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

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

                                   FORM 10-K

(Mark One)
   [X]
                 ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
                    OF THE SECURITIES EXCHANGE ACT OF 1934

                   For the fiscal year ended March 31, 2001

                                      OR

   [_]
           TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                        SECURITIES EXCHANGE ACT OF 1934

                       Commission File Number: 000-22125

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

                      DiamondCluster International, Inc.
            (Exact name of registrant as specified in its charter)

                         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)

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

      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 [_] No [X]

   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. [_]

   As of May 31, 2001 there were 22,115,426 shares of Class A Common Stock and
8,166,507 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 $284.0 million based upon the closing price of
$14.11 per share on May 31, 2001.

                      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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<PAGE>

                      DIAMONDCLUSTER INTERNATIONAL, INC.

             Annual Report on Form 10-K for the Fiscal Year Ended
                                March 31, 2001

                               TABLE OF CONTENTS

<TABLE>
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                                                                                                  Page
                                                                                                   --
<S>                                                                                               <C>
PART I

   Item 1. Business..............................................................................  3

   Item 2. Properties............................................................................ 16

   Item 3. Legal Proceedings..................................................................... 16

   Item 4. Submission of Matters to a Vote of Security Holders................................... 16

PART II

   Item 5. Market for Registrant's Common Equity and Related Stockholder Matters................. 16

   Item 6. Selected Financial Data............................................................... 17

   Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations. 18

   Item 7A. Quantitative and Qualitative Disclosures About Market Risk Sensitive Instruments..... 23

   Item 8. Financial Statements and Supplementary Data........................................... 23

   Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.. 23

PART III

   Item 10. Directors and Executive Officers of the Registrant................................... 23

   Item 11. Executive Compensation............................................................... 23

   Item 12. Security Ownership of Certain Beneficial Owners and Management....................... 23

   Item 13. Certain Relationships and Related Transactions....................................... 24

PART IV

   Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K...................... 24
</TABLE>


                                      2

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                                    PART I

Item 1. Business

Overview

   DiamondCluster International, Inc. (DiamondCluster) is a global business
strategy and technology solutions consulting firm. We deliver value to clients
worldwide by developing and implementing innovative digital strategies that
capitalize on the opportunities presented by new technologies. We combine
business and industry insight with technology expertise to create these digital
strategies for leading national and multinational businesses. For a business to
succeed in today's digital economy, we believe it must have a business strategy
that goes beyond conventional strategic thinking to fully incorporate
technology. We offer an approach that results in innovative new business models
that enable our clients to leverage technology and their existing competencies
to develop business opportunities.

   We lead CEOs and senior leadership teams through a process designed to
broaden their understanding of the ways in which technology can be used to
leverage their company's existing assets to deliver value. After thorough
analysis of a client's existing business model, we create a digital strategy to
help the client develop and sustain a competitive advantage in the digital
economy. Once we have conceived a digital strategy, we prototype, test and
scale the applications needed to successfully execute the strategy.

   DiamondCluster was formed on November 28, 2000, when Diamond Technology
Partners Incorporated acquired all of the outstanding shares of Cluster Telecom
BV (Cluster). Cluster was a pan-European management consulting firm
specializing in wireless technology, Internet and digital strategies.
DiamondCluster leverages Diamond Technology Partners's innovative work in
creating and implementing digital strategies with Cluster's leading-edge
broadband wireless industry and application expertise in Europe and Latin
America.

   DiamondCluster generated approximately $259.3 million of revenues from 169
clients in fiscal year 2001 and at March 31, 2001 employed 1,141 consultants in
12 offices in North America, Europe and Latin America. The company has offices
in Barcelona, Boston, Chicago, Dusseldorf, Lisbon, London, Madrid, Munich, New
York, Paris, San Francisco and Sao Paulo.

Industry Background

   The evolution of pervasive technologies, such as the Internet, has
fundamentally changed the way companies do business. Initially, companies used
various technologies simply to automate back-office functions and as an
additional means of displaying product and service information on static
corporate web sites. Today, well-established companies, including industry
leaders, have recognized the power of some of the new technologies, such as the
Internet and wireless communications, as a medium for creating new business
models and conducting both business-to-consumer and business-to-business
transactions. Large companies that have made significant investments in
building their existing sales forces, marketing strategies, brands, supply and
distribution systems and data management systems require digital strategies
that enable them to leverage these assets to take advantage of the power of
these technologies.

   Broadband Internet access is another significant emerging technology that we
believe will create important market opportunities. Through broadband Internet
access, which permits faster transmission speeds, we believe media will
converge on the Internet, as it becomes the source for video, music, newspapers
and other communication and entertainment. These developments present companies
with the opportunity to access potential customers around the world with their
products and services without the risk of failing to adapt to a changed market
environment.

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   International Data Corporation (IDC) estimates that the Internet economy
will help to more than double worldwide consulting revenues from $60.1 billion
in 1999 to $124.5 billion in 2004. In addition, IDC estimates worldwide
wireless subscribers to grow from 303 million in 1998 to over 1.5 billion by
2005.

   Successful development and implementation of digital strategies requires a
combination of innovative strategic analysis, in-depth vertical industry
expertise and a thorough understanding of technology and its applications. In
addition, digital strategies are often core transformations of a business,
which are very complex in scale and scope. We believe that few companies
possess the internal resources required to develop, manage and implement their
own digital strategies. As a result, companies are increasingly turning to
outside professional service providers for development, management and
implementation of their digital strategies.

   Few consulting service providers have the full range of strategy and
technology expertise and the global presence required to help clients identify
and implement innovative digital strategies. Traditional information technology
service providers typically focus only on the enhancement of existing systems
and the implementation of traditional business applications. Traditional
strategic consulting firms typically do not integrate their strategic and
technological capabilities and are often not accountable for the resulting
implementation.

   Because technology fundamentally affects how a company relates to its
customers, suppliers, employees, investors and competitors, the development and
implementation of a digital strategy is a focus at the highest levels of
business organizations, including the CEO and the board of directors. We
believe that companies increasingly seek outside consultants that possess both
the strategic insight necessary to create innovative digital strategies and the
resources required to prototype and scale applications to implement those
strategies.

The DiamondCluster Solution

   We combine innovative strategic thinking, in-depth vertical industry
expertise, a global presence, and a thorough understanding of technology and
its applications to deliver end-to-end business solutions. Our ability to
identify, prototype and scale innovative business solutions for our clients is
predicated on six attributes that we believe distinguish us from our
competitors.

   Strategic Business Model Focus. We work with CEOs and senior leadership
teams to establish new business models capitalizing on the opportunities
presented by new technologies. We collaborate with our clients to develop
digital strategy opportunities that leverage the value of their existing
physical and digital assets, intellectual capital and business relationships.
We believe we have the capabilities to develop and deliver new business models
and transform existing business models by drawing on our expertise in strategy,
technology, operations, and program management.

   Strategic Industry Insight and Expertise. We currently focus on serving four
vertical industry groupings: financial services, consumer and industrial
products and services, telecommunications and energy, and health care and
insurance. We believe our vertical industry focus enables us to define and
deliver innovative solutions that effectively address the market dynamics and
business opportunities facing our clients. Within each of the vertical
industries we serve, we have internal and outside experts whose intellectual
capital and experience allow us to create innovative, industry-specific digital
strategies.

   Global Perspective and Presence. We deliver our services in North America,
Latin America and Europe with one common brand and business model designed to
allow us to deliver the expertise best matched for the client. We believe that
our global reach and knowledge, combined with our understanding of local
markets provide us the ability to deliver consistent, high-quality consulting
services.

   Comprehensive Services. We work with our clients from the earliest stages of
study and assessment to the creation and implementation of a digital strategy.
We believe our multidisciplinary teams that consist of

                                      4

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strategists, technologists and program managers provide our clients with
perspective and expertise not available from other consulting firms.

   Transfer of Knowledge. The company seeks to develop long-term relationships
with its clients. To this end, DiamondCluster consultants work closely with
clients to create an environment in which knowledge and skills are constantly
shared. This transfer of knowledge is of significant value to the client.

   Deliver Results. DiamondCluster delivers tangible results, not just
recommendations. Consultants work with our client management to develop a
complete cost/benefit analysis for every project, which focuses on metrics such
as shareholder value and return on invested capital. DiamondCluster then works
with the client to execute the implementation plan to achieve the results.

Our Growth Strategy

   Our goal is to become the leader in the identification, design and delivery
of digital strategies. Our business model is designed to allow us to be a
trusted advisor and to provide the highest value services to our clients. The
following strategies guide our actions as we grow our business:

   Attract and Retain Skilled Personnel. We believe that our continued success
and growth require us to expand our base of highly skilled professionals. This
emphasis on human resources begins with our recruitment of client-serving
professionals from the best business and technical schools. It continues
through the process of training, developing and promoting promising
professionals within DiamondCluster and culminates in the sharing of equity in
DiamondCluster as an acknowledgment of merit, a means of retention and an
alignment of interests. In addition, we seek to complement organic growth by
hiring experienced and talented professionals, both through experienced
recruiting programs and carefully targeted acquisitions.

   Cultivate Senior Level Client Relationships. We develop strong, long-term
relationships with our clients that often lead to repeat business and
referrals. We achieve this by doing very high-impact work and cultivating close
relationships with the CEOs and senior leadership teams at our clients to
facilitate the transition. Our work often includes assuming key management
roles in the clients' organizations during the implementation of the digital
strategy. The access, contact and goodwill generated through our existing
client relationships affords us significant opportunities to provide additional
services and solutions.

   Deliver Services Through Multidisciplinary Teams. In order to maintain a
differentiated service offering, we seek to develop and sustain a business
culture that is common across all disciplines and all geographies in the
organization. We seek to promote our culture by exposing our professionals to
all of the various services that we provide while further developing skills in
each professional's principal area of expertise. Our end-to-end delivery of a
digital strategy enables professionals with different skill sets such as
strategy, technology, operations, and program management to contribute their
expertise to our clients' projects and to learn from each other.

   Leverage Assets from Business Combination With Cluster. There are
significant growth opportunities from our recent business combination with
Cluster. First, we have begun to leverage our multiple industry expertise to
expand into industries beyond telecommunications, the former Cluster
Consultings' primary industry focus, in Europe and Latin America. Second, we
have begun to leverage Cluster's deep telecommunications expertise,
specifically in wireless communications, to further penetrate the North
American telecommunications industry, which is generally recognized as being
less advanced than in Europe. Third, we have begun to develop a Diamond
Marketspace Solutions, or DMS, technology consulting capability in Europe and
Latin America similar to the capability existing in North America.

   Nurture and Promote Our Intellectual Capital. We utilize our accumulated
knowledge and experience to provide relevant intellectual capital to a given
project and to develop innovative solutions for our clients. We continuously
seek to identify, disseminate and incorporate new intellectual capital
throughout our organization to

                                      5

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keep abreast of business and technology trends. Intellectual capital is
provided by internal and external experts and industry practitioners, including
the DiamondCluster Network.

   Leverage Our Vertical Industry Expertise. We believe that our vertical
market focus gives us the industry-specific insights necessary to develop
innovative digital strategies for our clients. We are able to offer consulting
services informed by a thorough understanding of the particular market through
a vertical focus in four key industry groups: financial services, consumer and
industrial products and services, telecommunications and energy, and health
care and insurance. We also believe that our vertical market focus provides a
scalable structure for growth. We expect the number of vertical markets on
which we focus to change and grow as our expertise and market demands evolve.

   Expand Into New Geographies. While we currently have a global presence with
offices in North America, Latin America and in several European countries, we
believe there remains growth opportunity for us to enter new markets.
Increasing our exposure and access to global markets will enable us to provide
additional service to our existing multinational clients and attract new
clients from international markets. We continue to evaluate expansion into
other global markets that complement the services we offer our current clients.
We may choose to enter or expand into those markets through organic growth or
targeted business acquisitions.

   Market the DiamondCluster Brand. We intend to continue to invest in the
development and maintenance of our brand identity in the marketplace. We
promote our name and credentials through publications, seminars, speaking
engagements, media and analyst relations, and other efforts. We believe that
building a brand image facilitates both the lead generation process and the
ability to attract and retain the best people by raising awareness of
DiamondCluster, resulting in an increase in the number of new clients and
recruitment opportunities.

Our Services

   We are a business services firm that combines business strategy and industry
insight with technology expertise to create innovative digital strategies for
leading national and multinational businesses. For a business to succeed in
today's digital economy, we believe it must have a strategy that goes beyond
conventional strategic thinking. The standard of building a business that is
''faster, better, and cheaper'' is based on improving the past. We offer an
approach that results in innovative new business models that enable our clients
to utilize technology and their existing competencies to develop new business
opportunities.

