   Other income, net                                              2               11               14               34
                                                          ---------        ---------        ---------        ---------
                                                             (5,535)          (5,408)         (16,280)         (15,986)
                                                          ---------        ---------        ---------        ---------

Income (loss) before income taxes                               630            1,602             (613)           2,242
Income tax provision                                            614              925              905            1,871
                                                          ---------        ---------        ---------        ---------
   Net  income (loss)                                            16              677           (1,518)             371
Dividends on preferred stock                                   --                  6             --                 18
                                                          ---------        ---------        ---------        ---------
   Net income (loss) applicable to
     common stockholders                                  $      16        $     671        $  (1,518)       $     353



                                                          =========        =========        =========        =========
           Basic income (loss) per common share           $    0.00        $    0.04        $   (0.09)       $    0.02
                                                          =========        =========        =========        =========
         Diluted income (loss) per common share           $    0.00        $    0.04        $   (0.09)       $    0.02
                                                          =========        =========        =========        =========
                  Basic weighted average shares              16,395           16,072           16,287           15,958
                                                          =========        =========        =========        =========
                Diluted weighted average shares              16,406           16,623           16,287           16,820
                                                          =========        =========        =========        =========

</TABLE>

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


                                       4
<PAGE>


                      COMFORCE CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (in thousands)
                                   (unaudited)
<TABLE>
<CAPTION>

                                                                          Nine Months Ended
                                                                             September 30,
                                                                     ---------------------------
                                                                     1999                   1998
                                                                     ----                   ----
<S>                                                              <C>                     <C>
Net cash flows provided by operating activities                  $  5,700                $  8,337
                                                                 --------                --------
Cash flows from investing activities:
   Acquisition,  net of cash acquired                                --                    (3,574)
   Purchases of property and equipment                             (3,655)                 (5,050)
   Payments of contingent consideration                            (2,689)                 (1,886)
   Restricted cash                                                   --                     1,036
   Decrease in other assets                                          --                       183
                                                                 --------                --------
      Net cash flows used in investing activities                  (6,344)                 (9,291)
                                                                 --------                --------

Cash flows from financing activities:
   Net proceeds (repayments) on line of credit agreement            1,130                    (986)
   Reduction of capital lease obligation                             (174)                   (155)
   Proceeds from exercise of stock options                           --                       137
   Proceeds from exercise of warrants                                --                       458
   Payment of registration costs                                     --                       (44)
   Dividends paid                                                    --                       (25)
                                                                 --------                --------
      Net cash flows provided by (used in) financing
activities                                                            956                    (615)
                                                                 --------                --------
Increase (decrease) in cash and cash equivalents                      312                  (1,569)
Cash and cash equivalents, beginning of period                      4,599                   6,512
                                                                 --------                --------
   Cash and equivalents, end of period                           $  4,911                $  4,943
                                                                 ========                ========

Supplemental cash flow information:
Cash paid during the period for:
   Interest paid                                                 $ 10,591                $  9,630
   Income taxes paid                                                  607                   1,211

Supplemental schedule of noncash investing  and
   financing activities:
   Common stock issued in connection with acquisitions                867                   1,900
   Dividends accrued but not paid                                     --                        2
   Issuance of Senior Secured PIK Debentures in lieu of
      interest payment                                              1,736                   1,542

</TABLE>

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


                                       5
<PAGE>


                      COMFORCE CORPORATION AND SUBSIDIARIES
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

1.   GENERAL

     The accompanying  unaudited interim  consolidated  financial  statements of
COMFORCE  Corporation,  COMFORCE Operating,  Inc. ("COI") and their subsidiaries
(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  31,  1998.  The  results  for the three and nine  months  ended
September  30, 1999 and 1998 are not  necessarily  indicative  of the results of
operations for the entire year.

