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

                       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 27, 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 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 23, 1999:
 
Common Stock, par value $.01                                   50,607,446
----------------------------                              -------------------
   (Title of each class)                                   (Number of shares)

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

<PAGE>

PART I -- FINANCIAL INFORMATION

Item 1. Financial Statements.
<TABLE>

DATA GENERAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)

<CAPTION>
                                                                     Quarter Ended                 Six-Months Ended
                                                                ----------------------           ---------------------   
                                                                Mar. 27,      Mar. 28,           Mar. 27,     Mar. 28,
IN THOUSANDS, EXCEPT PER SHARE AMOUNTS                           1999          1998               1999         1998   
----------------------------------------------------------------------------------------------------------------------
<S>                                                            <C>            <C>               <C>            <C>     
REVENUES:
    Product.................................................   $257,679      $263,744           $526,515      $530,921
    Service.................................................     97,671        98,066            194,424       196,164
                                                              ---------      --------           --------      --------
         Total revenues.....................................    355,350       361,810            720,939       727,085
                                                              ---------      --------           --------      --------   
COSTS AND EXPENSES:
    Cost of product revenues................................    177,116       190,698            361,333       379,869
    Cost of service revenues................................     61,366        63,114            122,197       123,290
    Research and development................................     28,646        28,945             57,519        56,393
    Selling, general, and administrative....................     86,317        85,083            172,792       169,454
                                                              ---------      --------           --------      --------   
         Total costs and expenses...........................    353,445       367,840            713,841       729,006
                                                              ---------      --------           --------      --------

Income (loss) from operations...............................      1,905        (6,030)             7,098        (1,921)
Interest income.............................................      3,026         3,382              6,045         6,891
Interest expense............................................      3,524         3,595              7,300         7,215
Other income................................................        642         2,240              6,014         2,240 
                                                              ---------      --------           --------      --------

Income (loss) before income taxes...........................      2,049        (4,003)            11,857            (5)
Provision (benefit) for income taxes........................        400           500             (6,300)        1,000
                                                              ---------      --------           --------      --------   

Net income (loss)...........................................  $   1,649      $ (4,503)          $ 18,157      $ (1,005)
                                                              =========      ========           ========      ========  


BASIC NET INCOME (LOSS) PER SHARE
    Net income (loss) per share.............................      $0.03        $(0.09)             $0.36        $(0.02)
                                                                  =====        ======              =====        ======  

    Weighted average shares outstanding.....................     50,325        48,887             50,063        48,763
                                                                 ======        ======             ======        ======    

DILUTED NET INCOME (LOSS) PER SHARE:
    Net income (loss) per share.............................      $0.03        $(0.09)             $0.35        $(0.02)
                                                                  =====        ======              =====        ======  

    Weighted average shares outstanding, including
    common stock equivalents, where applicable..............     51,631        48,887             51,433        48,763
                                                                 ======        ======             ======        ======
    
<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>

DATA GENERAL CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS

<TABLE>
 
                                                                                        (Unaudited)
                                                                                          Mar. 27,             Sept. 26,
DOLLARS IN THOUSANDS, EXCEPT PAR VALUE                                                     1999                  1998    
-------------------------------------------------------------------------------------------------------------------------
<S>                                                                                      <C>                   <C>          
ASSETS
Current assets
    Cash and temporary cash investments............................................    $  137,678            $  158,220
    Marketable securities..........................................................       152,587               160,354
    Receivables, net...............................................................       293,271               307,428
    Inventories....................................................................       128,907               141,639
    Other current assets...........................................................        30,702                28,320
                                                                                       ----------            ----------
                
         Total current assets......................................................       743,145               795,961

Property, plant, and equipment, net................................................       194,179               180,454

Other assets.......................................................................        95,238                88,649
                                                                                       ----------            ----------      

         Total assets..............................................................    $1,032,562            $1,065,064
                                                                                       ==========            ==========    

LIABILITIES AND STOCKHOLDERS' EQUITY         
Current liabilities
    Accounts payable...............................................................    $  119,786            $  160,940
    Other current liabilities......................................................       263,067               269,774
                                                                                       ----------            ----------   
         Total current liabilities.................................................       382,853               430,714
                                                                                       ----------            ----------

Long-term debt.....................................................................       212,750               212,750
                                                                                       ----------            ----------
   
Other liabilities..................................................................        26,324                36,645
                                                                                       ----------            ----------   
Stockholders' equity
    Common stock, $0.01 par value
         Outstanding - 50,586,000 shares at Mar. 27, 1999
         and 49,689,000 shares at Sept. 26, 1998 (net of
         deferred compensation of $17,332 at Mar. 27, 1999
         and $15,444 at Sept. 26, 1998)............................................       636,868               626,137
Accumulated deficit................................................................      (213,819)             (231,976)
Unrealized gains on marketable securities..........................................         7,518                 8,513
Equity adjustment for minimum pension liability....................................        (6,252)               (6,252)
Cumulative translation adjustment..................................................       (13,680)              (11,467)
                                                                                       ----------            ---------- 

         Total stockholders' equity................................................       410,635               384,955
                                                                                       ----------            ----------   
         Total liabilities and stockholders' equity................................    $1,032,562            $1,065,064
                                                                                       ==========            ==========    
<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. 27,           Mar. 28,
IN THOUSANDS                                                                                1999               1998      
------------------------------------------------------------------------------------------------------------------------
<S>                                                                                        <C>                 <C>    
CASH FLOWS FROM OPERATING ACTIVITIES
    Net income (loss)..................................................................   $ 18,157           $ (1,005)
    Adjustments to reconcile net income (loss) to
     net cash provided from operating activities
         Depreciation..................................................................     38,194             38,442
         Amortization of capitalized software development costs........................      8,787             12,565
         Gain on sale of marketable securities.........................................     (6,014)            (2,240)
         Other non-cash items, net.....................................................     (6,049)             2,693
         Change in operating assets and liabilities....................................    (11,559)           (42,021)
                                                                                          --------           --------            

         Net cash provided from operating activities...................................     41,516              8,434
                                                                                          --------           --------      

CASH FLOWS FROM INVESTING ACTIVITIES
    Expenditures for property, plant, and equipment....................................    (63,357)           (66,149)
    Net proceeds from the purchases and sales of marketable securities.................     12,787             22,003
    Capitalized software development costs.............................................    (16,498)           (21,290)
                                                                                          --------           --------               