   We work closely with our clients to help them understand, develop, and
manage the complete implementation of a digital strategy. Typically, this
involves analyzing and categorizing their business options, identifying
transforming business concepts, prototyping and launching the chosen concepts,
then market testing and scaling the business for ongoing success. Our teams
combine innovative strategic thinking, creative design capabilities,
technological expertise, change management and disciplined program management
to identify and scale innovative solutions quickly with minimized risk. We also
provide operational efficiency consulting for companies faced with the
challenge of reducing costs of current operations.

   Specifically, telecommunications and wireless communications consulting
experience in Europe, which was the focus of Cluster Consulting prior to the
combination with Diamond Technology Partners, includes working closely with
network operators, WAP portals, m-commerce ventures, new mobile content
providers, broadband network operators and telecom equipment manufacturers to
develop pan-European and global strategies, balance global and local content,
reposition portals, adopt one-to-one marketing methods and cope with the
technology's impact.

   Our project teams are composed of strategists, technologists, program
managers, operations managers, web site developers and creative designers who
work closely with our clients and analyze, create, and implement a digital
strategy. Teams are often supported by DiamondCluster Fellows who are leading
professional and

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academic thinkers in their fields and who bring additional insight, experience
and intellectual capital to our clients' challenges.

Our Approach

   DiamondCluster works in multidisciplinary teams of strategists,
technologists and program managers to provide a seamless approach to the
implementation of innovative digital strategies. The company has three core
skill competencies under which various services are offered. Often more than
one service is provided to a client simultaneously.

   Strategy Competency. Strategy skills are used to understand the impact
current and potential changes in the market, technology and competition. The
client is taken through a process of conceptualizing the business differently.
Services utilizing the strategy include:

      Business Strategy. By applying rigorous analysis and creative thinking,
   consultants identify shifting landscapes, new competition, unique market
   opportunities and emerging technologies.

      Strategic Marketing. Development of marketing plans and programs to
   acquire customers and capture value from target market segments.

   Technology Competency. Technology skills are used in tandem with strategy
skills in order to fully understand the impact of current and emerging
technologies. Technolgy skills are also used to define and deliver the
technical components required to achieve the benefits of the digital strategy.
Services utilizing the technology competency include:

      Solutions Delivery. Define and deliver technology solutions that create
   sustained and measured business value.

      Experience Design. Ensure user adoption through better functional design,
   multimedia interfaces and innovative market distribution tactics.

      Technical Architecture. Conceptualize, design and implement effective
   technology platforms for high-impact service delivery.

      Alliance Partners. Coordinate specialized skills and technologies from
   carefully chosen DMS alliance partners around the world (see "Alliances").

   Execution Compentency. Execution skills are used to ensure that the digital
strategy is implemented as designed, and that the team remains focused on the
business value of the project. Services utilizing the execution competency
include:

      Interim Executive Teams. Provide temporary executives and managers for
   operating roles and at the CxO-level.

      Value Management. Guide complex programs, operations and new initiatives
   through effective management to ensure on-time and on-budget delivery.

      Business Operations. Develop or refine business operations to maximize
   profitability for a client's business.

   Throughout each stage, our services may be supplemented by the services of
third parties who specilize in areas such as research, advertising, capital
funding and web hosting.

Strategic Alliances

   DiamondCluster International has a strategic alliance program through
DiamondCluster Marketspace Solutions (DMS). Our DMS alliance program develops
strategic relationships with select companies to provide

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consultants and clients with access to market-leading technology products and
services and decrease the implementation risk to DiamondCluster clients.
Relationships with DMS alliance companies are non-exclusive agreements designed
to deliver benefit for both organizations through knowledge sharing and joint
marketing. DiamondCluster does not recognize revenue for work performed by any
alliance company, and generally there are no fees associated with joining the
alliance program.

<TABLE>
<CAPTION>
Alliance Company                       Description                      Date Announced
----------------   -                                                    -
<C>                <S>                                                  <C>
Aceva Technologies Aceva Technologies Inc. is a leading provider of      2-14-01
                   collaborative finance infrastructure solutions.

Calico             Calico Commerce, Inc. provides software to enable    12-05-00
                   corporations to sell in Net markets, either directly
                   over the web or through existing channels.

Digex              Digex is a leading provider of managed Web and        7-21-00
                   application hosting services.

iMediation         iMediation is a global provider of collaborative     11-14-00
                   selling software and services.

Intel              Intel is a supplier of chips, boards, systems,         8-7-00
                   software, networking and communications
                   equipment, and services that comprise the
                   "ingredients" of computer architecture and the
                   Internet.

iSynidcate         iSyndicate develops, markets, and supports a line     7-18-00
                   of infrastructure and application software,
                   technologies and tools allowing for the
                   aggregation, distribution, exchange, and
                   management of digital content and information
                   across the Internet and to any Internet-connected
                   device.

Osage              Osage provides computing, networking, data            7-26-00
                   storage and associated hardware and related
                   operating systems and services.

Plumtree           Plumtree Software is the founder and leader of        9-06-00
                   corporate portal software that brings together
                   various applications and Internet services.

SafeHarbor.com     SafeHarbor.com provides Web-based self-help          10-31-00
                   customer support services.

Verity             Verity provides knowledge retrieval software for     10-16-00
                   business portals.
</TABLE>

Sales and Marketing

   Our principal sales activities are managed by our senior partners. They are
responsible for building relationships with CEOs and senior leadership teams of
existing and potential clients and for formulating and executing our sales and
marketing strategy. Our 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.

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   We primarily sell our services to CEOs or other senior executives of
national and multinational businesses. We believe that a majority of our fees
are sourced from CEO and senior management's operating budgets as opposed to
information technology budgets. We have divided our senior partners into
vertical industry groups focused on four industry groups: financial services;
consumer and industrial products and services; telecommunications and energy;
and health care and insurance. The sales efforts in each group are led by a
senior partner who is assigned revenue and profit contribution responsibility
for the group. We seek projects within each group from both new prospects and
existing clients. Each vertical industry group maintains a current list of
targeted prospects that are tracked on an ongoing basis by our senior
management. Building on leads generated through our marketing programs, senior
partners pursue formal consulting engagements.

   The primary focus of our marketing programs is to generate leads through
building relationships and educating client prospects about DiamondCluster. We
have initiated a number of relationship-marketing programs designed to
complement, encourage and accelerate personal relationships. We build
relationships both directly and on a collaborative basis with DiamondCluster
Network members and through relationships with certain third-party industry
executives who we call ''client relationship executives.'' These executives are
typically retired senior executives with a wide network of contacts in a given
industry. As of March 31, 2001, we had twenty five active client relationship
executives associated with our four vertical industry groups.

   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 publications, surveys, e-mail
newsletters, media and analyst relations, speeches and a homepage on the World
Wide Web. Three of our more substantive marketing efforts include publishing
the business magazine, Context; hosting the Exchange and Insight, two executive
learning forums; and publishing books and other regular newsletters focusing on
digital strategies. Each of these programs is designed to educate the market on
the opportunities of digital strategies, demonstrate our intellectual capital,
and create an ongoing dialogue with client prospects. See ''Intellectual
Capital'' for a description of these efforts.

Representative Clients

   The following are examples of clients that are representative of our
business:

   American Express. In the United Kingdom, DiamondCluster assisted American
Express to identify and implement a viable wireless commerce, or m-commerce,
strategy. DiamondCluster identified the most significant business opportunities
for the client and which international markets were the highest priorities. We
then combined this strategic insight with the client's existing fixed Internet
strategy. In a follow-up project, DiamondCluster also helped the client
negotiate an agreement with a joint venture partner to launch a new and
innovative e-payments business.

   Enron. Enron is one of the world's leading electricity, natural gas and
communications companies. Enron has a successful history of making markets in
commodities. Seeing an opportunity in bandwidth, Enron formed a new company to
pioneer the creation of the industry's first broadband trading market.
Increased market demand for data transmission capacity, telecommunication
deregulation, and an excess supply make bandwidth a fast growing commodity. We
teamed with Enron in June of 1999 to develop and launch an over-the-counter
bandwidth market. First, we interviewed traders, documented trading processes,
and defined system requirements. Next, we began designing a solution by
bringing in highly skilled technology developers and delivering the first
release of the Web-based, business-to-business trading system in just under
three months. Enron, using the DiamondCluster-developed trading system,
executed the first commodity bandwidth trade in December 1999. Traditionally,
contracting for bandwidth entailed multiple-year contracts and waits of several
months for actual connectivity. These transactions took weeks to negotiate. By
contrast, the Enron bandwidth trading system automates key parts of the
process, enabling the trading of individual bandwidth contracts on a spot
basis. This is only possible because the automated system physically controls
the network elements, cross-connecting buyers and sellers in a matter of
seconds.

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   Xfera. In Spain, DiamondCluster is currently working with Xfera, the first
third-generation wireless operator in Europe, taking on managerial positions to
help launch the company. We are directly involved in defining the Xfera's
business and market entry strategy, building and rolling out its customer care
system, hiring and training key executive positions and developing and
implementing portals that will make broadband wireless Internet fully
competitive.

   Large Financial Services Organization. DiamondCluster helped a large
U.S.-based insurance company transform its insurance operations from a
traditional propriety product and agent-based company to a diversified,
multi-product, multi-channel financial services enterprise. This was a shift in
the company's core business, and the strategy was fundamentally based on the
functionality and opportunity presented by the Internet. The work included
planning and implementing a new full-service business strategy, including
definition of a new IT architecture and infrastructure that would support the
many new technical requirements necessitated by the change. DiamondCluster
became an integral part of the client's management team and successfully led
the implementation of the new strategy.

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,
we have developed multiple programs to continuously identify, develop and
disseminate intellectual capital from individuals both within and outside
DiamondCluster.

   Context. Context is a business magazine we have published since November of
1997 covering the growing intersection of business and technology. We have
recently increased the frequency of distribution from quarterly to bi-monthly
and have begun newsstand distribution in select locations. Context's
circulation totals 45,000 readers. The magazine serves as a useful business
development and marketing tool to communicate directly with our existing and
prospective clients. Context also provides a means to further develop our
employees' points of view as abstracted and generated from client engagement
experiences.

   Exchange. The Exchange is a series of executive learning forums that we
launched in February 1997. CEOs and other senior executives are invited to
participate in the Exchange. We provide our paid subscription members with
innovative, leading-edge research to explore and understand the strategic risks
and opportunities of emerging technologies. Exchange members meet three times a
year to discuss current issues and research findings, and their business
implications. During these meetings, we provide the members with the
opportunity to discuss their issues with DiamondCluster Network members, our
partners and other business leaders.

   Insight. Insight is a series of one-and-a-half day management learning
sessions focused on the theory and practice of Digital strategy. Launched in
late 1998, the sessions provide senior executives of our existing and
prospective clients with the opportunity to explore the strategic risks and
opportunities of emerging technologies. The forums are sponsored each year by
leading technology firms and is being sponsored by Intel Corporation in
calendar 2001.

   Catalyst. Catalyst workshops are one- or two-day sessions tailored to
specific client situations. Launched in late 2000, Catalyst workshops bring
together DiamondCluster clients with DiamondCluster consultants and Fellows, in
a collaborative setting to create the focus, tools and guidelines needed to
define a project's key issues. These sessions are designed to showcase the
company's intellectual capital and focus and align the client management and
project team around a common goal.

   Books and Other Publications. In 1998, a senior partner of DiamondCluster
and a member of the DiamondCluster Network co-authored a book, Unleashing the
Killer App: Digital Strategies for Market Dominance. To date, it has sold over
180,000 copies and is published in 12 different languages. It is widely

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recognized as a leading publication in the field of digital strategy. Other
DiamondCluster employees and Fellows are currently authoring books with
DiamondCluster's support. The most recently published book is The Seven Steps
to Nirvana: Strategic Insights into eBusiness Transformation co-authored by
DiamondCluster Fellow Mohanbir Sawhney (McGraw Hill, 2001), and The New Market
Leaders: Who's Winning and How in the Battle for Customers (The Free Press) by
DiamondCluster Fellow Fred Wiersema is expected to be published in June 2001.
In addition, we publish electronic and physical newsletters to CEOs and senior
managers, and our partners and DiamondCluster Network members are frequent
speakers at business and technology forums.

   Knowledge Center. DiamondCluster's Knowledge Center collects, processes and
re-packages information from a wide range of internal and external sources to
meet DiamondCluster's specific needs. The Knowledge Center contains
intellectual capital such as best practices, benchmarks, project frameworks,
industry overviews, and various DiamondCluster analysis and opinions exploring
recent trends, events, opportunities, and possibilities that address our
clients' current and future market environment.

   Knowledge Leaders. We have created a career path for certain of our
professionals who desire to specialize in a particular area, such as technical
architecture, electronic commerce or supply-chain operations. We refer to these
professionals as ''knowledge leaders'' within our 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.

