<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                   March 31, 2001
                              --------------------------------------------------

                                       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)


<TABLE>
<S>                                                                      <C>
                       Delaware                                                     06-0852458
---------------------------------------------------------------------------------------------------------
(STATE OR OTHER JURISDICTION OF INCORPORATION OR ORGANIZATION)           (IRS EMPLOYER IDENTIFICATION NO.)
</TABLE>

   Sterling Plaza, 3rd Floor, 3535 Factoria Boulevard SE, Bellevue, WA 98006
--------------------------------------------------------------------------------
              (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)

REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE        (425) 688-1000
                                                  ------------------------------

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: 13,560,972 shares as of April
30, 2001



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                              DATA DIMENSIONS, INC.
                                      Index

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

   Item 1. Consolidated Financial Statements

           Consolidated Balance Sheets (unaudited) at March 31, 2001 and December 31, 2000     3

           Consolidated Statements of Operations (unaudited) for the three month periods
               ended March 31, 2001 and 2000                                                   4

           Consolidated Statements of Comprehensive Income (unaudited) for the three month
               periods ended March 31, 2001 and 2000                                           4

           Consolidated Statements of Cash Flows (unaudited) for the three month periods
               ended March 31, 2001 and 2000                                                   5

           Notes to Consolidated Financial Statements (unaudited)                              6

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

   Item 3. Quantitative and Qualitative Disclosure About Market Risk                           8

PART II -- OTHER INFORMATION.

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

SIGNATURES                                                                                     9
</TABLE>



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PART I -- FINANCIAL INFORMATION

Item 1.  Consolidated Financial Statements


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


<TABLE>
<CAPTION>
                                                              March 31,       December 31,
                                                                2001             2000
                                                              ---------       ------------
<S>                                                          <C>              <C>
Current assets:
  Cash and cash equivalents                                   $  1,932         $  2,110
  Accounts receivable, net                                       7,539           11,523
  Income tax receivable                                          4,809            4,500
  Prepaid and other current assets                               1,065              973
  Deferred income taxes                                             --              130
                                                              --------         --------
       Total current assets                                     15,345           19,236

Equipment and furniture, net                                     2,924            2,952
Deferred income taxes                                               --              280
Other assets                                                       660              667
                                                              --------         --------
       Total assets                                           $ 18,929         $ 23,135
                                                              ========         ========

Current liabilities:
  Accounts payable                                            $    861         $  1,057
  Accrued compensation and commissions                           1,404            1,638
  Other accrued liabilities                                        546            1,393
                                                              --------         --------
        Total current liabilities                                2,811            4,088

Other long term liabilities                                        198              192
                                                              --------         --------
        Total liabilities                                        3,009            4,280
                                                              --------         --------

Commitments and contingencies (Note 2)

Stockholders' equity:
  Common stock, $.001 par value; 20,000 shares
    authorized; 13,673 issued in 2001 and 2000                      14               14
  Additional paid in capital                                    24,844           24,775
  Treasury stock, at cost; 112 shares in 2001 and 2000          (3,034)          (3,034)
  Cumulative comprehensive loss                                   (550)            (371)
  Accumulated deficit                                           (5,354)          (2,529)
                                                              --------         --------
       Total stockholders' equity                               15,920           18,855
                                                              --------         --------
Total liabilities and stockholders' equity                    $ 18,929         $ 23,135
                                                              ========         ========
</TABLE>


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



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


<TABLE>
<CAPTION>
                                                                  Three Month Periods
                                                                     Ended March 31,
                                                                 2001             2000
                                                               --------         --------
<S>                                                            <C>              <C>
Revenue                                                        $  6,452         $  7,625

Direct costs                                                      4,494            5,298
                                                               --------         --------

Gross margin                                                      1,958            2,327

Selling, general and administrative expenses                      4,591            5,500
                                                               --------         --------

Loss from operations                                             (2,633)          (3,173)

Other (income) expense, net                                          62              (47)
                                                               --------         --------

Loss from continuing operations before income tax                (2,695)          (3,126)
Income tax expense (benefit) from continuing operations             130           (1,219)
                                                               --------         --------

Loss from continuing operations, net of tax                      (2,825)          (1,907)

Loss from discontinued operations, net of tax                        --             (370)
                                                               --------         --------
Net loss                                                       $ (2,825)        $ (2,277)
                                                               ========         ========

Loss per share-basic
    From continuing operations                                 $  (0.21)        $  (0.14)
    From discontinued operations                                     --            (0.03)
                                                               --------         --------
                                                               $  (0.21)        $  (0.17)
                                                               ========         ========
Loss per share-diluted
    From continuing operations                                 $  (0.21)        $  (0.14)
    From discontinued operations                                     --            (0.03)
                                                               --------         --------
                                                               $  (0.21)        $  (0.17)
                                                               ========         ========