         Net cash used by investing activities.........................................    (67,068)           (65,436)
                                                                                          --------           --------       
                                                                 
CASH FLOWS FROM FINANCING ACTIVITIES
    Cash provided from stock plans.....................................................      7,301              5,212
                                                                                          --------           --------        
    
         Net cash provided from financing activities...................................      7,301              5,212
                                                                                          --------           --------     
    
Effect of foreign currency rate fluctuations
 on cash and temporary cash investments................................................     (2,291)            (1,108)
                                                                                          --------           --------          

Decrease in cash and temporary cash investments........................................    (20,542)           (52,898)
Cash and temporary cash investments - beginning of period..............................    158,220            216,814
                                                                                          --------           --------

Cash and temporary cash investments - end of period....................................   $137,678           $163,916
                                                                                          ========           ========

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
    Interest paid......................................................................   $  6,807           $  6,646
    Income taxes paid..................................................................   $  4,458           $    908
<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
                                                                                           Mar. 27,            Sept. 26,
in thousands                                                                                 1999                1998   
-------------------------------------------------------------------------------------------------------------------------
<S>                                                                                        <C>                <C>     
Inventories
    Raw materials......................................................................   $   5,987          $   1,420
    Work in process....................................................................      58,206             64,200
    Finished systems...................................................................      40,954             50,632
    Field engineering parts and components.............................................      23,760             25,387
                                                                                          ---------          --------- 
                                                                                          $ 128,907          $ 141,639
                                                                                          =========          ========= 


Property, plant, and equipment
    Property, plant, and equipment.....................................................   $ 657,101          $ 641,612
    Accumulated depreciation...........................................................    (462,922)          (461,158)
                                                                                          ---------          --------- 
                                                                                          $ 194,179          $ 180,454
                                                                                          =========          ========= 
</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.
<TABLE>

                                                                                   Quarter Ended
                                                -----------------------------------------------------------------------------------
                                                               Mar. 27, 1999                              Mar. 28, 1998  
                                                ----------------------------------------   ----------------------------------------
                                                  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                              $1,649           50,325        $0.03       $(4,503)         48,887       $(0.09)
                                                                                  =====                                     ======

Effect of Dilutive Securities

Stock options                                         --             1,306                        --              --
                                                  -------           ------                    -------          ------ 
                            
Diluted Earnings Per Share

Net income (loss) available to
  common stockholders and
  assumed conversions                              $1,649           51,631        $0.03       $(4,503)         48,887       $(0.09)
                                                   ======           ======        =====       =======          ======       ======
</TABLE>



<PAGE>

<TABLE>
                                                                                    Six Months Ended
                                                  ---------------------------------------------------------------------------------
                                                                  Mar. 27, 1999                              Mar. 28, 1998  
                                                  ----------------------------------------   --------------------------------------
                                                  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                             $18,157            50,063        $0.36     $(1,005)          48,763       $(0.02)
                                                                                   =====                                    ======


Effect of Dilutive Securities

Stock options                                         --              1,370                       --               --    
                                                  --------           ------                  --------          -------


Diluted Earnings Per Share

Net income (loss) available to
  common stockholders and
  assumed conversions                             $18,157            51,433        $0.35     $(1,005)          48,763       $(0.02)
                                                  =======            ======        =====     =======           ======       ======
<FN>
         For the quarter and  six-month  periods  ended March 27, 1999 and March
28, 1998, 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 been
therefore 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  1998 Annual  Report.  The results of operations for
the quarter ended March 27, 1999 are not  necessarily  indicative of the results
of the entire fiscal year.


Note 4.  Restructuring Charge

     During  fiscal  year  1998,   the  Company   approved  and   implemented  a
restructuring  program designed to strengthen the Company's focus on storage and
enterprise  computing  solutions and reduce costs in  non-strategic  areas.  The
restructuring was adopted in response to the increasing price competition within
the computer hardware industry.

     Accordingly,  during  fiscal year 1998,  the  Company  recorded a charge of
approximately  $135  million  related to the  restructuring  program and certain
asset  write-downs  resulting  from the plan.  A summary of the related  accrued
liability balance at March 27, 1999 is as follows:
<TABLE>

-----------------------------------------------------------------------------------------------------------------------
                                                                             Less: Fiscal Year 1999
                                                         Sept. 26, 1998         Cash Payments and        Mar. 27, 1999
 in millions                                                Balance             Asset Write-downs           Balance
-----------------------------------------------------------------------------------------------------------------------
<S>                                                          <C>                      <C>                     <C>        
Employee termination benefits                                $ 27.0                  $ 10.1                 $ 16.9
Asset write-downs                                               6.7                     5.0                    1.7
Lease abandonments                                             10.6                     1.4                    9.2
Other exit costs                                                3.7                     2.0                    1.7
                                                             ------                  ------                 ------      
          Total                                              $ 48.0                  $ 18.5                 $ 29.5
                                                             ======                  ======                 ======  
--------------------------------------------------------------------------------------------------------------------------
</TABLE>

     The provision  included severance benefits for approximately 480 employees,
of which  approximately 65% were based in the United States and the remainder in
Europe and Asia/Pacific. Of the 480 employees identified, approximately 422 were
terminated as of March 27, 1999. The remaining  terminations  are expected to be
complete by the end of the fiscal year. Asset write-downs are composed primarily
of fixed assets,  including leasehold  improvements and demonstration  equipment
which are being disposed of in connection with the  restructuring  program.  The
provision for lease abandonments relates to vacated lease properties,  mainly in
Europe and Asia,  and  includes a change in estimate  of $1.3  million for lease
abandonment  costs  accrued in prior  years.  There were no material  changes in
estimates  to  prior  provisions  or  additional  charges  recorded  during  the
six-month period ended March 27, 1999.