   DiamondCluster Network. The DiamondCluster Network is a group currently
comprised of 13 recognized business and technology leaders associated with
DiamondCluster. Members of the DiamondCluster Network, whom we refer to as
DiamondCluster Fellows, provide us with a set of skills that augment and
enhance the value that we can provide to our clients. DiamondCluster Fellows
provide a source of intellectual capital, introduce us to prospective clients,
author and contribute to industry publications, serve as faculty to the
Exchange, Insight, and Catalyst workshops and participate in client projects.
DiamondCluster Fellows are contractually committed to dedicate a number of days
annually to DiamondCluster to support marketing, sales, and client work.
DiamondCluster Fellows are compensated with a combination of stock options and
per diem payments for services provided to us, or to our clients on our behalf.
Current Fellows 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 and
   computer consultant-at-large. 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. He also led the
   development of Digital Equipment's VAX. Additionally, Mr. Bell directed the
   National Science Foundation's efforts in computing research.

      George Day is a Geoffrey T. Boisi Professor, professor of marketing, and
   director of the Mack Center for the Management of Technological Innovation
   at the Wharton School of the University of Pennsylvania. Mr. Day was
   previously the executive director of the Marketing Science Institute and has
   authored 14 books and 125 articles in the areas of marketing, strategy
   development, organization change, and competitive strategies. His most
   recent books are Wharton on Managing Emerging Technologies (2000, John Wiley
   & Sons) and The Market-Driven Organization (1999, Free Press).

      James J. Duderstadt is President Emeritus of the University of Michigan.
   Mr. Duderstadt teaches and conducts research in the areas of science,
   mathematics and engineering, including work in computer simulation, science
   policy, higher education, information technology, nuclear fission reactors,
   thermonuclear fusion, and high-powered lasers. He has served on and/or
   chaired numerous boards including the National Science Board, the Nuclear
   Energy Research Advisory Committee of the Department of Energy, Unisys and
   CMS Energy.

                                      11

<PAGE>

      Tim Gallwey consults 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 to create work environments that
   support learning and peak performance. His fifth book, The Inner Game of
   Work, was published in January 2000 by Random House.

      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 our 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
   fellow. Dr. Kay is credited with the conception of the laptop computer and
   the overlapping windows and icon interface that is used in almost all
   personal computers today. He was also a contributor to the development of
   the Ethernet, laser printing, network client/servers, and the forerunner of
   the Macintosh computer. He contributed to the inventions of 3D graphics and
   the ARPANet, now the Internet.

      Andrew Lippman, Ph.D. is an associate director and founding member of the
   Media Lab at the Massachusetts Institute of Technology. Mr. Lippman is the
   principal investigator of the Digital Life research program, a consortium of
   45 companies and 15 faculties that researches technical, social, and
   economic aspects of computing in everyday life. He has published widely and
   made over 100 presentations on digital entertainment, personal
   communications, and making the information highway entertaining and
   profitable.

      Heidi Mason is a managing director of The Bell-Mason Group and is a
   technology marketing consultant in Silicon Valley specializing in new
   ventures. Ms. Mason is co-creator, with Gordon Bell, of the Bell-Mason
   Diagnostic and Venture Development System, a technology and methodology to
   assess strengths and weaknesses of high-tech, early stage ventures.

      B. Joseph Pine II is co-founder of Strategic Horizons LLP. Mr. Pine is
   co-author of The Experience Economy: Work is Theatre and Every Business a
   Stage (1999). His earlier publication, Mass Customization: The New Frontier
   in Business Competition, received the 1995 Shingo Prize for Excellence in
   Manufacturing Research.

      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. He was a senior scientist at Interval
   Research Corp., vice-president and chief scientist for Lotus Development
   Corp., and vice-president of research and development and chief scientist at
   Software Arts Inc.

      Mohanbir Sawhney is the Tribune Professor of Electronic Commerce and
   Technology at Northwestern University's Kellogg Graduate School of
   Management, and a specialist in crafting marketing strategies in the
   fast-changing network economy. He has been awarded the Sydney Levy award for
   excellence in teaching and named the 1998 Outstanding Professor of the Year
   at Kellogg.

      Fred Wiersema is author of The New Market Leaders: Who's Winning and How
   in the Battle for Customers (Free Press), expected to be published in June
   2001. Mr. Wiersema was also co-author of The Discipline of Market Leaders
   (1997, Perseus Publishing). Mr. Wiersema was previously a senior partner and
   founder of the market leadership practice at CSC Index, an international
   management consultancy. He has worked with numerous market-leading companies
   on issues ranging from business development and market strategy to
   competitive positioning and management alignment.

      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 DiamondCluster community through inclusion in our Knowledge
Center, employee meetings, the Exchange, Insight and Catalyst programs,
Context, and our interactive case-based training and development programs.

                                      12

<PAGE>

Investment Activities

   In the course of providing services to our clients, we have encountered
opportunities to invest in our clients or with our clients in new ventures that
resulted from the implementation of a digital strategy. We have carefully
considered these options and have made small investments in a few of our
clients. In these instances, we have received equity interests in lieu of a
portion of our fees. As of March 31, 2001, these investments were not material
to our financial results.

Human Resources and Culture

   As of March 31, 2001, we had 1,478 employees. Of these employees, 1,141 were
client-serving professionals and 337 were management and administrative
personnel comprising intellectual capital development, marketing, human
resources, finance, accounting, legal, internal information systems and
administrative support.

   The responsibilities of our partners include client relationship
development, business development, client management, program management,
thought leadership, professional staff development and mentoring. Our partners
typically have ten to twenty years or more of experience.

   Culture. We believe our ability to simultaneously provide expertise in
strategy, technology, operations and program management is dependent upon our
ability to develop and sustain a business culture that is common across all
disciplines in the organization. DiamondCluster's employees are talented and
energetic professionals that come from a multitude of professional backgrounds
and over 45 nationalities which DiamondCluster believes fosters an exciting and
diverse work environment. Three primary elements comprise our culture:

  .  an environment that intellectually challenges our personnel through
     continuous training and client work;

  .  consistency in compensation and career paths across all disciplines and
     skill sets within DiamondCluster; and

  .  participation by all of our employees in our continuing development and
     ownership of DiamondCluster.

   Recruiting. We believe our success will depend on our ability to continue to
attract, retain and motivate highly skilled employees to support our current
operations and future growth. We attribute our success in hiring these people
to our ability to provide individuals with high impact client opportunities,
multidisciplinary training and career development, attractive long-term career
advancement opportunities, small teams and a collaborative approach to
consulting and competitive compensation.

   Although a significant number of our current employees were hired directly
from other firms, a growing number of our associates are being hired annually
from undergraduate and graduate business programs at many of the country's
leading universities. Over time, we expect to hire a majority of our employees
from these programs and, as a result, we expect senior level positions will be
predominantly filled from internal promotions.

   Training and Professional Development. Our training and professional
development programs help us to deliver high-quality services to our clients,
as well as to attract and retain highly skilled professionals. We have
developed programs that ensure all individuals have the opportunity to develop
consulting, business and technology skills throughout their careers. These
programs reinforce our culture by exposing all professionals to the various
services we provide while further developing deep skills in each professional's
principal area of expertise.

   Compensation. Our compensation programs have been structured to attract and
retain highly skilled professionals by offering competitive base salaries
coupled with annual cash bonus opportunities. We use equity at all levels
within DiamondCluster to provide long-term wealth creation opportunities and to
retain individuals through vesting provisions. We believe that those
professional services firms able to offer equity will be more successful in
attracting and retaining talented individuals to their organizations.

                                      13

<PAGE>

   Our partners are eligible to receive an annual bonus comprised of cash
commensurate with their level of responsibility and based on our overall
performance. Our partners are granted stock options upon being elected a
partner. We grant additional equity in conjunction with movement through the
partner levels. Options that we issue to partners vest annually over five
years. Individuals below the partner level are awarded annual cash bonuses
based on their performance and our overall performance. Our non-partners are
granted stock options at the time of hire and promotion. These options
typically vest ratably over four years.

Competition

   Our primary competitors include traditional strategic consulting firms,
traditional systems integrators, and firms that provide both strategic
consulting and systems integration services. Many of our competitors are
substantially larger than us and have significantly greater financial,
technical and marketing resources, greater name recognition and greater
revenues. We believe that competition may increase from both the large,
traditional strategic consulting firms as these firms increase their use of
information technology in their services and enter the digital strategy market.
We believe that the principal criteria considered by prospective clients when
selecting a consulting firm to develop and implement digital strategies include
diagnostic capabilities, effectiveness of strategic business models, scope of
services, global presence, service delivery approach, technical and industry
expertise, perceived value and a results orientation.

   Furthermore, we face the additional challenge of competing for and retaining
the best personnel available in the business services market. As other firms
enter the digital strategy market, we believe that our client-serving
professionals and employees may be targeted by other firms to satisfy their own
personnel needs.

Executive Officers of the Registrant

   Our executive officers are as follows:

<TABLE>
<CAPTION>
         Name          Age                        Position
         ----          --                         --------
<S>                    <C> <C>
Melvyn E. Bergstein    59  Chairman of the Board of Directors and Chief Executive
                           Officer

Michael E. Mikolajczyk 49  Vice Chairman, Secretary and Director

William McClayton      56  Senior Vice President--Finance and Administration

Karl E. Bupp           39  Chief Financial Officer and Treasurer

Michael J. Connolly    39  President, Global Diamond Marketspace Solutions

Adam J. Gutstein       38  President, North America and Director

Javier Rubio           40  President, Europe and Latin America and Director

John J. Sviokla        43  Vice Chairman and Director
</TABLE>

   Melvyn E. Bergstein co-founded Diamond Technology Partners Incorporated,
which following the combination with Cluster Consulting in November 2000
changed its name to DiamondCluster International, Inc., in January 1994 and
served as its Chairman, Chief Executive Officer and President until July 1,
1998 when Mr. Bergstein vacated the office of President in favor of Mr.
Mikolajczyk. Mr. Bergstein has been a member of DiamondCluster's Board of
Directors since January 1994. Prior to co-founding DiamondCluster, Mr.
Bergstein held several senior executive positions with Technology Solutions
Company from 1991 to 1993. Prior to that time, Mr. Bergstein held several
senior positions with other consulting firms, including twenty-one years in
various positions with the Arthur Andersen & Co.'s consulting division, now
Accenture LTD.

   Michael E. Mikolajczyk co-founded DiamondCluster joining the Company in
April 1994 and serving as a member of the Board of Directors since then. From
April 1994 until July 1998 Mr. Mikolajczyk also served as

                                      14

<PAGE>

DiamondCluster's Senior Vice President, Chief Financial and Administrative
Officer. From July 1998 until April 2000 Mr. Mikolajczyk served as President.
In July 1999 he became Secretary and since April 1, 2000 he has also been a
vice chairman. Prior to joining DiamondCluster, he served as senior vice
president of finance and administration and chief financial officer for
Technology Solutions Company. Prior to that time, Mr. Mikolajczyk held several
senior financial and corporate development positions at MCI Telecommunications
Corporation.

   William McClayton joined the Company in April 2001 as partner and Senior
Vice President of Finance and Administration responsible for finance, planning,
legal and facilities worldwide. Prior to joining DiamondCluster, Mr. McClayton
was a senior partner in the audit division of Arthur Andersen. During his
35-year career at Arthur Andersen, Mr. McClayton served public and private
audit clients, and led the firm's Chicago-based global financial markets
practice for ten years.

   Karl E. Bupp co-founded DiamondCluster and joined the Company in April 1994
as Vice President of Financial Planning responsible for our internal planning,
analysis and treasury functions. Since July 1998, Mr. Bupp has served as our
Chief Financial Officer and Treasurer. Prior to joining us, Mr. 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.

   Michael J. Connolly joined DiamondCluster in May 1995 as a partner and Vice
President. Since July 1999, Mr. Connolly has been managing our Diamond
Marketspace Solutions group. Diamond Marketspace Solutions helps build and
operate fully functioning e-business ventures for DiamondCluster's clients. Mr.
Connolly assumed the title of President, Global DMS on November 28, 2000. Prior
to joining DiamondCluster, Mr. Connolly was an associate partner with Andersen
Consulting, now Accenture.

   Adam J. Gutstein co-founded DiamondCluster in January 1994 and has served as
a partner and Vice President since inception and as a member of
DiamondCluster's Board of Directors since August 1999. From July 1998 until
April 2000 Mr. Gutstein served as Chief Operating Officer. From April to
November 2000 Mr. Gutstein served as President and since November 2000 Mr.
Gutstein has served as President, North America. Prior to joining
DiamondCluster, Mr. Gutstein was a vice president at Technology Solutions
Company and a manager with Andersen Consulting, now Accenture LTD.