2.   NEWLY-ISSUED ACCOUNTING STANDARDS

     In June 1998, the Financial  Accounting  Standards  Board  ("FASB")  issued
Statement of Financial  Accounting  Standards No. 133, Accounting for Derivative
Instruments and Hedging Activities ("SFAS 133"). The FASB issued SFAS No. 137 in
June 1999 to delay the  effective  date of SFAS 133 to  fiscal  years  beginning
after June 15, 2000  (January  1, 2001 for the  Company).  The Company  does not
expect the  adoption of SFAS 133, as amended by SFAS 137, to have a  significant
effect on the Company's results of operations or its financial position.

3.   DEBT

     Notes  payable and  long_term  debt at September  30, 1999 and December 31,
1998 consisted of the following (in thousands):
<TABLE>
<CAPTION>

                                                                                September 30,      December 31,
                                                                                    1999               1998
                                                                                ------------       -----------
<S>                   <C>                                                           <C>               <C>
12% Senior Notes, due 2007                                                          $110,000          $110,000

15% Senior Secured PIK Debentures, due 2009                                           24,898            23,162

Revolving line of credit,  due November 26, 2002, with interest payable
   monthly at LIBOR plus up to 2.25%.  At September 30, 1999, the
   average rate of such borrowings was 7.6%                                           46,547            45,417
                                                                                ------------       -----------
                                                                                     181,445           178,579
   Less, current portion                                                               4,000             4,000
                                                                                ------------       -----------
        Total long-term debt                                                        $177,445          $174,579
                                                                                ============       ===========

</TABLE>


                                       6
<PAGE>


4.   EQUITY

     The  increase in common  stock  outstanding  during the nine  months  ended
September 30, 1999 relates  principally  to 55,554 shares issued on February 17,
1999 at a price of $4.75 per share and 193,124  shares issued on May 20, 1999 at
a price of $3.125 per share. These shares were issued as contingent  payments in
connection with two of the Company's prior acquisitions.

5.   EARNINGS PER SHARE

     Basic  income  (loss) per common  share is computed by dividing  net income
(loss)  available  for common  stockholders  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-month  and nine-month  periods ended  September 30, 1999 and 1998 (in
thousands):

<TABLE>
<CAPTION>

                                                      Three Months Ended               Nine Months Ended
                                                         September 30,                    September 30,
                                                     1999           1998               1999              1998
                                                 --------         --------          --------          --------
<S>                                              <C>              <C>               <C>               <C>
Numerator:
   Net income (loss)                             $     16         $    677          $ (1,518)         $    371
   Preferred stock dividends                           --               (6)               --               (18)
                                                 --------         --------          --------          --------
   Numerator for basic and diluted
    income (loss) per share--income
    (loss) available to common
    stockholders                                 $     16         $    671          $ (1,518)         $    353
                                                 ========         ========          ========          ========
Denominator:
   Weighted-average shares                         16,395           16,072            16,287            15,958
Effect of dilutive securities:
   Stock options                                       --              179                --               390
   Warrants                                            11              372                --               472
                                                 --------         --------          --------          --------
Denominator for diluted income (loss) per
   share-adjusted weighted average shares
   and assumed conversions                         16,406           16,623            16,287            16,820
                                                 ========         ========          ========          ========

</TABLE>

     Outstanding  options  and  warrants  to  purchase  shares of common  stock,
representing  approximately  4,000,000  shares of common stock on September  30,
1999, were not included in the computations of diluted earnings (loss) per share
for the  three-month  and  nine-month  periods ended  September 30, 1999 because
their effect would be anti-dilutive.

6.   STOCK OPTIONS:

     Effective as of June 9, 1999, the date the annual  meeting of  shareholders
of the Company was held,  the Company  granted to each of its five  non-employee
directors of the Company an option to purchase  10,000  shares of the  Company's
common stock at an exercise price of $3.13 per share. These options,  which were
granted under the


                                       7
<PAGE>


Company's  Long-Term  Stock  Investment  Plan,  will  fully  vest  on the  first
anniversary of the date of grant.

