<PAGE>   1



                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549
                                    FORM 10-Q


(Mark One)

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


For the quarterly period ended      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        0-4748
                       ---------------------

                              Data Dimensions, Inc.
--------------------------------------------------------------------------------
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

            Delaware                                      06-0852458
--------------------------------------------------------------------------------
(Name or Other jurisdiction of                (IRS employer identification no.)
 incorporation or organization)

   One Bellevue Center, 411 - 108th Avenue NE, Suite 2100, Bellevue, WA 98004
           (Address of principal executive offices)                 (Zip code)

Registrant's telephone number, including area code        (425) 688-1000
                                                  ------------------------------

Indicate by check 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

             Common Stock: 13,657,462 shares as of October 29, 1999
--------------------------------------------------------------------------------




                                     Page 1
<PAGE>   2



                              DATA DIMENSIONS, INC.
                                      Index

<TABLE>
<CAPTION>
                                                                                                          Page
                                                                                                         Number
                                                                                                         ------
<S>     <C>                                                                                              <C>
PART I - FINANCIAL INFORMATION.

     Item 1.  Consolidated Financial Statements.

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

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

         Consolidated Statements of Comprehensive Income for the three month and nine month
         periods ended September 30, 1999 and 1998 (unaudited).                                            4

         Consolidated Statements of Cash Flows for the nine month periods 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.                                                                        8

     Item 3.  Quantitative and Qualitative Disclosure About Market Risk.                                  11

PART II - OTHER INFORMATION.

     Item 4.  Exhibits and Reports on Form 8-K.                                                           11

SIGNATURES                                                                                                12
</TABLE>










                                     Page 2
<PAGE>   3



PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements


                              DATA DIMENSIONS, INC.
                           CONSOLIDATED BALANCE SHEETS
                                 (In thousands)


<TABLE>
<CAPTION>
                                                             September 30,    December 31,
                                                                 1999             1998
                                                             -------------    ------------
                                                              (unaudited)
<S>                                                          <C>              <C>
Current assets:
   Cash and cash equivalents                                   $  6,600         $    776
   Accounts receivable, net                                      23,172           36,876
   Prepaid and other current assets                               4,154            2,850
   Deferred income taxes                                          1,799            1,140
                                                               --------         --------
        Total current assets                                     35,725           41,642

Equipment and furniture, net                                      6,152            8,467
Investment in product development, net                               --            1,016
Other assets                                                        623              812
                                                               --------         --------
        Total assets                                           $ 42,500         $ 51,937
                                                               ========         ========

Current liabilities:
   Accounts payable                                            $  2,202         $  4,571
   Accrued compensation and commissions                           6,139            6,157
   Other accrued liabilities                                      3,270            3,596
   Current portion of capital lease obligations                   1,341            1,161
   Income taxes payable                                              --            5,997
   Deferred income taxes                                            276              797
                                                               --------         --------
        Total current liabilities                                13,228           22,279

Capital lease obligations, net of current portion                 1,243            1,976
Other long term liabilities                                         183              180
                                                               --------         --------
Total liabilities                                                14,654           24,435
                                                               --------         --------

Commitments and contingencies (Note 2)

Stockholders' equity:
   Common stock, $.001 par value; 20,000 shares
       authorized; 13,549 and 13,521 outstanding                     13               13
   Additional paid in capital                                    24,628           24,539
   Treasury stock, at cost, 112 shares in 1999 and 1998          (3,034)          (3,034)
   Retained earnings                                              6,397            6,104
   Cumulative comprehensive loss                                   (158)            (120)
                                                               --------         --------
        Total stockholders' equity                               27,846           27,502
                                                               --------         --------
    Total liabilities and stockholders' equity                 $ 42,500         $ 51,937
                                                               ========         ========
</TABLE>


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


                                     Page 3
<PAGE>   4



                              DATA DIMENSIONS, INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                      (In thousands, except per share data)
                                   (Unaudited)


<TABLE>
<CAPTION>
                                                  Three Month Periods        Nine Month Periods
                                                  Ended September 30,       Ended September 30,
                                                  -------------------       -------------------
                                                   1999         1998         1999          1998
                                                 --------      -------     --------      --------
<S>                                              <C>           <C>         <C>           <C>
Revenue
  Field consulting                               $ 15,987      $25,526     $ 64,543      $ 60,907
  Outsourcing services                              2,210        4,169       10,317         8,555
  Test centers                                      2,911        3,731        9,081        10,531
  Other                                               485        1,022        2,149         2,816
                                                 --------      -------     --------      --------
              Total revenue                        21,593       34,448       86,090        82,809

