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                UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-K

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[X]        ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
                     SECURITIES EXCHANGE ACT OF 1934
                 FOR THE FISCAL YEAR ENDED MARCH 31, 1999
                                    OR
[ ]      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
                     SECURITIES EXCHANGE ACT OF 1934
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                       Commission File Number: 000-26970

                    DIAMOND TECHNOLOGY PARTNERS INCORPORATED
             (Exact name of registrant as specified in its charter)

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                   DELAWARE                                      36-4069408
       (State or other jurisdiction of                        (I.R.S. Employer
        incorporation or organization)                      Identification No.)

      875 N. MICHIGAN AVENUE, SUITE 3000                           60611
              CHICAGO, ILLINOIS                                  (Zip Code)
   (Address of Principal Executive Offices)
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       Registrant's telephone number, including area code: (312) 255-5000

        Securities registered pursuant to Section 12(b) of the Act: NONE

          Securities registered pursuant to Section 12(g) of the Act:
                CLASS A COMMON STOCK, PAR VALUE $.001 PER SHARE

     Indicate by check mark whether the Registrant (i) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.  Yes  [X]     No  [ ]

     Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.  [X]

     As of May 31, 1999 there were 10,138,248 shares of Class A Common Stock and
3,462,556 shares of Class B Common Stock of the Registrant outstanding. The
aggregate market value of the voting stock of the Registrant held by
non-affiliates was an estimated $272 million based upon the closing price of
$24.00 per share on May 28, 1999.

                      DOCUMENTS INCORPORATED BY REFERENCE

     Part III of this Annual Report on Form 10-K incorporates by reference
portions of the Registrant's definitive proxy statement, to be filed with the
Securities and Exchange Commission not later than 120 days after the close of
its fiscal year; provided that if such proxy statement is not filed with the
Commission in such 120-day period, an amendment to this Form 10-K shall be filed
no later than the end of the 120-day period.

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                    DIAMOND TECHNOLOGY PARTNERS INCORPORATED

              ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED
                                 MARCH 31, 1999

                               TABLE OF CONTENTS

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PART I.
Item 1.       Business....................................................     3
Item 2.       Properties..................................................    12
Item 3.       Legal Proceedings...........................................    12
Item 4.       Submission of Matters to a Vote of Security Holders.........    12

PART II
Item 5.       Market for Registrant's Common Equity and Related
              Stockholder Matters.........................................    14
Item 6.       Selected Financial Data.....................................    15
Item 7.       Management's Discussion and Analysis of Financial Condition
              and Results of Operation....................................    15
Item 7A.      Quantitative and Qualitative Disclosures About Market Risk
              Sensitive Instruments.......................................    20
Item 8.       Financial Statements and Supplementary Data.................    20
Item 9.       Changes in and Disagreements with Accountants on Accounting
              and Financial Disclosure....................................    20

PART III
Item 10.      Directors and Executive Officers of the Registrant..........    20
Item 11.      Executive Compensation......................................    20
Item 12.      Security Ownership of Certain Beneficial Owners and
              Management..................................................    20
Item 13.      Certain Relationships and Related Transactions..............    20

PART IV
Item 14.      Exhibits, Financial Statement Schedules and Reports on Form
              8-K.........................................................    21
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                                     PART I

ITEM 1. BUSINESS

OVERVIEW

     Diamond Technology Partners Incorporated (the "Company" or "Diamond") is an
e-commerce consulting firm. Positioned as the CEO's guide to e-commerce, the
Company helps its leading national and multinational clients create and
implement digital strategies--business strategies for the digital age. The
Company serves clients primarily in the telecommunications, energy, financial
services, insurance, healthcare, consumer products, and consumer services
industries. The Company offers services in digital strategy development, program
management, change management and profit improvement. Diamond was founded upon a
belief that effective e-commerce digital strategies can be conceived only when
strategy and technology are considered in tandem, not in sequence.

     The Company works with its clients to help them understand, develop and
then manage the implementation of digital strategies. The Company leads its
clients through a process that broadens their understanding of the ways
e-commerce and information technology ("IT") can be used strategically to gain
competitive advantage in their rapidly changing markets. Diamond's
professionals, working closely with client personnel, perform thorough analyses
of the client's current business with a focus on alternative technology-driven
business strategies. When an appropriate strategy has been developed, Diamond
stays with the client to manage the implementation of the strategy, which
generally includes design, deployment and integration of IT solutions, together
with modification of business processes, organizational structure and the
training of client personnel. Because Diamond works in small teams, relevant
knowledge is transferred to the client organization throughout the process.

RECENT EVENTS

     On April 26, 1999, Diamond acquired change management firm OmniTech
Consulting Group, Inc. ("OmniTech"). OmniTech specializes in web-based and other
multimedia corporate learning. OmniTech has 43 client-serving professionals and
has offices in Chicago (headquarters), Boston and Bridgewater, New Jersey.
OmniTech offers a variety of web-based and multimedia change management
solutions as well as custom change programs for organizations' leaders and work
teams. OmniTech's clients include well-known companies such as AT&T, Ameritech,
Bell Atlantic, Bell South, Carrier Corporation, Fidelity, Lucent, Microsoft,
Motorola and Xerox.

INDUSTRY BACKGROUND

     Many leading corporations face a rapidly changing business environment and
new competitive pressures. Success in the midst of change requires mastering
increasing complexity, adapting products and services to dynamic market
conditions, reducing costs and improving quality. IT is increasingly being used
in a variety of innovative, strategic ways to create new businesses, products
and services, open new sales and marketing channels and provide cost reduction
and time-to-market advantages. For instance, technology has enabled book
retailing to be accomplished in cyberspace, with no physical retail presence.
Stocks and bonds can be purchased and sold on a home computer at negligible
cost. Packages can be delivered overnight, with each step in the journey
traceable through the Internet. As IT takes on a more prominent role as a driver
of business strategy, it also creates new competitors, eliminates established
sales and marketing channels, and shortens research and development cycles.

     Business leaders no longer view IT solely as a support function, but often
struggle to incorporate the potential that technology holds as a driver of
business strategies. Many senior executives realize that they do not have the
internal expertise and capability to define and address challenges presented by
blending strategy and IT. The Company believes that the current business
environment provides an opportunity for a firm that offers high-level strategic
management consulting with an in-depth understanding of technology. In addition,
the pace of change today -- primarily driven by the Internet and e-commerce --
dictates that the same firm that develops the strategy also be responsible for
implementing that strategy.

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THE DIAMOND ADVANTAGE

     Diamond was founded with the objective of providing superior client
solutions by creating a common business culture in which strategic consulting
and IT expertise are optimally integrated to design and deliver digital
strategies. The Diamond solution is distinguished by the combination of three
essential characteristics: (i) the synthesis of business strategy and
technology, (ii) solution objectivity, and (iii) accountability for the delivery
of benefits.

  The Synthesis of Business Strategy and Technology

     A digital strategy combines business strategy and technology in innovative
ways. The Company recognizes that technology does not merely support business,
it creates business. Diamond simultaneously provides expertise in strategic
consulting, business processes and IT, enabling the Company to identify
e-commerce digital strategy opportunities for its clients that might not
otherwise be considered by traditional management consulting or systems
integration firms. The Company's services are delivered through small,
experienced and multidisciplinary teams that work collaboratively with the
client to create an environment in which knowledge and skills are constantly
shared. This transfer of knowledge is of significant value to the client.

  Solution Objectivity

     A consulting firm that objectively advises on strategy should not be in the
business of selling software or hardware. Diamond has intentionally avoided
entering into alliances that might influence, or be perceived to influence, the
strategy that it recommends to a client. Diamond believes this objectivity earns
its clients' trust and is a key component of its ability to create digital
strategies and implement the results.

  Accountability for the Delivery of Benefits

     In the digital age, business environments change so rapidly that the same
team that develops a business strategy must be held accountable for the delivery
of its benefits to the client. Rather than defining the success of an engagement
by the delivery of a strategy or application, Diamond measures success in terms
of the project's accomplishment of stated strategic goals such as return on
investment or reduction in manufacturing cycle times. Because the Diamond
solution is delivered to the client by the same multidisciplinary team that
created the strategy, the time-to-market and other transition risks associated
with these projects are reduced.

DIAMOND'S GROWTH STRATEGY

     Diamond's goal is to become the leader in the design and delivery of
e-commerce digital strategies. Diamond has three fundamental areas of focus:
People, the Company's "product"; Clients, the Company's revenue source; and
Brand and Intellectual Capital, the Company's entree to new business.

  People

     The Company believes that its continued success and growth require it to
expand its base of highly skilled professionals. This emphasis on human
resources begins with the Company's recruitment of client-serving professionals
from the best business and technical schools, continues through the process of
training, developing and promoting professionals within the Company and
culminates in the sharing of equity in the Company as both an acknowledgment of
merit and a means of retention.

     In order to maintain a differentiated service offering, the Company seeks
to develop and sustain a business culture that is common across all disciplines
in the organization. The Company seeks to promote its culture by exposing its
professionals to all of the various services that Diamond provides while further
developing skills in each professional's principal area of expertise.

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  Clients

     The Company seeks to develop strong relationships with clients that sustain
and grow repeat business. The access, contact and goodwill generated through its
existing client relationships afford the Company significant opportunities to
provide additional services and solutions. In addition, the Company plans to
continue investing in several sales and marketing activities designed to further
demonstrate the Company's capabilities to both new and existing clients. See "--
Sales and Marketing."

     The Company believes that its vertical market focus provides a scalable
structure for growth. Through a vertical focus in seven key markets
(telecommunications, energy, financial services, insurance, health care,
consumer products, and consumer services), the Company is able to offer
e-commerce digital strategies anchored by an in-depth understanding of
market-specific knowledge. The Company expects the number of vertical markets on
which it focuses to change and grow as the Company's expertise and market
demands evolve.

  Brand and Intellectual Capital

     Diamond utilizes its accumulated knowledge and experience to provide
relevant and sustainable intellectual capital to a given project and to develop
innovative solutions for its clients. The Company continuously seeks to identify
and disseminate new intellectual capital throughout its organization to keep
abreast of business and technology trends. Intellectual capital is created by
individuals both within and outside the Company and incorporated into the
Company's practice and training. The Company's intellectual capital is often its
entree into a new client project.

     Diamond intends to continue to invest in the development and maintenance of
its brand identity in the marketplace, driven by its intellectual capital. The
Company promotes its name and credentials through publications, seminars,
speaking engagements, media and analyst relations, direct marketing, the World
Wide Web and other efforts. The Company believes that building a brand image
facilitates the lead generation process by raising awareness of the Company, and
consequently, increasing the number of potential clients.

DIAMOND'S SERVICES

     The Company designs and manages the delivery of digital strategies. Diamond
leads a client through a process combining creative and analytical thinking with
an in-depth understanding of IT to enable the client to conceptualize its
business differently, and then designs and delivers a digital strategy. This is
fundamentally different than the traditional, sequential approach that addresses
strategy first, followed by development of new or revised IT solutions. A small
project team of Diamond consultants with expertise in strategy, business
processes and IT works closely with the client throughout this process. The
phases which are included on any given client project, and the amount of time
spent on each phase vary greatly depending upon the scope of work and the
readiness of the client organization to change.

  Digital Strategy

     The development of a digital strategy begins with an executive alignment
segment designed to help the client explore the new strategic possibilities of
technology before determining a strategy. This segment consists of three phases:
learning, collaboration and prototyping. Learning helps clients explore and
understand the new strategic possibilities of technology in order to set
preliminary goals. Collaboration gains consensus within the client's
organization on these preliminary goals. Prototyping tests the goals to ensure
they are realistic and prioritizes them based on desired results. This segment
leads to the development of a digital strategy to achieve a client's objectives.

     Based on the results of the executive alignment, a digital strategy is then
determined and prototyped by the Company and the client. The strategy is a
blueprint to help the client reach its goal. When determining the strategy, the
team further evaluates the dynamics of the client's competitive and financial
environments. Importantly, specific performance goals and detailed deployment
plans for the new strategy are created, which constitute milestones by which the
client can readily measure results during the deployment phase. The

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deployment plans developed in this phase correspond to the requirements of the
project, but generally include an organizational strategy, a process redesign
strategy and an IT strategy.

  Program Management

     The objective of Diamond's program management services is to maintain focus
on the business value of the project throughout the implementation of the
strategy. Diamond manages the implementation of digital strategies using a
collaborative approach, often utilizing the client's IT staff. Diamond's program
management services provide the leadership and management needed to implement
adjustments to the deployment plan as needed to deliver a solution on time and
within budget. Key variables managed throughout this segment include project
content, constituencies affected by the project, knowledge transferred, risk
associated with the project and resources utilized.

