U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

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

                     For the Quarter ended December 31, 2002

                                       OR

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

            For the transition period from__________ to __________

                         Commission file number 1-11568

                                  DYNTEK, INC.
             (Exact Name of Registrant as Specified in its Charter)


         Delaware                                      95-4228470
         --------                                      ----------
(State or other jurisdiction of                       (I.R.S Employer
  incorporation or organization)                       Identification No.)


                          18881 Von Karman Avenue, #250
                                Irvine, CA 92612
               (Address of principal executive offices) (Zip code)

        Registrant's telephone number, including area code (949) 955-0078
                                                           --------------




     Check whether the Registrant (1) has filed all reports required to be filed
by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months, and (2) has been subject to such filings requirements for
the past 90 days. Yes X No ___

     The number of shares outstanding of the issuer's Class A Common Stock,
$.0001 par value, as of February 14, 2003 was 35,501,450.

                                        1
<PAGE>


<TABLE>
<CAPTION>

                          DYNTEK, INC. AND SUBSIDIARIES

                                      INDEX
PART I - FINANCIAL INFORMATION                                                          Page
                                                                                       Number
Item 1.  Consolidated Financial Statements (unaudited)
<S>                                         <C> <C>                                       <C>
     Consolidated Balance Sheets - December 31, 2002                                      3
         and June 30, 2002

     Consolidated Statements of Operations and Comprehensive Loss - For the
         Three Months and Six Months ended December 31, 2002 and 2001,                    4


     Consolidated Statements of Cash Flows - For the                                      5
         Six Months ended December 31, 2002 and 2001

     Notes to Consolidated Financial Statements                                           6 - 11

Item 2. Management's Discussion and Analysis of Financial                                 12 - 16
           Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk                        17
Item 4. Controls and Procedures                                                           17

PART II - OTHER INFORMATION

Item 6. Exhibits and Reports on Form 8-K                                                  17

SIGNATURE                                                                                 18

CERTIFICATIONS                                                                            19
</TABLE>



                                        2
<PAGE>



Part I.  FINANCIAL INFORMATION
Item 1.  Consolidated Financial Statements (unaudited)

                          DYNTEK, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                      (in thousands, except per share data)
<TABLE>
<CAPTION>

                                                                                              December 31,       June 30,
                                              ASSETS                                             2002              2002
                                              ------                                             ----              ----
CURRENT ASSETS:                                                                                Unaudited
<S>                                         <C>      <C>                                       <C>             <C>
         Cash (includes restricted cash of  $719 and $986)                                     $   1,102      $    1,012
         Accounts receivable, net of allowance for doubtful accounts of $464 and $609              7,107          15,023
         Tax refund receivable                                                                         -             245
         Inventories                                                                                 288           1,008
         Costs and estimated earnings in excess of billings on uncompleted contracts                 303           3,015
         Prepaid expenses and other assets                                                           191             128
         Note receivable - current portion                                                           187             375
         Other receivables                                                                           192             779
                                                                                               ---------       ---------
                  TOTAL CURRENT ASSETS                                                             9,370          21,585

RESTRICTED CASH                                                                                      985             995

INVESTMENTS - Marketable Securities                                                                  348             366

PROPERTY AND EQUIPMENT, net of accumulated depreciation of $3,247 and $2,844                       1,117           1,514

GOODWILL                                                                                          43,538          43,538
CAPITALIZED SOFTWARE COSTS, net of accumulated amortization of $486 and $378                         591             698
ACQUIRED CUSTOMER LIST, net of accumulated amortization of $4,128 and $3,110                       8,962           9,979
PURCHASED SOFTWARE, net of accumulated amortization of $411 and $325                                 279             365

NOTES RECEIVABLE, long term, including receivable from officer $100                                1,017           1,017