7.   INDUSTRY SEGMENT INFORMATION:

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

     Revenues  and profits in the Staff  Augmentation  segment are  generated by
providing   temporary   employees   to   client   companies   generally   on   a
time-and-materials  basis.  Staff  Augmentation  services  are  offered  through
several divisions.  Telecom provides  telecommunications  workers,  primarily to
telecommunications  companies;  Information  Technologies  provides programmers,
systems consultants, software engineers and other IT workers to a broad range of
companies  which  outsource  portions  of their IT  requirements;  and  Staffing
Services provides primarily technical workers,  including engineers,  scientists
and laboratory workers, to a variety of corporations and laboratories.

     Revenues  and  profits in the  Financial  Services  segment  are  generated
through  outsourcing  and consulting  services for client  companies.  Financial
Services is composed of two  distinct  activities:  The PrO  Unlimited  division
provides  confidential  consulting and conversion  services  related to clients'
employment of  independent  contractors,  and typically  provides  non-recruited
payrolling  services  to  those  clients.   Through  its  THISCO  and  Brentwood
divisions,  the Financial Services segment also offers  outsourcing  services to
independent  consulting and staffing  companies,  in which the Company  provides
payroll funding services and back office support to those clients.

     The accounting  policies of the segments are the same as those described in
the notes to the consolidated  financial  statements  contained in the Company's
Annual  Report on Form 10-K for the year ended  December 31,  1998.  The Company
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.

     The  table  below  presents  information  on  the  revenues  and  operating
contribution  for each segment for the three and nine months ended September 30,
1999 and 1998, and items which reconcile segment  operating  contribution to the
Company's reported pre-tax income (loss).


                                       8
<PAGE>

<TABLE>
<CAPTION>

                                            Three Months Ended                         Nine Months Ended
                                               September 30,                             September 30,
                                               -------------                             -------------
                                            1999            1998                       1999           1998
                                            ----            ----                       ----           ----
                                                                      (in thousands)
<S>                                      <C>                 <C>                 <C>                  <C>
Net sales of services:
   Financial Services                    $  30,300           $  23,490           $  82,381            $  66,977
   Staff Augmentation                       79,094              93,740             245,207              280,370
                                         ---------           ---------           ---------            ---------

                                           109,394             117,230             327,588              347,347
                                         ---------           ---------           ---------            ---------
Operating contribution:
   Financial Services                        3,794               3,300              10,146                9,402
   Staff Augmentation                        7,599               8,713              22,191               24,439
                                         ---------           ---------           ---------            ---------
                                            11,393              12,013              32,337               33,841
                                         ---------           ---------           ---------            ---------
Consolidated expenses:
   Interest                                  5,537               5,419              16,294               16,020
   Depreciation and amortization             1,632               1,320               5,037                4,017
   Corporate general and
    administrative                           3,594               3,672              11,619               11,562
                                         ---------           ---------           ---------            ---------
                                            10,763              10,411              32,950               31,599
                                         ---------           ---------           ---------            ---------

Income (loss) before income taxes        $     630           $   1,602           $    (613)           $   2,242
                                         =========           =========           =========            =========

                                                                At September 30,          At December 31,
                                                                     1999                     1998
                                                             -------------------     --------------------
Identifiable Assets:

  Financial Services                                                   $41,524                   $39,967
  Staff Augmentation                                                    48,461                   41,714
           Corporate                                                    20,978                   19,502
                                                             -------------------     --------------------
                                                                      $110,963                 $101,183
                                                             ===================     ====================

</TABLE>


                                       9
<PAGE>


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   Operating,   Inc.   ("COI")  and  their   subsidiaries
(collectively, the "Company").

Overview

     The  Company  operates  its  Staff  Augmentation   business  through  three
divisions  --  Information  Technologies,  Telecom and  Staffing  Services.  The
Company's outsourcing and consulting services are provided through its Financial
Services division.

