================================================================================

                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 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 28, 1998
                                                    -----------------
                                       OR

[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act  of  1934  For  the  transition  period  from   _______________________   to
__________________________

                          Commission File Number 1-7352
                         ------------------------------

                            Data General Corporation
             ------------------------------------------------------
             (Exact name of registrant as specified in its charter)


           Delaware                                    04-2436397
-------------------------------         --------------------------------------  
(State or other jurisdiction of         (I.R.S. Employer Identification Number)
 incorporation or organization)        


4400 Computer Drive, Westboro, Massachusetts              01580
--------------------------------------------            --------- 
  (Address of principal executive offices)              (Zip Code)

        Registrant's telephone number, including area code (508) 898-5000
                                                           --------------

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

                         ------------------------------

     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
                                       ---  ---

     Number of shares outstanding of each of the registrant's  classes of common
stock, as of April 24, 1998:

  Common Stock, par value $.01                          49,145,661
  ----------------------------                      ------------------
     (Title of each class)                          (Number of shares)

                                                       
================================================================================
                         
<PAGE>


PART I -- FINANCIAL INFORMATION
<TABLE>
Item 1. Financial Statements.

DATA GENERAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<CAPTION>
                                                                     Quarter Ended                  Six Months Ended
                                                                 Mar. 28,      Mar. 29,            Mar. 28,     Mar. 29,
in thousands, except net income (loss) per share                   1998           1997              1998         1997
---------------------------------------------------------------------------------------------------------------------
<S>                                                             <C>            <C>             <C>            <C>         
Revenues:      
    Product.................................................    $263,744       $292,022        $530,921       $541,822
    Service.................................................      98,066         97,358         196,164        196,011
                                                              ----------     ----------       ---------       --------
         Total revenues.....................................     361,810        389,380         727,085        737,833
                                                              ----------      ---------       ---------       --------

Costs and expenses:
    Cost of product revenues................................     190,698        198,694         379,869        363,756
    Cost of service revenues................................      63,114         62,167         123,290        126,575
    Research and development................................      28,945         27,044          56,393         53,282
    Selling, general, and administrative....................      85,083         85,544         169,454        166,053
                                                               ---------      ---------        --------       --------
         Total costs and expenses...........................     367,840        373,449         729,006        709,666
                                                               ---------       --------        --------       --------

Income (loss) from operations...............................      (6,030)        15,931          (1,921)        28,167

Interest income.............................................       3,382          1,591           6,891          3,573
Interest expense............................................       3,595          3,141           7,215          6,344
Other income, net...........................................       2,240             --           2,240             --
                                                               ----------     ---------     -----------        -------

Income (loss) before income taxes...........................      (4,003)        14,381             ( 5)        25,396
Income tax provisions.......................................         500            600           1,000          1,200
                                                               -----------     --------       -----------     --------

Net income (loss)...........................................   $  (4,503)      $ 13,781        $  (1,005)      $ 24,196
                                                               ==========      ========        ==========      ========

Basic net income (loss) per share
    Net income (loss) per share.............................      $(0.09)         $0.34          $(0.02)         $0.61
                                                                  =======         =====          =======         =====

    Weighted average shares outstanding.....................      48,887         40,146          48,763          39,938
                                                                  ======        =======          ======          ======

Net income (loss) per share assuming dilution
    Net income (loss) per share.............................      $(0.09)         $0.32          $(0.02)         $0.57
                                                                  =======         =====          =======         =====

    Weighted average shares outstanding, including
    common stock equivalents, where applicable..............      48,887         42,944          48,763          42,517
                                                                  ======         ======          ======          ======

<FN>

No cash dividends have been declared or paid since inception.
The accompanying  Notes to Condensed  Consolidated  Financial  Statements are an
integral part of these financial statements.