   Javier Rubio has served as DiamondCluster's President, Europe and Latin
America since the consummation of the business combination between the Company
and Cluster Consulting in November 2000. Mr. Rubio founded Cluster in 1993 and
served as its Chairman and Chief Executive Officer. Prior to founding Cluster,
Mr. Rubio held several senior positions with other consulting firms, including
seven years in various positions with the MAC Group (Gemini Consulting) and the
Monitor Company. Mr. Rubio is a top advisor to CEOs and a respected voice in
the telecom industry across Europe. Mr. Rubio's expertise in telecom ranges
from mobile, satellite and fixed network to CATV. He has worked on multiple
assignments for a variety of Fortune 500 companies, such as AT&T,
Vodafone-AirTouch, Ericsson and British Telecom, assisting them with strategic
decision making.

   John J. Sviokla joined DiamondCluster in September 1998 as a partner and
Vice President and became a member of DiamondCluster's Board of Directors in
August 1999. Since April 1, 2000 Dr. Sviokla has been a vice chairman. Prior to
joining DiamondCluster, Dr. Sviokla was a professor at the Harvard Business
School from October 1986 to August 1998. His pioneering work on "Marketspace"
established Harvard's first course on electronic commerce. He co-authored the
seminal articles "Managing in the Marketspace" and "Exploiting the Virtual
Value Chain," both appearing in the Harvard Business Review. Dr. Sviokla has
authored over 90 articles and cases, edited books and been a consultant to
large and small companies around the world. He has been a guest professor at
many universities including Kellogg, MIT, The London Business School, the
Melbourne Business School and the Hong Kong Institute of Science and
Technology. His current research and consulting focuses on how to help large
companies unlock value in the new economy.

                                      15

<PAGE>

Item 2. Properties

   Our headquarters and principal administrative, information systems,
financial, accounting, marketing, legal and human resources operations are
located in Chicago, Illinois. In North America, we also have operations located
in San Francisco, California; New York, New York; and Boston, Massachusetts.

   Our international operations are based in Barcelona, Spain, with offices in
seven other cities: Madrid, Spain; Dusseldorf and Munich, Germany; Lisbon,
Portugal; London, UK; Paris, France; and Sao Paulo, Brazil.

   We anticipate that we will require additional office space in some cities as
our business expands and believe that we will be able to obtain suitable space
as needed.

Item 3. Legal Proceedings

   We are not party to any claims or actions that we believe could have a
material effect on our 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 2001.

                                    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>
                                                   Sales Price Per Share
                                                      --------------
                                                    High           Low
                                                   -------        ------
               <S>                                 <C>            <C>
               Fiscal year ending March 31, 2000:
                  First Quarter................... $ 17.17        $12.83
                  Second Quarter..................   33.09         14.29
                  Third Quarter...................   93.63         25.83
                  Fourth Quarter.................. $107.25        $59.00
               Fiscal year ending March 31, 2001:
                  First Quarter................... $ 88.88        $47.25
                  Second Quarter..................   98.94         49.44
                  Third Quarter...................   74.94         20.69
                  Fourth Quarter.................. $ 44.13        $ 7.88
</TABLE>

   On June 22, 2001, the closing price of Class A Common Stock was $10.47 per
share. At such date, we had approximately 10,000 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, we have not paid any cash dividends on our Common
Stock and do not expect to declare or pay any cash or other dividends in the
foreseeable future. Our financing arrangements currently do not prohibit us
from declaring or paying dividends or making other distributions on the Common
Stock.

                                      16

<PAGE>

   During fiscal year 2001, we sold to our Partners, 8,823 shares of our Class
B Common Stock at $61.54 per share. These sales were made under the exemption
from registration provided under Section 4(2) of the Securities Act of 1933.

Item 6. Selected Consolidated Financial Data

   The selected consolidated financial data presented below has been derived
from our 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,
                                                           ------------------------------------------
                                                            1997       1998    1999     2000     2001
                                                           -------    ------- ------- -------- --------
                                                        (Dollars in thousands, except per share amounts)
<S>                                                     <C>           <C>     <C>     <C>      <C>
Statement of Operations Data:
   Net revenues........................................ $37,557       $58,369 $82,389 $136,235 $259,340
                                                        -------       ------- ------- -------- --------
   Operating expenses:
       Project personnel and related expenses..........  21,863        31,619  43,275   72,355  134,784
       Professional development and recruiting.........   6,272         6,155   9,448   13,199   26,673
       Marketing and sales.............................   1,928         3,210   4,669    7,325   13,431
       Management and administrative support...........   6,348         8,602  11,298   18,260   41,989
       Goodwill amortization...........................      --            --      --      493   21,928
       Noncash compensation............................      --            --      --       --   18,187
                                                        -------       ------- ------- -------- --------
          Total operating expenses.....................  36,411        49,586  68,690  111,632  256,992
                                                        -------       ------- ------- -------- --------
Income from operations.................................   1,146         8,783  13,699   24,603    2,348
                                                        -------       ------- ------- -------- --------
Interest income, net...................................     172         1,150   2,488    2,002   11,999
Other income (expense), net............................      --            --      --       --   (8,714)
                                                        -------       ------- ------- -------- --------
          Total other income, net......................     172         1,150   2,488    2,002    3,285
                                                        -------       ------- ------- -------- --------
Income before taxes....................................   1,318         9,933  16,187   26,605    5,633
Income taxes...........................................     685         3,925   6,351   10,377   18,500
                                                        -------       ------- ------- -------- --------
Net income (loss)...................................... $   633       $ 6,008 $ 9,836 $ 16,228 $(12,867)
                                                        =======       ======= ======= ======== ========
Basic net income (loss) per share of Common Stock (1).. $   .05       $   .34 $   .49 $    .78 $  (0.49)
Shares used in computing basic net income(loss) per
  share of Common Stock (1)............................  13,716        17,634  19,915   20,807   26,448
Diluted net income (loss) per share of Common Stock (1) $   .04       $   .28 $   .42 $    .62 $  (0.49)
Shares used in computing diluted net income (loss) per
  share of Common Stock (1)............................  14,856        21,258  23,346   25,984   26,448
</TABLE>

<TABLE>
<CAPTION>
                                                              March 31,
                                              -----------------------------------------
                                               1997    1998    1999     2000     2001
                                              ------- ------- ------- -------- --------
                                                       (Dollars in thousands)
<S>                                           <C>     <C>     <C>     <C>      <C>
Balance Sheet Data:
   Cash and cash equivalents................. $17,547 $31,437 $47,698 $182,945 $151,358
   Working capital...........................  15,725  26,236  46,872  183,967  132,501
   Total assets..............................  25,494  40,352  67,086  249,410  522,256
   Long-term debt, including current portion.   2,000      --      --    1,000      500
   Total stockholders' equity................ $18,300 $28,767 $53,301 $218,318 $452,367
</TABLE>
--------
(1) See Note 2 of ''Notes to Consolidated Financial Statements'' for an
    explanation of the methods used to compute basic and diluted earnings per
    share data.

                                      17

<PAGE>

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 related notes included
elsewhere or incorporated by reference in this prospectus.

Overview

   We are a global business strategy and technology solutions firm that
delivers value to its leading national and multinational clients by developing
and implementing innovative digital strategies that capitalize on the
opportunities presented by new technologies. Once conceived, we believe such
strategies must be implemented rapidly in order to maximize competitive
benefits. We have experienced substantial revenue growth since our inception,
generating net revenues of $259.3 million from 169 clients during the fiscal
year ended March 31, 2001. We employed 1,141 client-serving professionals as of
March 31, 2001.

   Our revenues are comprised of professional fees for services rendered to our
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, we and our client agree on fees for services based upon the scope
of the project, our staffing requirements and the level of client involvement.
We recognize revenue as services are performed in accordance with the terms of
the client engagement. Out-of-pocket expenses are either reimbursed by our
clients and offset against expenses incurred or, if not reimbursed, reduce the
amount of recognized revenues. Provisions are made based on our experience for
estimated uncollectible amounts or costs incurred subsequent to project
completion. Although from time to time we have been required to make revisions
to our clients' estimated deliverables, to date none of such revisions has had
a material adverse effect on our operating or financial results.

   The largest portion of our costs consists primarily of employee-related
expenses for our client-serving professionals and other direct costs, such as
third-party vendor costs and unbillable costs associated with the delivery of
services to our clients. The remainder of our costs are comprised of the
expenses associated with the development of our business and the support of our
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 content development and delivery costs. Marketing and sales expenses
consist primarily of the costs associated with our development and maintenance
of our marketing materials and programs. Management and administrative support
expenses consist primarily of the costs associated with operations, finance,
information systems, facilities, including the rent of office space and other
administrative support for project personnel.

   We regularly review our fees for services, professional compensation and
overhead costs to ensure that our services and compensation are competitive
within the industry. In addition, we monitor the progress of client projects
with client senior management. We manage activities of our professionals by
closely monitoring engagement schedules and staffing requirements for new
engagements. Because most of our client engagements are, and may be in the
future, terminable by our clients without penalty, an unanticipated termination
of a client project could require us to maintain underutilized employees. While
professional staff must be adjusted to reflect active engagements, we must
maintain a sufficient number of senior professionals to oversee existing client
engagements and participate in our sales efforts to secure new client
assignments.

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

                                      18

<PAGE>

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.

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,
                                            ---------------------
                                             1999   2000   2001
                                            -----  -----   -----
<S>                                         <C>    <C>    <C>
Net Revenues............................... 100.0% 100.0% 100.0%
                                            -----  -----  -----
Operating Expenses:........................
   Project personnel and related expenses..  52.5   53.1   52.0
   Professional development and recruiting.  11.5    9.7   10.3
   Marketing and sales.....................   5.7    5.4    5.2
   Management and administrative support...  13.7   13.3   16.2
   Goodwill amortization...................   0.0    0.4    8.4
   Noncash compensation....................   0.0    0.0    7.0
                                            -----  -----  -----
       Total operating expenses............  83.4   81.9   99.1
                                            -----  -----  -----
Income from operations.....................  16.6   18.1    0.9
Other income, net..........................   3.0    1.4    1.3
                                            -----  -----  -----
Income before taxes........................  19.6   19.5    2.2
Income taxes...............................   7.7    7.6    7.1
                                            -----  -----  -----
Net income (loss)..........................  11.9%  11.9%  (4.9%)
                                            =====  =====  =====
</TABLE>

Fiscal 2001 Compared to Fiscal 2000

   Our net income of $16.2 million during fiscal 2000 decreased $29.1 million
resulting in a net loss of $12.9 million during fiscal 2001 primarily due to
the amortization of goodwill and noncash compensation recorded in connection
with the Cluster acquisition and an increase in the effective tax rate,
partially offset by an increase in operating income before amortization of
goodwill and noncash compensation. The Cluster acquisition, the largest of our
two acquisitions during fiscal 2001, closed on November 28, 2000 and Cluster's
results are included from that date.

   Our net revenues increased 90.4% to $259.3 million during fiscal 2001 as
compared to fiscal 2000. The increase in our net revenues reflects an increase
in the volume of services delivered to new clients, continued services to our
existing client base, continued growth of our Diamond Marketspace Solutions
practice, as well as four acquisitions, two in fiscal year 2000 and two in
fiscal year 2001. Revenue from new clients accounted for 39% of the revenue
while revenue to existing clients accounted for 61% of total revenue during
fiscal 2001. We served 169 clients during fiscal 2001 as compared to 143
clients served during fiscal 2000.

   Project personnel and related expenses increased $62.4 million, or 86.3%, to
$134.8 million during fiscal 2001 as compared to fiscal 2000. This increase is
due to increases in both the number and compensation of our client-serving
professionals. We increased our client-serving professional staff from 452 at
March 31, 2000 to 1,141 at March 31, 2001 as a result of the Cluster
transaction and our continued success in recruiting client-serving
professionals. As a percentage of net revenues, project personnel and related
expenses decreased from 53.1% to 52.0% during fiscal 2001 as compared to fiscal
2000, due primarily to the inclusion of the results of Cluster's operations
from November 28, 2000 to the end of the fiscal year.

                                      19

<PAGE>

   Professional development and recruiting expenses increased $13.5 million to
$26.7 million during fiscal 2001 as compared to fiscal 2000. This increase
reflects our recruiting and training of a greater number of client-serving
professionals and an associated increase in recruiting and training resources.
As a percentage of net revenues, these expenses increased to 10.3% from 9.7%
during the same period in the prior year.