     Gross  margins on staffing  services  can vary  significantly  depending on
factors such as the specific services being performed, the overall contract size
and the amount of recruiting  required.  Margins on the  Company's  sales in the
technical  services sector are typically  significantly  lower than those in the
telecommunications,  information  technology  and  financial  services  sectors.
Consequently,  changes in the Company's  sales mix can be expected to impact the
overall gross margins generated by the Company.

     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 billable  employees,  and
offers retirement plans to eligible employees.

Results of Operations

Three Months Ended  September 30, 1999 Compared to Three Months Ended  September
30, 1998

     Net sales of services for the three months  ended  September  30, 1999 were
$109.4  million  as  compared  to  $117.2  million  for the three  months  ended
September 30, 1998.  This 6.7% decline in net sales of services is  attributable
principally  to a decrease in sales in the  Staffing  Services  and  Information
Technologies  divisions,  offset  partially  by  higher  sales in the  Company's
Telecom and Financial  Services  divisions.  The Company's  business with Boeing
Corporation,  its largest customer in 1998, remained  substantially lower in the
third quarter of 1999 than in the comparable prior year period. This represented
the majority of the Staffing Services revenue decline. The Company's Information
Technologies  division  also  experienced  a decline in sales for the 1999 third
quarter as compared to the comparable prior year period as result of the current
Year 2000 lockdown,  which has slowed contract activity,  as many customers have
limited or delayed development work until the Year 2000.

     Cost of services for the three months ended September 30, 1999 was 80.4% of
net sales of services compared to cost of services of 80.8% for the three months
ended  September 30, 1998. The cost of services  decrease as a percentage of net
sales for the 1999 period is a result of the strategies undertaken by management
to increase  margins,  as well as the Company's  business mix,  which  reflected
growth  in  the  Company's  Telecom  and  Financial  Services  divisions.  These
divisions have historically  generated higher gross margins than the more mature
Staffing Services division.


                                       10
<PAGE>


     Selling, general and administrative expenses decreased by $496,000, or 3.5%
during  the third  quarter  of 1999 as  compared  to the prior  year  comparable
quarter.  However,  due to the decline of net sales of services discussed above,
selling,  general  and  administrative  expenses  as  a  percentage  of  revenue
increased  to 12.5% for the three months ended  September  30, 1999  compared to
12.1% for the three months ended September 30, 1998.

     Operating  income for the three  months ended  September  30, 1999 was $6.2
million, compared to $7.0 million for the three months ended September 30, 1998.
This decrease was principally  attributable to the reduced net sales of services
discussed above, partially offset by increased margins.

     The  Company's  interest  expense for the three months ended  September 30,
1999 and 1998 is attributable  to the interest on the Company's  credit facility
with Heller Financial, Inc. (the "Credit Facility"),  COI's 12% Senior Notes due
2007 (the "COI Notes") and the Company's 15% Senior  Secured PIK  Debentures due
2009  (the  "PIK   Debentures"),   which  obligations  were  incurred  in  1997,
principally in connection with the funding of business acquisitions.

     The income tax provision for the three months ended  September 30, 1999 was
$614,000 on income before taxes of $630,000, compared to an income tax provision
of $925,000 on income  before  taxes of $1.6  million for the three months ended
September 30, 1998. The difference between the Federal statutory income tax rate
and the Company's effective tax rate relates primarily to the  non-deductibility
of  amortization   expense   associated  with  certain  intangible  assets,  the
nondeductibility  of a portion of the interest  expense  associated with the PIK
Debentures and state income taxes.

Nine Months Ended September 30, 1999 Compared to Nine Months Ended September 30,
1998

     Net sales of services  for the nine months  ended  September  30, 1999 were
$327.6 million as compared to $347.3 million for the nine months ended September
30, 1998. This 5.7% decline in net sales of services is attributable principally
to a decrease in sales in theStaffing Services division.  The Company's business
with Boeing Corporation,  its largest customer in 1998,  remained  substantially
lower for the nine months ended September 30, 1999 than in the nine months ended
September 30, 1998.  The decrease in net sales of services was partially  offset
by sales increases in the Company's Financial Services and Telecom divisions.