</FN>
</TABLE>

<PAGE>

<TABLE>


DATA GENERAL CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
<CAPTION>

                                                                                       (Unaudited)
                                                                                         Mar. 28,              Sept. 27,
dollars in thousands                                                                       1998                   1997
-------------------------------------------------------------------------------------------------------------------------
<S>                                                                                    <C>                  <C>
Assets
Current Assets
    Cash and temporary cash investments............................................    $  163,916           $   216,814
    Marketable securities..........................................................       140,525               151,455
    Receivables, net...............................................................       290,863               296,375
    Inventories....................................................................       173,463               166,008
    Other current assets...........................................................        37,298                27,584
                                                                                      -----------          ------------
                  Total current assets.............................................       806,065               858,236
Property, plant, and equipment, net................................................       200,731               180,410
Other assets.......................................................................       108,649                96,222
                                                                                      -----------          -------------
                                                                                       $1,115,445            $1,134,868
                                                                                       ==========            ==========

Liabilities and stockholders' equity
Current liabilities
    Accounts payable...............................................................    $  146,740          $    154,624
    Other current liabilities......................................................       213,728               237,198
                                                                                       ----------          ------------
                  Total current liabilities........................................       360,468               391,822
                                                                                       ----------          ------------
Long-term debt.....................................................................       212,750               212,750
                                                                                     ------------          ------------
Other liabilities..................................................................         8,439                11,516
                                                                                     ------------          ------------

Stockholders' equity
    Common stock
         Outstanding - 49,096,000 shares at Mar. 28, 1998
         and 48,588,000 shares at Sept. 27, 1997 (net of
         deferred compensation of $16,007 at Mar. 28, 1998
         and $14,157 at Sept. 27, 1997)............................................       615,390               607,130
Accumulated deficit................................................................       (80,586)              (79,581)
Unrealized gains on marketable securities..........................................        11,014                 2,812
Cumulative translation adjustment..................................................       (12,030)              (11,581)
                                                                                     ------------          ------------
         Total stockholders' equity................................................       533,788               518,780
                                                                                     ------------          ------------
                                                                                       $1,115,445            $1,134,868
                                                                                     ============          ============
<FN>

The accompanying  Notes to Condensed  Consolidated  Financial  Statements are an
integral part of these financial statements.

</FN>
</TABLE>

<PAGE>


<TABLE>
DATA GENERAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<CAPTION>
                                                                                                 Six Months Ended
                                                                                           Mar. 28,            Mar. 29,
in thousands                                                                                  1998               1997
------------------------------------------------------------------------------------------------------------------------

<S>                                                                                       <C>                 <C>              
Cash flows from operating activities                                                                      
    Net income (loss)..................................................................   $  (1,005)          $ 24,196
    Adjustments to reconcile net income (loss) to
     net cash provided from operating activities
         Depreciation..................................................................      38,442             39,946
         Amortization of capitalized software development costs........................      12,565              9,924
         Other non-cash items, net.....................................................         454              5,918
         Change in operating assets and liabilities....................................     (42,022)           (16,548)
                                                                                          ----------          ---------

         Net cash provided from operating activities...................................       8,434             63,436
                                                                                         -----------          ---------

Cash flows from investing activities
    Expenditures for property, plant, and equipment....................................     (66,149)           (51,775)
    Net proceeds from the sales (purchases) of marketable securities...................      22,003             14,746
    Capitalized software development costs.............................................     (21,290)           (16,508)
                                                                                         -----------        -----------

         Net cash used by investing activities.........................................    (65,436)            (53,537)
                                                                                         ----------           ---------

Cash flows from financing activities
    Cash provided from stock plans.....................................................       5,212              5,429
    Decrease in notes payable..........................................................         -               (1,794)
    Repayment of long-term debt........................................................         -               (3,900)
                                                                                         -----------         ----------

         Net cash (used by) provided from financing activities.........................       5,212               (265)
                                                                                         -----------         ----------      
Effect of foreign currency rate fluctuations
 on cash and temporary cash investments................................................      (1,108)            (2,891)
                                                                                        ------------        -----------

Increase (decrease) in cash and temporary cash investments.............................     (52,898)             6,743
Cash and temporary cash investments - beginning of period..............................     216,814            178,997
                                                                                          ----------        -----------
Cash and temporary cash investments - end of period....................................   $ 163,916           $185,740
                                                                                          ==========        ===========