   Marketing and sales expenses increased $6.1 million to $13.4 million during
fiscal 2001 as compared to fiscal 2000 as a result of increased spending for:

  .  the publication of our magazine, Context, which transitioned from a
     quarterly publication to a bi-monthly publication and is now being
     marketed at selected newsstands across the United States and distributed
     to senior executives in Europe;

  .  the conduct and sponsorship of several Diamond Exchange, Insight and other
     seminars for prospective clients; and

  .  the hiring of additional marketing staff to further develop our corporate
     branding and marketing initiatives.

   As a percentage of net revenues, these expenses decreased from 5.4% to 5.2%
as a result of our improved operating leverage resulting from our net revenue
growth.

   Management and administrative support expenses increased from $18.3 million
to $42.0 million, or 130.0%, during fiscal 2001 as compared to fiscal 2000 as a
result of the additional facilities, including the opening of the San Francisco
office in the third fiscal quarter of FY 2000, the London office in the fourth
fiscal quarter of FY 2000, the New York office during the third fiscal quarter
of FY 2001, offices located in Barcelona, Boston, Dusseldorf, Lisbon, London,
Madrid, Munich, Paris, and Sao Paolo resulting from the Cluster transaction,
and equipment and personnel necessary to support our growth and increased
consulting capacity. As a percentage of net revenues, these expenses increased
from 13.3% to 16.2% due mainly to increased costs associated with the new
offices.

   Goodwill amortization increased $21.4 million from $0.5 million to $21.9
million during fiscal 2001 as compared to fiscal 2000 due primarily to the
acquisitions of Momentus and Cluster which were completed in May and November
2000, respectively. As a percentage of net revenues, these expenses increased
from 0.4% to 8.4%.

   Noncash compensation increased from zero during fiscal 2000 to $18.2 million
during fiscal 2001. This is primarily the amortization of equity granted to
employees at amounts below fair market value as a result of the Cluster
acquisition that will be earned contingent on their continued employment. As a
percentage of net revenues, noncash compensation is 7.0%.

   Income from operations decreased from $24.6 million to $2.3 million during
fiscal 2001 as compared to fiscal 2000 due primarily to the amortization of
goodwill and noncash compensation. EBITA, which consists of earnings from
operations before amortization of goodwill and noncash compensation, increased
from $25.1 million to $42.5 million during fiscal 2001 as compared to the same
period in the prior year.

   Other income increased $1.3 million from $2.0 million to $3.3 million during
fiscal 2001 as compared to fiscal 2000 primarily due to increased cash balances
throughout fiscal year 2001 resulting in an increase in interest income of
$10.0 million, which was partially offset by realized losses on equity
investments of $8.6 million. As a percentage of net revenues, other income
decreased slightly from 1.4% to 1.3%.

   Income taxes increased from $10.4 million to $18.5 million due principally
to an increase in income before taxes, goodwill amortization and noncash
compensation.

                                      20

<PAGE>

Fiscal 2000 Compared to Fiscal 1999

   We had net income of $16.2 million during fiscal 2000 which improved from
net income of $9.8 million during fiscal 1999 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
our growth during the period.

   Our net revenues increased 65.4% to $136.2 million during fiscal 2000 as
compared to fiscal 1999. The increase in our net revenues reflected an increase
in the volume of services delivered to new clients, continued services to our
existing client base, as well as two acquisitions. Revenue from new clients
accounted for 41% of the revenue while revenue to existing clients accounted
for 59% of total revenue during fiscal 2000. We served 143 clients during
fiscal 2000 as compared to 85 clients served during fiscal 1999.

   Project personnel and related expenses increased $29.1 million, or 67.2%, to
$72.4 million during fiscal 2000 as compared to fiscal 1999. This increase
resulted from increases in both the number and compensation of our
client-serving professionals to respond to growth. We increased our
client-serving professional staff from 239 at March 31, 1999 to 452 at March
31, 2000. As a percentage of net revenues, project personnel and related
expenses increased from 52.5% to 53.1% during fiscal 2000.

   Professional development and recruiting expenses increased $3.8 million
during fiscal 2000 as compared to fiscal 1999. This increase reflected our
recruiting and training of a higher number of client-serving professionals and
an associated increase in recruiting and training resources. As a percentage of
net revenues, these expenses decreased to 9.7% from 11.5% during the same
period in the prior year as a result of our improved operating leverage
resulting from our net revenue growth.

   Marketing and sales expenses increased $2.7 million to $7.3 million during
fiscal 2000 as compared to fiscal 1999 as a result of increased spending for:

  .  the publication of our magazine, Context, which transitioned from a
     quarterly publication to a bi-monthly publication and is now being
     marketed at selected newsstands across the United States;

  .  the conduct of several Diamond Exchange and Insight seminars for
     prospective clients; and

  .  the hiring of a chief marketing officer and supporting staff to lead our
     corporate branding and marketing initiatives.

As a percentage of net revenues, these expenses decreased from 5.7% to 5.4% as
a result of our improved operating leverage resulting from our net revenue
growth.

   Management and administrative support expenses increased from $11.3 million
to $18.8 million, or 66.0%, during fiscal 2000 as compared to fiscal 1999 as a
result of the additional facilities, equipment and personnel necessary to
support our growth and increased consulting capacity. As a percentage of net
revenues, management and administrative support expenses remained the same at
13.7%.

   Goodwill amortization increased to $0.5 million during fiscal 2000 as
compared to fiscal 1999 as a result of the acquisitions of Omnitech and
Leverage which were completed in April and October 1999, respectively. As a
percentage of net revenues, these expenses increased from 0.0% to 0.4%.

   Income from operations increased from $13.7 million to $24.6 million during
fiscal 2000 as compared to fiscal 1999 primarily due to an increase in net
revenues, partially offset by an increase in expenses required to support our
growth during the period. EBITA, which consists of earnings from operations
before amortization of goodwill and noncash compensation, increased from $13.7
million to $25.1 million during fiscal 2000 as compared to the same period in
the prior year.

                                      21

<PAGE>

   Other income decreased $0.5 million from $2.5 million to $2.0 million during
fiscal 2000 as compared to fiscal 1999 primarily as a result of decreased cash
balances throughout fiscal year 2000 resulting in a decrease in interest income
of $0.4 million. As a percentage of net revenues, other income decreased from
3.0% to 1.4%.

Liquidity and Capital Resources

   We maintain a revolving line of credit pursuant to the terms of an unsecured
credit agreement from a commercial bank under which we 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 our discretion. This line of credit has been reduced to
account for letters of credit outstanding. As of March 31, 2001, we had
approximately $9.9 million available under this line of credit.

   Net cash of $65.6 million provided by operating activities consisted
primarily of income (after adjusting net loss for non-cash items) of $45.8
million, and $19.9 million provided in working capital and other activities.
Net cash provided in working capital and other activities resulted primarily
from decreases in accounts receivable and prepaid expenses totaling $15.1
million and increases in accrued compensation and income taxes payable totaling
$19.6 million, offset by a net increase in other assets and liabilities of
$12.2 million. Our billings for the quarter ended March 31, 2001 totaled $85.9
million. These amounts include billings to clients for out-of-pocket expenses
that are reimbursed by clients which are not included in recognized revenues.
Our gross accounts receivable balance of $34.9 million at March 31, 2001
represented 37 days of billings for the quarter.

   Cash used in investing activities was $65.9 million for fiscal 2001. Cash
used in investing activities resulted primarily from purchases of property and
equipment and cash used in acquisitions. During fiscal 2001, we acquired two
companies and used cash, net of cash acquired, of approximately $54.2 million.

   Cash used in financing activities was $30.7 million for fiscal 2001. Cash
used in financing activities resulted primarily from the repurchase of
DiamondCluster's Class A Common Stock totaling $30.7 million. During fiscal
year 2001 our Board of Directors authorized the repurchase, from time to time,
of an additional two million shares of our Class A Common Stock as part of our
existing stock repurchase program. This authorization brought the total
authorized shares to three million shares for the stock repurchase program,
which commenced in October 1998 when our Board of Directors authorized the
repurchase of up to one million shares of our Class A Common Stock. These
repurchases were authorized to be made in the open market or in privately
negotiated transactions with the timing and volume dependent upon market
conditions. At March 31, 2001, the number of shares purchased under this
authorization was 2.0 million shares at an aggregate cost of $40.8 million. We
funded the repurchases through our cash balances.

   On January 30, 2001, we offered our employees (other than senior officers) a
plan, approved by the Board of Directors, which gave employees a choice to
cancel certain stock options granted to them in exchange for new options to
purchase the same class of shares, a majority of which will vest
proportionately over a four year period. A total of 2.3 million stock options
were cancelled as part of this plan. The new options granted will range from
75% to 100% of the original grant, will be granted six months and one day from
the date the old options are cancelled, and will have an exercise price to be
set on the grant date. The exercise price for a majority of the options granted
on August 9, 2001 will be set at fair market value. The original options were
granted under DiamondCluster's 2000 Stock Option Plan and under
DiamondCluster's 1998 Equity Incentive Plan. Employees who accepted the offer
were required to make an election with respect to all covered options by
February 8, 2001. In order to receive the new options, the employees must
remain employed by DiamondCluster until the new grant date. The exchange offer
is not available to the members of the Board of Directors or senior officers of
DiamondCluster.

   In March 2000, we completed a public offering and sold 1,500,000 shares of
Class A Common Stock at a price of $80.13 per share. We realized approximately
$114.0 million in connection with the sale, net of payment of the underwriters'
commissions and other expenses of the offering. In the offering, an additional
1,775,000 shares were sold by selling stockholders.

                                      22

<PAGE>

   We believe that our current cash balances, existing lines of credit and cash
flow from existing and future operations, will be sufficient to fund our
operating requirements at least through fiscal 2002. We have announced a
five-point program designed to reduce our costs while operating around cash
flow neutral. We expect that these programs will generate over $20 million in
savings from May 2001 through the end of fiscal 2002.
   Should our business expand more rapidly than expected, we believe that
additional bank credit would be available to fund any additional operating and
capital requirements. In addition, we could consider seeking additional public
or private debt or equity financing to fund future growth opportunities.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk Sensitive
Instruments.

   We do not invest excess funds in derivative financial instruments or other
market rate sensitive instruments.

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.

                                      23

<PAGE>

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.

                                    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-14

   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

      A report on Form 8-K/A was filed on April 12, 2001 as an amendment to the
   report on Form 8-K that was filed on September 11, 2000 to reflect the
   information required by Item 7.

      A report on Form 8-K was filed on March 7, 2001 relating to the
   preannouncement of preliminary fiscal year 2001 fourth quarter operating
   results.

   (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 DiamondCluster International, Inc. 1998 Equity Incentive Plan.

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.

10.6**  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.
</TABLE>

                                      24

<PAGE>

<TABLE>
<CAPTION>
Exhibit
Number                                          Description
------                                          -----------
<C>     <S>

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.

 99.1** Risk Factors.
</TABLE>
--------
*  Filed herewith
** Incorporated by reference to the corresponding exhibits filed with the
   Company's Registration Statement on Form S-3 (No. 333-30666)

                                      25

<PAGE>

                                  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.

                                          DIAMONDCLUSTER INTERNATIONAL, INC.

                                          By: _________________________________
                                             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.

      Signature                      Title                    Date
      ---------                      -----                    ----

                       Chairman and Chief                 June 26, 2001
----------------------   ExecutiveOfficer (Principal
 Melvyn E. Bergstein     ExecutiveOfficer)

                       Chief Financial Officer            June 26, 2001
----------------------   andTreasurer (Principal
     Karl E. Bupp        Financialand Accounting Officer)

                       Vice Chairman, Secretary           June 26, 2001
----------------------   andDirector
Michael E. Mikolajczyk

                       Vice Chairman and Director         June 26, 2001
----------------------
   John J. Sviokla

                       President, North America and       June 26, 2001
----------------------   Director
   Adam J. Gutstein

                       President, Europe and Latin        June 26, 2001
----------------------   America and Director
     Javier Rubio

                                      26

<PAGE>

                       Signature         Title       Date
                       ---------         -----       ----

                                        Director June 26, 2001
                 ----------------------
                 Christopher J. Moffitt

                                        Director June 26, 2001
                 ----------------------
                   Edward R. Anderson

                                        Director June 26, 2001
                 ----------------------
                   Donald R. Caldwell

                                        Director June 26, 2001
                 ----------------------
                      Alan C. Kay

                                        Director June 26, 2001
                 ----------------------
                     Mark L. Gordon

                                        Director June 26, 2001
                 ----------------------
                    Arnold R. Weber

                                        Director June 26, 2001
                 ----------------------
                   John D. Loewenberg


                                      27

<PAGE>

                      DIAMONDCLUSTER INTERNATIONAL, INC.