     Cost of services for the nine months ended  September 30, 1999 was 80.9% of
net sales of services  compared to cost of services of 81.4% for the nine months
ended  September 30, 1998. The cost of services  decrease as a percentage of net
sales for the 1999 period is a result of the strategies undertaken by management
to increase  margins,  as well as the Company's  business mix,  which  reflected
growth  in  the  Company's  Telecom  and  Financial  Services  divisions.  These
divisions have historically  generated higher gross margins than the more mature
Staffing Services division.

     Selling,  general and  administrative  expenses  increased by $456,000,  or
1.1%,  during the nine months ended  September 30, 1999 as compared to the prior
year comparable  period.  Due to the decline of net sales of services  discussed
above, selling,  general and administrative  expenses as a percentage of revenue
increased  to 12.8% for the nine months  ended  September  30, 1999  compared to
12.2% for the nine months ended September 30, 1998.

     Operating  income for the nine months  ended  September  30, 1999 was $15.7
million, compared to operating income of $18.2 million for the nine months ended
September 30, 1998.  This decrease was  principally  attributable to the reduced
net sales of services, partially offset by increased margins.


                                       11
<PAGE>


     The Company's interest expense for the nine months ended September 30, 1999
and 1998 is attributable to the interest on the Credit  Facility,  the COI Notes
and PIK  Debentures,  which  obligations  were incurred in 1997,  principally in
connection with the funding of business acquisitions.

     The income tax provision  for the nine months ended  September 30, 1999 was
$905,000 on a loss before taxes of $613,000, compared to an income tax provision
of $1.9 million on income before taxes of $2.2 million for the nine months ended
September 30, 1998. The difference between the Federal statutory income tax rate
and the Company's  effective tax rate relates primarily to the  nondeductibility
of  amortization   expense   associated  with  certain  intangible  assets,  the
nondeductibility  of a portion of the interest  expense  associated with the PIK
Debentures and state income taxes.

Financial Condition, Liquidity and Capital Resources

     The Company pays its billable  employees  weekly for their services  before
receiving payment from its customers. In addition, certain statutory payroll and
related taxes as well as other fringe benefits are generally paid by the Company
before  the  Company  receives  payment  from  its  customers.  Consequently,  a
significant  portion of the  Company's  cost of services is normally paid by the
Company  prior  to  receiving  payment  from  its  customers.  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 debt service costs  associated with the borrowings  under the COI Notes
and the Credit Facility have significantly reduced the Company's liquidity.  The
debt service costs  associated with the PIK Debentures may be satisfied  through
the issuance of new notes. To date, the Company has chosen to issue new notes to
pay these costs.

     Management of the Company believes that cash flow from operations and funds
anticipated  to be available  under the Credit  Facility  will be  sufficient to
service the  Company's  indebtedness  and to meet  anticipated  working  capital
requirements for the foreseeable  future.  However,  various factors,  including
those described or referenced under "Forward-Looking Statements" and "Year 2000"
in this Item 2 could prevent the Company from realizing these objectives.

     As of September  30, 1999,  the Company had  outstanding  $24.9  million in
principal  amount of PIK Debentures  bearing  interest at a rate of 15%,  $110.0
million in principal  amount of COI Notes bearing  interest at a rate of 12% and
$46.5  million  outstanding  under the Credit  Facility  bearing  interest at an
average rate of 7.6% per annum.

     As of September 30, 1999,  approximately  $139.0 million,  or 54.4%, of the
Company's  total  assets  were  intangible   assets.   These  intangible  assets
substantially  represent amounts attributable to goodwill recorded in connection
with the  Company's  acquisitions  and will be amortized  over a five to 40 year
period,  resulting in an annual charge of  approximately  $4.4 million.  Various
factors could impact the Company's ability to generate the earnings necessary to
support  this  amortization   schedule,   including  the  factors  described  or
referenced under "Forward-Looking Statements" and "Year 2000" in this Item 2.