Supplemental disclosure of cash flow information
    Interest paid...................................................................... $     6,646          $   6,022
    Income taxes paid.................................................................. $       908          $     567

<FN>
The accompanying  Notes to Condensed  Consolidated  Financial  Statements are an
integral part of these financial statements.
</FN>
</TABLE>


<PAGE>


DATA GENERAL CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
<TABLE>
Note 1. Consolidated Balance Sheet Details
<CAPTION>
                                                Mar. 28,          Sept. 27,
in thousands                                      1998              1997
---------------------------------------------------------------------------------------------------------------------
<S>                                           <C>                <C>
Inventories
    Raw materials...........................  $  23,294          $  16,169
    Work in process.........................     77,969             78,335
    Finished systems........................     46,739             44,349
    Field engineering parts and components..     25,461             27,155
                                               ----------         ----------
                                               $173,463            166,008
                                               =========          ==========

Property, plant, and equipment
    Property, plant, and equipment..........  $ 685,169          $ 657,351
    Accumulated depreciation................   (484,438)          (476,941)
                                               --------           --------
                                              $ 200,731          $ 180,410
                                              =========          =========
</TABLE>

<TABLE>

Note 2.  Accounting Policies

         In the first quarter of fiscal 1998, the Company  adopted  Statement of
Financial  Accounting  Standards No. 128 ("SFAS 128") "Earnings per Share".  The
following  data show the amounts  used in  computing  earnings per share and the
effect on  income  and the  weighted  average  number  of shares of  potentially
dilutive common stock.
<CAPTION>
                                                                          Quarter Ended
                                         ------------------------------------------------------------------------------------------
                                                     Mar. 28, 1998                            Mar.  29, 1997
                                         -------------------------------------------------------------------------------------------
                                           Income        Shares      Per-Share      Income        Shares        Per-Share
in thousands, except per share amounts   (Numerator)  (Denominator)    Amount     (Numerator)  (Denominator)     Amount
                                         ----------    -----------   ---------     ---------   -------------    ---------
<S>                                        <C>          <C>           <C>           <C>           <C>             <C>   
Basic Earnings Per Share

Net income  (loss) available to
  common stockholders                      $(4,503)      48,887       $(0.09)       $13,781       40,146          $0.34
                                                                      =======                                     =====

Effect of Dilutive Securities

Stock Options                                 --            --                         --          2,798
                                          ----------    ---------                   -------       ------                       

Diluted Earnings Per Share

Net income (loss) available to
  common stockholders and
  assumed conversions                      $(4,503)      48,887       $(0.09)       $13,781       42,944          $0.32
                                           ========      ======       =======       =======       ======          =====

</TABLE>


<PAGE>

<TABLE>

                                   
                                                                        Six Months Ended
                                         ------------------------------------------------------------------------------------------
                                                     Mar. 28, 1998                            Mar.  29, 1997
                                         -------------------------------------------------------------------------------------------
                                           Income        Shares      Per-Share      Income        Shares        Per-Share
in thousands, except per share amounts   (Numerator)  (Denominator)    Amount     (Numerator)  (Denominator)     Amount
                                         ----------    -----------   ---------     ---------   -------------    ---------
<S>                                        <C>          <C>           <C>           <C>           <C>             <C>   
Basic Earnings Per Share

Net income  (loss) available to
  common stockholders                      $(1,005)      48,763       $(0.02)       $24,196       39,938          $0.61
                                                                      =======                                     =====

Effect of Dilutive Securities

Stock Options                                 --            --                         --          2,579
                                          ----------    ---------                   -------       ------                        

Diluted Earnings Per Share

Net income (loss) available to
  common stockholders and
  assumed conversions                      $(1,005)      48,763       $(0.02)       $24,196       42,517          $0.57
                                           ========      ======       =======       =======       ======          =====


<FN>

         For the quarter and  six-month  periods  ended March 28, 1998 and March
29, 1997, the assumed conversion of the convertible debentures, giving effect to
the  incremental  shares  and the  adjustment  to reduce  interest  expense,  is
anti-dilutive  and has therefore  been excluded  from the  computation.  For the
quarter and six-month period ended March 28, 1998, the assumed exercise of stock
options,  giving effect to the  incremental  shares,  is  anti-dilutive  and has
therefore been excluded from the computation.