                  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, 2000 and 2001.................................... F-3

   Consolidated Statements of Operations and Comprehensive Income (Loss) for the Years Ended
     March 31, 1999, 2000 and 2001.............................................................. F-4

   Consolidated Statements of Stockholders' Equity for the Years Ended March 31, 1999, 2000 and
     2001....................................................................................... F-5

   Consolidated Statements of Cash Flows for the Years Ended March 31, 1999, 2000 and 2001...... 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>

                         INDEPENDENT AUDITORS' REPORT

The Stockholders and Board of Directors
DiamondCluster International, Inc.:

   We have audited the accompanying consolidated balance sheets of
DiamondCluster International, Inc. and subsidiaries as of March 31, 2000 and
2001, and the related consolidated statements of operations and comprehensive
income (loss), stockholders' equity and cash flows for each of the years in the
three-year period ended March 31, 2001. 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 auditing standards generally
accepted in the United States of America. 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
DiamondCluster International, Inc. and subsidiaries as of March 31, 2000 and
2001, and the results of their operations and their cash flows for each of the
years in the three-year period ended March 31, 2001, in conformity with
accounting principles generally accepted in the United States of America.

                                          KPMG LLP

Chicago, Illinois
May 1, 2001

                                      F-2

<PAGE>

                      DIAMONDCLUSTER INTERNATIONAL, INC.

                          CONSOLIDATED BALANCE SHEETS

                            March 31, 2000 and 2001
                     (In thousands, except per share data)

<TABLE>
<CAPTION>
                                       ASSETS                                           2000       2001
                                       ------                                         --------  ---------
<S>                                                                                   <C>       <C>
Current assets:
   Cash and cash equivalents......................................................... $182,945  $ 151,358
   Accounts receivable, net of allowance of $1,279 and $2,028 as of March 31, 2000
     and 2001, respectively..........................................................   10,596     32,879
   Income taxes receivable...........................................................   13,874         --
   Prepaid expenses and deferred taxes...............................................    7,144     18,153
                                                                                      --------  ---------
       Total current assets..........................................................  214,559    202,390
Computers, equipment, and software, net..............................................    8,214     16,182
Other assets.........................................................................   15,981      8,084
Goodwill, net........................................................................   10,656    295,600
                                                                                      --------  ---------
       Total assets.................................................................. $249,410  $ 522,256
                                                                                      ========  =========
<CAPTION>

                        LIABILITIES AND STOCKHOLDERS' EQUITY
                        ------------------------------------
<S>                                                                                   <C>       <C>
Current liabilities:
   Accounts payable.................................................................. $  3,759  $   7,824
   Note payable, current portion.....................................................      500        500
   Accrued compensation..............................................................   14,219     28,336
   Deferred revenue..................................................................    3,629      2,684
   Taxes payable.....................................................................       --     11,027
   Other accrued liabilities.........................................................    8,485     19,518
                                                                                      --------  ---------
       Total current liabilities.....................................................   30,592     69,889
   Note payable, less current portion................................................      500         --
                                                                                      --------  ---------
       Total liabilities.............................................................   31,092     69,889
Stockholders' equity:
   Preferred Stock, $1.00 par value, 2 shares authorized, no shares issued...........       --         --
   Class A Common Stock, $.001 par value, 40,000 shares authorized, 21,958 and
     23,659 issued as of March 31, 2000 and 2001, respectively.......................       22         24
   Class B Common Stock, $.001 par value, 20,000 shares authorized, 2,701 and 8,752
     issued as of March 31, 2000 and 2001, respectively..............................        3          9
   Additional paid-in capital........................................................  195,372    652,234
   Unearned compensation.............................................................       --   (177,375)
   Notes receivable from sale of common stock........................................     (232)      (332)
   Accumulated other comprehensive income............................................      539     (1,249)
   Retained earnings.................................................................   32,679     19,812
                                                                                      --------  ---------
                                                                                       228,383    493,123
   Less Class A Common Stock in treasury, at cost, 770 shares held at March 31, 2000
     and 2,016 shares held at March 31, 2001.........................................   10,065     40,756
                                                                                      --------  ---------
       Total stockholders' equity....................................................  218,318    452,367
                                                                                      --------  ---------
       Total liabilities and stockholders' equity.................................... $249,410  $ 522,256
                                                                                      ========  =========
</TABLE>

          See accompanying notes to consolidated financial statements

                                      F-3

<PAGE>

                      DIAMONDCLUSTER INTERNATIONAL, INC.

     CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

               Fiscal years ended March 31, 1999, 2000 and 2001
                     (In thousands, except per share data)

<TABLE>
<CAPTION>
                                                                              1999     2000      2001
                                                                            -------  --------  --------
<S>                                                                         <C>      <C>       <C>
Net revenues............................................................... $82,389  $136,235  $259,340
                                                                            -------  --------  --------
Operating expenses:
   Project personnel and related expenses..................................  43,275    72,355   134,784
   Professional development and recruiting.................................   9,448    13,199    26,673
   Marketing and sales.....................................................   4,669     7,325    13,431
   Management and administrative support...................................  11,298    18,260    41,989
   Goodwill amortization...................................................      --       493    21,928
   Noncash compensation *..................................................      --        --    18,187
                                                                            -------  --------  --------
       Total operating expenses............................................  68,690   111,632   256,992
                                                                            -------  --------  --------
Income from operations.....................................................  13,699    24,603     2,348
                                                                            -------  --------  --------
   Interest income.........................................................   2,534     2,099    12,055
   Interest expense........................................................     (46)      (97)      (56)
   Other income (expense), net.............................................      --        --    (8,714)
                                                                            -------  --------  --------
       Total other income, net.............................................   2,488     2,002     3,285
                                                                            -------  --------  --------
Income before taxes........................................................  16,187    26,605     5,633
Income taxes...............................................................   6,351    10,377    18,500
                                                                            -------  --------  --------
Net income (loss)..........................................................   9,836    16,228   (12,867)
   Unrealized gain (loss) from securities, net of income tax expense of
     $344 and net of income tax benefit of $577 for the fiscal years ended
     March 31, 2000 and 2001, respectively.................................      --       539      (902)
   Foreign currency translation adjustments................................      --        --      (886)
                                                                            -------  --------  --------
Comprehensive income (loss)................................................ $ 9,836  $ 16,767  $(14,655)
                                                                            =======  ========  ========
Basic net income (loss) per share of common stock.......................... $  0.49  $   0.78  $  (0.49)
Diluted net income (loss) per share of common stock........................ $  0.42  $   0.62  $  (0.49)
Shares used in computing basic net income (loss) per share of
  common stock.............................................................  19,915    20,807    26,448
Shares used in computing diluted net income (loss) per share of
  common stock.............................................................  23,346    25,984    26,448
</TABLE>
--------
*  Noncash compensation:

<TABLE>
                <S>                                     <C>
                Project personnel and related expenses. $17,930
                Professional development and recruiting      29
                Marketing and sales....................      14
                Management and administrative support..     214
                                                        -------
                   Total noncash compensation.......... $18,187
                                                        =======
</TABLE>

          See accompanying notes to consolidated financial statements

                                      F-4

<PAGE>

                      DIAMONDCLUSTER INTERNATIONAL, INC.

                CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

               Fiscal years ended March 31, 1999, 2000 and 2001
                                (In thousands)

<TABLE>
<CAPTION>
                                                                      Notes
                                                                      Receivable                       Accumulated
                              Class A Class B Additional              from sale of Retained             Other
                              Common  Common   Paid-in    Unearned    Common       (Deficit) Treasury  Comprehensive
                              stock   stock    Capital   Compensation Stock        Earnings    Stock    Income
                                ---     ---    --------   ---------      -----     --------  --------     -------
<S>                           <C>     <C>     <C>        <C>          <C>          <C>       <C>       <C>
Balance at March 31, 1998.... $11     $ 7     $ 22,457   $      --    $(323)       $  6,615  $     --  $    --
Issuance of stock............   1      --       15,998          --      (60)             --        --       --
Exercise of warrants.........  --      --        1,326          --       --              --        --       --
Exercise of stock options....  --       1        1,460          --       --              --        --       --
Income tax benefit related to
 stock option exercises......  --      --        1,331          --       --              --        --       --
Purchase of stock............  --      --         (426)         --       --              --    (5,284)      --
Conversion to Class A........   3      (3)          --          --       --              --        --       --
Repayment of notes...........  --      --           --          --      351              --        --       --
Net income...................  --      --           --          --       --           9,836        --       --
                              ---     ---     --------   ---------    -----        --------  --------  -------
Balance at March 31, 1999.... $15     $ 5     $ 42,146   $      --    $ (32)       $ 16,451  $ (5,284) $    --
Issuance of stock............   2      --      118,741          --     (668)             --        --       --
Exercise of warrants.........  --      --          243          --       --              --        --       --
Exercise of stock options....   1       2        8,638          --       --              --        --       --
Income tax benefit related to
 stock option exercises......  --      --       23,730          --       --              --        --       --
Purchase of stock............  --      --         (174)         --       --              --    (4,781)      --
Conversion to Class A........   4      (4)          --          --       --              --        --       --
Repayment of notes...........                                           468                                 --
Employee stock purchase
 plan........................  --      --        2,048          --       --              --        --       --
Unrealized gain..............  --      --           --          --       --              --        --      539
Net income...................  --      --           --          --       --          16,228        --       --
                              ---     ---     --------   ---------    -----        --------  --------  -------
Balance at March 31, 2000.... $22     $ 3     $195,372   $      --    $(232)       $ 32,679  $(10,065) $   539
Issuance of stock............  --       6      246,867          --     (543)             --        --       --
Issuance of stock options
 below market................  --      --      190,062    (195,562)      --              --        --       --
Noncash compensation.........  --      --           --      18,187       --              --        --       --
Exercise of stock options....   1       1        7,661          --       --              --        --       --
Income tax benefit related to
 stock option exercises......  --      --        7,910          --       --              --        --       --
Purchase of stock............  --      --           --          --       --              --   (30,691)      --
Conversion to Class A........   1      (1)          --          --       --              --        --       --
Repayment of notes...........  --      --           --          --      443              --        --       --
Employee stock purchase
 plan........................  --      --        4,362          --       --              --        --       --
Unrealized gain (loss).......                                   --                                        (902)
Translation adjustment.......  --      --           --          --       --              --        --     (886)
Net income (loss)............  --      --           --          --       --         (12,867)       --       --
                              ---     ---     --------   ---------    -----        --------  --------  -------
Balance at March 31, 2001.... $24     $ 9     $652,234   $(177,375)   $(332)       $ 19,812  $(40,756) $(1,249)
                              ===     ===     ========   =========    =====        ========  ========  =======
</TABLE>
<TABLE>
<CAPTION>


                                Total
                              stockholders'
                               equity
                                --------
<S>                           <C>
Balance at March 31, 1998.... $ 28,767
Issuance of stock............   15,939
Exercise of warrants.........    1,326
Exercise of stock options....    1,461
Income tax benefit related to
 stock option exercises......    1,331
Purchase of stock............   (5,710)
Conversion to Class A........        -
Repayment of notes...........      351
Net income...................    9,836
                              --------
Balance at March 31, 1999.... $ 53,301
Issuance of stock............  118,075
Exercise of warrants.........      243
Exercise of stock options....    8,641
Income tax benefit related to
 stock option exercises......   23,730
Purchase of stock............   (4,955)
Conversion to Class A........       --
Repayment of notes...........      468
Employee stock purchase
 plan........................    2,048
Unrealized gain..............      539
Net income...................   16,228
                              --------
Balance at March 31, 2000.... $218,318
Issuance of stock............  246,330
Issuance of stock options
 below market................   (5,500)
Noncash compensation.........   18,187
Exercise of stock options....    7,663
Income tax benefit related to
 stock option exercises......    7,910
Purchase of stock............  (30,691)
Conversion to Class A........       --
Repayment of notes...........      443
Employee stock purchase
 plan........................    4,362
Unrealized gain (loss).......     (902)
Translation adjustment.......     (886)
Net income (loss)............  (12,867)
                              --------
Balance at March 31, 2001.... $452,367
                              ========
</TABLE>

          See accompanying notes to consolidated financial statements

                                      F-5

<PAGE>

                      DIAMONDCLUSTER INTERNATIONAL, INC.