     Program management services are delivered either as part of the
implementation of a strategy, or as a service by itself. As part of the
implementation of a strategy, program management consists primarily of three
phases: architecture, development and deployment. Architecture defines the
implementation of a new strategy, including its business and technical
components. Development involves the transfer of specific knowledge about new
technologies and processes to the client. Deployment consists of the management
of the implementation of the strategy using the client's IT management and
programming resources. When delivered as a separate service, program management
services are used to manage very large, enterprise-wide initiatives, or to help
a client regain control of a project that has materially deviated from plan.

  Change Management

     The Company's change management services address the people aspects of the
business model change inherent in fundamental e-commerce initiatives. Through
its recently acquired business, OmniTech Consulting Group, Diamond offers a
variety of web-based and multimedia change management solutions as well as
custom change programs for organizations' leaders and work teams. Change
management services typically overlap the end of the program management segment.
Change management services may also be delivered as a stand-alone service.

  Profit Improvement

     Diamond provides profit improvement services to drive restructuring of
costs and improve a company's cost position through the innovative application
of technology. Diamond provides profit improvement services as part of larger
digital strategy projects, or as a stand-alone service offering. While client
companies participate in profit improvement work during both good and bad
economic times, it is most prevalent during economic recessions when there is
increased scrutiny on companies' cost structures.

SALES AND MARKETING

     The principal sales activities of the Company are managed by senior
Partners and supported by a Chief Marketing Officer. The senior Partners are
responsible for building relations with senior executives of existing and
potential clients and for formulating and executing the Company's sales and
marketing strategy. The senior Partners call on existing and potential clients,
discuss potential engagements, negotiate the terms of engagements, and direct
the staffing and execution of consulting projects.

     The Company primarily sells its services to senior executives of national
and multinational corporations. Although every client relationship is unique,
the Company's client relationships to date generally have included multiple
projects. Diamond has divided its Partners into vertical groups focused on
several industry sectors: insurance, health care, telecommunications, energy,
financial services, consumer products and services. The sales efforts in each
group are led by a senior Partner who is assigned revenue and profit
contribution responsibility. New projects are sought within each group from both
new prospects and existing clients. Each vertical group maintains a current list
of targeted prospects which are tracked on an ongoing basis by senior management
of the Company. Building on leads generated through the Company's marketing

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programs, senior Partners engage in dialogue with client and prospect senior
management which can result in formal consulting engagements.

     The primary focus of the Company's marketing programs is to generate leads
through building relationships and educating client prospects about Diamond. The
Company has initiated a number of relationship-marketing programs designed to
complement, encourage and accelerate personal relationships. The Company builds
relationships both directly and on a collaborative basis with members of the
Diamond Network (see "-- Intellectual Capital") and through relationships with
certain third-party industry executives, called "client relationship executives"
("CREs"). Members of the CRE program are typically semi-retired senior
executives with a wide network of contacts in a given industry. The Company
currently has eighteen CREs focusing in each of the industries Diamond serves.

     Complementing the relationship-marketing programs are a variety of other
business development and marketing techniques used to communicate directly with
current and prospective clients, including a magazine, books, newsletters, media
and analyst relations, speeches and an interactive homepage on the World Wide
Web. Three of the more substantive marketing efforts include: (i) the
publication of the business magazine, Context; (ii) a book focusing on digital
strategy, "Unleashing the Killer App: Digital Strategies for Market Dominance";
and (iii) two series of executive seminars called the Diamond Exchange and
Insight (see "Intellectual Capital"). Each of these programs is designed to
educate the market on the opportunities of digital strategies, demonstrate the
Company's intellectual capital, and create an ongoing dialogue with client
prospects.

     Context is a controlled-circulation magazine covering the growing
intersection of business and technology that is distributed to approximately
35,000 senior executives (CEOs and their direct reports in the United States).
In early fiscal year 2000, Diamond increased the frequency of Context from
quarterly to bi-monthly and began distributing the magazine on newsstands.
"Unleashing the Killer App: Digital Strategies for Marketing Dominance" is a
book co-authored by a Diamond Partner and a member of the Diamond Network and
was published in the first quarter of fiscal 1999. The Diamond Exchange and
Insight seminars provide forums to talk to clients and prospects face-to-face
about the opportunities and challenges of the Internet and e-commerce.

REPRESENTATIVE CLIENTS

     Diamond currently focuses on providing services to clients in several
industry sectors: insurance, health care, telecommunications, energy, financial
services, consumer products and services. The Company intends to expand the
industries in which it focuses as its expertise and market demands evolve.

     The following are examples of clients that are representative of the
Company's business:

  Agricultural Chemicals Company

     One of the world's largest agricultural chemicals companies approached
Diamond to explore how we could apply Killer App design principles to enter a
new market in a centuries-old commodity business: fertilizer. Traditionally, the
production and distribution of fertilizer is typified by large investments in
production facilities and huge inventories (due to seasonality), resulting in
large fixed costs. This is a mature industry and sales are highly cyclical. The
practice of large-scale fertilization of agricultural land is under pressure
from environmentalists claiming a risk of run-off pollution. Diamond was
retained to define and test a new business model that would give the client more
control of the economic drivers of the business. The goal was to create a
higher-margin, lower-cost commercial platform, while at the same time offering a
more differentiated value proposition to its end customer. Diamond helped the
client adapt a more customer-centric approach using Internet technology to
bypass current distribution channels.

     Diamond designed and managed the implementation of a complete e-commerce
solution for the prototype -- complete with interfaces to the client's financial
and production systems -- in less than 6 months. Diamond also reconfigured the
client's organization, pricing structure, and business processes, including the

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conversion of sales staff (traditionally selling to distributors) into farm
advisors (building relationships directly with farmers).

  Energy Retailer

     Diamond was initially engaged to assist this investor-owned electric
utility in developing a new business that offered power from renewable sources
to consumers in newly deregulated markets. Diamond worked with the client to
develop a digital strategy that would differentiate the company by creating an
electronic dialogue with its customers over the Internet, track behaviors and
subsequently adapt to their specific desires over time. Diamond's relationship
with this client consists of five separate, but related, projects: (i) the
conduct of an economic viability study that explored technology and industry
trends affecting the ability of the client to reach retail and small-business
customers with renewable power, (ii) the development of the digital strategy and
business plan to secure the external funding needed, (iii) the development of a
fundable business strategy and technology/operations implementation plan, (iv)
the management of the technology and operations infrastructure roll-out,
including a network of third-party vendors, and (v) the ongoing counsel to the
client with respect to its efforts in shaping the rules of engagement in the
deregulated energy markets.

  Insurance Company

     This multi-billion dollar specialty insurer initially engaged Diamond to
design strategies to sustain the superior revenue performance and growth in
shareholder wealth that it had experienced over the last several years. The
project commenced with a 1 1/2-day executive workshop where management explored
the potential impacts of technology on the company. The project then evolved
into the development of a model for a technology-based, customer-centric
strategy to reshape the company into a customer-focused business. Diamond was
then engaged to work with the client to assess the IT organization and develop
business, economic and technical architecture implementation plans. The plans
called for revamping the client's entire operations (including product
development, marketing, sales and service functions) in order to focus on the
customer using the Internet and other technologies. Diamond is currently working
with the client to create the first of a series of deployment plans to implement
the customer-centric strategy and realize the benefits. In concurrent projects,
Diamond reviewed the migration and consolidation requirements for the client's
benefits function, as well as defined criteria for the client to assess
potential outsourcing vendors.

INTELLECTUAL CAPITAL

     Consulting firms are notably knowledge-intensive organizations. In the
past, the existence of accumulated experience within a consulting firm was
enough to attract and retain clients. Today, information is more readily
accessible and the useful life of new knowledge is shortening. In recognition of
this trend, Diamond has developed programs to identify, capture and disseminate
intellectual capital from individuals both within and outside the Company.

  Knowledge Leaders

     The Company has created a career path for certain of its professionals who
desire to specialize in a particular area, such as technical architecture,
electronic commerce or supply-chain operations. Diamond refers to these
professionals as "knowledge leaders" within its organization. Knowledge leaders
are responsible for identifying new developments within their respective areas
of expertise and capabilities, and applying that knowledge to client projects
and within the organization. Diamond currently has four Partner-level knowledge
leaders and anticipates that more knowledge leaders will be added in the future.

  Diamond Exchange

     The Diamond Exchange is a series of executive learning forums that the
Company launched in February 1997. Senior executives ranging from CEOs to CIOs
are invited to participate in the Diamond Exchange. The Company provides its
paid-subscription members with innovative, leading-edge research to explore and
understand the strategic risks and opportunities of emerging technologies.
Diamond Exchange

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members meet three times a year to discuss current issues and research findings,
and their business implications. During these meetings, Diamond provides the
members of the Diamond Exchange with the opportunity to discuss their issues
with Diamond Network members and other business leaders. The objectives of this
program are threefold: (i) to help clients and prospects learn and research the
strategic possibilities of technology in the digital future; (ii) to maintain
and develop relationships with clients; and (iii) to build intellectual capital
and integrate it into the Company.

  INSIGHT Seminars

     Diamond's INSIGHT seminars, launched in fiscal year 1999, are a series of
one-day seminars in the theory and practice of digital strategy. Diamond is
holding eight seminars in fiscal year 2000: four breakfast seminars co-sponsored
by Microsoft in Chicago, one co-sponsored with Diebold in Germany, and three
hosted by Diamond in Chicago, San Francisco and Atlanta.

  Diamond Network

     The Diamond Network is a group currently comprised of 14 recognized
business and technology leaders. Members of the Diamond Network provide Diamond
with a set of skills that augment and enhance the value that Diamond can provide
to its clients. Diamond Network members provide a source of intellectual
capital, introduce the Company to prospective clients, serve as faculty to the
Diamond Exchange (see above), and participate in client projects. Members are
contractually committed to dedicate a certain number of days to Diamond to
support marketing, sales, and client work. Diamond Network relationships are
generally non-exclusive, two-year contracts. Members are given a combination of
stock options and per diem payments for services provided to the Company or its
clients on the Company's behalf. Current members of the Diamond Network include:

          John Perry Barlow is a writer and lecturer on the social, legal and
     economic issues arising on the border between the physical and virtual
     worlds. He is a contributing writer for Wired magazine and co-founder and
     vice chairman of the Electronic Frontier Foundation, an organization that
     promotes freedom of expression in digital media.

          Gordon Bell is a senior researcher with Microsoft Corporation focusing
     on telepresence, and author of High-Tech Ventures. Mr. Bell spent 23 years
     at Digital Equipment Corp. as vice president of research and development
     where he managed the development of the first time-sharing and
     mini-computers, and led the development of the DEC VAX.

          Leonard L. Berry, Ph.D. is a professor of marketing and director of
     the Center for Retailing Studies at the College of Business Administration
     at Texas A&M University. Dr. Berry is the former national president of the
     American Marketing Association and holds the JC Penney Chair in Retailing
     Studies.

          Larry Downes is a consultant and speaker on the impact of digital
     technologies on business strategy. He teaches at the Kellogg Graduate
     School of Business at Northwestern University and co-authored "Unleashing
     the Killer App: Digital Strategies for Market Dominance," which was
     published by Harvard Business School Press in May 1998.

          Tim Gallwey is a consultant and author in the area of learning in the
     business environment. Mr. Gallwey has worked with a number of major
     corporations to develop the coaching skills of their managers and reduce
     the internal obstacles that interfere with learning and create work
     environments that support peak performance.

          James H. Gilmore is co-founder (with B. Joseph Pine II) of Strategic
     Horizons LLP, a consultancy specializing in the strategic marketing and
     operating issues of electronic commerce, and co-author of The Experience
     Economy (1999).

          Alan C. Kay, Ph.D. is a Disney fellow and vice-president of research
     and development for Walt Disney Imagineering and also a member of Diamond's
     Board of Directors. Dr. Kay was also a founding principal of the Xerox Palo
     Alto Research Center, chief scientist of Atari, Inc. and an Apple Computer

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     fellow. Dr. Kay was one of the principal inventors of personal computing,
     the bit map screen, overlapping window interfaces, and object-oriented
     programming. He contributed to the inventions of 3D graphics and the
     ARPANet (now the Internet).