</FN>
</TABLE>

Note 3.  Basis of Presentation and Use of Estimates

         The  preparation of financial  statements in conformity  with generally
accepted  accounting  principles  requires  management  to  make  estimates  and
assumptions  that  affect the  reported  amounts of assets and  liabilities  and
disclosure of  contingent  assets and  liabilities  at the date of the financial
statements  and the  reported  amounts  of  revenues  and  expenses  during  the
reporting period. Actual results could differ from these estimates.

         In the opinion of  management,  the  accompanying  unaudited  condensed
consolidated financial statements reflect all adjustments,  consisting of normal
recurring accruals, considered necessary for a fair presentation.  The Company's
accounting  policies  are  described  in the  Notes  to  Consolidated  Financial
Statements in the Company's  1997 Annual  Report.  The results of operations for
the quarter ended March 28, 1998 are not  necessarily  indicative of the results
of the entire fiscal year.



<PAGE>



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

Financial Condition

         Cash and temporary  cash  investments  as of March 28, 1998 were $163.9
million,  a decrease of $52.9  million from the end of fiscal 1997.  At the same
date, the Company held $140.5 million in marketable  securities,  a net decrease
of $10.9  million  during  the  current  six-month  period.  In total,  cash and
temporary cash  investments  along with  marketable  securities  decreased $63.8
million for the current six-month period.  The decrease was mainly  attributable
to the  purchases  of  inventory  and  equipment  required for the growth of the
Company's server and storage  businesses and payments reducing  employee-related
accruals.  The marketable  securities  held, which supplement cash and temporary
cash investments,  include United States treasury bills and notes,  notes issued
by U.S.  government  agencies,  commercial paper and certificates of deposit, as
well as equity securities recorded at the fair market value of $12.3 million and
classified as  available-for-sale.  The unrealized gain on marketable securities
of $11 million is  recorded as a separate  component  of  stockholders'  equity.
During the current  quarter,  the Company recorded a gain of $2.2 million on the
sale an equity  security.  Net cash provided from  operations for the six months
ended March 28, 1998 totaled $8.4 million; expenditures for property, plant, and
equipment were $66.1 million;  capitalized  software  development  costs totaled
$21.3  million;  and cash provided  from stock plans  totaled $5.2 million.  The
effect of foreign currency exchange rate fluctuations on cash and temporary cash
investments was a decrease of $1.1 million.

         Net  receivables at March 28, 1998 were $290.9  million,  a decrease of
$5.5 million from $296.4  million at September 27, 1997.  Total  inventories  at
March 28, 1998 were $173.5  million,  an increase of $7.5 million from September
27,  1997,  primarily  as a result of  end-of-quarter  procurement  required  to
support  both the  server and  storage  businesses.  Net  property,  plant,  and
equipment  increased  $20.3 million from September 27, 1997,  principally due to
the  purchases  of  equipment  and  capital  expenditures  for  developing  both
operating and financial  systems and to support the new product  initiatives  in
the server and storage businesses.  Fixed asset dispositions related to the sale
of  demonstration  equipment  totaled  $2.5  million for the  current  six-month
period. Management expects that sales of demonstration equipment will continue.

         The decrease of $7.9 million in accounts  payable  from  September  27,
1997 levels was attributed  mainly to the timing of payments related to material
purchases.  Other current liabilities decreased $23.5 million from September 27,
1997,  primarily  as a result of payments  reducing  employee-related  accruals.
Long-term debt of $212.8 million remained unchanged from September 27, 1997.