                     CONSOLIDATED STATEMENTS OF CASH FLOWS

               Fiscal Years ended March 31, 1999, 2000 and 2001
                                (In thousands)

<TABLE>
<CAPTION>
                                                                              Twelve Months Ended March 31,
                                                                              ----------------------------
                                                                                1999      2000      2001
                                                                              -------   --------  --------
<S>                                                                           <C>       <C>       <C>
Cash flows from operating activities
   Net income (loss)......................................................... $ 9,836   $ 16,228  $(12,867)
   Adjustments to reconcile net income/(loss) to net cash provided by
     operating activities:
       Depreciation and amortization.........................................     998      3,533     6,333
       Goodwill amortization.................................................      --        493    21,928
       Noncash compensation..................................................      --         --    18,187
       Deferred income taxes.................................................      38     (4,341)   (4,282)
       Tax benefits from employee stock plans................................   1,331     23,730     7,921
       Write-down of equity investments......................................                 --     8,555
       Changes in assets and liabilities, net of effects of acquisition:.....
          Accounts receivable................................................  (5,371)     1,844     5,028
          Prepaid expenses and other.........................................  (1,242)   (14,417)   10,042
          Accounts payable...................................................    (266)     1,963    (1,739)
          Accrued bonuses....................................................   2,300      3,896    14,117
          Deferred revenue...................................................    (420)     2,920      (944)
          Income taxes payable...............................................      --         --     5,527
          Other assets and liabilities.......................................  (1,314)      (557)  (12,162)
                                                                              -------   --------  --------
              Net cash provided by operating activities......................   5,890     35,292    65,644
                                                                              -------   --------  --------
Cash flows used in investing activities:.....................................
   Capital expenditures, net.................................................  (2,773)    (7,871)   (9,258)
   Acquisitions, net of cash acquired........................................      --     (5,328)  (54,174)
   Other assets..............................................................    (223)    (7,190)   (2,500)
                                                                              -------   --------  --------
              Net cash used in investing activities..........................  (2,996)   (20,389)  (65,932)
                                                                              -------   --------  --------
Cash flows from financing activities:........................................
   Repayment of note.........................................................      --         --   (12,484)
   Stock issuance costs......................................................  (1,523)      (582)       --
   Common stock issued.......................................................  20,600    125,881    12,483
   Purchase of treasury stock................................................  (5,284)    (4,781)  (30,690)
   Repurchase of common stock................................................    (426)      (174)       --
                                                                              -------   --------  --------
              Net cash provided by (used in) financing activities............  13,367    120,344   (30,691)
                                                                              -------   --------  --------
Effect of exchange rate changes on cash......................................      --         --      (608)
                                                                              -------   --------  --------
Net increase (decrease) in cash and cash equivalents.........................  16,261    135,247   (31,587)
Cash and cash equivalents at beginning of period.............................  31,437     47,698   182,945
                                                                              -------   --------  --------
Cash and cash equivalents at end of period................................... $47,698   $182,945  $151,358
                                                                              =======   ========  ========
Supplemental disclosure of cash flow information:............................
   Cash paid during the period for interest.................................. $    24   $     25  $     25
   Cash paid during the period for income taxes..............................   5,875      5,821       316
Supplemental disclosure for noncash investing and financing activities:
   Issuance of common stock for notes........................................ $    60   $    668  $    543
   Issuance of acquisition note payable......................................      --      1,000        --
                                                                              =======   ========  ========
</TABLE>

          See accompanying notes to consolidated financial statements

                                      F-6

<PAGE>

                      DIAMONDCLUSTER INTERNATIONAL, INC.

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(1) Description of Business

   DiamondCluster International, Inc. (the ''Company'' or ''Diamond'') is an
e-business services firm that synthesizes business and industry insight with
technology expertise to create innovative digital strategies for leading
national and multinational businesses. The Company serves clients primarily in
four key markets: financial services, consumer and industrial products and
services, telecommunications and energy, and health care and insurance.

(2) Summary of Significant Accounting Policies

  Principles of Consolidation

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

  Foreign Currency Translation

   All assets and liabilities denominated in foreign currencies are translated
at the exchange rate on the balance sheet date. Revenues, costs and expenses
are translated at average rates of exchange prevailing during the period.
Translation adjustments are deferred as a separate component of stockholders'
equity. Gains and losses resulting from foreign currency transactions are
included in the results of operations.

  Revenue Recognition

   Our revenues are comprised of professional fees for services rendered to our
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, we and our client agree on fees for services based upon the scope
of the project, our staffing requirements and the level of client involvement.
We recognize revenue as services are performed in accordance with the terms of
the client engagement. Out-of-pocket expenses are either reimbursed by our
clients and offset against expenses incurred or, if not reimbursed, reduce the
amount of recognized revenues. Provisions are made based on our experience for
estimated uncollectible amounts or costs incurred subsequent to project
completion.

  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.

  Long-Lived Assets

   Computers and equipment, leasehold improvements and software are stated at
cost less accumulated depreciation and amortization. Depreciation and
amortization are computed by applying the straight-line method over the
estimated useful lives of assets, which range from eighteen months to five
years for computers and equipment, five years for leasehold improvements, and
three years for software. Costs capitalized for internally developed software
include external consulting fees and employee salaries. Related depreciation
and amortization expense was $998,000, $3,533,000 and $6,333,000 for the years
ended March 31, 1999, 2000 and 2001, respectively.

                                      F-7

<PAGE>

                      DIAMONDCLUSTER INTERNATIONAL, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


  Goodwill

   Goodwill resulting from business acquisitions represents the excess of
purchase price over fair value of net assets acquired and is being amortized on
a straight-line basis over useful lives ranging between 5 and 25 years.
Accumulated amortization amounted to $493,000 and $22,421,000 as of March 31,
2000 and 2001, respectively. Periodically, the Company re-evaluates goodwill
and other intangibles based on undiscounted operating cash flows whenever
significant events or changes occur which might impair recovery of recorded
asset costs.

  Accounting for Investment Interests

   Occasionally, the Company may obtain non-controlling equity ownership
interests either for cash or as compensation for services performed. Equity
securities are accounted for under the cost method of accounting unless these
securities have readily determinable fair values based on quoted market prices.
Securities for which the fair market value is determinable are recorded under
SFAS No. 115, ''Accounting for Certain Investments in Debt and Equity
Securities.'' The Company classified the securities as available-for-sale
securities. Unrealized gains and losses on these investments are reported under
''Unrealized gain on investment'' as a separate component of stockholders'
equity, net of any related tax effect. Declines in value that are judged to be
other than temporary are reported in other income (expense).

  Unearned Compensation

   Unearned compensation represents stock-based compensation and is being
reported under "Unearned compensation" as a separate component of stockholders'
equity. The Company has chosen to account for the stock-based compensation
using the intrinsic value method prescribed inAccounting Principles Board
Opinion No. 25, "Accounting for Stock Issued to Employees," and related
interpretations. Accordingly, compensation cost of stock options ("Non-cash
compensation") is measured as the excess, if any, of the quoted market price of
the Company's stock at the date of the grant over the options exercise price
and is charged to operations over the vesting period ranging between two and
five years.

  Other Comprehensive Income

   Other comprehensive income represents unrealized gains on available-for-sale
investments and securities, net of the related tax effect, and cumulative
translation adjustments.

  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 two customers which collectively
accounted for 25% of revenues for the year ending March 31, 1999, and one
customer who accounted for 14% and 12% of revenues for the years ending March
31, 2000 and 2001, respectively.

  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

                                      F-8

<PAGE>

                      DIAMONDCLUSTER INTERNATIONAL, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

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.

  Net Income Per Share

   Basic net income per share is computed using the weighted average number of
common shares outstanding. Diluted net income 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
net income per share for the fiscal years ended March 31, 1999, 2000 and 2001:

<TABLE>
<CAPTION>
                                                                 1999   2000   2001
                                                                ------ ------ ------
<S>                                                             <C>    <C>    <C>
Shares used in computing basic net income per share............ 19,915 20,807 26,448
Dilutive effect of stock options and warrants..................  3,431  5,177     --
                                                                ------ ------ ------
Shares used in computing diluted net income per share.......... 23,346 25,984 26,448
                                                                ------ ------ ------
Antidilutive securities not included in dilutive net income per
  share calculation............................................     24    103 18,206
                                                                ====== ====== ======
</TABLE>

  Use of Estimates

   The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America 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.

(3) Computers, Equipment and Software

   Computers, equipment and software at March 31, 2000 and 2001 are summarized
as follows (amounts in thousands):

<TABLE>
<CAPTION>
                                                 2000     2001
                                               -------  --------
<S>                                            <C>      <C>
Computers and equipment....................... $ 5,868  $ 15,936
Leasehold improvements........................ $ 5,342  $  7,569
Software......................................   3,383     6,299
                                               -------  --------
                                                14,593    29,804
Less accumulated depreciation and amortization  (6,379)  (13,622)
                                               -------  --------
                                               $ 8,214  $ 16,182
                                               =======  ========
</TABLE>

                                      F-9

<PAGE>

                      DIAMONDCLUSTER INTERNATIONAL, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


(4) Other Assets

   Other assets at March 31, 2000 and 2001 are summarized as follows (amounts
in thousands):

<TABLE>
<CAPTION>
                                    2000    2001
                                   ------- ------
<S>                                <C>     <C>
Investment in public companies.... $ 2,265 $1,481
Investment in non-public companies   9,773  2,500
Other assets......................   3,943  4,103
                                   ------- ------
Total............................. $15,981 $8,084
                                   ======= ======
</TABLE>

(5) Commitments

   The Company leases office space and equipment under various operating
leases. As of March 31, 2001, 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>
2002................. $ 9,256
2003.................   5,820
2004.................   3,240
2005.................   3,080
2006.................   2,226
Thereafter...........  10,441
                      -------
                      $34,063
                      =======
</TABLE>

   Rent expense under operating leases amounted to $1,660,000, $2,428,000 and
$9,580,000 for the years ended March 31, 1999, 2000 and 2001, 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 $75,000 as of March 31, 2001, declining annually during
the lease terms.

(6) Notes Payable and Line of Credit

   The Company has an available line of credit of $10,000,000 with a commercial
bank that has been reduced by a letter of credit outstanding as of March 31,
2001 in the amount of $75,000. At March 31, 2001, 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.

   Notes payable consists of amounts due to former shareholders of Omnitech
Consulting Group, Inc. The note payable of $500,000 was due on April 23, 2001
and was paid subsequent to year end. The note carried a 5% interest rate.

(7) Stockholders' Equity

  Stock Option Rehab

   On January 30, 2001, we offered our employees (other than senior officers) a
plan, approved by the Board of Directors, which gave employees a choice to
cancel certain stock options granted to them in exchange for new

                                     F-10

<PAGE>

                      DIAMONDCLUSTER INTERNATIONAL, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

options to purchase the same class of shares, a majority of which will vest
proportionately over a four year period. A total of 2.3 million stock options
were cancelled as part of this plan. The new options granted will range from
75% to 100% of the original grant, will be granted six months and one day from
the date the old options are cancelled, and will have an exercise price to be
set on the grant date. The exercise price for a majority of the options granted
on August 9, 2001 will be set at fair market value. The original options were
granted under DiamondCluster's 2000 Stock Option Plan (the "2000 Plan") and
under DiamondCluster's 1998 Equity Incentive Plan (the "1998 Plan"). Employees
who accepted the offer were required to make an election with respect to all
covered options by February 8, 2001. In order to receive the new options, the
employees must remain employed by DiamondCluster until the new grant date. The
exchange offer was not made available to the members of the Board of Directors
or senior officers of DiamondCluster.

  Stock Options

   In connection with the consummation of the Cluster business combination,
options to purchase 8.0 million shares of Class B Common Stock were granted
pursuant to the 2000 Plan. These options are included in the 14.2 million stock
options granted during fiscal 2001, disclosed in the table below. Under the
2000 Plan and the 1998 Plan (collectively, the "Plans"), the Company may grant
qualified incentive stock options to officers and employees of the Company.

   The 1998 Plan provides that 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 varying
percentages 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 non-officer employees which fully vest either upon
the third anniversary of the date of grant and expire on the fifth anniversary
of the date of grant or which vest ratably over four years and expire on the
sixth 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 non-employee members of the Board of Directors. These non-qualified
stock options vest over periods ranging from immediate to five years.

                                     F-11

<PAGE>

                      DIAMONDCLUSTER INTERNATIONAL, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


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

<TABLE>
<CAPTION>
                                 Shares                  Weighted-Average
                                  Under                  Exercise Price Per
                                 Option  Range of Prices Share
                                 ------  ---------------       ------
     <S>                         <C>     <C>             <C>
     Balances, March 31, 1998...  6,159  $0.81 to $15.07 $ 6.25
        Granted.................  3,530   6.73 to  19.87   9.16
        Exercised...............   (972)  0.81 to   8.93   1.52
        Canceled................ (2,555)  1.21 to  19.87  12.74

                                 ------  --------------- ------
     Balances, March 31, 1999...  6,162   0.81 to  18.27   6.20
        Granted.................  4,991  13.53 to  92.55  22.44
        Exercised............... (1,904)  0.81 to  20.87   4.57
        Canceled................   (879)  0.81 to  28.17  10.15

                                 ------  --------------- ------
     Balances, March 31, 2000...  8,370   0.81 to  92.55  15.83
        Granted................. 14,157   5.24 to  92.90  28.63
        Exercised............... (1,045)  0.81 to  31.00   7.27
        Canceled................ (3,276)  7.75 to  92.90  51.49

                                 ------  --------------- ------
     Balances, March 31, 2001... 18,206  $0.81 to $89.95 $19.98

                                 ======  =============== ======
</TABLE>

   At March 31, 1999, 2000 and 2001, 772,500, 625,800 and 1,423,200 options
were exercisable, respectively, under the Plans.