Note 5.  Comprehensive Income

     In the first quarter of fiscal 1999, the Company adopted SFAS Number 130,
"Reporting  Comprehensive  Income."  This  statement  establishes  standards for
reporting and displaying  comprehensive  income and its components in a full set
of  general  purpose   financial   statements.   This  statement   requires  the
classification  of items of comprehensive  income by their nature in a financial
statement and the accumulated balance of other  comprehensive  income separately
from retained  earnings and additional  paid-in capital in the equity section of
the balance sheet. The Company's total comprehensive income is as follows:

<TABLE>

                                                       Quarter Ended                   Six-Months Ended
                                               ---------------------------        -------------------------
                                                  Mar. 27,       Mar. 28,           Mar. 27,       Mar. 28
in thousands                                       1999           1998               1999           1998
-----------------------------------------------------------------------------------------------------------
<S>                                                <C>             <C>              <C>            <C>        
Net income (loss) ...........................    $ 1,649         $ (4,503)         $ 18,157      $(1,005)
Other comprehensive income (expense):

    Unrealized gains (losses) on
       marketable securities.................     (1,758)           7,527              (995)       8,202
    Cumulative translation adjustment........     (1,601)             (72)           (2,213)        (449)
                                                 -------         --------          --------      -------            

Total other comprehensive income (loss)......     (3,359)           7,455            (3,208)       7,753
                                                 -------         --------          --------      -------            

Total comprehensive income (loss)............    $(1,710)        $  2,952          $ 14,949      $ 6,748
                                                 =======         ========          ========      =======
</TABLE> 

<PAGE>     


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


Results of Operations

     The Company  reported  net income of $1.7  million for the current  quarter
ended  March 27,  1999,  compared  with a net loss of $4.5  million for the same
period of the prior year.  The net income was $18.2  million for the  six-months
ended  March  27,  1999,  compared  with a net  loss  of  $1.0  million  for the
comparable six-month period ended March 28, 1998. The net income for the current
six-month  period  includes a gain of $7.5 million  resulting  from a settlement
with the Internal  Revenue  Service  related to taxes paid during the  Company's
1983 through 1991 fiscal years and an additional gain of $6.0 million  resulting
from sales of an investment.

<TABLE>

Revenues (in millions)
----------------------------------------------------------------------------------------------------------------------
                                              Quarter ended                                Six-months ended
                                  ------------------------------------------------------------------------------------
                                  3/27/99         Change        3/28/98         3/27/99         Change         3/28/98
                                  -------         ------        -------         -------         ------         -------
<S>                                <C>              <C>           <C>             <C>             <C>            <C>    
Product                           $257.7           (2%)          $263.7         $526.5           (1%)          $530.9
  % of Total Revenues                73%                            73%            73%                            73%

Service                             97.6           (1%)            98.1          194.4           (1%)           196.2
  % of Total Revenues                27%                            27%            27%                            27%

Total                             $355.3           (2%)          $361.8         $720.9           (1%)          $727.1
----------------------------------------------------------------------------------------------------------------------

</TABLE>

     In the fiscal  quarter ended March 27, 1999,  product  revenues were $135.0
million  from the  Company's  AViiON  family  of open  systems  server  products
compared with product revenues of $133.5 million in the comparable period of the
prior  year.  In  the  current  quarter,   revenues  from  the  Company's  Intel
processor-based  AViiON  systems  increased 12% to $125.9 million while revenues
from the Motorola  processor-based  AViiON systems declined by 56% compared with
the same period of the prior year. The Company  anticipates  that the percentage
of  server  product  revenues  generated  by the  Intel  processor-based  AViiON
products  will  continue  to  increase  in  fiscal  1999,   while  the  Motorola
processor-based  AViiON  system  revenues  are  expected to continue to decline.
Revenues from AViiON systems running the Microsoft  Windows NT operating  system
increased by  approximately  13% as compared to the same quarter in fiscal 1998.
Product revenues from the Company's  CLARiiON  storage systems  increased 12% to
$103.0  million  from the  comparable  prior-year  period  despite a decline  in
revenues from CLARiiON's  largest OEM customer by nearly 50%. Excluding revenues
from this  customer,  CLARiiON  revenues  grew  approximately  50% from the same
period of the prior-year.  CLARiiON revenues  accounted for 40% of total product
revenues in the current quarter.  Within the CLARiiON family of storage systems,
full fibre channel  revenues  represented  approximately  59% of total  CLARiiON
revenues.  The Company  anticipates  that the  percentage  of revenues from full
fibre  channel  products  will  continue to  increase  while the  percentage  of
revenues  from  SCSI-based  products will  decline.  CLARiiON is sold  primarily
through the Company's  original  equipment  manufacturer  (OEM) 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.  Product  revenues from personal
computers  and other  equipment  decreased 28% from the same period in the prior
year  and  represented  7% of  total  product  revenues  compared  to 9% for the
comparable  prior-year  period.  Product  revenues from VALiiANT,  the Company's
contract  manufacturing  operation  decreased  by nearly  $12  million  from the
comparable  quarter in fiscal 1998 as certain  contracts have expired.  VALiiANT
revenues  represented  less than 1% of total  product  revenues  for the quarter
ended March 27, 1999.

     For the  six-months  ended March 27,  1999,  product  revenues  were $272.7
million  from the  Company's  AViiON  family  of open  systems  server  products
compared with product revenues of $266.8 million in the comparable period of the
prior year. In the current six-month  period,  revenues from the Company's Intel
processor-based  AViiON  systems  increased 14% to $252.6 million while revenues
from the Motorola  processor-based  AViiON systems declined by 56% compared with
the same  six-month  period of the prior  year.  Revenues  from  AViiON  systems
running the Microsoft NT operating system  increased by  approximately  24% from
the  comparable  period of the prior year.  Product  revenues from the Company's
CLARiiON  storage  systems  increased 11% to $216.7  million from the comparable
prior-year period and accounted for 41% of total product revenues in the current
six-month  period.  Within the CLARiiON  family of storage  systems,  full fibre
channel  revenues  increased  nearly  five times from the  comparable  six-month
period of the prior year and  represented  approximately  53% of total  CLARiiON
revenues  in the  current  six-month  period.  Product  revenues  from  personal
computers and other  equipment  decreased 30% from the same six-month  period in
the prior year and represented 7% of total product  revenues  compared to 9% for
the comparable prior-year period.