          Andrew Lippman, Ph.D. is co-director and founding member of the Media
     Lab at the Massachusetts Institute of Technology. He is an influential
     expert on future technologies and an advisor to the federal government,
     corporations and startup ventures. He is on the science council of the
     Corporation for National Research Initiatives' program to develop global
     information infrastructures.

          Anthony J. Paoni is a Clinical Professor of Management Information at
     the Kellogg Graduate School of Management at Northwestern University. Paoni
     is an expert in the areas of strategic impact of information technology,
     information management tools, and managing in a digital economy.

          B. Joseph Pine II is co-founder (with James H. Gilmore) of Strategic
     Horizons LLP, a consultancy specializing in the strategic marketing and
     operating issues of electronic commerce. Pine is author of Mass
     Customization: The New Frontier In Business Competition and co-author of
     The Experience Economy (1999).

          David P. Reed, Ph.D. is an information architect and independent
     entrepreneur who focuses on designing the information space in which
     people, groups and organizations operate within the rapidly expanding
     Internet environment. He was formerly chief scientist for Lotus Development
     Corp., a senior scientist at Interval Research Corp., and chief scientist
     and vice-president of research and development for Software Arts Inc.

          Mohanbir S. Sawhney is a Tribune Professor of Electronic Commerce at
     the Kellogg Graduate School of Management at Northwestern University.
     Sawhney helps companies rethink their industry position in terms of
     customer activities rather than corporate products and services. He has
     particular expertise in e-commerce and the role of technology in marketing
     and new product development.

          Richard Y. Wang, Ph.D. is an associate professor at the MIT Sloan
     School of Management with expertise in database management systems,
     connectivity among information systems, and data quality management. Wang
     is also founder of Cambridge Research Group, a firm specializing in data
     quality management.

          Marvin Zonis, Ph.D. is a professor of international political economy
     and leadership at the University of Chicago Graduate School of Business. He
     is an expert and consultant on political risk and emerging markets, Mideast
     politics, the oil industry, and the foreign policies of Russia and the
     United States.

     The intellectual capital gathered through these various programs is shared
throughout the Company in both formal and informal ways. Some formal venues
include quarterly all-hands meetings for all Diamond employees, the Diamond
Exchange learning forum, and the Company's interactive case-based training and
development programs.

HUMAN RESOURCES AND CULTURE

     As of March 31, 1999, Diamond had 309 employees. Of these employees, 239
were client-serving professionals and 70 were management and administrative
personnel comprising marketing, human resources, finance, accounting, legal,
internal information systems and administrative support.

  Culture

     Diamond believes its ability to simultaneously provide expertise in digital
strategy, business processes and IT is dependent upon its ability to develop and
sustain a business culture that is common across all disciplines in the
organization. Three primary elements comprise Diamond's culture: (i) an
environment that intellectually challenges its personnel through continuous
training and client work; (ii) consistency in compensation and career paths
across all disciplines and skill sets within the firm; and (iii) participation
by all employees in the continuing development and ownership of the firm. The
Company plans to further strengthen

                                       10
<PAGE>   11

its culture through various policies and programs and by continuing to increase
promotions from within the organization.

  Recruiting

     The Company intends to grow primarily from within to maintain a strong
culture. The Company's success will depend on its ability to continue to
attract, retain and motivate highly skilled employees to support current
operations and future growth. The Company attributes its success in hiring these
people to its ability to provide individuals with competitive compensation,
multidisciplinary training and career development, attractive long-term career
advancement opportunities, small teams and a collaborative approach to
consulting.

     Although a significant number of the Company's current employees were hired
directly from other firms, a growing number of associates are being hired from
graduate business programs at many of the country's leading universities. The
Company also has a summer associate program that provides an additional source
of graduate business program hires. Over time, the Company expects to hire a
majority of its employees from these programs.

  Training and Development

     The Company's training and professional development programs help it
deliver high-quality services to its clients, as well as attract and retain
highly skilled professionals. The Company has developed programs that ensure all
individuals have the opportunity to develop consulting, business and IT skills
throughout their careers. These programs reinforce Diamond's culture by exposing
all professionals to the various services Diamond provides while further
developing deep skills in each professional's principal area of expertise.

  Compensation

     The Company's compensation programs have been structured to attract and
retain highly skilled professionals by offering competitive base salaries
coupled with annual cash bonus opportunities. Equity is used at all levels
within the organization to provide long-term wealth creation opportunities and
to retain individuals through vesting provisions. Diamond believes that those
professional services firms able to offer equity will be more successful in
attracting and retaining talented individuals than those firms that do not offer
equity at all levels.

     Individuals below the Partner level are awarded annual cash bonuses based
on their performance as it compares to their peers. Partners can receive an
annual bonus comprised of both cash and equity commensurate with their level of
responsibility and based on the overall performance of the Company. Non-Partners
are granted stock options at the time of hire and/or promotion, based on their
level. These options vest after three years. Partners buy stock and are granted
stock options upon being elected a Partner. Additional equity grants are made in
conjunction with movement through the Partner levels. Stock and options issued
to Partners vest annually over five years.

COMPETITION

     The Company's primary competitors include management consulting firms,
e-commerce integrators and firms that provide both management consulting and
e-commerce integration services. Many of the Company's competitors are
substantially larger than the Company and have significantly greater financial,
technical and marketing resources, greater name recognition and greater revenues
than the Company. Management believes that competition may increase from the
large traditional management consulting firms as these firms increase their use
of IT in their consulting services and enter the digital strategy market. The
Company believes that the principal criteria considered by prospective clients
when selecting a consulting firm to develop and implement e-commerce digital
strategies include: scope of services, service delivery approach, technical and
industry expertise, perceived value, and achievement of results.

                                       11
<PAGE>   12

     Furthermore, the Company faces the additional challenge of competing for
and retaining the best personnel available in the digital strategy market. As
other firms enter the digital strategy market, the Company believes that its
client-serving professionals and employees may be targeted by other firms to
satisfy their own personnel needs.

FORWARD-LOOKING STATEMENTS

     Statements contained anywhere in this report that are not historical facts
contain forward-looking statements including such statements identified by the
words "anticipate", "believe", "estimate", "expect" and similar terminology used
with respect to the Company and its management. These forward-looking statements
are subject to risks and uncertainties which could cause the Company's actual
results, performance and prospects to differ materially from those expressed in,
or implied by, the forward-looking statements. The forward-looking statements
speak only as of the date hereof and the Company undertakes no obligation to
revise or update them to reflect events or circumstances that arise in the
future. Readers are cautioned not to place undue reliance on forward-looking
statements. For a statement of the Risk Factors that might adversely affect the
Company's operating or financial results, see Exhibit 99.1 to this Annual Report
on Form 10-K.

ITEM 2. PROPERTIES

     The Company's headquarters and principal administrative, information
systems, financial, accounting, marketing, legal and human resources operations
are located in approximately 51,000 square feet of leased space in Chicago,
Illinois, comprised of two lease agreements. The initial lease agreement covers
35,000 square feet. In September 1998, the Company subleased an additional
16,000 square feet of office space at the same location. The total approximate
payments due from the Company under these leases for fiscal year 2000 are
$1,300,000. The initial lease expires in 2002, but permits an extension of five
years with notice. The sublease for the additional space expires in 2006.
Diamond has also leased approximately 7,000 square feet of office space in
Cleveland, Ohio. The approximate payments due from the Company under this lease
for fiscal 2000 are $219,000. This lease expires in 2001, but permits an
extension of three years with notice. See Note 4 of Notes to Consolidated
Financial Statements. In connection with its acquisition of OmniTech, Diamond
assumed OmniTech's obligations under its principal office lease in Chicago,
Illinois. The Chicago lease covers approximately 16,500 square feet, has total
approximate payments due for fiscal year 2000 of $374,000 and expires in 2004.

     The Company anticipates that additional office space will be required as
business expands and believes that it will be able to obtain suitable space as
needed.

ITEM 3. LEGAL PROCEEDINGS

     In the opinion of management, there are no claims or actions against the
Company the ultimate disposition of which will have a material effect on the
Company's results of operations or financial position.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     No matter was submitted to a vote of security holders, through the
solicitation of proxies or otherwise, during the fourth quarter of fiscal 1999.

                                       12
<PAGE>   13

ITEM 4A. EXECUTIVE OFFICERS OF THE REGISTRANT

     The executive officers of the Company are as follows:

<TABLE>
<CAPTION>
          NAME               AGE                             POSITION
          ----               ---                             --------
<S>                          <C>    <C>
Melvyn E. Bergstein          57     Chairman of the Board of Directors and Chief Executive
                                      Officer
Karl E. Bupp                 36     Treasurer and Chief Financial
                                    and Administrative Officer
Adam Gutstein                36     Chief Operating Officer
Michael E. Mikolajczyk       47     President and Director
Christopher J. Moffitt       44     Senior Vice President, Secretary and Director
James C. Spira               55     Senior Vice President and Director
</TABLE>

     Melvyn E. Bergstein co-founded the Company in January 1994 and served as
its Chairman, Chief Executive Officer and President until July 1998, and its
Chairman and Chief Executive Officer since then. From 1991 to 1993, Mr.
Bergstein at various times served as vice chairman, executive vice president,
president and co-chief executive officer, and as a member of the board of
directors of Technology Solutions Company, a publicly traded, Chicago-based
systems integrator. From 1989 to 1991, he was senior vice president -- systems
integration for Computer Sciences Corporation. From 1968 to 1989, Mr. Bergstein
held a number of positions with Arthur Andersen & Co.'s consulting division (now
Andersen Consulting). While with Andersen Consulting, Mr. Bergstein served as
partner from 1977 to 1989 and managing director of worldwide technology from
1985 to 1989. Mr. Bergstein served on Arthur Andersen's Board during the 1985 to
1989 period, and as chairman of Arthur Andersen's Consulting Oversight Committee
during 1989. Mr. Bergstein received his bachelors degree from the University of
Pennsylvania.

     Karl E. Bupp joined the Company in April 1994 as vice president of
financial planning responsible for the firm's internal planning, analysis and
treasury functions. Since July 1998, Bupp has served as Chief Financial Officer.
Prior to joining Diamond, Bupp was the corporate controller, and director of
planning and treasury services for Technology Solutions Company. From 1985 to
1993, he held various financial management and analyst positions with MCI
Telecommunications Corporation.

     Adam Gutstein was a co-founder of the Company in January 1994 and served as
a partner of the Company. Since July 1998 he has served as Chief Operating
Officer responsible for the client-serving operations of the Company including
revenue and profit contribution. Prior to joining Diamond, Gutstein was a vice
president at Technology Solutions Company and a manager with Andersen
Consulting.

     Michael E. Mikolajczyk joined the Company in April 1994 and served as its
Senior Vice President, Chief Financial and Administrative Officer, and a member
of its Board of Directors until July 1998. Effective July 1, 1998, Mr.
Mikolajczyk became President of the Company and continues to serve as a member
of its Board of Directors. From 1993 to 1994, he served as senior vice president
of finance and administration and chief financial officer for Technology
Solutions Company. From 1981 to 1993, Mr. Mikolajczyk was with MCI
Telecommunications Corporation where he served at various times as vice
president of finance and administration for both its Business Services Division
and its Central Division, vice president of corporate development and analysis,
vice president of business analysis, tariffs and contracts, and vice president
of marketing and finance for MCI's Digital Information Services Company. Mr.
Mikolajczyk received his bachelors degree from Wayne State University and his
M.B.A. from Harvard Business School.

     Christopher J. Moffitt co-founded the Company in January 1994 and has
served as Senior Vice President, Secretary and a member of the Board of
Directors of the Company since that time. From 1988 to 1993, he served as senior
vice president of Technology Solutions Company. From 1986 to 1988, Mr. Moffitt
was a principal in the Management Consulting Group of Arthur Young & Co. (a
predecessor to Ernst & Young, LLP) where he became partner in 1988. From 1981 to
1986, Mr. Moffitt served as director of information

                                       13
<PAGE>   14

systems for Neiman Marcus. Mr. Moffitt began his career in 1974 with Electronic
Data Systems as a systems engineer and account manager. Mr. Moffitt received his
bachelors degree from the University of Miami.

     James C. Spira joined the Company in November 1995 and has served as its
Senior Vice President since that time. He became a member of its Board of
Directors in February 1996. From 1991 to 1995, Mr. Spira was a group vice
president of The Tranzonic Companies, Inc., a $200 million public corporation
specializing in the manufacture and distribution of quality paper, cloth and
vinyl products. Prior to that time, Mr. Spira co-founded Cleveland Consulting
Associates in 1974, where he served as the firm's president and chief executive
officer. Mr. Spira serves on the board of directors of CIBER, Inc., and The
Tranzonic Companies, Inc. Mr. Spira holds an M.B.A. from the University of
Pennsylvania's Wharton School and a B.A. in history from Hobart College.