Direct costs                                       15,725       19,391       55,883        46,889
                                                 --------      -------     --------      --------

Gross margin                                        5,868       15,057       30,207        35,920

Selling, general and administrative expenses        8,296        8,058       27,590        24,452
Non-recurring charges                               1,923          757        1,923           757
                                                 --------      -------     --------      --------

Income (loss) from operations                      (4,351)       6,242          694        10,711

Other income (expense)                                (42)          33         (213)         (182)
                                                 --------      -------     --------      --------

Income (loss) before income tax                    (4,393)       6,275          481        10,529

Income tax provision (benefit)                     (1,713)       2,327          188         4,177
                                                 --------      -------     --------      --------

Net income (loss)                                $ (2,680)     $ 3,948     $    293      $  6,352
                                                 ========      =======     ========      ========

Earnings (loss) per share-basic                  $  (0.20)     $  0.29     $   0.02      $   0.48
Earnings (loss) per share-diluted                $  (0.20)     $  0.29     $   0.02      $   0.47

Weighted average shares outstanding-basic          13,537       13,398       13,533        13,319
Weighted average shares outstanding-diluted        13,537       13,474       13,596        13,469
</TABLE>


                 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
                                 (In thousands)
                                   (Unaudited)


<TABLE>
<S>                                             <C>          <C>        <C>        <C>
Net Income (loss)                               $(2,680)     $3,948     $ 293      $ 6,352
Other comprehensive income (loss) - foreign
       currency translation adjustments              43           5       (38)        (124)
                                                -------      ------     -----      -------

Comprehensive income (loss)                     $(2,637)     $3,953     $ 255      $ 6,228
                                                =======      ======     =====      =======
</TABLE>


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



                                     Page 4
<PAGE>   5



                              DATA DIMENSIONS, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (In thousands)
                                   (Unaudited)


<TABLE>
<CAPTION>
                                                                   Nine Month Periods
                                                                   Ended September 30,
                                                                 ------------------------
                                                                   1999            1998
                                                                 --------        --------
<S>                                                              <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income                                                       $    293        $  6,352
Adjustments to reconcile net income to net cash provided (used)
  by operating activities:
       Depreciation and amortization                                4,581           2,193
       Deferred income tax provision (benefit)                     (1,180)          4,177
       Non cash portion of non recurring charges                    1,055
       Changes in certain operating assets and liabilities
         Accounts receivable                                       13,704         (17,415)
         Prepaid and other assets                                  (2,176)         (1,097)
         Accounts payable                                          (2,369)            804
         Advanced billings                                           (300)         (1,155)
         Accrued compensation and commissions                         (18)           1979
         Accrued liabilities                                          203           1,979
         Income taxes payable                                      (5,997)             --
       Other                                                          511            (183)
                                                                 --------        --------
Net cash provided (used) by operating activities                    8,307          (2,552)
                                                                 --------        --------

CASH FLOWS FROM INVESTING ACTIVITIES
Maturities and sales of investments                                    --             986
Purchases of equipment and furniture                               (1,244)         (2,585)
Investment in product development                                      --             (52)
                                                                 --------        --------
Net cash used by investing activities                              (1,244)         (1,651)
                                                                 --------        --------

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from short term debt                                          --           2,300
Payment of capital lease obligations                               (1,026)           (218)
Distribution to shareholder                                          (229)           (514)
Repayment of note payable                                              --          (1,888)
Proceeds from issuance of common stock                                 16             400
                                                                 --------        --------
Net cash provided (used) by financing activities                   (1,239)             80
                                                                 --------        --------

Net increase (decrease) in cash and cash equivalents                5,824          (4,123)

Cash and cash equivalents, beginning of period                        776           4,734
                                                                 --------        --------

Cash and cash equivalents, end of period                         $  6,600        $    611
                                                                 ========        ========

Cash paid during the period for:
      Interest                                                        296             118
      Income tax                                                    6,703              --
      Equipment acquired under capital lease                          473              --
</TABLE>


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



                                     Page 5
<PAGE>   6



                              DATA DIMENSIONS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE 1: Basis of Presentation

The consolidated financial statements present the consolidated financial
position and results of operations of Data Dimensions, Inc. and its
subsidiaries, ("Data Dimensions" or the "Company") in accordance with the rules
and regulations of the Securities and Exchange Commission. Certain information
and footnote disclosures normally included in the financial statements prepared
in accordance with generally accepted accounting principles have been condensed
or omitted in accordance with such rules and regulations.