<TABLE>

Revenues by Geographic Marketplace
--------------------------------------------------------------------------------------------------------------------------
                                                  Percentage of                               Percentage Change of
                                              Consolidated Revenues                              $ of Revenues
                             ---------------------------------------------------------------------------------------------
                                   Quarter ended              Six-months ended                 3/27/99 - 3/28/98
                             ---------------------------------------------------------------------------------------------
                               3/27/99       3/28/98       3/27/99        3/28/98      Quarter ended     Six-months ended
                             ---------------------------------------------------------------------------------------------
<S>                               <C>          <C>           <C>            <C>              <C>               <C>           
Domestic
Product                          62%           59%           61%            60%               1%                1%
Service                          60%           59%           59%            60%               -                (3%)
Total                            61%           59%           60%            60%               1%                -

Europe
Product                          24%           25%           25%            24%              (5%)               -
Service                          31%           31%           32%            31%                -                5%
Total                            27%           27%           27%            26%              (3%)               1%

Other International
Product                          14%           16%           14%            16%             (12%)              (8%)
Service                           9%           10%            9%             9%              (3%)              (7%)
Total                            12%           14%           13%            14%             (10%)              (8%)
--------------------------------------------------------------------------------------------------------------------------

</TABLE>

     The  increase  in domestic  product  revenues  for the current  quarter and
six-month  period  ended  March 28,  1999 was  primarily  a result of  increased
shipments of CLARiiON and Intel processor-based AViiON systems, which was partly
offset by decreased  shipments of Motorola  processor-based  AViiON  systems and
VALiiANT products.

     The decrease in European  product  revenues,  including  U.S direct  export
sales,  for the  current  quarter  was due to  decreased  shipments  of Motorola
processor-based  AViiON  systems and  personal  computers  and other  equipment,
offset,  in part,  by  increases  in Intel  processor-based  AViiON  systems and
CLARiiON.
 
     Other international  product revenues,  including U.S. direct export sales,
for the current quarter and six-month  period ended March 27, 1999 decreased 12%
and 8%,  respectively,  as compared  with the same fiscal  periods in 1998.  The
decreases for the  three-month  and six-month  periods ended March 27, 1999, are
attributable to decreased  shipments from CLARiiON offset, in part, by increases
in Intel processor-based AViiON systems.

     In the service business,  the Company experienced a 4% decrease in contract
maintenance  revenues  in the current  quarter  ended March 27, 1999 as compared
with the same period in fiscal 1998 due to a decline in the contract maintenance
service  base.  This  decrease  was  offset,  in  part,  by a  10%  increase  in
professional  services  revenues in the current  quarter ended March 27, 1999 as
compared with the quarter ended March 28, 1998.  Professional  services revenues
represented  approximately 27% of total service revenues in the current quarter.
For the  six-month  period the  Company  experienced  a 3%  decrease in contract
maintenance revenues offset, in part, by a 6% increase in professional  services
revenue.  Professional  services  revenues  represented  26%  of  total  service
revenues in the current six-month period.

     The effect of foreign exchange on international revenues was negligible for
the current quarter.

Cost of Revenues (in millions)

<TABLE>

-----------------------------------------------------------------------------------------------------------------------
                                             Quarter ended                                 Six-months ended
                            -------------------------------------------------------------------------------------------
                                3/27/99         Change          3/28/98         3/27/99         Change         3/28/98
                            -------------------------------------------------------------------------------------------

<S>                                <C>            <C>            <C>               <C>             <C>             <C>   
Product                         $177.1           (7%)           $190.7           $361.3           (5%)          $379.9
 % of Product Revenues             69%                             72%              69%                            72%

Service                           61.4           (3%)             63.1            122.2           (1%)           123.3
 % of Service Revenues             63%                             64%              63%                            63%

Total Cost of Revenues          $238.5           (6%)           $253.8           $483.5           (4%)          $503.2
 % of Total Revenues               67%                             70%              67%                            69%
-----------------------------------------------------------------------------------------------------------------------

</TABLE>

     The decrease in the product cost as a percentage  of product  revenues from
the  comparable  prior-year  periods  was  primarily  the result of the shift in
product mix to high-end NUMA technology  based AViiON  servers.  The decrease in
the service cost as a  percentage  of service  revenues for the current  quarter
ended March 27,  1999 as  compared  to the same  period of the prior year,  is a
result  of  the  reduction  in  labor  costs   associated   with  the  Company's
restructuring program and improved spare parts management.

Operating Expenses (in millions)

<TABLE>
------------------------------------------------------------------------------------------------------------------------
                                                        Quarter ended                         Six-months ended
                                            ----------------------------------------------------------------------------
                                              3/27/99      Change       3/28/98      3/27/99       Change       3/28/98
                                            ----------------------------------------------------------------------------
<S>                                             <C>           <C>          <C>          <C>          <C>          <C>       
Research & Development                         $28.6         (1%)        $28.9        $57.5          2%          $56.4
  % of Total Revenues                             8%                        8%           8%                         8%

Selling, general & administrative              $86.3          1%         $85.1        $172.8         2%         $169.5
  % of Total Revenues                            24%                       24%           24%                       23%
------------------------------------------------------------------------------------------------------------------------

</TABLE>

     The Company continues to focus its research and development  efforts on its
core business technology:  multi-user computer systems and mass storage devices.
In the current six-month period,  gross expenditures on research and development
and software development before capitalization were $74.0 million, a decrease of
5% from $77.6 million for the comparable  prior-year period.  Gross expenditures
on research and development  before  capitalization  for the quarter ended March
27, 1999 were $37.1 million, a decrease of 6% from $39.5 million expended during
the quarter ended March 28, 1998. For both the three-month and six-month periods
ended  March  27,  1999,   continued   increases  in  research  and  development
expenditures  in CLARiiON  fibre  channel  products  and NUMA  technology,  were
offset, in part, by savings associated from the Company's  restructuring program
implemented in fiscal year 1998.

     For the current  six-month period ended March 27, 1999,  selling,  general,
and  administrative  expenses  increased  by 2% over the  comparable  prior-year
quarter.  The increase is a result of increased sales  marketing  efforts in the
storage business,  partially offset by savings in the server business  resulting
from the  Company's  fiscal 1998  restructuring  program.  Selling,  general and
administrative  expenses  were $86.3  million for the  three-month  period ended
March 27,  1999,  an increase  of 1% as  compared  to the $85.1  million for the
three-month period ended March 28, 1998.

     During  fiscal  year  1998,   the  Company   approved  and   implemented  a
restructuring  program designed to strengthen the Company's focus on storage and
enterprise  computing  solutions and reduce costs in  non-strategic  areas.  The
restructuring was adopted in response to the increasing price competition within
the computer hardware industry.