                                    PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

     The Class A Common Stock is quoted on the Nasdaq National Market under the
symbol "DTPI". The following table sets forth for the periods indicated the high
and low sales prices for the Class A Common Stock.

<TABLE>
<CAPTION>
                                                                CLOSING PRICE
                                                                  PER SHARE
                                                              -----------------
                                                               HIGH       LOW
                                                              -------   -------
<S>                                                           <C>       <C>
Fiscal year ending March 31, 1998:
  First Quarter.............................................  $12.125   $ 5.750
  Second Quarter............................................   15.750    10.125
  Third Quarter.............................................   17.750    12.375
  Fourth Quarter............................................   27.250    13.750
Fiscal year ending March 31, 1999:
  First Quarter.............................................  $31.000   $21.250
  Second Quarter............................................   31.500    16.000
  Third Quarter.............................................   21.000     7.500
  Fourth Quarter............................................   30.250    16.000
</TABLE>

     On June 14, 1999, the closing price of Class A Common Stock was $21.625 per
share. At such date, the Company had approximately 7,100 holders of record of
Class A Common Stock.

     Holders of Common Stock are entitled to receive ratably such dividends, if
any, as may be declared by the Board of Directors out of funds legally available
therefore, subject to any preferential dividend rights of outstanding Preferred
Stock. To date, the Company has not paid any cash dividends on its Common Stock
and does not expect to declare or pay any cash or other dividends in the
foreseeable future. The Company's financing arrangements currently do not
prohibit the Company from declaring or paying dividends or making other
distributions on the Common Stock.

     During fiscal year 1999, the Company sold to its Partners, 5,200 shares of
its Class B Common Stock at $11.63 per share. These sales were made under the
exemption from registration provided under Section 4(2) of the Securities Act of
1933.

                                       14
<PAGE>   15

ITEM 6. SELECTED CONSOLIDATED FINANCIAL DATA

     The selected consolidated financial data presented below has been derived
form the Company's consolidated financial statements. The data presented below
should be read in conjunction with "MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS," the Consolidated Financial
Statements and the notes thereto and other financial information appearing
elsewhere in this Annual Report on Form 10-K.

<TABLE>
<CAPTION>
                                                               YEAR ENDED MARCH 31
                                               ----------------------------------------------------
                                                 1995       1996       1997       1998       1999
                                               --------   --------   --------   --------   --------
                                                 (DOLLARS IN THOUSANDS, EXPECT PER SHARE AMOUNTS)
<S>                                            <C>        <C>        <C>        <C>        <C>
STATEMENT OF OPERATIONS DATA:
Net revenues................................   $12,843    $26,339    $37,557    $58,369    $82,389
                                               -------    -------    -------    -------    -------
Operating expenses:
  Project personnel and related expenses....     8,351     15,312     21,863     31,619     43,275
  Professional development and recruiting...     1,395      4,587      6,272      6,155      9,448
  Marketing and sales.......................       451        606      1,928      3,210      4,669
  Management and administrative support.....     3,108      4,460      6,348      8,602     11,298
                                               -------    -------    -------    -------    -------
          Total operating expenses..........    13,305     24,965     36,411     49,586     68,690
                                               -------    -------    -------    -------    -------
Income (loss) from operations...............      (462)     1,374      1,146      8,783     13,699
Interest income, net........................        85        164        172      1,150      2,488
                                               -------    -------    -------    -------    -------
Income (loss) before taxes..................      (377)     1,538      1,318      9,933     16,187
Income taxes................................        --        302        685      3,925      6,351
                                               -------    -------    -------    -------    -------
Net income (loss)...........................   $  (377)   $ 1,236    $   633    $ 6,008    $ 9,836
                                               =======    =======    =======    =======    =======
Basic earnings (loss) per share of Common
  Stock(1)..................................   $ (0.06)   $  0.16    $   .07    $   .51    $   .74
Shares used in computing basic earnings
  (loss) per share of Common Stock(1).......     6,071      7,620      9,144     11,756     13,277
Diluted earnings (loss) per share of Common
  Stock(1)..................................   $ (0.06)   $  0.16    $   .06    $   .42    $   .63
Shares used in computing diluted earnings
  (loss) per share of Common Stock(1).......     6,071      7,620      9,904     14,172     15,564
</TABLE>

<TABLE>
<CAPTION>
                                                                   MARCH 31,
                                                 ---------------------------------------------
                                                  1995     1996     1997      1998      1999
                                                 ------   ------   -------   -------   -------
                                                            (DOLLARS IN THOUSANDS)
<S>                                              <C>      <C>      <C>       <C>       <C>
BALANCE SHEET DATA:
Cash and cash equivalents......................  $4,690   $4,635   $17,547   $31,437   $47,698
Working capital................................   4,345    4,397    15,725    26,236    46,872
Total assets...................................   7,513   11,615    25,494    40,352    67,086
Long-term debt, including current portion......     256      125     2,000        --        --
Total stockholders' equity.....................   5,187    6,568    18,300    28,767    53,301
</TABLE>

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

(1) The Company's basic earnings per share and diluted earnings per share are
    computed in accordance with Statement of Financial Accounting Standards No.
    128 and are presented in accordance with SAB No. 98 issued by the Securities
    and Exchange Commission. SAB No. 98 revised the calculation of pre-initial
    public offering common stock and common stock equivalent shares previously
    governed by SAB No. 83. The Company has retroactively applied SAB No. 98 to
    all periods prior to fiscal year 1998.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

     The following information should be read in connection with the information
contained in the Consolidated Financial Statements and notes thereto appearing
elsewhere in this Annual Report on

                                       15
<PAGE>   16

Form 10-K. This Annual Report on Form 10-K contains forward-looking statements
that involve risks and uncertainties. The Company's actual results may differ
materially from the results discussed in the forward-looking statements (See
Item 1. Business).

OVERVIEW

     Diamond is an e-commerce consulting firm. Positioned as the CEO's guide to
e-commerce, the Company helps its leading national and multinational clients
create and implement digital strategies -- business strategies for the digital
age. The Company has experienced substantial revenue growth in its five years
since inception, generating net revenues of $82.4 million from 85 clients during
the twelve months ended March 31, 1999. The Company had 239 client-serving
professionals as of March 31, 1999.

     The Company's revenues are comprised of professional fees for services
rendered to clients which are billed either monthly or semi-monthly in
accordance with the terms of the client engagement. Prior to the commencement of
a client engagement, the Company and its client agree on fees for services based
upon the scope of the project, Diamond staffing requirements and the level of
client involvement. The Company recognizes revenues as services are performed in
accordance with the terms of the client engagement. Out-of-pocket expenses are
reimbursed by clients and offset against expenses incurred and are not included
in recognized revenues. Provisions are made for estimated uncollectible amounts
based on the Company's experience. Although the Company from time to time has
been required to make revisions to its clients' estimated deliverables, to date
none of such revisions has had a material adverse effect on the Company's
operating or financial results.

     The largest portion of the Company's costs consists primarily of
employee-related expenses for its client-serving professionals and other direct
costs, such as third-party vendor costs and unbilled travel costs associated
with the delivery of services to clients. The remainder of the Company's costs
are comprised of the expenses associated with the development of the business
and the support of its client-serving professionals, such as professional
development and recruiting, marketing and sales, and management and
administrative support. Professional development and recruiting expenses consist
primarily of recruiting and training costs. Marketing and sales expenses consist
primarily of the costs associated with the Company's development and maintenance
of its marketing materials and programs. Management and administrative support
expenses consist primarily of the costs associated with operations, finance,
information systems, facilities and other administrative support for project
personnel.

     The Company regularly reviews its fees for services, professional
compensation and overhead costs to ensure that its services and compensation are
competitive within the industry. In addition, Diamond periodically monitors the
progress of client projects with its clients' senior management. The Company
manages activities of its professionals by closely monitoring engagement
schedules and staffing requirements for new engagements. Because most of the
Company's client engagements are, and may be in the future, terminable by the
client without penalty, an unanticipated termination of a client project could
require the Company to maintain underutilized employees.

RECENT DEVELOPMENTS

     On April 23, 1999, the Company acquired OmniTech, a Chicago-based change
management firm specializing in web-based and other multimedia corporate
learning. OmniTech, with 43 client-serving professionals and offices in Chicago,
Boston and New Jersey, offers a variety of web-based and multimedia change
management solutions as well as customer change programs for companies. Under
the terms of the acquisition agreement, the Company paid $4.0 million in cash,
and issued a $1.0 million note and 115,641 shares of the Company's Class A
Common Stock. The acquisition will be accounted for under the purchase method of
accounting.

                                       16
<PAGE>   17

RESULTS OF OPERATIONS

     The following table sets forth, for the periods indicated, selected
statements of operations data as a percentage of net revenues:

<TABLE>
<CAPTION>
                                                              YEAR ENDED MARCH 31,
                                                              ---------------------
                                                              1997    1998    1999
                                                              -----   -----   -----
<S>                                                           <C>     <C>     <C>
Net Revenues................................................  100.0%  100.0%  100.0%
                                                              -----   -----   -----
Operating Expenses:
  Project personnel and related expenses....................   58.2    54.2    52.5
  Professional development and recruiting...................   16.7    10.6    11.5
  Marketing and sales.......................................    5.1     5.5     5.7
  Management and administrative support.....................   16.9    14.7    13.7
                                                              -----   -----   -----
          Total operating expenses..........................   96.9    85.0    83.4
                                                              -----   -----   -----
Income from operations......................................    3.1    15.0    16.6
Interest income, net........................................    0.4     2.0     3.0
                                                              -----   -----   -----
Income before taxes.........................................    3.5    17.0    19.6
Income taxes................................................    1.8     6.7     7.7
                                                              -----   -----   -----
Net income..................................................    1.7%   10.3%   11.9%
                                                              =====   =====   =====
</TABLE>

FISCAL 1999 COMPARED TO FISCAL 1998

     The Company's net income of $9.8 million during fiscal 1999 improved from
net income of $6.0 million during fiscal 1998 as a result of increased revenues
combined with an improvement in the utilization of client-serving professionals,
partially offset by an increase in expenses required to support the Company's
growth during the period.

     The Company's net revenues increased 41.2% to $82.4 million during fiscal
1999 as compared to fiscal 1998. The increase in the Company's net revenues
reflects an increase in the volume of services delivered to new clients, as well
as the leveraging of the Company's existing client base. For fiscal 1999, $16.9
million of revenue was derived from services delivered to new clients and $65.5
million related to the completion of projects or the undertaking of additional
projects from the Company's client base of the previous fiscal year. The Company
served 85 clients during fiscal 1999 as compared to 65 clients served during
fiscal 1998.

     Project personnel and related expenses increased $11.7 million, or 36.9%,
to $43.3 million during fiscal 1999 as compared to fiscal 1998. This increase
resulted from an increase in the number of client-serving professionals to
respond to growth. The Company increased its client-serving professional staff
from 175 at March 31, 1998 to 239 at March 31, 1999. As a percentage of net
revenues, project personnel and related expenses decreased from 54.2% to 52.5%
during fiscal 1999, reflecting the improvement in utilization of client-serving
professionals.

     Professional development and recruiting expenses increased $3.3 million
during fiscal 1999 as compared to fiscal 1998. This increase reflects the
Company's recruiting and training of a higher number of client-serving
professionals during fiscal 1999. The Company has continued its recruiting and
training programs to support the growth of the business. As a percentage of net
revenues, professional development and recruiting expenses increased from 10.6%
to 11.5% during fiscal 1999.

     Marketing and sales expenses increased $1.5 million to $4.7 million during
fiscal 1999 as compared to fiscal 1998 as a result of the Company's investment
in its marketing and branding programs. The Company's marketing activities in
fiscal 1999 were focused on (i) the continued development of its magazine,
"Context", which was launched during the quarter ended December 31, 1997, (ii)
the promotion of intellectual capital through the Diamond Exchange, the
Company's executive learning forum for senior executives and (iii) the

                                       17
<PAGE>   18

conduct of three one-day digital strategy executive seminars for prospective
clients. As a percentage of net revenues, marketing and sales expenses increased
from 5.5% to 5.7%.