DEPOSITS AND OTHER ASSETS                                                                            320             462
                                                                                               ---------      ----------
                                                                                               $  66,527      $   80,519
                                                                                               =========      ==========
                               LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
         Accounts payable                                                                      $  15,273      $   16,963
         Line of credit                                                                            2,778           6,347
         Accrued expenses                                                                          2,880           4,437
         Deferred  revenue                                                                         1,147           4,658
         Audit assessment                                                                          1,895           1,861
         Notes payable                                                                               486           1,250
         Capital leases, net of long term portion                                                     84             144
                                                                                               ---------       ---------
                  TOTAL CURRENT LIABILITIES                                                       24,543          35,660

DEFERRED REVENUE - long term                                                                         985             995
LONG TERM PORTION CAPITAL LEASE                                                                       53              84
NOTE PAYABLE to STOCKHOLDER                                                                        5,000               -
                                                                                               ---------       ---------
                             TOTAL LIABILITIES                                                    30,581          36,739
                                                                                               ---------       ---------
COMMITMENTS AND CONTINGENCIES                                                                          -               -
STOCKHOLDERS' EQUITY:
         Preferred stock, $.0001 par value, 10,000,000: shares authorized
         1,607,535and 1,616,397 shares issued and outstanding as of December 31,
         2002 and June 30, 2002, respectively                                                          1               1
         Class A Common stock, $.0001 par value, 70,000,000 shares authorized;35,501,450
         shares and 23,533,692 shares issued and outstanding after deducting 300,000 in
         treasury as of December 31, 2002.                                                             4               2
         Class B Common stock, $.0001 par value, 20,000,000 shares authorized;0 shares
         and 18,336,663 shares issued and outstanding as of December 31, 2002 and June
         30, 2002, respectively                                                                        -               2
         Additional paid-in-capital                                                               80,801          86,193
         Unrealized loss on securities                                                              (178)           (131)
         Deficit                                                                                 (44,682)        (42,287)
                                                                                               ---------       ---------
                  TOTAL STOCKHOLDERS' EQUITY                                                      35,946          43,780
                                                                                               ---------       ---------
                  TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                   $  66,527       $  80,519
                                                                                               =========       =========
</TABLE>
                 See notes to consolidated financial statements

                                        3
<PAGE>



                          DYNTEK, INC. AND SUBSIDIARIES
          CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
                                   (Unaudited)
                      (in thousands, except per share data)

<TABLE>
<CAPTION>

                                                                           Three Months Ended            Six Months Ended
                                                                              December 31,                 December 31,
                                                                              -----------                  -----------
                                                                           2002          2001           2002          2001
                                                                        ----------     ---------      ---------     ---------
REVENUES:
<S>                                                                     <C>            <C>            <C>           <C>
       Product Revenues                                                 $    4,963     $   6,009      $  11,125     $  12,506
       Service Revenues                                                     16,747         6,221         35,840        11,309
                                                                        ----------     ----------     ---------    ----------
                Total revenues                                              21,710        12,230         46,965        23,815
                                                                        ----------     ----------     ---------    ----------

COST OF REVENUES:
       Cost of products                                                      4,094         5,242          9,361        10,539
       Cost of services                                                     15,030         4,279         31,683         8,131
                                                                        ----------    ----------     ----------    ----------
          Total cost of revenues                                            19,124         9,521         41,044        18,670
                                                                        ----------    ----------     ----------    ----------
GROSS PROFIT                                                                 2,586         2,709          5,921         5,145
                                                                        ----------    ----------     ----------    ----------

OPERATING EXPENSES:
       Selling expenses                                                      1,400         2,144          3,584         4,108
       General and administrative expenses                                   1,143         1,171          2,476         2,090
       Application development                                                   -           152              -           492
       Depreciation and amortization                                           804           566          1,614         1,110
                                                                        ----------    ----------     ----------    ----------
                Total operating expenses                                     3,347         4,033          7,674         7,798
                                                                        ----------    ----------     ----------    ----------

LOSS FROM OPERATIONS                                                          (761)       (1,324)        (1,753)       (2,654)
                                                                        ----------    ----------     ----------     ---------