     Accordingly,  during  fiscal year 1998,  the  Company  recorded a charge of
approximately  $135  million  related to the  restructuring  program and certain
asset  write-downs  resulting  from the plan.  A summary of the related  accrued
liability balance at March 27, 1999 is as follows:

<TABLE>

------------------------------------------------------------------------------------------------------------------------
                                                                             Less: Fiscal Year 1999
                                                         Sept. 26, 1998         Cash Payments and        Mar. 27, 1999
 in millions                                                Balance             Asset Write-downs           Balance
------------------------------------------------------------------------------------------------------------------------
<S>                                                            <C>                    <C>                    <C>       
Employee termination benefits                               $ 27.0                  $ 10.1                 $ 16.9
Asset write-downs                                              6.7                     5.0                    1.7
Lease abandonments                                            10.6                     1.4                    9.2
Other exit costs                                               3.7                     2.0                    1.7
                                                            ------                  ------                 ------    
          Total                                             $ 48.0                  $ 18.5                 $ 29.5
                                                            ======                  ======                 ======    
      
--------------------------------------------------------------------------------------------------------------------------

</TABLE>

     The provision  included severance benefits for approximately 480 employees,
of which  approximately 65% were based in the United States and the remainder in
Europe and Asia/Pacific. Of the 480 employees identified, approximately 422 were
terminated as of March 27, 1999. The remaining  terminations  are expected to be
complete by the end of the fiscal year. Asset write-downs are composed primarily
of fixed assets,  including leasehold  improvements and demonstration  equipment
which are being disposed of in connection with the  restructuring  program.  The
provision for lease abandonments relates to vacated lease properties,  mainly in
Europe and Asia,  and  includes a change in estimate  of $1.3  million for lease
abandonment  costs  accrued in prior  years.  There were no material  changes in
estimates  to  prior  provisions  or  additional  charges  recorded  during  the
six-month period ended March 27, 1999.

     During fiscal year 1995, the Company recorded a restructuring charge of $43
million.  As of March 27, 1999 the  remaining  reserves of $2.6 million from the
1995  restructuring  charge are for excess vacant rental  properties,  primarily
located in Europe.

     At March 27, 1999,  the number of employees  totaled  approximately  4,800,
which is an increase of approximately 100 employees from the number of employees
at September 26, 1998 and a reduction of approximately  300 employees from March
28, 1998.

     Interest income for the current  quarter was $3.0 million,  an 11% decrease
from  $3.4  million  for the  comparable  period of  fiscal  1998,  due to lower
interest  yields and levels of invested cash.  Interest  expense for the current
quarter was $3.5  million,  a 2% decrease  from $3.6 million for the  comparable
period of fiscal 1998,  and relates  primarily  to interest on the  Company's 6%
Convertible  Subordinated  Notes due 2004.  Other income for the current quarter
includes  a gain of $0.6  million  from the sale of an  equity  investment  in a
non-affiliated company.  Interest income, interest expense and other income were
$6.0  million,  $7.3 million and $6.0 million,  respectively,  for the six-month
period ended March 27, 1999 as compared to $6.9  million,  $7.2 million and $2.2
million, respectively, for the comparable period of the prior year. Other income
consists of gains on sales of equity investments in non-affiliated  companies in
both years.

     The current quarter income tax expense of $0.4 million relates primarily to
foreign and state income taxes,  as well as federal  alternative  minimum taxes.
The Company has a valuation  allowance which offsets  substantially all deferred
tax assets as of March 27, 1999 and March 28,  1998.  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.
The income tax benefit  for the  six-month  period  ended March 27, 1999 of $6.3
million  includes a gain of $7.5 million  resulting  from a settlement  with the
Internal  Revenue  Service for taxes paid during the Company's 1983 through 1991
fiscal years.

<PAGE>

Financial Condition

     Cash and  temporary  cash  investments  as of March 27,  1999  were  $137.7
million,  a decrease of $20.5  million from the end of fiscal 1998.  At the same
date, the Company held $152.6 million in marketable  securities,  a net decrease
of $7.8 million from the end of fiscal 1998. In total,  cash and temporary  cash
investments  along with  marketable  securities  decreased $28.3 million for the
current six-month period. The decrease was mainly  attributable to the purchases
of equipment required for the Company's server and storage businesses,  payments
reducing  employee and vendor  related  accruals,  and  payments  related to the
restructuring  program implemented in June 1998. 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
their   fair   market   value   of   $8.8   million   and  are   classified   as
available-for-sale. The unrealized gain on marketable securities of $7.5 million
as of March 27,  1999 is  recorded  as a  separate  component  of  stockholders'
equity.  During the current  three-month  and six-month  periods ended March 27,
1999, the Company recorded gains of $0.6 million and $6.0 million,  respectively
on the sale of an investment in  marketable  securities.  Net cash provided from
operations  for the  six-months  ended March 27,  1999  totaled  $41.5  million;
expenditures  for  property,   plant,  and  equipment   totaled  $63.4  million;
capitalized software development costs totaled $16.5 million. Cash provided from
stock plans totaled $7.3 million during the current six-month period ended March
27, 1999. The effect of foreign currency  exchange rate fluctuations on cash and
temporary cash investments was a decrease of $2.3 million.

     Net  receivables  as of March 27, 1999 were $293.3  million,  a decrease of
$14.1  million  from $307.4  million as of September  26, 1998.  The decrease is
primarily  attributable  to a decline in revenues.  Inventories  as of March 27,
1999 were $128.9  million,  a decrease of $12.7 million from September 26, 1998,
primarily as a result of the reduction in inventory  levels  related to improved
supply management.  Net property,  plant, and equipment  increased $13.7 million
from  September  26, 1998 to $194.2  million  primarily  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 $3.2  million for the current  six-month  period.  Management
expects that sales of demonstration equipment will continue.

     The  increase of $6.6 million in other  assets from  September  26, 1998 to
$95.2 million at March 27, 1999 was attributed  mainly to the  capitalization of
software development costs net of related amortization.

     The decrease of $41.2 million in accounts  payable from  September 26, 1998
levels was attributed  mainly to the timing of payments  related to purchases of
material and an increase in the value of unmatured  foreign exchange  contracts.
Other current and other  liabilities  decreased by  approximately  $17.0 million
from September 26, 1998 to $289.4 million.  The decrease from September 26, 1998
was  primarily  related to funding of the  Company's  domestic  pension plan and
payments  related to the  Company's  restructuring  program.  Long-term  debt of
$212.8 million remained unchanged from September 26, 1998.