         During fiscal year 1995, the Company recorded  restructuring charges of
$43 million.  No material changes in estimates to prior provisions or additional
charges were  recorded  during the first  six-month  period of fiscal 1998.  All
charges,  excluding  asset  writedowns  and certain other  charges,  are cash in
nature and are funded from operations. The remaining reserves of $5.4 million at
March 28, 1998 are for the closure of various  domestic branch sales offices and
excess  vacant  rental  properties,  primarily  located in  Europe,  and for the
remaining  severance  payments  due to employees  impacted by the  restructuring
actions.



<PAGE>



Results of Operations

         The Company reported a net loss of $4.5 million for the current quarter
ended March 28,  1998,  compared  with net income of $13.8  million for the same
period of the  prior-year.  The net loss was $1 million for the six months ended
March 28, 1998, compared with net income of $24.2 million for the same six-month
period ended March 29, 1997.

<TABLE>

Revenues (in millions)
<CAPTION>

----------------------------------------------------------------------------------------------------------------------------
                                              Quarter ended                                     Six months ended
                              ----------------------------------------------------------------------------------------------
                                 3/28/98         Change         3/29/97              3/28/98         Change         3/29/97
                              ----------------------------------------------------------------------------------------------
<S>                              <C>             <C>            <C>                  <C>              <C>           <C>
Product                          $263.7          (10%)          $292.0               $530.9           (2%)          $541.8
  % of Total Revenues              73%                            75%                  73%                            73%

Service                            98.1            1%             97.3                196.2            --            196.0
  % of Total Revenues              27%                            25%                  27%                            27%

Total                            $361.8           (7%)          $389.3               $727.1           (1%)          $737.8
----------------------------------------------------------------------------------------------------------------------------

</TABLE>

         In the fiscal quarter ended March 28, 1998,  product revenues of $133.5
million  from the  Company's  AViiON  family  of open  systems  server  products
represented an increase of 5% from the  comparable  period of the prior year. In
the current  quarter,  revenues from the Company's  Intel-based  AViiON  systems
increased 48%, while revenues from the Motorola-based AViiON systems declined by
59%  compared  with the same period of the prior year.  The Company  anticipates
that the  percentage of server  product  revenues  generated by the  Intel-based
AViiON   products  will   continue  to  increase  in  fiscal  1998,   while  the
Motorola-based  AViiON  system  revenues  are  expected  to continue to decline.
Product revenues from the Company's  CLARiiON storage systems decreased 31% from
the comparable prior-year period and accounted for 35% of total product revenues
in the current quarter.  This decline is primarily the result of the longer than
anticipated  product  transition from SCSI-based  systems to the Company's newer
fibre-based  storage products.  CLARiiON is sold primarily through the Company's
Original  Equipment  Manufacturer  and distributor  channels;  thus sales in any
given period are subject to sales cycles and  inventory  levels of the Company's
customers.  CLARiiON product revenues have been concentrated in a limited number
of customers, with a significant portion of the Company's CLARiiON product sales
to a single OEM.  Product  revenues from personal  computers and other equipment
decreased 24% from the same period in the prior year and represented 9% of total
product revenues compared to 11% for the comparable prior-year period. In fiscal
1996,  the Company formed the VALiiANT  Business Unit, a contract  manufacturing
operation,  to take  advantage  of the  Company's  manufacturing  expertise  and
facilities.  VALiiANT  product  revenues  for the  quarter  ended March 28, 1998
represented 5% of total product revenues.


<PAGE>



         For the six months  ended March 28,  1998,  product  revenues of $266.8
million  from the  Company's  AViiON  family  of open  systems  server  products
increased 7% from $248.4 million for the first six-month  period of fiscal 1997.
For the current  six-month  period,  the Company's  Intel-based  AViiON revenues
increased 58%,  while product  revenues from the  Motorola-based  AViiON systems
declined  by 58% as compared  with the first  six-month  period of fiscal  1997.
Product  revenues  from the Company's  CLARiiON  storage  systems  decreased 17%
compared to the same  six-month  period in fiscal 1997.  Product  revenues  from
personal computers and other equipment  decreased by 13% from the same six-month
period in the prior year and  represent  9% of total  product  revenues  for the
current six-month period compared to 11% for the comparable  prior-year  period.
The VALiiANT product revenues for the six-month ended March 28, 1998 represented
4% of total product revenues.