Weighted average shares outstanding - basic                      13,561           13,557
Weighted average shares outstanding - diluted                    13,561           13,557
</TABLE>


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

<TABLE>
<S>                                                            <C>             <C>
Net loss                                                       $(2,825)        $(2,277)
Other comprehensive loss - foreign currency translation
    adjustments                                                   (179)            (25)
                                                               -------         -------

Comprehensive loss                                             $(3,004)        $(2,302)
                                                               =======         =======
</TABLE>



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


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


<TABLE>
<CAPTION>
                                                                    Three Month Periods
                                                                      Ended March 31,
                                                                   2001            2000
                                                                 --------         --------
<S>                                                              <C>              <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss                                                         $ (2,825)        $ (2,277)
Adjustments to reconcile net loss to net cash provided by
  (used in) operating activities:
    Depreciation and amortization                                     464            1,395
    Deferred income tax expense (benefit)                             410             (200)
    Other non cash items                                               75             (170)
    Changes in certain operating assets and liabilities
      Accounts receivable                                             384            4,617
      Income tax receivable                                          (309)           1,064
      Prepaid and other assets                                        (85)            (483)
      Accounts payable                                               (196)            (275)
      Accrued compensation and commissions                           (234)          (1,403)
      Other accrued liabilities                                      (847)            (343)
    Other                                                            (179)             (17)
                                                                 --------         --------
Net cash provided by (used in) operating activities                (3,342)           1,908
                                                                 --------         --------

CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of equipment and furniture                                 (436)            (620)
Proceeds from sale of discontinued operations                       3,600               --
Proceeds from sale of equipment and furniture                          --               36
                                                                 --------         --------
Net cash provided by (used in) investing activities                 3,164             (584)
                                                                 --------         --------

CASH FLOWS FROM FINANCING ACTIVITIES
Payment of capital lease obligations                                   --             (467)
Proceeds from issuance of common stock                                 --               10
                                                                 --------         --------
Net cash used in financing activities                                  --             (457)
                                                                 --------         --------

Net increase (decrease) in cash and cash equivalents                 (178)             867

Cash and cash equivalents, beginning of period                      2,110           10,390
                                                                 --------         --------

Cash and cash equivalents, end of period                         $  1,932         $ 11,257
                                                                 ========         ========

Cash paid during the period for:
    Interest                                                     $      6         $     76
    Income taxes                                                 $     --         $      3
</TABLE>


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



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                              DATA DIMENSIONS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

NOTE 1: Business and Basis of Presentation

Business

Data Dimensions, Inc. and its subsidiaries ("Data Dimensions" or the "Company")
provide comprehensive outsourced software quality assurance and test solutions
and application development and maintenance services. From 1991 through 1999,
the Company derived the majority of its revenue by providing solutions
specifically related to the millennium date change ("Y2K"). From 1997 until 2000
the Company provided data center outsourcing services. This operation was sold
in December 2000.

On March 8, 2001, the Company signed an Agreement and Plan of Reorganization
with Lionbridge Technologies, Inc., as amended on March 16, 2001. The agreement
calls for the Company to be acquired pursuant to an exchange of the Company's
common stock for shares of common stock of Lionbridge. The approximate value of
the transaction is $15 million based on the value of the shares on the date of
agreement. The transaction must be approved by the Company's stockholders at a
special meeting for stockholders which is scheduled to be held on June 21, 2001.

Basis of Presentation

The consolidated financial statements present the consolidated financial
position and results of operations of 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 month periods ended
March 31, 2001 and 2000 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, 2000 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 2000 Annual Report on Form 10-K.

The results of operations for the 2001 interim period presented are not
necessarily indicative of the results to be expected for the year ending
December 31, 2001 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 period presentation.

NOTE 2: Commitments and 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 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



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equivalent shares consist of common stock issuable upon exercise of stock
options using the treasury stock method.

For the three months ended March 31, 2001 and 2000, respectively, options and
warrants to purchase 2,095 and 1,881 common shares at prices of $0.25 to $33.88
and $0.25 to $34.75 were excluded from the computation of diluted loss per share
because inclusion would have had an anti-dilutive effect.

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 2000 Annual Report on Form 10-K.

On March 8, 2001, the Company signed an Agreement and Plan of Reorganization
with Lionbridge Technologies, Inc., as amended on March 16, 2001. The agreement
calls for the Company to be acquired pursuant to an exchange of the Company's
common stock for shares of common stock of Lionbridge. The approximate value of
the transaction is $15 million based on the value of the shares on the date of
agreement. The transaction must be approved by the Company's stockholders at a
special meeting for stockholders which is scheduled to be held on June 21, 2001.