<PAGE>

Year 2000 Information and Readiness Disclosure

     The "Year 2000 issue" arises  because many  computer  hardware and software
systems use only two digits to represent  the year.  As a result,  these systems
and programs may not correctly handle dates beyond 1999,  resulting in errors in
information or program or systems failures. Assessments of the potential effects
of the Year 2000 issues vary markedly among  different  companies,  governments,
consultants,  economists,  and  commentators.  It is not possible to  accurately
predict what the actual impact may be. In this context,  the Company  offers the
following  statements  concerning the Year 2000 issues.  All statements made and
referred to here are Year 2000  readiness  disclosures  under the U.S. Year 2000
Information and Readiness Disclosure Act.

     To better address the Year 2000 issue in a  comprehensive  and  coordinated
manner,  across all of Data  General's  operations  worldwide,  the  Company has
created a  cross-functional  corporate  Year 2000 project  team,  reporting  and
responsible  to the senior  management of the Company.  A project  plan has been
adopted and is guiding  the  Company's  efforts to assess and address  Year 2000
issues  pertaining to each of the identified  functional  areas of the company's
operations.

1.   Product Readiness and Customer Communications

     The Company is  communicating  with its customers  concerning the Year 2000
issue. The primary means of communication are the Data General and CLARiiON Year
2000     Internet     web     sites    at     http://www.dg.com/year2000     and
http://www.clariion.com/corporat/yr2000readiness.html, where Year 2000 readiness
disclosures  concerning various products and the Company's Year 2000 program are
made available to customers and the general public.

     The Company has assessed the Year 2000 readiness of Data  General's  AViiON
computer  systems and  CLARiiON  storage  products,  as well as of Data  General
Pentium processor-based and later generation personal computers.  Based on these
efforts as of March 27,  1999,  the Company has  determined  that Data General's
AViiON computer systems and CLARiiON storage products are either Year 2000 Ready
or may be made so by means of Year 2000  updates or patches  available  from the
Company.  As well,  the  Company  offers a Year 2000  support  strategy  for the
current releases of Data General's DG/UX operating system software,  the details
of which are available on the Data General Year 2000 web site. Most other active
Data General and  CLARiiON-branded  products,  including  many 32-bit ECLIPSE MV
computer systems,  have also been evaluated for Year 2000 readiness.  Consistent
with industry practices, inquiries concerning Year 2000 readiness of third-party
products resold by Data General are being referred to the third-party  suppliers
of such products.  The Company has  determined not to test certain  products for
Year 2000 Readiness. As well, some Data General products have been determined to
not be Year 2000 Ready. For the most current  information  concerning  products'
Year 2000  readiness,  customers  are directed to the Data General Year 2000 web
sites,  since the Company is making no statement  regarding  Year 2000 readiness
for any product except as noted on the Company's Year 2000 web sites.


2.   Data General's Internal Systems, Manufacturing Processes, and Facilities

     Data  General  has been  preparing  for Year 2000 since  mid-1996,  and has
established  teams to  coordinate  solutions  to the Year 2000 issue for its own
internal  information systems and applications  across the Company's  operations
worldwide.  Generally,  the Company has structured the Year 2000 project in four
phases:  inventory and  assessment;  remediation  and/or  avoidance;  compliance
confirmation; and (as and when appropriate) contingency planning. As of December
31, 1998, Data General had substantially  completed the assessment and inventory
phase of its Year 2000 project relative to the Company's key information  system
and applications.  As of March 27,  1999, approximately 60% of the Company's key
business  systems have been  qualified  by the Company as Year 2000 Ready.  Data
General continues to address known Year 2000 issues,  and is committed to making
its key  internal  information  systems  Year  2000  Ready  in time to meet  the
Company's critical business requirements. Based on existing plans and schedules,
and  subject  to  the   possibility  of  delays,   the  Company  plans  to  have
substantially  all of its key business  systems Year 2000 Ready by September 30,
1999.  Although  Data  General's  Year 2000  project  relative  to its  critical
information  management  systems is still in process,  the Company believes that
the impact of the Year 2000 issues on its core business systems and applications
should not have a material adverse impact on future results.

     The  Company  has   assessed   the  Year  2000  issue  as  related  to  its
manufacturing  facilities and processes.  Projects are underway to address those
Year  2000  issues  which  have been  identified.  The  Company  is not aware at
March 27,  1999,  of  any  material  Year  2000  concerns  with  respect  to its
manufacturing facilities and processes.

     The Company is also  continuing  its  assessment of the possible  impact of
Year 2000 issues on the operations of its offices and facilities (including such
matters  as  security  systems,  PBX and  voicemail  systems,  and  heating  and
air-conditioning  systems).  Projects  are  underway to address  those Year 2000
issues which have been identified.  The Company is not aware at March 27,  1999,
of any material  Year 2000 concerns with respect to the operation of its offices
and facilities.

     The  Company is also  seeking to assess  the Year 2000 risks  arising  from
external  factors,  such as potential  interruptions  of  telecommunications  or
transportation  services, or utilities.  The likelihood and extent of widespread
or persistent  interruptions to such  infrastructure  services will generally be
difficult to predict. As better information becomes available,  the Company will
be developing  contingency plans intended to support the continued  operation of
the Company's critical functions in the event of interruptions to infrastructure
services.

3.   Data General's Suppliers

     The  Company's  procurement  organizations  are seeking to monitor the Year
2000  readiness of the  Company's  key  suppliers.  The Company is assessing the
responses to Year 2000  readiness  questionnaires  sent in December  1998, to an
extensive  list  of  suppliers, including  those  suppliers  which  the  Company
considers  most  critical to its  operations.  The Company is  following up with
these  suppliers  where  appropriate.  Since the Company's  suppliers' Year 2000
preparations and assessments are ongoing,  Data General's efforts to monitor the
Year 2000 readiness of key suppliers will be continuing.  If Year 2000 readiness
issues are identified,  the Company intends to take reasonable actions as needed
to address the Company's business requirements.

     Since  determining the Year 2000 readiness of suppliers  depends upon their
cooperation   and  upon  their   disclosure  of  often  imprecise  or  estimated
information,  it is likely  that the  Company's  inquiries  will not be entirely
successful,  and it remains  possible that the actual  outcomes may deviate from
the suppliers'  assurances to the Company.  It is possible that  notwithstanding
the Company's efforts, interruptions of key components or services could have an
adverse impact on the Company's operations and future results.

     The Company is evaluating  contingency plans to mitigate or avoid potential
interruptions to normal business  operations.  It is likely,  however,  that not
every  potential  Year 2000  exposure will be avoided;  for example  alternative
sources  of supply  for  single-sourced  components  may not  always be  readily
available.  A measure of reasonable business risk will be undertaken relative to
the Year 2000 problem, both by Data General and by other companies.