         In the  service  business,  the  Company  experienced  an 18% and a 14%
increase in professional  service  revenues in the current quarter and six-month
periods ended March 28, 1998, respectively, as compared with the same periods in
fiscal 1997.  This  increase was  completely  offset by a 4% decline in contract
maintenance  revenues in both the current  quarter and  six-month  periods ended
March 28, 1998 as compared  with the quarter and  six-month  periods ended March
29, 1997.

<TABLE>

Revenues by Geographic Marketplace
<CAPTION>

------------------------------------------------------------------------------------------------------------------------------------
                                               Percentage of                                   Percentage Change of
                                           Consolidated Revenues                                  $ of Revenues
                             -------------------------------------------------------------------------------------------------------
                                  Quarter ended            Six months ended                      3/28/98 - 3/29/97
                             -------------------------------------------------------------------------------------------------------
                               3/28/98     3/29/97        3/28/98     3/29/97          Quarter ended         Six months ended
                             -------------------------------------------------------------------------------------------------------
<S>                              <C>        <C>            <C>         <C>                 <C>                     <C>  
Domestic:
Product                          59%        64%            60%         62%                 (17%)                   (7%)
Service                          59%        57%            60%         57%                   4%                     4%
Total                            59%        63%            60%         61%                 (12%)                   (4%)

Europe:
Product                          25%        22%            24%         23%                   5%                     5%
Service                          31%        33%            31%         32%                  (3%)                   (5%)
Total                            27%        24%            26%         25%                   2%                     2%

Other International:
Product                          16%        14%            16%         15%                   -                      7%
Service                          10%        10%             9%         11%                  (7%)                   (9%)
Total                            14%        13%            14%         14%                  (2%)                    3%
------------------------------------------------------------------------------------------------------------------------------------

</TABLE>

<PAGE>



         The decrease in domestic  product  revenues for the current quarter and
six-month  periods  ended  March 28, 1998 was  primarily  a result of  decreased
shipments of CLARiiON,  Motorola-based AViiON systems, and personal computer and
other equipment product revenues, which was partly offset by the increase in the
Company's  Intel-based  AViiON systems and product  revenues from VALiiANT.  The
increase in European product  revenues,  including U.S. direct export sales, for
the  current  quarter  and  six-month  periods  ended  March 28, 1998 was mainly
attributable to the increase in Intel-based  AViiON product  revenues  partially
offset by decreases in CLARiiON product revenues.  Other  international  product
revenues,  including U.S. direct export sales,  for the current quarter remained
unchanged  as compared  with the same fiscal  quarter in 1997.  The  increase in
other  international  product  revenues for the six-month period ended March 28,
1998 was  primarily  due to an increase in revenues  from the  CLARiiON  product
line.

         For the  current  six-month  period,  total  revenues  in the  European
marketplace  were reduced by  approximately  3% due to a stronger U.S. dollar as
compared to the six-month period ended March 29, 1997.

<TABLE>

Cost of Revenues (in millions)
<CAPTION>

------------------------------------------------------------------------------------------------------------------------------------
                                             Quarter ended                                        Six months ended
                            --------------------------------------------------------------------------------------------------------
                               3/28/98          Change            3/29/97           3/28/98          Change           3/29/97
                            --------------------------------------------------------------------------------------------------------
<S>                            <C>              <C>               <C>              <C>               <C>              <C>      
Product                        $190.7           (4%)             $198.7             $379.9            4%               $363.8
 % of Product Revenues           72%                             68%                  72%                               67%

Service                          63.1            2%                62.1              123.3           (3%)               126.5
 % of Service Revenues           64%                             64%                  63%                               65%

Total Cost of Revenues         $253.8           (3%)             $260.8             $503.2            3%               $490.3
 % of Total Revenues             70%                             67%                  69%                               66%
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>


         The increase in the product cost as a  percentage  of product  revenues
for the current quarter and six-month periods ended March 28, 1998 was primarily
caused by competitive pricing pressures and a shift in product mix. Service cost
as a percentage  of service  revenues  for the quarter  ended March 28, 1998 was
relatively  unchanged  as  compared to the quarter  ended  March 29,  1997.  The
decrease in the service  cost as a  percentage  of service  revenues for the six
months  ended March 28, 1998 was the result of continued  improvements  in spare
parts  inventory  management  and  improved  gross  margins in the  professional
service business.