     Management and administrative support expenses increased from $8.6 million
to $11.3 million, or 31.3%, during fiscal 1999 as compared to fiscal 1998. This
increase resulted from the cost of additional facilities, equipment and
personnel necessary to support the Company's growth and increased consulting
capacity. As a percentage of net revenues, management and administrative support
expenses decreased from 14.7% to 13.7% as a result of the Company's improved
operating leverage resulting from its net revenue growth.

FISCAL 1998 COMPARED TO FISCAL 1997

     The Company's net income of $6.0 million during fiscal 1998 improved from
net income of $633,000 during fiscal 1997 as a result of increased revenues
combined with an improvement in the utilization of client-serving professionals,
partially offset by an increase in expenses required to support the Company's
growth during the period. The Company's net income in fiscal 1997 included net
losses for the first six months of the fiscal year, which resulted primarily
from the loss of two projects as a result of clients' cancellations of business
initiatives. The Company responded to these project cancellations and the
resulting business circumstances during the quarter ended September 30, 1996, by
reducing spending levels, including the elimination of its bonus programs for
fiscal 1997. The Company reinstated its bonus programs effective for fiscal
1998. Accordingly, the Company recognized bonus expense of $7.6 million during
fiscal 1998 as compared to none during fiscal 1997.

     The Company's net revenues increased 55.4% to $58.4 million during fiscal
1998 as compared to fiscal 1997. The increase in the Company's net revenues
reflects an increase in the volume of services delivered to new clients, as well
as the leveraging of the Company's existing client base. For fiscal 1998, $20.1
million of revenue was derived from services delivered to new clients and $38.3
million related to the completion of projects or the undertaking of additional
projects from the Company's client base of the previous fiscal year. The Company
served 65 clients during fiscal 1998 as compared to 45 clients served during
fiscal 1997.

     Project personnel and related expenses increased $9.8 million, or 44.6%, to
$31.6 million during fiscal 1998 as compared to fiscal 1997. This increase
resulted from an increase in the number of client-serving professionals to
respond to growth, combined with the impact of the reinstatement of the bonus
program during fiscal 1998. The Company increased its client-serving
professional staff from 146 at March 31, 1997 to 175 at March 31, 1998. As a
percentage of net revenues, project personnel and related expenses decreased
from 58.2% to 54.2% during fiscal 1998, reflecting the improvement in
utilization of client-serving professionals.

     Professional development and recruiting expenses decreased $117,000 during
fiscal 1998 as compared to fiscal 1997. This decrease reflects the initial
investment in certain intellectual capital programs during fiscal 1997,
partially offset by the Company's training of a higher number of client-serving
professionals during fiscal 1998. The Company continued its recruiting and
training programs to support the growth of the business. As a percentage of net
revenues, professional development and recruiting expenses decreased from 16.7%
to 10.6% during fiscal 1998 as a result of the Company's improved operating
leverage resulting from its net revenue growth.

     Marketing and sales expenses increased $1.3 million to $3.2 million during
fiscal 1998 as compared to fiscal 1997 as a result of the Company's investment
in its marketing and branding programs. The Company's marketing activities in
fiscal 1998 were focused on (i) the development of its magazine, "Context",
which was launched during the quarter ended December 31, 1997 and (ii) the
promotion of intellectual capital through the Diamond Exchange, the Company's
executive learning forum for senior executives. As a percentage of net revenues,
marketing and sales expenses increased from 5.1% to 5.5%.

     Management and administrative support expenses increased from $6.3 million
to $8.6 million, or 35.5%, during fiscal 1998 as compared to fiscal 1997. This
increase resulted from the cost of additional facilities, equipment and
personnel necessary to support the Company's growth and increased consulting
capacity, combined with the impact of the reinstatement of bonus programs. As a
percentage of net revenues,

                                       18
<PAGE>   19

management and administrative support expenses decreased from 16.9% to 14.7% as
a result of the Company's improved operating leverage resulting from its net
revenue growth.

LIQUIDITY AND CAPITAL RESOURCES

     The Company closed its initial public offering of common stock in April
1997 and received net proceeds totaling approximately $10.1 million. The Company
used $2.0 million of the proceeds from the initial public offering to repay a
loan from Safeguard Scientifics, Inc.

     In April 1998, the Company sold approximately 650,000 shares of Class A
Common Stock as part of a secondary offering. Net proceeds to the Company
totaling approximately $15.9 million were realized in April 1998.

     The Company also maintains a revolving line of credit pursuant to the terms
of an unsecured credit agreement from a commercial bank under which the Company
may borrow up to $10.0 million at an annual interest rate based on the prime
rate or based on the LIBOR plus 1.75%, at the Company's discretion. This line of
credit has been reduced to account for letters of credit outstanding. As of
March 31, 1999, the Company had approximately $9.6 million available under this
line of credit.

     The Company's billings for the quarter ended March 31, 1999 totaled $26.5
million. These amounts include billings to clients for out-of-pocket expenses
that are reimbursed by clients which are not included in recognized revenues.
The Company's gross accounts receivable balance of $10.9 million at March 31,
1999 represents 37 days of billings for the quarter.

     The Company believes that the net proceeds from the sale of the Class A
Common Stock in April 1998, together with its current cash balances and cash
flow from future operations, will be sufficient to fund its operating
requirements for at least fiscal 2000. Should the Company's business expand more
rapidly than expected, the Company believes that additional bank credit would be
available to fund such operating and capital requirements. In addition, the
Company could consider seeking additional public or private debt or equity
financing to fund future growth opportunities.

YEAR 2000 ISSUE

     Existing computer programs of many companies were designed and developed
without considering the impact of the upcoming change in the century and
consequently use only two digits to identify a year in the date field. If not
corrected, many of these computer applications could fail or create erroneous
results by or at the year 2000 (the "Year 2000 Issue" or "Y2K"). The Company has
conducted an assessment of the potential impact of the Year 2000 Issue on its
operations and mission critical vendors. In light of the fact that the Company
has only been in existence for a little over five years, the Company's key
financial, information and operation systems have been designed to be Year 2000
compliant without the need for any modifications or conversions. Accordingly,
the Company does not expect the Year 2000 Issue to have a material effect on the
Company's consolidated financial position, results of operations or cash flows.

     The Company has participated in certain projects that involve Y2K issues
for some of its clients. Generally, the Company includes provisions in client
contracts that, among other things, disclaim implied warranties, limit the
duration of express warranties and limit the company's liability to the amount
of fees paid by the client to the Company in connection with the project. The
Company also maintains insurance to protect against potential liability that may
arise in connection with Y2K issues at its clients. Although the Company has no
reason to believe that any such work will result in litigation against the
Company, it is possible that the Company could be adversely affected by
litigation in connection with these projects. There can be no assurance that the
Company will be able to obtain the desired contractual protections in
agreements, or that any such contractual provisions will prevent clients from
asserting claims against the Company with respect to the Y2K issue. There can
also be no assurance that the contractual protections, if any, obtained by the

                                       19
<PAGE>   20

Company or the insurance coverage will operate to protect the Company from, or
adequately limit the amount of, any liability arising from claims asserted
against the Company.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK SENSITIVE
         INSTRUMENTS

     The Company does not invest excess funds in derivative financial
instruments or other market rate sensitive instruments for the purpose of
managing its foreign currency exchange rate risk.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

     The information required by this item is contained in the financial
statements and schedules set forth in Item 14(a) under the captions
"Consolidated Financial Statements" and "Financial Statement Schedules" as a
part of this report.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
        FINANCIAL DISCLOSURE

     None.

                                    PART III

     Part III of this Annual Report on Form 10-K incorporates by reference
portions of the Registrant's definitive proxy statement, to be filed with the
Securities and Exchange Commission not later than 120 days after the close of
its fiscal year; provided that if such proxy statement is not filed with the
Commission in such 120-day period, an amendment to this Form 10-K shall be filed
no later than the end of the 120-day period.

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

     Information with respect to Directors of the Company will be set forth in
the forthcoming Proxy Statement under the heading "Election of Directors," which
information is incorporated herein by reference or in an amendment to this Form
10-K. Information regarding the executive officers of the Company is included as
Item 4A of Part I of this Form 10-K as permitted by Instruction 3 to Item 401(b)
of Regulation S-K. Information required by Item 405 of Regulation S-K will be
set forth in the forthcoming Proxy Statement under the heading "Compliance with
Section 16(a) of the Securities Exchange Act of 1934," which information is
incorporated herein by reference.

ITEM 11. EXECUTIVE COMPENSATION

     Information with respect to executive compensation will be set forth in the
Proxy Statement under the heading "Compensation of Executive Officers," which
information is incorporated herein by reference (except for the Compensation
Committee report on Executive Compensation and the Performance Graph), or in an
amendment to this Form 10-K.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     Information with respect to security ownership of certain beneficial owners
and management will be set forth in the forthcoming Proxy Statement under the
heading "Beneficial Ownership of Common Stock," which information is
incorporated herein by reference, or in an amendment to this Form 10-K.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     Information with respect to certain relationships and transactions will be
set forth in the forthcoming Proxy Statement, which information is incorporated
herein by reference, or in an amendment to this Form 10-K.

                                       20
<PAGE>   21

                                    PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

     (a) Financial Statements and Schedules

          (1) The financial statements and schedule listed in the index on page
     F-1 are filed as part of this Form 10-K on pages F-2 to F-13

     All information for which provision is made in the applicable accounting
regulations of the Securities and Exchange Commission is either included in the
financial statements or is not required under the related instructions or are
inapplicable, and therefore have been omitted.

          (2) see (1) above

          (3) see (c) below

     (b) Reports on Form 8-K

          No reports on Form 8-K were filed by the Company during the quarter
     ended March 31, 1999. A report on Form 8-K was filed on April 23, 1999
     related to the acquisition of OmniTech Consulting Group, Inc.

     (c) Exhibits

     The following is a list of exhibits required by Item 601 of Regulation S-K
filed as part of this Form 10-K. Where so indicated by footnote, exhibits which
were previously filed are incorporated by reference. For exhibits incorporated
by reference, the location of the exhibit in the previous filing is indicated in
parentheses.

<TABLE>
<CAPTION>
        EXHIBIT
         NUMBER                                  DESCRIPTION
        -------                                  -----------
<C>                      <S>
         3.1**           -- Form of Restated Certificate of Incorporation of the
                            Company.
         3.2**           -- Form of Amended and Restated By-laws of the Company.
        10.1**           -- Amended and Restated Diamond Technology Partners
                            Incorporated 1994 Stock Option Plan, as amended.
        10.2**           -- Employment Agreement between Melvyn E. Bergstein and the
                            Company, dated February 1, 1994, as amended.
        10.3**           -- Employment Agreement between Michael E. Mikolajczyk and
                            the Company, dated April 18, 1994, as amended.
        10.4**           -- Employment Agreement between James C. Spira and the
                            Company, dated November 1, 1995, as amended.
        10.5**           -- Employment Agreement between Christopher J. Moffitt and
                            the Company, dated February 1, 1994, as amended.
        10.6**           -- Stock Purchase Agreement dated as of March 22, 1994 among
                            the Company, Melvyn E. Bergstein, Christopher J. Moffitt,
                            Safeguard Scientifics, Inc. and certain other investors,
                            as amended.
        10.7**           -- Amended and Restated Voting and Stock Restriction
                            Agreement dated as of April 1, 1996 among the Company,
                            Technology Leaders L.P., Technology Leaders Offshore C.
                            V., CIP Capital L.P., Safeguard Scientifics (Delaware),
                            Inc. and certain of the shareholders of the Company.
        10.8**           -- Amended and Restated Partners Operating Agreement dated
                            as of April 1, 1996 among the Company and the Partners of
                            the Company.
        10.9**           -- Amended and Restated Warrant Certificates to Purchase
                            Common Stock dated as of November 8, 1996 among the
                            Company and Safeguard Scientifics (Delaware), Inc.
        10.11**          -- Warrant Certificate to Purchase Common Stock dated as of
                            January 31, 1997 between Safeguard Scientifics
                            (Delaware), Inc. and the Company.
</TABLE>

                                       21
<PAGE>   22

<TABLE>
<CAPTION>
        EXHIBIT
         NUMBER                                  DESCRIPTION
        -------                                  -----------
<C>                      <S>
        10.12**          -- Warrant Certificate to Purchase Common Stock dated as of
                            January 31, 1997 between Capital, L.P. and the Company.
        10.13**          -- Warrant Certificate to Purchase Common Stock dated as of
                            January 31, 1997 between Technology Leaders FR Corp. and
                            the Company.
        10.14**          -- Warrant Certificate to Purchase Common Stock dated as of
                            January 31, 1997 between Technology Leaders, L.P. and the
                            Company.
        10.15*           -- Asset Purchase Agreement, dated as of April 23, 1999 by
                            and among OmniTech Consulting Group, Inc, its
                            stockholders and the Registrant.
        21.1**           -- Subsidiaries of the Registrant.
        24.1*            -- Power of Attorney (included on signature page).
        24.2*            -- Consent of Independent Public Accountants.
        27.1*            -- Financial Data Schedule.
        99.1*            -- Risk Factors.
</TABLE>

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

 * Filed herewith

** Incorporated by reference to the corresponding exhibits filed with the
   Company's Registration Statement on Form S-1 (No. 333-17785)

                                       22
<PAGE>   23

                                   SIGNATURES

     PURSUANT TO THE REQUIREMENTS OF SECTION 13 OR 15 (D) 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.