The financial information included herein for the three and nine month periods
ended September 30, 1999 and 1998 is unaudited; however, such information
reflects all adjustments consisting only of normal recurring adjustments which
are, in the opinion of management, necessary for a fair presentation of the
consolidated financial position, results of operations, comprehensive income and
cash flows for the interim periods. The financial information as of December 31,
1998 is derived from the Company's audited consolidated financial statements.
These interim consolidated financial statements should be read in conjunction
with the audited consolidated financial statements and related notes thereto,
which are included in the Company's 1998 Annual Report on Form 10-K.

The results of operations for the 1999 interim periods presented are not
necessarily indicative of the results to be expected for the year ended December
31, 1999 or any future interim period, and the Company makes no representation
related thereto.

Certain amounts have been reclassified in the prior period financial statements
to conform with the current year presentations.

NOTE 2: Contingencies

The Company is from time to time involved in various claims and legal
proceedings of a nature considered by Company management to be routine and
incidental to its business. In the opinion of Company management, after
consultation with outside legal counsel, the ultimate disposition of such
matters is not expected to have a material adverse effect on the Company's
financial position, results of operations or liquidity.

NOTE 3: Reconciliation of Earnings (Loss) Per Share

Basic earnings per share is computed using the weighted average number of common
shares outstanding during the period. Diluted earnings per share is computed
using the weighted average number of common shares and dilutive common
equivalent shares outstanding during the period. Dilutive common equivalent
shares consist of common stock issuable upon exercise of stock options using the
treasury stock method.

For the three months ended September 30, 1999, all potential common equivalent
shares were excluded from the computation of diluted earnings (loss) per share
because inclusion would have had an anti-dilutive effect on earnings (loss) per
share.




                                     Page 6
<PAGE>   7





The following provides a reconciliation of the numerators and denominators of
the basic and diluted per share computations:


<TABLE>
<CAPTION>
                                                         Three Month Periods          Nine Month Periods
                                                         Ended September 30,          Ended September 30,
                                                         1999           1998          1999          1998
                                                       --------        -------       -------       -------
<S>                                                    <C>             <C>           <C>           <C>
Weighted average shares outstanding                      13,537         13,398        13,533        13,319
Dilutive common stock options using the treasury
    stock method                                             --             76            63           150
                                                       --------        -------       -------       -------
Weighted average diluted shares outstanding              13,537         13,474        13,596        13,469
                                                       ========        =======       =======       =======

Net income (loss)                                      $ (2,680)       $ 3,948       $   293       $ 6,352
Earnings (loss) per share - basic                      $  (0.20)       $  0.29       $  0.02       $  0.48
Earnings (loss) per share - diluted                    $  (0.20)       $  0.29       $  0.02       $  0.47
</TABLE>


NOTE 4: Non-Recurring Charge

A non-recurring charge of $1.9 million was recorded in the quarter ended
September 30, 1999. The charge resulted from the Company's transition from
providing products and consulting services addressing Year 2000 remediation to
providing information technology consulting and other services. The
non-recurring charge consists of (in thousands):

<TABLE>
<S>                                                             <C>
Capitalized product development                                 $  388
Asset impairment                                                   667
Severance costs                                                    868
                                                                ------
                                                                $1,923
                                                                ======
</TABLE>

Write-off of capitalized product development represents costs associated with
the development of the Company's Ardes 2K and IVR products. The Company has
decided to discontinue selling these products as they are no longer a part of
the Company's core business strategy.

Asset impairment reflects the write-down of certain computer equipment at the
Company's Outsourcing Services division. This equipment was used specifically in
the testing of platforms for compliance with Y2K and due to the shift in the
focus to enterprise integration will not be fully utilized. The Company has
written these assets down to their estimated net realizable value and intends to
hold these assets for potential future projects which could require the specific
equipment identified.

Severance costs reflect a workforce reduction of approximately 240 individuals
primarily in field consulting. Of the non-recurring amount, approximately
$528,000 is included in Accrued Compensation and Commissions and reflects
severance costs for terminations scheduled for the fourth quarter of 1999.