     The Company is  obligated  under  various  acquisition  agreements  to make
earn-out payments to the sellers of acquired companies,  subject to the acquired
companies' having met certain  contractual  requirements.  The maximum amount of
the remaining potential earn-out payments is $3.0 million in cash payable in the
three-year  period from 1999 to 2001.  The  Company  cannot  currently  estimate
whether it will be obligated  to pay the maximum  amount;  however,  the Company
anticipates that the cash generated by the operations of the acquired  companies
will provide all or a substantial  part of the capital required to fund the cash
portion of the earn-out payments.


                                       12
<PAGE>


     During the nine months ended  September  30, 1999,  the  Company's  primary
sources of funds to meet working  capital needs were from  operating  activities
and borrowings  under the Credit Facility.  Cash and cash equivalents  increased
$312,000 during the nine months ended September 30, 1999. Cash flows provided by
operating  activities  of $5.7  million  and cash flows  provided  by  financing
activities of $956,000 exceeded the $6.3 million of cash flows used in investing
activities.  Cash flows used in investing activities were principally related to
additions to fixed assets and the payment of earn-out consideration.  Cash flows
provided by financing activities were principally attributable to net borrowings
under the Credit Facility.

Year 2000

     The Company has  completed  a review of its  potential  Year 2000 issues by
examining all of its internal and third party  applications,  operating systems,
interfaces and hardware.  Independent of its Year 2000 compliance  program,  the
Company  initiated a major system conversion in early 1998, based principally on
industry_leading  PeopleSoft(R) software, in order to improve access to business
information through common, integrated computing systems nationwide. This system
is expected to make the Company's IT systems fully Year 2000 compliant. To date,
the Company has  converted  all of its  critical  billing,  payable and accounts
receivable functions to Year 2000 compliant systems.

     In assessing  potential  Year 2000 issues,  the Company  established a Year
2000 committee, a compliance program and a budget. The committee has divided the
Company's Year 2000 compliance program into four sections: (1) systems inventory
and assessment,  (2)systems testing  evaluation and monitoring,  (3) third party
suppliers  and  (4)  contingency  planning.  Each of  these  sections  has  been
completed  except  monitoring  and  contingency  planning,  which will  continue
through  year-end.  The  Company  expects  that all of its IT systems and non-IT
systems will be Year 2000  compliant  prior to December  31,  1999.  The Company
estimates  the total  Year 2000  expenditures  that will have been  incurred  by
year-end  will not be  material.  Not  included  in these costs are the costs of
conversion  to the  new  integrated  computing  systems,  which  was  undertaken
independently of its Year 2000 compliance initiative.

     As a part of its Year 2000 compliance program, the Company has communicated
with its material  third_party  vendors and service providers in order to assess
their  Year  2000  readiness  and seek to  ensure  that  they  will be Year 2000
compliant.  The Company has  received  reasonable  assurances  from its material
vendors  that they are or will  before  year-end  be Year 2000  compliant.  With
respect to the purchases of computer systems,  or upgrades for existing computer
systems,  the Company's  policy is to receive Year 2000  certification  from the
vendor prior to completing the purchase.

     The  statements  above,  which express the Company's  belief that Year 2000
problems  will  not  have a  material  adverse  effect  on the  Company,  may be
forward_looking  statements.  Although  management believes that the Company has
acted with  appropriate  diligence to address  potential  Year 2000  issues,  no
assurance  can be given that Year 2000  issues  will not  materially  affect its
business or  operations.  Factors which could  potentially  cause the Company to
suffer  business  interruptions  or other losses include the failure of its Year
2000  project  team  to  identify  latent  or  other   non-compliant   codes  or
technologies, the failure of any of the customers, vendors, service suppliers or
financial  institutions  with which the Company  deals to address their own Year
2000 problems or the  ineffectiveness  of any contingency  plans put in place by
the Company to mitigate the effects of  interruptions  in its  businesses due to
Year 2000 problems.