                                            DIAMOND TECHNOLOGY PARTNERS
                                              INCORPORATED

                                            By:   /s/ MELVYN E. BERGSTEIN
                                              ----------------------------------
                                                     Melvyn E. Bergstein
                                                 Chairman and Chief Executive
                                                            Officer

                               POWER OF ATTORNEY

     KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Melvyn E. Bergstein and Michael E.
Mikolaczyk, and each of them, his true and lawful attorneys-in-fact and agents,
with full power of substitution, for him and in his name, place and stead, in
any and all capacities, to sign any and all amendments (including post-effective
amendments) to this Annual Report on Form 10-K, and to file the same, with all
exhibits thereto and all documents in connection therewith, with the Securities
and Exchange Commission, granting unto said attorneys-in-fact and agents full
power and authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
that each said attorneys-in-fact and agents, or his or their substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.

     Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed by the following persons in the capacities and on the
dates indicated.

<TABLE>
<CAPTION>
                      SIGNATURE                                    TITLE(S)                   DATE
                      ---------                                    --------                   ----
<C>                                                    <S>                                <C>
               /s/ MELVYN E. BERGSTEIN                 Chief Executive Officer,           June 14, 1999
-----------------------------------------------------    Chairman and Director
                 Melvyn E. Bergstein

             /s/ MICHAEL E. MIKOLAJCZYK                President (Principal Executive     June 14, 1999
-----------------------------------------------------    Officer), Director
               Michael E. Mikolajczyk

                  /s/ KARL E. BUPP                     Treasurer, Chief Financial         June 14, 1999
-----------------------------------------------------    Officer (Principal Financial
                    Karl E. Bupp                         and Accounting Officer)

             /s/ CHRISTOPHER J. MOFFITT                Director                           June 14, 1999
-----------------------------------------------------
               Christopher J. Moffitt

               /s/ DONALD R. CALDWELL                  Director                           June 14, 1999
-----------------------------------------------------
                 Donald R. Caldwell

               /s/ EDWARD R. ANDERSON                  Director                           June 14, 1999
-----------------------------------------------------
                 Edward R. Anderson

                   /s/ ALAN C. KAY                     Director                           June 14, 1999
-----------------------------------------------------
                     Alan C. Kay

                 /s/ JAMES C. SPIRA                    Director                           June 14, 1999
-----------------------------------------------------
                   James C. Spira

               /s/ JOHN D. LOEWENBERG                  Director                           June 14, 1999
-----------------------------------------------------
                 John D. Loewenberg
</TABLE>

                                       23
<PAGE>   24

                    DIAMOND TECHNOLOGY PARTNERS INCORPORATED

                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
                                                              PAGE
                                                              ----
<S>                                                           <C>
CONSOLIDATED FINANCIAL STATEMENTS:
Independent Auditors' Report................................  F-2
Consolidated Balance Sheets as of March 31, 1998 and 1999...  F-3
Consolidated Statements of Operations for the Years Ended
  March 31, 1997, 1998 and 1999.............................  F-4
Consolidated Statements of Stockholders' Equity for the
  Years Ended March 31, 1997, 1998 and 1999.................  F-5
Consolidated Statements of Cash Flows for the Years Ended
  March 31, 1997, 1998 and 1999.............................  F-6
Notes to Consolidated Financial Statements..................  F-7

SUPPLEMENTAL FINANCIAL SCHEDULES:
Independent Auditors' Report................................  S-1
Schedule II -- Valuation and Qualifying Accounts............  S-2
</TABLE>

                                       F-1
<PAGE>   25

                          INDEPENDENT AUDITORS' REPORT

The Stockholders and Board of Directors
Diamond Technology Partners Incorporated:

     We have audited the accompanying consolidated balance sheets of Diamond
Technology Partners Incorporated and subsidiary as of March 31, 1998 and 1999,
and the related consolidated statements of operations, stockholders' equity and
cash flows for each of the years in the three-year period ended March 31, 1999.
These consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audits.

     We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

     In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Diamond
Technology Partners Incorporated and subsidiary as of March 31, 1998 and 1999,
and the results of their operations and their cash flows for each of the years
in the three-year period ended March 31, 1999 in conformity with generally
accepted accounting principles.

                                            [LOGO]

Chicago, Illinois
April 19, 1999

                                       F-2
<PAGE>   26

                    DIAMOND TECHNOLOGY PARTNERS INCORPORATED

                          CONSOLIDATED BALANCE SHEETS
                            MARCH 31, 1998 AND 1999
                    (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

                                     ASSETS

<TABLE>
<CAPTION>
                                                               1998      1999
                                                              -------   -------
<S>                                                           <C>       <C>
Current assets:
  Cash and cash equivalents.................................  $31,437   $47,698
  Accounts receivable, net of allowance of $559 and $419 as
     of March 31, 1998 and 1999, respectively...............    5,063    10,434
  Prepaid expenses..........................................      548     1,790
  Deferred income taxes.....................................      773       735
                                                              -------   -------
          Total current assets..............................   37,821    60,657
Computers, equipment and software, net......................    1,644     3,419
Other assets................................................      887     3,010
                                                              -------   -------
          Total assets......................................  $40,352   $67,086
                                                              =======   =======

                     LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Accounts payable..........................................  $ 1,734   $ 1,468
  Accrued compensation......................................    6,535     8,835
  Deferred revenue..........................................    1,129       709
  Other accrued liabilities.................................    2,187     2,773
                                                              -------   -------
          Total current liabilities.........................   11,585    13,785
                                                              -------   -------
Stockholders' equity:
  Preferred Stock, $1.00 par value, 2,000 shares authorized,
     no shares issued.......................................       --        --
  Class A Common Stock, $.001 par value, 40,000 shares
     authorized, 7,298 issued in 1998 and 10,005 issued in
     1999...................................................        7        10
  Class B Common Stock, $.001 par value, 20,000 shares
     authorized, 4,887 issued in 1998 and 3,649 issued in
     1999...................................................        5         4
  Additional paid-in capital................................   22,463    42,152
  Notes receivable from sale of common stock................     (323)      (32)
  Retained earnings.........................................    6,615    16,451
                                                              -------   -------
                                                               28,767    58,585
  Less Class A Common Stock in treasury, at cost, 304 shares
     in 1999................................................       --     5,284
                                                              -------   -------
          Total stockholders' equity........................   28,767    53,301
                                                              -------   -------
          Total liabilities and stockholders' equity........  $40,352   $67,086
                                                              =======   =======
</TABLE>

          See accompanying notes to consolidated financial statements

                                       F-3
<PAGE>   27

                    DIAMOND TECHNOLOGY PARTNERS INCORPORATED

                     CONSOLIDATED STATEMENTS OF OPERATIONS
                FISCAL YEARS ENDED MARCH 31, 1997, 1998 AND 1999
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
                                                               1997      1998      1999
                                                              -------   -------   -------
<S>                                                           <C>       <C>       <C>
Net revenues................................................  $37,557   $58,369   $82,389
                                                              -------   -------   -------
Operating expenses:
  Project personnel and related expenses....................   21,863    31,619    43,275
  Professional development and recruiting...................    6,272     6,155     9,448
  Marketing and sales.......................................    1,928     3,210     4,669
  Management and administrative support.....................    6,348     8,602    11,298
                                                              -------   -------   -------
     Total operating expenses...............................   36,411    49,586    68,690
                                                              -------   -------   -------
Income from operations......................................    1,146     8,783    13,699
Interest income.............................................      183     1,201     2,534
Interest expense............................................      (11)      (51)      (46)
                                                              -------   -------   -------
Income before taxes.........................................    1,318     9,933    16,187
Income taxes................................................      685     3,925     6,351
                                                              -------   -------   -------
Net income..................................................  $   633   $ 6,008   $ 9,836
                                                              =======   =======   =======
Basic earnings per share of common stock....................  $  0.07   $  0.51   $  0.74
Shares used in computing basic earnings per share of common
  stock.....................................................    9,144    11,756    13,277
Diluted earnings per share of common stock..................  $  0.06   $  0.42   $  0.63
Shares used in computing diluted earnings per share of
  common stock..............................................    9,904    14,172    15,564
</TABLE>

          See accompanying notes to consolidated financial statements

                                       F-4
<PAGE>   28

                    DIAMOND TECHNOLOGY PARTNERS INCORPORATED

                CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                FISCAL YEARS ENDED MARCH 31, 1997, 1998 AND 1999
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                                 NOTES
                                                                               RECEIVABLE
                               CLASS A   CLASS B     CLASS A     ADDITIONAL   FROM SALE OF   RETAINED                   TOTAL
                               COMMON     COMMON      STOCK       PAID-IN        COMMON      (DEFICIT)   TREASURY   STOCKHOLDERS'
                                STOCK     STOCK     SUBSCRIBED    CAPITAL        STOCK       EARNINGS     STOCK        EQUITY
                               -------   --------   ----------   ----------   ------------   ---------   --------   -------------
<S>                            <C>       <C>        <C>          <C>          <C>            <C>         <C>        <C>
Balance at March 31, 1996....    $3        $4        $    --      $ 6,844        $(257)       $   (26)   $    --       $ 6,568
Stock issued and
  subscribed.................     2         1          8,476        2,488         (120)            --         --        10,847
Purchase of stock............    --        --             --           (3)          --             --         --            (3)
Repayment of notes...........    --        --             --           --          255             --         --           255
Net income...................    --        --             --           --           --            633         --           633
                                 --        --        -------      -------        -----        -------    -------       -------
Balance at March 31, 1997....     5         5          8,476        9,329         (122)           607         --        18,300
Issuance of stock............     2        --         (8,476)      11,555         (443)            --         --         2,638
Exercise of stock options....    --        --             --        1,192           --             --         --         1,192
Income tax benefit related to
  stock option exercises.....    --        --             --          480           --             --         --           480
Purchase of stock............    --        --             --          (93)          --             --         --           (93)
Repayment of notes...........    --        --             --           --          242             --         --           242
Net income...................    --        --             --           --           --          6,008         --         6,008
                                 --        --        -------      -------        -----        -------    -------       -------
Balance at March 31, 1998....     7         5             --       22,463         (323)         6,615         --        28,767
Issuance of stock............     1        --             --       15,998          (60)            --         --        15,939
Exercise of warrants.........    --        --             --        1,326           --             --         --         1,326
Exercise of stock options....    --         1             --        1,460           --             --         --         1,461
Income tax benefit related to
  stock option exercises.....    --        --             --        1,331           --             --         --         1,331
Purchase of stock............    --        --             --         (426)          --             --     (5,284)       (5,710)
Conversion to Class A........     2        (2)            --           --           --             --         --            --
Repayment of notes...........    --        --             --           --          351             --         --           351
Net income...................    --        --             --           --           --          9,836         --         9,836
                                 --        --        -------      -------        -----        -------    -------       -------
Balance at March 31, 1999....   $10        $4        $    --      $42,152        $ (32)       $16,451    $(5,284)      $53,301
                                 ==        ==        =======      =======        =====        =======    =======       =======
</TABLE>