4.   Risks of Claims

     There may be a  potential  for claims  against  the  Company  arising  from
products and services  that were not Year 2000 Ready.  Because the Company is in
the business of selling  computer system  products,  the Company's risk of being
subjected  to lawsuits  relating to Year 2000 issues with its products is likely
to be greater than that of companies in other  industries.  Although the Company
believes  that it has valid  defenses to Year 2000  claims  which may be brought
against it by its customers,  the outcomes of Year 2000 claims and the impact of
such  claims on the  Company  cannot be  determined  at this  time.  The  actual
outcomes will depend on the facts and  circumstances of each situation and on an
evolving  state of law as Year  2000  claims  are  addressed  by  legal  systems
worldwide.

5.   Costs associated with the Year 2000 Project

     The cost of addressing  Year 2000 issues is funded  through  operating cash
flows.  The Company does not expect the amounts to have a material effect on its
financial  position or results of operations.  The Company has incurred costs of
approximately $3 million directly  associated with Year 2000 projects to date as
of March 27, 1999.

6.   Certain Additional Risk Factors

     It is unknown how the Company's  sales may be impacted by Year 2000 issues.
As the Company's  customers focus on preparing  their  businesses for Year 2000,
capital budgets in the near term may be redirected toward  remediation  efforts,
potentially  delaying the  purchase or  implementation  of new systems,  thereby
creating  less  demand  for  the  Company's  products  and  services.  As  well,
customers'  procurement  efforts may be temporarily  delayed as a result of Year
2000 readiness testing within  customers'  operations.  Alternatively,  sales of
Year 2000 Ready Data General  products  could be  increased,  as Year 2000 Ready
products replace older products.  Service revenues could be reduced if customers
discontinue  support  of  products  which are not Year 2000  Ready,  or  perhaps
increased as customers  purchase  new,  Year 2000 Ready  systems.  As well,  the
Company's  sales during 1999 could be affected by the customers'  perceptions of
Data General's own state of Year 2000 readiness.  All these factors could affect
the Company's future revenues.

     Overriding  any  preparations  taken by the  Company,  the Year 2000  issue
presents risks and  uncertainties  that could affect the Company;  these include
unexpected  Year  2000  issues,  or  unexpected   problems  arising  from  plans
implemented to anticipate Year 2000 problems;  interruptions to power,  water or
telecommunications  utility  services;  potential  unavailability  of skilled or
critical  personnel;  delays or interruptions  in  transportation  systems;  and
potential  governments'  responses  to  Year  2000  emergencies,  among  others.
Further,  there  can be no  assurance  that  there  will not be  delays  in,  or
increased costs associated with, the Company's Year 2000 readiness  efforts,  or
that the Company's  suppliers and other parties will adequately  prepare for the
Year 2000.  Notwithstanding  the Company's diligent efforts,  one can anticipate
that Data  General  will not be able in all cases to  identify  and avoid  every
possible Year 2000 impact.

     As of March 27,  1999, the Company is working to assess and evaluate likely
Year 2000  problem  scenarios  and to evaluate  Year 2000  contingency  plans in
appropriate  cases.  The Company expects that this  contingency  planning effort
will continue  throughout 1999 as the Company completes its preparations for the
Year 2000 and learns more about the Year 2000  preparations and  vulnerabilities
of third parties.

     The  nature of the  uncertainties  surrounding  the Year 2000 issue is such
that it remains  possible  that Year 2000 issues  could have a material  adverse
impact on the Company's operations and financial results. While the Company does
not currently  expect that this will be the case and  continues to  aggressively
pursue  its  preparations  for Year 2000,  the  Company  can offer no  assurance
whether or to what extent the  Company  may be affected by matters  which it has
not  anticipated  or by matters  outside of the Company's  control.  The Company
recognizes  the need to  continue  its  analysis,  assessment,  monitoring,  and
planning for the various Year 2000 issues, across its businesses worldwide,  and
to  address  Year 2000  issues as they are  identified.  Within  that  uncertain
context,  however,  and  subject to the various  factors  discussed  above,  the
Company  believes as of  March 27,  1999,  the impact of Year 2000 issues on its
business  should not have a material  adverse effect on the Company's  financial
position or results of operations.


Market Risk

     The  Company is exposed to market  risk  primarily  in its cash and foreign
currency transactions. Because a substantial portion of the Company's operations
and  revenue  occur  outside the United  States,  the  Company's  results can be
significantly  impacted  by changes  in foreign  currency  exchange  rates.  The
Company  manages its foreign  currency  risk through the use of forward  foreign
currency contracts. The Company does not hold or enter into derivative financial
instruments for trading  purposes.  At inception,  the forward foreign  currency
contracts  are  designated as hedges of  intercompany  accounts  receivable  and
foreign  sales  which  are  firmly  committed  or  forecasted.  These  contracts
generally  mature  within  three-months.  Market value gains and losses on these
contracts  are  included in the cost of product  revenues and  generally  offset
exchange gains or losses on the related transactions.

     As of March 27, 1999, the Company had entered into forward foreign currency
contracts to purchase  $30.4 million and sell $84.0  million in various  foreign
currencies  with  maturity  dates on March 29 and March 30, 1999.  The effect of
foreign  exchange rate movements from March 27, 1999 until maturity did not have
a significant  adverse or beneficial effect on the Company's  financial position
or results of operations.

Euro Conversion

     On January 1, 1999, 11 of the 15 members of the European Union  established
fixed  conversion  rates between their  existing  currencies and the "euro." The
euro will trade on  currency  exchanges  and the legacy  currencies  will remain
legal  tender for a  transition  period  between  January 1, 1999 and January 1,
2002.  During the transition  period,  public and private  companies may pay for
goods  and  services  using  the  euro  or the  participating  country's  legacy
currency.  The participating  countries will issue sovereign debt exclusively in
euros, and will redenominate outstanding sovereign debt. Participating countries
no longer control their own monetary policies by directing  independent interest
rates for their legacy  currencies.  Instead,  the authority to direct  monetary
policy,  including money supply and official interest rates will be exercised by
the new European Central Bank.