<PAGE>


<TABLE>

Operating Expenses (in millions)
<CAPTION>

----------------------------------------------------------------------------------------------------------------------
                                                       Quarter ended                       Six months ended
                                           ---------------------------------------------------------------------------
                                             3/28/98       Change     3/29/97      3/28/98      Change     3/29/97
                                           ---------------------------------------------------------------------------
<S>                                           <C>          <C>         <C>         <C>          <C>         <C>
Research & Development                        $28.9         7%         $27.1       $56.4         6%         $53.3
  % of Total Revenues                           8%                       7%          8%                       7%

Selling, general & administrative             $85.1        (1%)        $85.4      $169.5         2%        $166.0
  % of Total Revenues                           24%                     22%         23%                      23%
----------------------------------------------------------------------------------------------------------------------
</TABLE>

         The Company continued to focus its research and development  efforts on
its core business  technology:  multi-user computer systems,  servers,  and mass
storage devices. In the current six-month period, gross expenditures on research
and  development  and  software  development  before  capitalization  were $77.6
million,  an increase of 11% from $69.8  million for the  comparable  prior-year
period.  The increase in research  and  development  expenditures  was driven by
investment in CLARiiON  fibre products and in the Company's  Non-Uniform  Memory
Access (NUMA) architecture for high-end servers.

         The increase in selling,  general, and administrative  expenses for the
six-month  period  ended  March 28, 1998 was the result of  increased  marketing
efforts in the server and storage  businesses.  The Company is in the process of
conducting a comprehensive review of its total cost structure. It is anticipated
that  this  review  will  result  in   decreases   in  selling,   general,   and
administrative  expenses in the second half of calendar  year 1998. At March 28,
1998, the number of employees totaled 5,091, a net decrease of 32 employees from
September 27, 1997 and a net increase of 162 employees from March 29, 1997.

         Interest  income  for the  current  quarter  was $3.4  million,  a 113%
increase  from $1.6 million for the  comparable  period of fiscal  1997,  due to
higher levels of invested  cash.  Interest  expense for the current  quarter was
$3.6  million,  a 15% increase  from $3.1 million for the  comparable  period of
fiscal  1997  due  to  the  interest  expense  related  to  the  6%  Convertible
Subordinated Notes due 2004 which were issued during the third fiscal quarter of
1997.  Other  income,  net  includes a gain of $2.2  million from the sale of an
equity security.

         The  income tax  provision  for the  current  quarter  was $.5  million
compared to $.6 million for the comparable  prior-year  period. The current year
tax  provision  relates  primarily to foreign,  state,  and federal  alternative
minimum taxes. The Company has a valuation allowance which offsets substantially
all deferred  tax assets as of March 28, 1998 and March 29, 1997.  The amount of
the  deferred  tax assets  considered  realizable  is subject to change based on
estimates of future  income  during the  carryforward  period.  The Company will
assess the need for the valuation  allowance at each balance sheet date based on
all available evidence and may adjust the level of the valuation  allowance,  if
appropriate.