NOTE 5: Subsequent Event

On November 1, 1999, the Company settled a lawsuit regarding royalties owed for
the use of its Y2K processes. The Company received $1.9 million as a result of
the settlement. There was no recognition of the settlement in the financial
statements for the quarter ended September 30, 1999.




                                     Page 7
<PAGE>   8



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

This management's discussion and analysis of financial condition and results of
operations should be read in conjunction with the discussion and analysis
presented in the Company's 1998 Annual Report on Form 10-K.

Results of Operations

Quarter Ended September 30, 1999

Revenue of $21.6 million in the third quarter ended September 30, 1999 was down
37 percent from the revenue of $34.4 million in the quarter ended September 30,
1998. The decrease resulted primarily from a significant number of Year 2000
consulting contracts being completed during the quarter without being replaced
by a commensurate number of non-Year 2000 contracts. This was most evident in
field consulting revenue, which decreased 37 percent. Outsourcing services,
which does not typically consist of Year 2000 contracts, had two significant
projects for outsourcing mainframes to perform Year 2000 testing end during the
quarter. As a result, outsourcing services revenue decreased 47 percent. Test
center revenue decreased 22 percent and other revenue decreased 53 percent. The
decline in Year 2000 projects can be attributed to many companies having
completed their Year 2000 work or being in the process of doing so. There is
also evidence that many companies are deferring new information technology (IT)
projects or investments until after the Year 2000 date change has passed. This
effect was evident in the quarter ended September 30, 1999 and is expected to
continue in the quarter ending December 31, 1999. The Company expected the
decline in Year 2000 projects, however the Company's non-Year 2000 services,
including IT consulting, quality assurance and testing, and data center and
application outsourcing, did not provide enough revenue in the quarter ended
September 30, 1999 to compensate for the loss of Year 2000 contract revenue.

Direct costs decreased 19 percent in the quarter ended September 30, 1999 from
the quarter ended September 30, 1998. This decrease did not compensate for the
decline in revenue as gross margin declined 61 percent in the quarter ended
September 30, 1999 from the quarter ended September 30, 1998. Gross margin as a
percentage of revenue decreased from 44 percent to 27 percent. This decline was
a result of having too many consultants on staff as the Year 2000 contracts
ended. During the quarter approximately 80 consultants were terminated as part
of the work force adjustment and the Company expects to terminate an additional
130 consultants in the fourth quarter. The associated severance costs have been
included in the non-recurring charge.

Selling, General and Administrative expenses increased 3 percent in the quarter
ended September 30, 1999 over the quarter ended September 30, 1998. The increase
was primarily due to higher employee related costs and higher legal costs. In
order to address costs in light of the declining revenue, several actions,
primarily personnel reductions, were taken to reduce costs. Costs related to
reduction in personnel costs have been included in non-recurring charges.

In the quarter ended September 30, 1999, the Company recorded a non-recurring
charge of $1.9 million. Since 1991, the Company has derived a significant
percentage of its business in consulting on projects associated with Year 2000
remediation projects. As this source of revenue will no longer be a prominent
portion of the continuing business strategy, the Company is redirecting its
service offerings to enterprise integration solutions, quality assurance and
testing and outsourcing. In transitioning to this business strategy, the Company
has reduced its workforce of field consultants in order to align the workforce
with the current level of demand for its service offerings. The Company has also
reduced general and administrative staffing levels to reflect lower expected
revenues in the near future.

Additionally, the Company wrote off capitalized development costs associated
with the Ardes 2K and IVR products. These products were specifically designed to
assist in the remediation of Year 2000 issues. The Company has determined that
these products are not aligned with the future business strategy and therefore
will no longer sell these products, and therefore has written off all
capitalized costs associated with the products.



                                     Page 8
<PAGE>   9
Asset impairments reflect the write-down of certain computer equipment at the
Company's Outsourcing Services division. This equipment was used specifically in
the testing of platforms for compliance with Y2K and due to the shift in focus
to enterprise integration will not be fully utilized. The Company has written
these assets down to their estimated net realizable value and intends to hold
these assets for potential future projects which could require the specific
equipment identified.

Other income (expense) recorded in 1999 and 1998 consists primarily of the
interest component of capital leases, and in 1998 interest income from
investments.