     The Company has  established  plans and has begun  developing the necessary
modifications  for  the  technical   adaptation  of  its  internal   information
technology and other systems to accommodate euro-denominated  transactions.  The
Company is also  assessing the business  implications  of the  conversion to the
euro, including long-term competitive implications and the effect of market risk
with  respect to  financial  instruments.  The  Company is  currently  unable to
determine the ultimate financial impact of these matters, if any, on its results
of  operations,  financial  condition or cash flows.  However,  the Company will
continue  to assess  the  impact  of euro  conversion  issues as the  applicable
accounting, tax, legal, and regulatory guidance evolves.

     Statements  concerning the Company's  business  outlook or future  economic
performance;  Year 2000 readiness; currency market risk; Euro conversion issues;
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 1998
fiscal year-ended  September 26, 1998 and this Quarterly Report on Form 10-Q for
the second fiscal quarter of 1999, which ended March 27, 1999.



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  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 AViiON and CLARiiON computer systems 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.

<PAGE>

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

(a)      Exhibits:
 
     3.  (c)     By-Laws of the Company, as amended through November 4, 1998,
                 previously filed as Exhibit 3(c) to the Company's  Quarterly 
                 Report on Form 10-Q for the quarter ended December 26, 1998,
                 which is incorporated herein by reference.

     3.  (e)     Amendment to Certificate of Incorporation of the Company,
                 filed January 28, 1999, previously filed as Exhibit 3(e) to 
                 the Company's  Quarterly Report on Form 10-Q for the quarter
                 ended December 26, 1998, which is incorporated herein by 
                 reference.
 
     10. (w)     Employee Qualified Stock Purchase Plan, as amended.

     10. (jj)    1998 Employee Stock Option Plan, previously filed as Exhibit 
                 4.1 to the Company's Registration Statement on Form S-8, 
                 Registration Number 333-69559, which is incorporated herein by
                 reference.

     10. (kk)    Form of (Key Executive) 1998 Employee Stock Option Agreement,
                 previously filed as Exhibit 10(kk) to the Company's Quarterly  
                 Report on Form 10-Q for the quarter ended December 26, 1998, 
                 which is incorporated herein by reference.

     10. (ll)    Form of Amendment to Employment Agreements between the Company 
                 and its key executives previously filed as Exhibit 10(ll) to 
                 the Company's  Quarterly Report on Form 10-Q for the quarter
                 ended December, 26, 1998, which is incorporated herein by
                 reference.

     10. (mm)    1998 Non-Employee Director Stock Option Plan, previously filed
                 as Exhibit 4.2 to the Company's Registration Statement on Form
                 S-8, Registration Number 333-69559, which is incorporated
                 herein by reference.

     10. (nn)    Form of 1998 Non-Employee Director Stock Option Agreement, 
                 previously filed as Exhibit 10(nn) to the Company's  Quarterly 
                 Report on Form 10-Q for the quarter ended December 26, 1998,  
                 which is incorporated herein by reference.

     10. (oo)    Summary of 1999 Fiscal Year Bonus Opportunity for Chief 
                 Executive Officer, previously filed as Exhibit 10(oo) to the 
                 Company's  Quarterly  Report on Form 10-Q for the quarter
                 ended December 26, 1998, which is incorporated herein by 
                 reference.

     10. (pp)    Amendment to Supplemental Pension and Retiree Medical 
                 Agreement dated December 2, 1998, between the Company and its 
                 President and Chief Executive Officer, previously filed as 
                 Exhibit 10(pp) to the Company's  Quarterly Report on Form 10-Q 
                 for the quarter ended December 26, 1998, which is incorporated
                 herein by reference.

     11.         Computation of basic and diluted earnings per share.


(b)      No reports on Form 8-K were filed during the current quarter ended 
         March 27, 1999.

<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/ John J. Gavin Jr.
                                   --------------------------------------------
                                                  John J. Gavin Jr.
                                   Chief Financial Officer, Vice President, and
                                               and Corporate Controller
                                                                 





    Dated:  May 6, 1999

<PAGE>

                                    EXHIBITS


Index to Exhibits.

     3.  (c)     By-Laws of the Company, as amended through November 4, 1998, 
                 previously filed as Exhibit 3(c) to the Company's  Quarterly  
                 Report on Form 10-Q for the quarter ended December 26, 1998, 
                 which is incorporated herein by reference.

     3.  (e)     Amendment to Certificate of Incorporation of the Company, 
                 filed January 28, 1999, previously filed as Exhibit 3(e) to 
                 the Company's  Quarterly Report on Form 10-Q for the quarter
                 ended December 26, 1998, which is incorporated herein by
                 reference.
 
     10. (w)     Employee Qualified Stock Purchase Plan, as amended.

     10. (jj)    1998 Employee Stock Option Plan, previously filed as Exhibit
                 4.1 to the Company's Registration Statement on Form S-8, 
                 Registration Number 333-69559, which is incorporated herein by
                 reference.

     10. (kk)    Form of (Key Executive) 1998 Employee Stock Option Agreement,
                 previously filed as Exhibit 10(kk) to the Company's Quarterly
                 Report on Form 10-Q for the quarter ended December 26, 1998,  
                 which is incorporated herein by reference.

     10. (ll)    Form of Amendment to Employment Agreements between the Company 
                 and its key executives previously filed as Exhibit 10(ll) to 
                 the Company's  Quarterly Report on Form 10-Q for the quarter 
                 ended December, 26, 1998, which is incorporated herein by 
                 reference.

     10. (mm)    1998 Non-Employee Director Stock Option Plan, previously filed 
                 as Exhibit 4.2 to the Company's Registration Statement on Form 
                 S-8, Registration Number 333-69559, which is incorporated 
                 herein by reference.

     10. (nn)    Form of 1998 Non-Employee Director Stock Option Agreement, 
                 previously filed as Exhibit 10(nn) to the Company's  Quarterly 
                 Report on Form 10-Q for the quarter ended December 26, 1998, 
                 which is incorporated herein by reference.

     10. (oo)    Summary of 1999 Fiscal Year Bonus Opportunity for Chief
                 Executive Officer, previously filed as Exhibit 10(oo) to the
                 Company's  Quarterly  Report on Form 10-Q for the quarter 
                 ended December 26, 1998, which is incorporated herein by 
                 reference.

     10. (pp)    Amendment to Supplemental Pension and Retiree Medical
                 Agreement dated December 2, 1998, between the Company and its
                 President and Chief Executive Officer, previously filed as
                 Exhibit 10(pp) to the Company's  Quarterly Report on Form 10-Q 
                 for the quarter ended December 26, 1998, which is incorporated 
                 herein by reference.

     11.         Computation of basic and diluted earnings per share.