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  services  in  the  technical   services   sector  has
historically  been


                                       13
<PAGE>


lower  during the  year-end  holidays  through  January of the  following  year,
showing  gradual  improvement  over the  remainder  of the year.  Although  less
pronounced  than  in  technical  services,   the  demand  for  services  in  the
telecommunications  and IT sectors is typically  lower during the first  quarter
until customers' operating budgets are finalized.

Other Matters

     In June 1998, the Financial  Accounting  Standards  Board  ("FASB")  issued
Statement of Financial  Accounting  Standards No. 133, Accounting for Derivative
Instruments and Hedging Activities ("SFAS 133"). The FASB issued SFAS No. 137 in
June 1999 to delay the  effective  date of SFAS 133 to  fiscal  years  beginning
after June 15, 2000  (January  1, 2001 for the  Company).  The Company  does not
expect the  adoption of SFAS 133, as amended by SFAS 137, to have a  significant
effect on the Company's results of operations or its financial position.

Forward Looking Statements

     The matters  discussed  below and elsewhere in this Report contain  forward
looking  statements that involve risks and  uncertainties,  many of which may be
beyond the Company's control.  See "Forward Looking Statements" in Item 1 of the
Company's Annual Report on Form 10-K for the year ended December 31, 1998, "Year
2000" in Part I, Item 2 herein and "Risk Factors" in the Company's  Registration
Statement on Form S-3 filed with the SEC on July 2, 1999 (Reg.  No.  333-82201).
These  disclosures may be accessed through the Website  maintained by the SEC at
"http://www.sec.gov" or, upon request made to Linda Annicelli, Vice President of
Administration at COMFORCE Corporation, 415 Crossways Park Drive, P.O. Box 9006,
Woodbury, NY 11797, telephone  516-437-3300,  the Company will provide a copy of
these disclosures without charge.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

     The  preponderance of the Company's  borrowings are fixed rate obligations.
During the nine months ended September 30, 1999, only  approximately  16% of the
Company's interest expense was attributable to variable rate loans, all of which
were under the Credit Facility.  Consequently,  management does not believe that
any  adjustments  to the rate  under the  Credit  Facility  are likely to have a
material  impact on its  results of  operations  in the  immediate  future.  The
Company has not entered into any swap  agreements or other hedging  transactions
as a means of limiting its exposure to interest rate fluctuations.



                                       14
<PAGE>


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  31,  1998,  there have been no material  new legal
proceedings   involving  the  Company  or  any  material   developments  to  the
proceedings  described  in such 10-K except as follows.  In the suits before the
Connecticut  Superior  Court brought by Austin Iodice and Anthony Giglio against
the  Company  concerning  whether  stock  options  issued by the  Company to the
plaintiffs  remain in effect,  the  parties  had  agreed to enter  into  binding
mediation to resolve all issues. The plaintiffs,  however,  withdrew their offer
of binding  mediation,  and  subsequently  the parties agreed to go forward with
non-binding mediation.

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

     Not applicable.

Item 5. Other Information

     Not applicable.

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

     (a)  Exhibits.

          27.  Financial  Data  Schedule of COMFORCE  Corporation  and  COMFORCE
               Operating, Inc.

     (b)  Reports on Form 8-K.

     Not applicable.


                                       15
<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/ Robert H.B. Baldwin, Jr.
     -----------------------------------------------
     Robert H.B. Baldwin, Jr.,
     Senior Vice President and Chief Financial Officer

Date: November 12, 1999


COMFORCE Operating, Inc.

By:   /s/ Robert H.B. Baldwin, Jr.
     -----------------------------------------------
     Robert H.B. Baldwin, Jr.,
     Senior Vice President and Chief Financial Officer

Date: November 12, 1999



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