          See accompanying notes to consolidated financial statements

                                       F-5
<PAGE>   29

                    DIAMOND TECHNOLOGY PARTNERS INCORPORATED

                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                FISCAL YEARS ENDED MARCH 31, 1997, 1998 AND 1999
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                               1997      1998      1999
                                                              -------   -------   -------
<S>                                                           <C>       <C>       <C>
Cash flows from operating activities:
  Net income................................................  $   633   $ 6,008   $ 9,836
  Adjustments to reconcile net income to net cash provided
     by operating activities:
     Depreciation and amortization..........................    1,290       871       998
     Deferred compensation forgiven.........................     (967)       --        --
     Cancellation of notes receivable.......................      226        --        --
     Deferred income taxes..................................     (213)     (461)       38
     Changes in assets and liabilities:
       Accounts receivable..................................   (1,192)     (567)   (5,371)
       Prepaid expenses and other...........................      617        15    (1,242)
       Accounts payable.....................................      454       125      (266)
       Deferred compensation................................     (248)       --        --
       Accrued compensation.................................   (1,089)    6,535     2,300
       Deferred revenue.....................................      710       419      (420)
       Income taxes payable.................................      480       (82)       --
       Other assets and liabilities.........................      603       655    (1,314)
                                                              -------   -------   -------
Net cash provided by operating activities...................    1,304    13,518     4,559
                                                              -------   -------   -------
Cash flows used in investing activities:
  Capital expenditures, net.................................   (1,218)     (475)   (2,773)
  Other assets..............................................     (476)     (648)     (223)
                                                              -------   -------   -------
Cash flows used in investing activities.....................   (1,694)   (1,123)   (2,996)
                                                              -------   -------   -------
Cash flows from financing activities:
  Proceeds from notes payable...............................    2,250        --        --
  Repayment of notes payable................................     (375)   (2,000)       --
  Stock issuance costs......................................     (692)     (649)   (1,523)
  Common stock issued and subscribed........................   12,122     4,237    21,931
  Purchase of treasury stock................................       --        --    (5,284)
  Repurchase of common stock................................       (3)      (93)     (426)
                                                              -------   -------   -------
Net cash provided by financing activities...................   13,302     1,495    14,698
                                                              -------   -------   -------
Net increase in cash and cash equivalents...................   12,912    13,890    16,261
Cash and cash equivalents at beginning of year..............    4,635    17,547    31,437
                                                              -------   -------   -------
Cash and cash equivalents at end of year....................  $17,547   $31,437   $47,698
                                                              =======   =======   =======
Supplemental disclosure of cash flow information:
  Cash paid during the year for interest....................  $    44   $    51   $    24
  Cash paid during the year for income taxes................      418     4,558     5,875
Supplemental disclosure for noncash investing and financing
  activities:
  Issuance of common stock for notes........................  $   120   $   443   $    60
  Stock issuance costs accrued but not paid.................      609        --        --
  Deferred and incentive compensation applied to
     Payment for common stock...............................      155     1,041        --
</TABLE>

          See accompanying notes to consolidated financial statements

                                       F-6
<PAGE>   30

                    DIAMOND TECHNOLOGY PARTNERS INCORPORATED

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(1) DESCRIPTION OF BUSINESS

     Diamond Technology Partners Incorporated (the "Company" or "Diamond") is an
e-commerce consulting firm. Positioned as the CEO's guide to e-commerce, the
Company helps its leading national and multinational clients create and
implement digital strategies -- business strategies for the digital age. The
Company serves clients primarily in the telecommunications, energy, financial
services, insurance, healthcare, consumer products, and consumer services
industries. The Company offers services in digital strategy development, program
management, change management and profit improvement. Diamond was founded upon a
belief that effective e-commerce digital strategies can be conceived only when
strategy and technology are considered in tandem, not in sequence.

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

  Principles of Consolidation

     The accompanying consolidated financial statements include the accounts of
the Company and its wholly owned subsidiary. All intercompany accounts and
balances have been eliminated in consolidation. Certain prior period amounts
have been reclassified to conform with current period presentation.

  Revenue Recognition

     The Company recognizes revenues on contracts as work is performed, net of
provisions for estimated uncollectible amounts. Actual uncollectible amounts are
charged against this reserve when they become known. Out-of-pocket expenses are
reimbursed by clients and are offset against expenses incurred.

  Computers, Equipment and Software

     Computers, equipment and software are stated at cost less accumulated
depreciation. Depreciation is based on the estimated useful lives of the assets
and is computed using the straight-line method. Costs capitalized for internally
developed software include external consulting fees and employee salaries.
Depreciation and amortization expense was $1,239,000, $720,000 and $998,000 for
the years ended March 31, 1997, 1998 and 1999, respectively.

  Cash and Cash Equivalents

     Cash equivalents are highly liquid investments with original maturities of
three months or less and are stated at cost, which approximates fair value. Cash
equivalents consist of money market funds and demand deposits.

  Concentrations of Credit Risk

     Financial instruments that potentially subject the Company to significant
concentration of credit risk consist principally of cash investments and
accounts receivable. The Company places its cash investments with high quality
financial institutions. Trade receivables potentially subject the Company to
credit risk. The Company extends credit to its customers based upon an
evaluation of the customer's financial condition and credit history and
generally does not require collateral. The Company has historically incurred
minimal credit losses. The Company had one customer which individually accounted
for 14% of revenues as of and for the year ended March 31, 1997. No customers
individually accounted for more than 10% of revenues as of and for the year
ended March 31, 1998. The Company had two customers which collectively accounted
for 25% of revenues as of and for the year ended March 31, 1999.

                                       F-7
<PAGE>   31
                    DIAMOND TECHNOLOGY PARTNERS INCORPORATED

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

  Income Taxes

     The Company accounts for income taxes in accordance with Statement of
Financial Accounting Standards No. 109, "Accounting for Income Taxes," which
requires the use of the liability method of accounting for income taxes.
Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
bases. Deferred tax assets and liabilities are measured using enacted tax rates
expected to apply to taxable income in the years in which those temporary
differences are expected to be reversed or settled.

  Earnings Per Share

     The Company's basic earnings per share and diluted earnings per share are
computed in accordance with Statement of Financial Accounting Standards No. 128
"Earnings Per Share," and are presented in accordance with Securities and
Exchange Commission Staff Accounting Bulletin ("SAB") No. 98. SAB No. 98 revised
the calculation of pre-initial public offering common stock and common stock
equivalent shares previously governed by SAB No. 83. The Company has
retroactively applied SAB No. 98 to all periods prior to fiscal year 1998.

     Basic earnings per share is computed using the weighted average number of
common shares outstanding. Diluted earnings per share is computed using the
weighted average number of common shares outstanding and the assumed exercise of
stock options and warrants (using the treasury stock method). Following is a
reconciliation of the shares (in thousands) used in computing basic and diluted
earnings per share for the fiscal years ended March 31, 1997, 1998 and 1999:

<TABLE>
<CAPTION>
                                                              1997     1998     1999
                                                              -----   ------   ------
<S>                                                           <C>     <C>      <C>
Shares used in computing basic earnings per share...........  9,144   11,756   13,277
Dilutive effect of stock options and warrants...............    760    2,416    2,287
                                                              -----   ------   ------
Shares used in computing diluted earnings per share.........  9,904   14,172   15,564
                                                              =====   ======   ======
Antidilutive securities not included in dilutive earnings
  per share calculation.....................................    637       44       16
                                                              =====   ======   ======
</TABLE>

  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 the
disclosure of contingent assets and liabilities, and revenues and expenses
during the period reported. Actual results could differ from those estimates.

  Financial Instruments

     The fair value of the Company's financial instruments approximates their
carrying value.

                                       F-8
<PAGE>   32
                    DIAMOND TECHNOLOGY PARTNERS INCORPORATED

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

(3) COMPUTERS, EQUIPMENT AND TRAINING SOFTWARE

     Computers, equipment and software at March 31, 1998, and 1999 are
summarized as follows (amounts in thousands):

<TABLE>
<CAPTION>
                                                               1998      1999
                                                              -------   -------
<S>                                                           <C>       <C>
Computers and equipment.....................................  $ 2,322   $ 4,272
Software....................................................    1,429     2,252
                                                              -------   -------
                                                                3,751     6,524
Less accumulated depreciation and amortization..............   (2,107)   (3,105)
                                                              -------   -------
                                                              $ 1,644   $ 3,419
                                                              =======   =======
</TABLE>

(4) COMMITMENTS

     The Company leases office space and equipment under various operating
leases. As of March 31, 1999, the minimum future lease payments under operating
leases with noncancelable terms in excess of one year are as follows (amounts in
thousands):

<TABLE>
<CAPTION>
                   YEAR ENDING MARCH 31,
                   ---------------------
<S>                                                           <C>
2000........................................................  $1,878
2001........................................................   1,115
2002........................................................     811
2003........................................................     403
2004........................................................     324
Thereafter..................................................     647
                                                              ------
                                                              $5,178
                                                              ======
</TABLE>

     Rent expense under operating leases amounted to $980,000, $1,611,000 and
$1,660,000 for the years ended March 31, 1997, 1998, and 1999, respectively.

     The Company is party to standby letters of credit in support of the minimum
future lease payments under leases for permanent office space and office
furniture amounting to $367,000 as of March 31, 1999, declining annually during
the lease terms.

(5) NOTES PAYABLE AND LINE OF CREDIT

     Notes payable at March 31, 1997 consisted of a $2,000,000 loan from
Safeguard Scientifics, Inc. ("Safeguard"). Interest on the outstanding principal
balance of the loan was payable quarterly at a rate of 6%. The Company repaid
the loan from Safeguard in April 1997 following the closing of its initial
public offering ("IPO").

     The Company has an available line of credit of $10,000,000 with a
commercial bank, which has been reduced by letters of credit outstanding as of
March 31, 1999 in the amount of $367,000. At March 31, 1999, all remaining
amounts under this line of credit were available to the Company at the bank's
prime rate or LIBOR plus 1.75%, at the Company's discretion.

                                       F-9
<PAGE>   33
                    DIAMOND TECHNOLOGY PARTNERS INCORPORATED

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

(6) STOCKHOLDERS' EQUITY

  Stock Split, Stock Recapitalization and Public Offerings

     The Board of Directors authorized a 1.65 to 1 stock split in the form of a
stock dividend effective February 18, 1997. All references in the financial
statements to share and per share data have been adjusted to effect this stock
split. Additionally, on February 18, 1997 the Company amended its certificate of
incorporation to divide its common stock into two classes, Class A and Class B,
and authorized 2,000,000 shares of Preferred Stock, par value $1.00 per share,
the terms of which may be determined by the Board of Directors. Class A Common
Stock is entitled to one vote per share and Class B Common Stock is entitled to
five votes per share on all matters submitted to the vote of holders of common
stock. Class B Common Stock may only be owned beneficially or of record by
employees of the Company or by the Company.

     On March 31, 1997, the Company completed its IPO and sold 1,755,000 of its
common shares at the price of $5.50 per share. The Company realized $8,476,000
in connection with the sale, net of the payment of the underwriters commissions
and other expenses of the offering. Of the net proceeds, $2,000,000 were used to
repay a loan from Safeguard. In the offering, an additional 1,600,000 shares
were sold by selling stockholders. On April 8, 1997, the underwriters', pursuant
to their exercise of the over-allotment option, purchased an additional 320,000
shares of the Company's common stock at $5.50 per share. The Company's proceeds
from these additional shares, net of expenses, were $1,595,000.

     In April 1998, the Company completed an offering and sold 654,792 shares of
Class A Common Stock at a price of $26.75 per share. The Company realized
approximately $15.9 million in connection with the sale, net of payment of the
underwriters' commissions and other expenses of the offering. In the offering,
an additional 2,345,208 shares were sold by selling stockholders.

     In September 1998, the Company's Board of Directors authorized the
repurchase, from time to time, of up to one million shares of the Company's
Class A Common Stock. These repurchases were authorized to be made in the open
market or in privately negotiated transactions. At March 31, 1999, the number of
shares purchased under this authorization was 303,800 at an aggregate cost of
$5,284,176. The Company funded the repurchases through its cash balances.

  Warrants and Stock Options

     In November 1996, the Company granted additional warrants to Safeguard. The
warrants permit the holder to purchase up to 526,597 shares of stock at an
exercise price of $5.50 per share and expire on November 1, 2001. On January 31,
1997, Safeguard transferred 285,415 of these warrants to certain of its
affiliates. Of these warrants, 241,182 were exercised on April 7, 1998.

     Under the Company's 1994 Stock Option Plan and under the Company's 1998
Equity Incentive Plan (collectively, the "Stock Option Plans" or "Plans"), the
Company may grant qualified incentive stock options to officers and employees of
the Company. The Stock Option Plans provide that, subsequent to the IPO, options
will be granted at the average of the closing price of a share of Class A Common
Stock on the Nasdaq Stock Market System for the ten trading days immediately
preceding the date of grant. Options have been granted to officers which vest
incrementally, with 10%, 15%, 25%, 25% and 25% of the option vesting on the
first through fifth anniversaries of the date of grant, respectively, and expire
on the seventh anniversary of the date of grant. Options have been granted to
employees which fully vest upon the third anniversary of the date of grant and
expire on the fifth anniversary of the date of grant. Options were also granted
to employees at various times which vest over periods ranging from 18 months to
3 years from the date of grant and which expire on the fifth anniversary of the
date of grant. The Company's Board of Directors has also granted non-qualified
stock options to certain persons who were not employees on the date of grant and
certain

                                      F-10
<PAGE>   34
                    DIAMOND TECHNOLOGY PARTNERS INCORPORATED

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

non-employee members of the Board of Directors. These non-qualified stock
options vest over periods ranging from immediate to five years.