The annual effective tax rate in 1999 is 39 percent compared to 37 percent in
1998.

Three Quarters Ended September 30, 1999

Revenue of $86.1 million in the three quarters ended September 30, 1999 was 4
percent higher than the revenue of $82.8 million in the three quarters ended
September 30, 1998. Field consulting revenue increased 6 percent, outsourcing
services revenue increased 21 percent, test center revenue decreased 14 percent
and other revenue decreased 24 percent. The increase in revenue from field
consulting was primarily due to Year 2000 contracts. The decrease in other
revenue is primarily a result of de-emphasizing the Company's product offering.
The Company has discontinued development and marketing of the existing products
and will continue supporting them only during the remaining product life cycle.

Direct costs increased 19 percent in the three quarters ended September 30, 1999
over the three quarters ended September 30, 1998. The increase in direct costs,
coupled with the 4 percent increase in revenue led to a 16 percent decrease in
gross margin year to year. As described above, the number of consultants was too
high as Year 2000 projects were completed and actions were taken to adjust the
workforce to the revenue level.

SG&A expenses increased 13 percent in the three quarters ended September 30,
1999 over the three quarters ended September 30, 1998, primarily due to an
increase in employee related costs associated with the Company's transition from
Year 2000 work to enterprise integration services.

Liquidity and Capital Resources

The Company utilized its $10 million line of credit during the three quarters
ended September 30, 1999 to fund a significant federal income tax payment early
in the year and to cover occasional short term cash requirements. At September
30, 1999, the Company had no borrowings outstanding under its line of credit and
had a cash balance of $6.6 million.

Working capital increased $3.1 million and the current ratio improved from 1.9
to 1 to 2.7 to 1 from December 31, 1998 to September 30, 1999. Accounts
receivable decreased $13.7 million from December 31, 1998, resulting in an
improvement in cash flow from operations.

The Company anticipates that it will be able to meet its cash requirements for
the foreseeable future through cash generated by operations and occasional use
of its line of credit.

Year 2000 Compliance

The Year 2000 issue is the result of computer programs that were written using
two digits rather than four to identify the applicable year. Any of the
Company's computer equipment, software and devices with embedded technology that
are time-sensitive may mistakenly identify a date field using "00" as the year
1900, rather than the year 2000.

State of Readiness

The Company provides Year 2000 consulting services to Fortune 500 companies and
government agencies and is employing the same methods and processes to complete
its own internal Year 2000 project that it provides to its customers. The
Company has established a Year 2000 task force, comprised



                                     Page 9
<PAGE>   10

of members representing the different business operations of the Company, to
assess and remediate the impact of the Year 2000 on its IT and non-IT systems,
material third party relationships, and service and product offerings. As
identified by the task force, the Year 2000 issues facing Data Dimensions that
may have a material impact on its ability to continue its business practices as
usual through the change of the century include: internal business systems;
internet and intranet service; telecommunications; power; and the compliance and
readiness of the Company's third party suppliers, vendors, and customers.

The task force has divided the Company's Year 2000 project into three major
phases: (1) assessment and planning; (2) implementation; and (3) verification
and contingency planning. The Company is completing the verification and
contingency planning phase. Through this process, the Company did not become
aware of any information which indicates that the magnitude of the Company's
Year 2000 problem is material. During the implementation phase of the project,
the Company replaced obsolete systems and updated (or repaired) the hardware,
applications and data so they are Year 2000 compliant. During the verification
and contingency planning phase of the project, the Company performed acceptance
testing and returned updated applications to production as well as removed any
unused and outdated hardware and software. The Company is in the process of
finalizing and testing its contingency plans.

In addition to its own compliance efforts, the Company conducted an assessment
of third parties with which it has material relationships to determine if they
are Year 2000 compliant. The Company contacted its key vendors and suppliers by
the distribution of questionnaires. A majority of the vendors and suppliers have
responded to the questionnaire with assurance that they will be Year 2000
compliant. The Company is in the process of developing contingency plans for
those vendors and suppliers that will not be fully Year 2000 compliant.

Prior to the start of the Company's Year 2000 project, implementation of a new
enterprise-wide integrated accounting package to provide for the financial needs
of the organization was completed. This software has been warranted by the
vendor to be Year 2000 compliant. Similarly, the operating system used by Data
Dimensions Information Services, Inc., the Company's subsidiary which outsources
mainframe computer processing services, also has been warranted by the vendor to
be Year 2000 compliant. Finally, the Company has replaced its phone and
voicemail systems with new, Year 2000 compliant systems to better provide for
the expanding communication needs of the organization.