   The following table summarizes information about stock options under the
Plans at March 31, 2001 (share amounts in thousands):

<TABLE>
<CAPTION>
                      Options Outstanding                           Options Exercisable
                  ----------------------------                  ----------------------------
                  Options     Weighted-Average                  Options
Range of Exercise Outstanding Remaining        Weighted-Average Exercisable Weighted-Average
     Prices       at 3/31/01  Contractual Life Exercise Price   at 3/31/01  Exercise Price
----------------    ------          ----            ------         -----         ------
<S>               <C>         <C>              <C>              <C>         <C>
$ 0.81 to $ 7.75   2,188      3.04             $ 6.24             666       $ 4.51
  7.85 to  12.23   3,904      6.29               8.96             188         9.98
 12.30 to  17.58   4,598      6.49              15.48             403        16.27
 17.67 to  26.37   3,396      5.34              25.54              22        18.92
 27.19 to  89.95   4,120      5.84              38.19             142        31.64
-                 ------      ----             ------           -----       ------
$ 0.81 to $89.95  18,206      5.67             $19.98           1,423       $11.50
=                 ======      ====             ======           =====       ======
</TABLE>

   The Company applies Statement of Financial Accounting Standards (SFAS) No.
123, ''Accounting for Stock Based Compensation,'' and Emerging Issues Task
Force (EITF) Issue No. 96-18, ''Accounting for Equity Instruments That Are
Issued to Other Than Employees for Acquiring, or in Conjunction with Selling,
Goods or Services'' for stock issued to individuals or groups other than
employees. The Company applies Accounting Principles Board (APB) Opinion 25,
''Accounting for Stock Issued to Employees,'' and related interpretations in
accounting for stock issued to employees as defined by APB No. 25. Had
compensation expense on these options been recorded 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-

                                     F-12

<PAGE>

                      DIAMONDCLUSTER INTERNATIONAL, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

Based Compensation,'' the Company's net income (loss) and diluted earnings per
share would have been reduced (increased) to the pro forma amounts indicated
below:

<TABLE>
<CAPTION>
                                     1999   2000     2001
                                    ------ ------- --------
<S>                                 <C>    <C>     <C>
Net income (loss)
   As reported..................... $9,836 $16,228 $(12,867)
   Pro forma.......................  7,737   5,055  (50,248)
Diluted net income (loss) per share
   As reported..................... $ 0.42 $  0.62 $  (0.49)
   Pro forma.......................   0.33    0.19    (1.90)
</TABLE>

   The weighted-average fair value of the options granted under the Stock
Option Plans in 1999, 2000 and 2001, calculated using the Black-Scholes pricing
model, was $2.68, $10.42 and $26.88, respectively. The following assumptions
were used in the Black-Scholes pricing model for options granted in 1999, 2000
and 2001: dividend yield of 0.0 percent for each year, estimated volatility of
35% for 1999, 60% in 2000 and 88.5% in 2001, risk-free interest rates ranging
from 4.5% to 6.3%, and an expected life of .5 to 6 years.

(8) Income Taxes

   The provision for income taxes for fiscal years ended March 31, 1999, 2000
and 2001 consisted of the following (in thousands):

<TABLE>
<CAPTION>
             1999    2000     2001
            ------ -------  -------
<S>         <C>    <C>      <C>
Current:
   Federal. $5,654 $10,070  $11,588
   State...    659   1,729    3,423
   Foreign.     --      --    6,131
            ------ -------  -------
             6,313  11,799   21,142
Deferred...     38  (1,422)  (2,642)
            ------ -------  -------
            $6,351 $10,377  $18,500
            ====== =======  =======
</TABLE>

   The total tax provision differs from the amount computed by applying the
federal income tax rate of 35 percent for 1999 and 2000 and 34 percent for 2001
to income before income taxes for the following reasons (in thousands):

<TABLE>
<CAPTION>
                                                     1999   2000    2001
                                                    ------ ------- -------
      <S>                                           <C>    <C>     <C>
      Federal income taxes at statutory rate....... $5,665 $ 9,311 $ 1,916
      Effect of non-deductible goodwill and noncash
        compensation...............................     --      --  13,533
      Effect of other permanent differences........    254     333     809
      State income taxes, net of federal benefit...    432     733   1,600
      Foreign tax rate differential................     --      --     642
                                                    ------ ------- -------
                                                    $6,351 $10,377 $18,500
                                                    ====== ======= =======
</TABLE>

                                     F-13

<PAGE>

                      DIAMONDCLUSTER INTERNATIONAL, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


   The tax effects of the temporary differences that give rise to the deferred
tax assets and liabilities at March 31, 2000 and 2001 are presented below (in
thousands):

<TABLE>
<CAPTION>
                                             2000   2001
                                            ------ -------
<S>                                         <C>    <C>
Deferred tax assets:
   Net operating loss carryforward......... $2,920 $   706
   Reserves and allowances.................  1,976   3,142
   Accrued bonuses.........................    564   3,583
   Accrued recruiting......................     78     211
   Depreciation............................     --   1,054
   Loss on investments.....................     --   1,477
                                            ------ -------
       Total gross deferred tax assets.....  5,538  10,173
Deferred tax liabilities:
   Accelerated depreciation................     70      --
   Unrealized gain on investments..........    344      --
   Unrealized foreign exchange gain........     --      98
   Goodwill--Omnitech......................     59     160
   Other...................................    333     324
                                            ------ -------
       Total deferred tax liabilities......    806     582
                                            ------ -------
Net deferred income taxes.................. $4,732 $ 9,591
                                            ====== =======
</TABLE>

   As of March 31, 2001, the Company has state net operating loss carryforwards
of approximately $12.8 million which may be used to offset future taxable
income. The expiration of these loss carryforwards ranges between four and
nineteen years.

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

(9) Segment Reporting

   The Company operates only in one segment, providing consulting services.
Even though the Company has different legal entities operating in various
countries, its operation and management is performed on a global basis. A
summary of the Company's revenues for the year ended March 31, 2001 is
summarized as follows (In thousands):

<TABLE>
<CAPTION>
                                South    North
                         Europe America America  Total
                         ------  -----  ------- -------
                         <S>    <C>     <C>     <C>
                         34,738 6,990   217,612 259,340
</TABLE>

   The segregation of revenue by geographic region is based upon the location
of the legal entity performing the services. Prior to fiscal 2001, all revenue
was generated in North America.

(10) Benefit Plans

  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.

                                     F-14

<PAGE>

                      DIAMONDCLUSTER INTERNATIONAL, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


(11) Business Combinations

   On November 28, 2000, the Company acquired Cluster Telecom B.V. ("Cluster"),
a pan-European management consulting firm specializing in wireless technology,
internet and digital strategies. Under the terms of the agreement, the Company
paid $494.2 million, consisting of $44 million in cash and an aggregate of 6.3
million shares of the Company's Class B Common Stock and 7.5 million options to
purchase shares of the Company's Class B Common Stock. The Company filed a
Registration Statement on Form S-4 on November 7, 2000. In connection with the
acquisition, the Company changed its name from Diamond Technology Partners
Incorporated to DiamondCluster International, Inc. At March 31, 2001, the
excess of net assets acquired ("Goodwill") recorded for the Cluster acquisition
was approximately $300.3 million. Additionally, the Company recorded unearned
compensation in connection with this merger.

   In May 2000, the Company acquired Momentus Group Limited ("Momentus"), a
London-based e-business consulting company. Under the terms of the acquisition
agreement, the Company paid $5.7 million, consisting of approximately $2.9
million in cash and 44,252 shares of the Company's Class A Common Stock.
Additionally Momentus shareholders may be paid a maximum of 69,265 shares of
the Company's Class A Common Stock over the two years following the closing
date upon the achievement of certain performance measures. At March 31, 2001,
goodwill recorded for the Momentus acquisition was approximately $5.6 million.

   In October 1999, the Company acquired Leverage Information Systems, Inc.,
(''Leverage''), a San Francisco based systems architecture and development
company specializing in the building of complex web sites and intranets. Under
the terms of the acquisition, the Company paid $3.4 million, consisting of $1.0
million in cash and 97,500 shares of the Company's Class A Common Stock. At
March 31, 2001, goodwill recorded for the Leverage acquisition was
approximately $3.3 million.

   In April 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 $9.0 million, consisting of $4.0
million in cash, a $1.0 million note and 173,461 shares of the Company's Class
A Common Stock. Additionally, OmniTech shareholders may be paid a maximum of
$2.0 million over the two years following the closing date upon the achievement
of certain performance measures. As of March 31, 2001, the full $2 million had
been recorded as acquisition costs. At March 31, 2001, goodwill recorded for
the Omnitech acquisition was approximately $8.8 million.

   The acquisitions are being accounted for under the purchase method of
accounting and, accordingly, the operating results of OmniTech, Leverage,
Momentus and Cluster have been included in the Company's consolidated financial
statements since the dates of the acquisitions. The amount of goodwill recorded
for OmniTech, Leverage, Momentus and Cluster approximated $318 million, and is
being amortized on a straight-line basis over useful lives ranging between 5
and 25 years. Amortization of goodwill was $0, $493,000 and $21,928,000 for the
years ended March 31, 1999, 2000 and 2001, respectively.

   The following summarized pro forma financial information for the years ended
March 31, 2000 and 2001 assume the OmniTech, Leverage, Momentus and Cluster
acquisitions occurred as of April 1 of each year:

<TABLE>
<CAPTION>
                                                2000       2001
                                              --------   --------
                                             (in thousands, except
                                                per share data)
                <S>                          <C>         <C>
                Net revenue................. $184,394    $320,007
                Net income (loss)...........  (53,764)    (75,484)
                Net income (loss) per share:
                   Basic & Diluted.......... $  (1.97)   $  (2.36)
</TABLE>

                                     F-15

<PAGE>

                      DIAMONDCLUSTER INTERNATIONAL, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


   These amounts are based upon certain assumptions and estimates, and do not
necessarily represent results that would have occurred if the acquisitions had
taken place on the basis assumed above, nor are they indicative of the results
of future combined operations.

(12) Quarterly Financial Information (Unaudited)

   The following table presents the unaudited quarterly financial information
for fiscal 2000 and 2001 (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, 2000
   Net revenues.................. $25,718 $30,467 $36,640 $ 43,410
   Income from operations........   4,551   5,518   6,638    7,896
   Income before taxes...........   4,916   5,931   7,124    8,634
   Net income....................   2,999   3,618   4,345    5,266
   Basic earnings per share......    0.15    0.18    0.21     0.24
   Diluted earnings per share.... $  0.13 $  0.14 $  0.16 $   0.19
Year Ended March 31, 2001
   Net revenues.................. $52,158 $59,878 $73,595 $ 73,709
   Income (loss) from operations.   9,126  10,400   2,639  (19,817)
</TABLE>
<TABLE>
<S>                                   <C>     <C>     <C>      <C>
   Income (loss) before taxes........  11,849  13,682   5,119   (25,017)
   Net income (loss).................   7,228   8,346  (1,168)  (27,273)
   Basic earnings (loss) per share...    0.30    0.34   (0.04)    (0.89)
   Diluted earnings (loss) per share. $  0.24 $  0.28 $ (0.04) $  (0.89)
</TABLE>

                                     F-16

<PAGE>

                         INDEPENDENT AUDITORS' REPORT

The Board of Directors
DiamondCluster International, Inc.:

   We have audited the accompanying consolidated balance sheets of
DiamondCluster International, Inc. and subsidiaries as of March 31, 2000 and
2001, and the related consolidated statements of operations and comprehensive
income (loss), stockholders' equity and cash flows for each of the years in the
three-year period ended March 31, 2001. 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.

                                          KPMG LLP

Chicago, Illinois
May 1, 2001

                                      S-1

<PAGE>

                      DIAMONDCLUSTER INTERNATIONAL, INC.

                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   Deduction Period
                          -----------                              ------     ------    ------     ------
<S>                                                              <C>        <C>        <C>       <C>
For the Year Ended March 31, 2001:
   Deducted from accounts receivable for uncollectible accounts. $1,279     $9,293     $8,544    $2,028
For the Year Ended March 31, 2000:
   Deducted from accounts receivable for uncollectible accounts. $  419     $3,020     $2,160    $1,279
For the Year Ended March 31, 1999:
   Deducted from accounts receivable for uncollectible accounts. $  559     $1,159     $1,299    $  419
</TABLE>


                                      S-2