Results of Operations

Revenue of $6.5 million in the first quarter ended March 31, 2001 declined 15
percent from revenue of $7.6 million in the quarter ended March 31, 2000. The
decrease resulted primarily from a reduction in consulting services, including
Year 2000 remediation services of $1.0 million. The quarter ended March 31, 2001
also reflected a decline in Internet-related testing services.

Direct costs decreased 15 percent in the quarter ended March 31, 2001 from the
quarter ended March 31, 2000 in response to reduced revenue levels. Gross margin
as a percentage of revenue was flat at 30 percent in each quarter. Gross margin
remains below expected levels due to lower utilization of technical personnel.

Selling, General and Administrative expenses decreased 17 percent in the quarter
ended March 31, 2001 compared to the prior year period. The decrease was
primarily due to a lower number of employees and employee related costs.

Other (income) expense recorded in 2001 consisted of financing related costs
partially offset by interest income. In 2000, other (income) expense reflected
net interest income.

In the quarter ended March 31, 2001 the Company's tax losses were not able to be
carried back and therefore no tax benefit was recorded. The 2001 tax expense is
related to the Company's foreign operations and adjustments to the deferred tax
asset valuation allowance. The Company's annual effective tax rate was 39
percent in the quarter ended March 31, 2000. In 2000, the tax benefit was
recorded due to the availability of tax loss carrybacks for taxes paid in 1998
and 1999.

Liquidity and Capital Resources

At March 31, 2001, the Company had $12.5 million of working capital, of which
$1.9 million was cash and cash equivalents. Accounts receivable decreased $4.0
million from December 31, 2000, resulting in an improvement in cash flow from
operating activities. The primary cause of the decrease was the receipt in
January of $3.6 million which represented the final payment from the sale of the
Company's data center operations on December 28, 2000. The Company incurred
continuing operating losses during the quarter ended March 31, 2001 and, as a
result, cash was reduced during the quarter. The Company has filed for a $4.8
million income tax refund that resulted from carrying back the tax losses
incurred in 2000 against taxes paid in 1998 and 1999. The Company cannot predict
when the refund will be received.

The Company has a $10 million, asset backed line of credit with a commercial
bank available for periodic working capital needs. The amount of available
credit is dependent on the level of assets and other financial criteria. Given
the anticipated tax refund, the availability of the line of credit and the



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pending merger with Lionbridge Technologies, Inc. the Company expects to meet
its short term cash requirements. If the Lionbridge merger is terminated, the
Company will need to significantly reduce its expenses and return to
profitability in order to meet its long term cash requirements.

Forward-Looking Statements and Associated Risks

The foregoing and the discussion and analysis presented in the Company's 2000
Annual Report on Form 10-K contains certain forward-looking statements,
including, among others, (i) 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); (ii) the
Company's business strategies for expanding its presence in the computer
services industry (including expanding the number of testing services offered,
geographic expansion, gaining additional business from individual client
organizations, and securing technology partnerships); and (iii) 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. Actual
results could differ materially from these forward-looking statements. Important
factors to consider in evaluating such forward-looking statements include (i)
the overall demand for Information Technology consulting services and
specifically customer demand for outsourced testing and quality assurance
services; (ii) the Company's ability to keep pace with rapidly changing
technology and to develop new service offerings; (iii) the Company's dependence
on its clients' product release cycles; (iv) the absence of long-term contracts
and the impact on the Company of the loss of a major client; (v) unanticipated
working capital or other cash requirements; (vi) the Company's ability to
attract and retain qualified technical personnel; (vii) the successful
completion of any business combination; and, (viii) 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 this Quarterly Report on Form 10-Q and
the Company's Annual Report on Form 10-K will, in fact, transpire.


Item 3.  Quantitative and Qualitative Disclosure About Market Risk

        Not Applicable.



PART II -- OTHER INFORMATION

Item 6.  Exhibits and Reports on Form 8-K

   (a) There are no exhibits filed as a part of this report.

   (b) Reports on Form 8-K filed during the quarter ended March 31, 2001.

        -       Form 8-K filed on January 12, 2001, reported the sale of the
                Company's data center operation on December 28, 2000 to Acxiom
                Corporation.

        -       Form 8-K filed on March 13, 2001 reported the signing of the
                Agreement and Plan of Reorganization between the Company,
                Lionbridge Technologies, Inc. and Diamond Acquisition Corp.,
                dated March 8, 2001.



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                                   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)


                         May 15, 2001       /s/ Laurence C. Leslie
                         ------------       ------------------------------------
                            Date            Laurence C. Leslie, Executive
                                            Vice President, Chief Financial
                                            Officer and Secretary (Principal
                                            Financial and Accounting Officer.)



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