OTHER INCOME (EXPENSE):
       Loss on sale of marketable securities                                     -        (1,241)             -        (1,241)
       Interest expense                                                      (420)        (1,440)          (594)       (1,626)
       Interest income                                                           8             9            16             21
       Equity interest in loss of investee                                    (35)           (85)           (62)         (192)
                                                                        ---------     ----------     ----------    ----------
                    Total other expense                                      (447)        (2,757)          (640)       (3,038)
                                                                        ---------     ----------     ----------    ----------

LOSS BEFORE INCOME TAX                                                  $  (1,208)        (4,081)        (2,393)       (5,691)

       INCOME TAX                                                                -             -              1            43
                                                                        ----------    ----------    -----------    ----------
       NET LOSS                                                         $   (1,208)   $   (4,081)   $    (2,394)   $   (5,734)
                                                                        ==========    ==========    ===========    ==========

       NET LOSS PER SHARE: Basic and Diluted                            $    (0.03)   $    (0.18)   $     (0.06)   $    (0.26)
                                                                        ==========    ==========    ===========    ==========
WEIGHTED AVERAGE NUMBER OF SHARES USED IN COMPUTATION -                 35,461,592    22,455,383     37,053,818    21,689,798
                                                                        ==========    ==========    ===========    ==========
      Basic and Diluted
NET LOSS                                                                $   (1,208)   $   (4,081)   $    (2,394)   $   (5,734)

OTHER COMPREHENSIVE LOSS, NET OF TAX
       Change in unrealized gain (loss) on available-for-sale-                 (52)          969
       securities                                                                                           (47)          913
                                                                        ----------    ----------     ----------    ----------
COMPREHENSIVE LOSS                                                      $   (1,260)   $   (3,112)    $   (2,441)   $   (4,821)
                                                                        ==========    ==========     ==========    ==========
</TABLE>

                                        4
                 See notes to consolidated financial statements.

<PAGE>
                          DYNTEK, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (Unaudited)
                                 (in thousands)
<TABLE>
<CAPTION>

                                                                                             Six months ended
                                                                                               December 31,
                                                                                             2002           2001
                                                                                         ----------      ---------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                                                      <C>             <C>
     Net loss                                                                            $   (2,395)     $  (5,734)
                                                                                         ----------      ---------
     Adjustments to reconcile net loss to net cash provided by (used in)
     operating activities:
        Depreciation and amortization                                                         1,506          1,002
        Amortization of capitalized software costs                                              108            108
        Amortization of deferred finance costs                                                    -           183
        Equity interest in investee                                                              62           192
        Loss on sale of marketable securities                                                     -         1,241
        Beneficial conversion feature of short-term notes                                         -           763
        Amortization of debt discount on short-term notes                                         -           322
        Interest on short term note payable                                                     260
        Settlement of Exodus future royalties, net                                             (425)            -

     Changes in operating assets and liabilities:
        Accounts receivable                                                                   7,916        (2,205)
        Inventory                                                                               720           886
        Costs and estimated earnings in excess of billings on uncompleted
        contracts                                                                             1,712             -
        Prepaid expenses and other current assets                                                (5)         (435)
        Deposits and other assets                                                                78           (54)
        Accounts payable                                                                     (1,690)          243
        Deferred revenue                                                                     (3,511)        1,222
        State audit assessment                                                                   34            34
        Accrued expenses                                                                       (893)         (439)
                                                                                         ----------      --------
             Total adjustments                                                                5,872         3,063
                                                                                         ----------      --------

        NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES                                   3,477        (2,671)
                                                                                         ----------      --------

CASH FLOWS FROM INVESTING ACTIVITIES:
     Note receivable                                                                            311             -
     Cash proceeds from sale of marketable securities                                             -           362
     Capital expenditures                                                                        (6)          (49)
                                                                                         ----------      --------
        NET CASH PROVIDED BY  INVESTING ACTIVITIES                                              305           313
                                                                                         ----------      --------

CASH FLOWS FROM FINANCING ACTIVITIES:
     Net (repayments) proceeds under bank line of credit                                     (3,569)        1,055
     Notes payable                                                                              (24)            -
     Securities issuance costs                                                                  (33)            -
     Capital lease repayments                                                                   (91)            -
     Cash proceeds from the sale of securities                                                   25             -
     Cash proceeds from exercise of stock options                                                 -           130
     Issuance of short term notes payable, net                                                    -         1,627
                                                                                         ----------      --------
        NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES                                  (3,692)        2,812
                                                                                         ----------      --------
NET INCREASE IN CASH                                                                             90           454

CASH AT BEGINNING OF YEAR                                                                     1,012         1,309
                                                                                         ----------      --------

CASH AT END OF PERIOD                                                                    $    1,102      $  1,763
                                                                                         ==========      ========
</TABLE>

                 See notes to consolidated financial statements.