<PAGE>




         Statements concerning the Company's business outlook or future economic
performance;  anticipated profitability,  revenues,  expenses or other financial
items;  product or service  line growth,  plans or  objectives;  and  statements
concerning assumptions made or expectations as to any future events, conditions,
performance or other matters, are "forward-looking  statements", as that term is
defined  under the  Federal  Securities  Laws.  Forward-looking  statements  are
subject to risks,  uncertainties  and other  factors  which could  cause  actual
results to differ  materially from those stated in such statements.  Such risks,
uncertainties  and factors  include,  but are not limited  to,  fluctuations  in
customer  demand,  order  patterns and inventory  levels,  changes and delays in
product  development plans and schedules,  customer  acceptance of new products,
changes in pricing or other actions by competitors, general economic conditions,
as well as other risks detailed in the Company's filings with the Securities and
Exchange  Commission,  including Data General's Report on Form 10-K for the 1997
fiscal year ended September 27, 1997 and this Quarterly  Report on Form 10-Q for
the second fiscal quarter of 1998, which ended March 28, 1998.



<PAGE>


                          PART II -- OTHER INFORMATION

Item 1.  Legal Proceedings.

         The Company has been engaged in patent infringement  litigation against
IBM Corporation since November 1994. Two lawsuits, both in the discovery stages,
are  pending  in  the  United  States   District   Court  for  the  District  of
Massachusetts  in  Worcester.  The Company  alleges  that  several IBM  products
including the AS/400 midrange systems and the AS/400 RISC-based computer product
line infringe various Company's  patents.  Both suits seek compensatory  damages
and, where appropriate, injunctive relief. IBM has answered both complaints, has
denied  the  Company's  infringement  claims  and has  interposed  counterclaims
alleging that the Company's CLARiiON storage products infringe IBM patents.

         Although the Company  believes its claims are valid,  it cannot predict
the  outcome  of  the  litigation.  In  the  opinion  of  management,  based  on
preliminary  evaluation  of the IBM  patents  covered in the  counterclaims  and
subject to the risks of litigation,  the  counterclaims  are without merit,  the
Company  will  prevail  thereon and the  counterclaims  will not have a material
adverse  impact on the results of operations  or the  financial  position of the
Company.

         The  Company and certain of its  subsidiaries  are  involved in various
other patent  infringement,  contractual,  and proprietary  rights suits. In the
opinion of  management,  the  conclusion of these suits will not have a material
adverse effect on the financial position or results of operations and cash flows
of the Company and its subsidiaries.


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

(a)  Exhibits:

          3. (c)     By-Laws of the  Company,  as amended,  previously  filed or
                     Form 10-K/A  dated  April 21,  1998, which is incorporated 
                     herein by reference.

             (d)     Certificate of Increase dated November 26, 1997, previously
                     filedon March  16,  1998 as  Exhibit 4 to the  Company's  
                     Registration Statement on Form 8-A, which is incorporated
                     herein by reference.

          4. (d)     Form of 6% Convertible Subordinated Note due 2004, 
                     previously filed on March 16, 1998 as Exhibit 2 to the
                     Company's Registration Statement on Form 8-A, which is 
                     incorporated herein by reference.

          10.(nn)    Deferred Compensation Plan Trust Agreement dated January 2,
                     1998.


          11.        Computation of basic and diluted earnings per share.



(b)  No reports on Form 8-K were filed during the current quarter ended March
     28, 1998.



<PAGE>


                                    SIGNATURE



        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 GENERAL CORPORATION
                                                         (Registrant)

                                                   /s/ Arthur W. DeMelle
                                              ----------------------------------
                                                     Arthur W. DeMelle
                                                   Senior Vice President
                                                  Chief Financial Officer



    Dated:  May 7, 1998





<PAGE>


                                    EXHIBITS


Index to Exhibits.

3.  (c)      By-Laws of the  Company,  as amended,  previously  filed on Form  
             10-K/A  dated  April 21,  1998,  which is incorporated herein by 
             reference.

    (d)      Certificate of Increase dated November 26, 1997, previously filed
             on March  16,  1998 as  Exhibit 4 to the  Company's  Registration
             Statement on Form 8-A, which is incorporated herein by reference.

4.  (d)      Form of 6% Convertible Subordinated Note due 2004, previously filed
             on March 16, 1998 as Exhibit 2 to the Company's Registration
             Statement on Form 8-A, which is incorporated herein by reference.

10. (nn)     Deferred Compensation Plan Trust Agreement dated January 2, 1998.

11.          Computation of basic and diluted earnings per share.