     The following table summarizes the transactions, both incentive and
nonqualified, pursuant to the Plans (amounts in thousands, except price per
share amounts).

<TABLE>
<CAPTION>
                                                                                       WEIGHTED-
                                                                                        AVERAGE
                                                           SHARES                      EXERCISE
                                                           UNDER        RANGE OF         PRICE
                                                           OPTION        PRICES        PER SHARE
                                                           ------   ----------------   ---------
<S>                                                        <C>      <C>                <C>
Balances, March 31, 1996.................................   1,116   $ 1.21 to   1.82    $ 1.48
  Granted................................................   2,204     1.82 to   5.50      3.22
  Exercised..............................................      --                 --        --
  Canceled...............................................    (152)    1.21 to   5.45      2.02
                                                           ------   ----------------    ------
Balances, March 31, 1997.................................   3,168     1.21 to   5.50      2.66
  Granted................................................   1,629     6.40 to  22.60     19.46
  Exercised..............................................    (548)    1.21 to   5.50      2.18
  Canceled...............................................    (143)    1.21 to  19.25      3.01
                                                           ------   ----------------    ------
Balances, March 31, 1998.................................   4,106     1.21 to  22.60      9.38
  Granted................................................   2,353    10.10 to  29.80     13.74
  Exercised..............................................    (648)    1.21 to  13.40      2.28
  Canceled...............................................  (1,703)    1.82 to  29.80     19.11
                                                           ------   ----------------    ------
Balances, March 31, 1999.................................   4,108   $ 1.21 to $27.40    $ 9.30
                                                           ======   ================    ======
</TABLE>

     At March 31, 1997, 1998 and 1999, 198,000, 621,000 and 515,000 options were
exercisable, respectively, under the Plans.

     The following table summarizes information about stock options under the
Plans at March 31, 1999 (share amounts in thousands):

<TABLE>
<CAPTION>
                        OPTIONS OUTSTANDING                                  OPTIONS EXERCISABLE
-------------------------------------------------------------------   ---------------------------------
                    OPTIONS     WEIGHTED-AVERAGE                         OPTIONS       WEIGHTED-AVERAGE
    RANGE OF      OUTSTANDING      REMAINING       WEIGHTED-AVERAGE   EXERCISABLE AT       EXERCISE
EXERCISE PRICES   AT 3/31/99    CONTRACTUAL LIFE    EXERCISE PRICE       3/31/99            PRICE
---------------   -----------   ----------------   ----------------   --------------   ----------------
<S>               <C>           <C>                <C>                <C>              <C>
$  1.21 to $ 1.82       837            3.23              $ 1.76             196              $ 1.73
   2.27 to   6.60       807            3.69                4.39             297                3.64
  10.01 to  11.63     1,749            5.26               11.61               5               11.63
  12.15 to  19.90       415            5.27               15.13              17               13.36
  21.45 to  27.40       300            5.66               21.92              --                  --
-----------------     -----            ----              ------             ---              ------
$  1.21 to $27.40     4,108            4.57              $ 9.30             515              $ 3.31
=================     =====            ====              ======             ===              ======
</TABLE>

     The Company applies Accounting Principles Board Opinion No. 25, "Accounting
for Stock Issued to Employees," and related interpretations in accounting for
its option plans. Accordingly, no compensation expense has been recognized. Had
compensation expense for the Company's Stock Option Plans been determined based
on the fair value at the grant date for awards under these plans consistent with
the methodology prescribed under Statement of Financial Accounting Standards No.
123, "Accounting for Stock-Based Compensation," the Company's net income and
diluted earnings per share would have been reduced by $229,000 or $.02 per share
in 1997, $345,000 or $.02 per share in 1998, and $2,099,000 or $.14 per share in
1999. The weighted-average fair value of the options granted under the Stock
Option Plans in 1997,

                                      F-11
<PAGE>   35
                    DIAMOND TECHNOLOGY PARTNERS INCORPORATED

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

1998 and 1999, calculated using the Black-Scholes pricing model, was $.70,
$6.72, and $4.02 respectively. The following assumptions were used in the
Black-Scholes pricing model for options granted in 1997, 1998 and 1999:
risk-free interest rate ranging from 4.4% to 6.3%, estimated volatility of 35%,
expected dividend yield 0% and an expected life of 1 to 6 years.

(7) INCOME TAXES

     The provision for income taxes for fiscal years ended March 31, 1997, 1998
and 1999 consisted of the following (in thousands):

<TABLE>
<CAPTION>
                                                            1997      1998      1999
                                                            -----    ------    ------
<S>                                                         <C>      <C>       <C>
Current:
  Federal.................................................  $ 656    $3,781    $5,654
  Foreign.................................................    131        --        --
  State...................................................    111       605       659
                                                            -----    ------    ------
                                                              898     4,386     6,313
Deferred..................................................   (213)     (461)       38
                                                            -----    ------    ------
                                                            $ 685    $3,925    $6,351
                                                            =====    ======    ======
</TABLE>

     The total tax provision differs from the amount computed by applying the
federal income tax rate of 34 percent for 1997 and 1998 and 35 percent for 1999
to income (loss) before income taxes for the following reasons (in thousands):

<TABLE>
<CAPTION>
                                                             1997     1998      1999
                                                             ----    ------    ------
<S>                                                          <C>     <C>       <C>
Federal income taxes at statutory rate.....................  $448    $3,377    $5,665
Effect of permanent differences............................   185       194       254
State income taxes, net of federal benefit.................    52       354       432
                                                             ----    ------    ------
                                                             $685    $3,925    $6,351
                                                             ====    ======    ======
</TABLE>

     The tax effects of the temporary differences that give rise to the deferred
tax assets and liabilities at March 31, 1998 and 1999 are presented below (in
thousands):

<TABLE>
<CAPTION>
                                                              1998    1999
                                                              ----   ------
<S>                                                           <C>    <C>
Deferred tax assets:
  Reserves and allowances...................................   814      521
  Accrued bonuses...........................................   101      318
  Accrued recruiting........................................   145      247
                                                              ----   ------
     Total gross deferred tax assets........................  1,060   1,086
                                                              ----   ------
Deferred tax liabilities:
  Accelerated depreciation..................................    97      157
  Capitalized assets........................................   120       18
  Other.....................................................    70      176
                                                              ----   ------
     Total deferred tax liabilities.........................   287      351
                                                              ----   ------
     Net deferred income taxes..............................  $773   $  735
                                                              ====   ======
</TABLE>

     Management believes it is more likely than not that the deferred tax assets
will be realized in the future.

                                      F-12
<PAGE>   36
                    DIAMOND TECHNOLOGY PARTNERS INCORPORATED

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

(8) BENEFIT PLANS

  Deferred Compensation

     Certain officers of the Company previously agreed to defer a portion of
their annual compensation under a deferred compensation program. The program
provided that amounts deferred could not be distributed prior to March 31, 1996
without approval by the Board of Directors. Amounts deferred under this program
accrued interest at rates available to the Company from its bank and were
immediately vested. Effective April 1, 1996, the Board of Directors elected to
discontinue this program. Pursuant to an agreement entered into by all officers
who had deferred compensation, approximately $967,000 was forgiven during the
year ended March 31, 1997.

  401(k) Plan

     The Company has a noncontributory defined contribution plan covering
substantially all of its employees. This plan is qualified under Section 401(k)
of the Internal Revenue Code of 1986. The Company may elect to make
contributions to this plan but to date has not done so.

(9) SUBSEQUENT EVENTS (UNAUDITED)

     On April 23, 1999, the Company acquired OmniTech Consulting Group, Inc.
("OmniTech"), a Chicago-based change management firm specializing in web-based
and other multimedia corporate learning. Under the terms of the acquisition
agreement, the Company paid $4.0 million in cash, and issued a $1.0 million note
and 115,641 shares of the Company's Class A Common Stock. Additionally, OmniTech
may be paid a maximum of $2 million over the next two years upon the achievement
of certain performance measures. The acquisition will be accounted for under the
purchase method of accounting.

                                      F-13
<PAGE>   37
                    DIAMOND TECHNOLOGY PARTNERS INCORPORATED

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

(10) QUARTERLY FINANCIAL INFORMATION (UNAUDITED)

     The following table presents the unaudited quarterly financial information
for fiscal 1997, 1998 and 1999 (in thousands, except per share amounts):

<TABLE>
<CAPTION>
                                                             QUARTER ENDED
                                                 -------------------------------------
                                                 JUNE 30   SEPT 30   DEC 31    MAR 31
                                                 -------   -------   -------   -------
<S>                                              <C>       <C>       <C>       <C>
YEAR ENDED MARCH 31, 1997
Net revenues...................................  $ 7,753   $ 8,336   $10,156   $11,312
Income (loss) from operations..................   (1,215)     (589)    1,235     1,715
Income (loss) before taxes.....................   (1,193)     (600)    1,306     1,805
Net income (loss)..............................     (714)     (385)      719     1,013
Basic earnings (loss) per share................    (0.09)    (0.04)     0.08      0.11
Diluted earnings (loss) per share..............  $ (0.09)  $ (0.04)  $  0.07   $  0.09
YEAR ENDED MARCH 31, 1998
Net revenues...................................  $12,101   $14,359   $15,390   $16,519
Income from operations.........................    1,260     2,105     2,498     2,920
Income before taxes............................    1,471     2,387     2,825     3,250
Net income.....................................      867     1,433     1,724     1,984
Basic earnings per share.......................     0.07      0.12      0.15      0.16
Diluted earnings per share.....................  $  0.06   $  0.10   $  0.12   $  0.14
YEAR ENDED MARCH 31, 1999
Net revenues...................................  $18,375   $20,136   $21,194   $22,684
Income from operations.........................    2,932     3,289     3,448     4,030
Income before taxes............................    3,529     3,938     4,117     4,603
Net income.....................................    2,135     2,383     2,511     2,807
Basic earnings per share.......................     0.16      0.18      0.19      0.21
Diluted earnings per share.....................  $  0.14   $  0.15   $  0.17   $  0.18
</TABLE>

                                      F-14
<PAGE>   38

                          INDEPENDENT AUDITORS' REPORT

The Board of Directors
Diamond Technology Partners Incorporated

     We have audited the accompanying consolidated balance sheets of Diamond
Technology Partners Incorporated and subsidiary as of March 31, 1998 and 1999,
and the related consolidated statements of operations, stockholders' equity and
cash flows for each of the years in the three-year period ended March 31, 1999.
In connection with our audits of the aforementioned consolidated financial
statements, we also audited the related financial statement schedule. This
financial statement schedule is the responsibility of the Company's management.
Our responsibility is to express an opinion on the schedule based on our audits.

     In our opinion, such financial statement schedule, when considered in
relation to the basic financial statements taken as a whole, presents fairly in
all material respects, the information set forth therein.

                                            [LOGO]

Chicago, Illinois
April 19, 1999

                                       S-1
<PAGE>   39

                    DIAMOND TECHNOLOGY PARTNERS INCORPORATED

                SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS
                             (AMOUNTS IN THOUSANDS)

<TABLE>
<CAPTION>
                     COLUMN A                         COLUMN B     COLUMN C     COLUMN D     COLUMN E
                     --------                        ----------   ----------   ----------   ----------
                                                     BALANCE AT   CHARGED TO                BALANCE AT
                                                     BEGINNING    COSTS AND                   END OF
                    DESCRIPTION                      OF PERIOD     EXPENSES    DEDUCTIONS     PERIOD
                    -----------                      ----------   ----------   ----------   ----------
<S>                                                  <C>          <C>          <C>          <C>
For the Year Ended March 31, 1999:
  Deducted from accounts receivable for
     uncollectible accounts........................     $559        $1,159       $1,299        $419
For the Year Ended March 31, 1998:
  Deducted from accounts receivable for
     uncollectible accounts........................      566           438          445         559
For the Year Ended March 31, 1997:
  Deducted from accounts receivable for
     uncollectible accounts........................      270           488          192         566
</TABLE>

                                       S-2