Costs to Address Year 2000 Issues

The total estimated cost of the project is approximately $1.0 million. These
costs consist primarily of the cost of labor needed to complete the Company's
readiness and compliance project. The approximate labor cost incurred through
September 30, 1999 was $800,000. The decision by the Company to acquire new
accounting and phone software and equipment, and the timing thereof, arose in
the ordinary course of the growth of the Company, and is not considered a cost
associated with the Year 2000 issue.

Risks of Year 2000 Issues

The failure to correct a material Year 2000 problem could result in an
interruption in, or a failure of, certain normal business activities or
operations. If such failures occur, the Company's results of operations,
liquidity, and financial condition could be materially and adversely affected
and the Company may be required to incur unanticipated expenses to remedy any
problems not addressed by the Company's compliance efforts. Additionally, if any
of the Company's material suppliers or vendors are not fully Year 2000
compliant, it is possible that a system failure or miscalculations causing
disruptions in the Company's operations or potential problems with its product
and service offerings could result.

Contingency Plans

Part of the Company's Year 2000 project includes the preparation of contingency
plans. The Company is in the process of completing and testing its contingency
plans.




                                    Page 10
<PAGE>   11



Forward-Looking Statements and Associated Risks

The foregoing and the discussion and analysis presented in the Company's 1998
Annual Report in Form 10-K and subsequent quarterly reports on Form 10-Q contain
certain forward-looking statements, including, among others (i) the potential
extent of the Year 2000 problem; (ii) anticipated trends in the Company's
financial condition and results of operations (including expected changes in the
Company's gross margin and general, administrative and selling expenses); (iii)
the Company's business strategies for expanding its presence in the computer
services industry and positioning itself for non-Year 2000 markets; and (iv) the
Company's ability to distinguish itself from its current and future competitors.

These forward-looking statements are based largely on the Company's current
expectations and are subject to a number of risks and uncertainties, some of
which are described in the Issues and Uncertainties section of the discussion
and analysis included in the Company's 1998 Annual Report on Form 10-K. The
Company does not provide forecasts of future financial performances. While
Company management is optimistic about the Company's long-term prospects, these
issues and uncertainties, among others, should be considered. Actual results
could differ materially from these forward-looking statements. Important factors
to consider in evaluating such forward-looking statements include (i) the
shortage of reliable market data regarding the Year 2000 consulting market; (ii)
changes in external competitive market conditions that might impact trends in
the Company's results of operations; (iii) unanticipated working capital or
other cash requirements; (iv) changes in the Company's business strategies or an
inability to execute its strategies due to unanticipated changes in the overall
information technology consulting market; (v) the Company's ability to recruit
new employees and retain current employees during the implementation of the
business strategy, and (vi) various competitive factors that may prevent the
Company from competing successfully in the marketplace. In view of these risks
and uncertainties, there can be no assurance that the forward-looking statements
contained in the Company's Annual Report on Form 10-K and subsequent quarterly
reports on Form 10-Q will, in fact, transpire.

Item 3.  Quantitative and Qualitative Disclosure About Market Risk

         Not Applicable.


PART II - OTHER INFORMATION

Item 4.  Exhibits and reports on Form 8-K

     (a) The following exhibits are filed as a part of this report, and this
list is intended to constitute the exhibit index:

<TABLE>
<CAPTION>
         Exhibit No.
         -----------
<S>                   <C>
              27.     Financial Data Schedule
</TABLE>

     (b) There were no reports on Form 8-K filed during the quarter ended
September 30, 1999.
















                                    Page 11
<PAGE>   12



                                   SIGNATURES



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



                            Data Dimensions, Inc.
                            (Registrant)


       November 12, 1999    /s/ Peter A. Allen
       -----------------    ----------------------------------------------------
       Date                     Peter A. Allen, President and Chief Executive
                                Officer



       November 12, 1999    /s/ Laurence C. Leslie
       -----------------    ----------------------------------------------------
       Date                     Laurence C. Leslie, Executive Vice President,
                                Chief Financial Officer and Secretary (Principal
                                Financial and Accounting Officer)















                                    Page 12