                                        5


<PAGE>



                           DYNTEK, INC. & SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2002
                                   (UNAUDITED)


1.       Basis of Presentation

The accompanying unaudited consolidated financial statements of Dyntek, Inc. and
Subsidiaries  ("DynTek") or ("the Company")have been prepared in accordance with
generally accepted  accounting  principles for interim financial  statements and
with  the  instructions  to  Form  10-Q  and  Article  10  of  Regulations  S-X.
Accordingly, they do not include all of the information and disclosures required
for annual financial  statements.  These financial  statements should be read in
conjunction with the consolidated financial statements and related footnotes for
the year ended June 30,  2002  included in the Form 10-K for the year then ended
and Form 10-K/A filed on October 13, 2002.

The accompanying  financial  statements  reflect all adjustments,  which, in the
opinion of  management,  are  necessary  for a fair  presentation  of  financial
position,  and the  results of  operations  for the interim  periods  presented.
Except  as  otherwise  disclosed,  all  such  adjustments  are of a  normal  and
recurring  nature.  The results of  operations  for any  interim  period are not
necessarily indicative of the results attainable for a full fiscal year.

2.         Recent Accounting Pronouncements

In December 2002,  Financial Accounting Standards Board, "FASB" issued Statement
of Financial  Accounting  Standard,  SFAS No. 148,  "Accounting  for Stock-Based
Compensation  - Transition  and  Disclosure - an amendment of FASB Statement No.
123."  SFAS  No.  148  amends  SFAS  No.  123,   "Accounting   for   Stock-Based
Compensation,"  to provide  alternative  methods of  transition  for a voluntary
change to the fair value based method of  accounting  for  stock-based  employee
compensation.  In addition,  SFAS No. 148 amends the disclosure  requirements of
SFAS No.  123 to  require  prominent  disclosures  in both  annual  and  interim
financial  statements  about the method of accounting for  stock-based  employee
compensation  and the  effect  of the  method  used  on  reported  results.  The
disclosure  requirements  apply to all  companies  for fiscal years ending after
December 15, 2002. The interim disclosure provisions are effective for financial
reports  containing  financial  statements for interim  periods  beginning after
December  15,  2002.  The  adoption  of SFAS No. 148 is not  expected  to have a
material impact on the Company's financial statements.

3.       Restricted Cash

As of December 31, 2002,  cash of $ 1,704,000  has been  received in  connection
with maintenance  agreements.  Such cash is restricted and will become available
to the Company as revenue is recognized according to the terms of the respective
agreements. Of this amount, approximately,  $719,000 will be released during the
2003 calendar year. The non-current portion,  $985,000, has been classified as a
non-current asset.

                                        6

<PAGE>





4.       Credit Facility

The credit agreement with Foothill Capital (the "Foothill  Agreement")  provides
for a revolving line of credit not to exceed $15,000,000.  The available line of
credit  at  December  31,  2002,   according  to  the  collateral  formula,  was
approximately  $5,148,000 of which $2,778,000 was outstanding.  Borrowing limits
are determined  based on a collateral  formula,  which includes 85% of qualified
trade receivables.  Also, borrowings bear interest at 1% over Norwest Bank prime
(4.25%  at  December  31,  2002)  with a  minimum  rate of 7%.  The  term of the
agreement has been extended through March 31, 2004 under similar terms.

In connection with the Foothill  Agreement  extension  amendment,  The Company's
Subsidiary, DynTek Services is required to maintain certain financial covenants,
based upon defined EBITDA, tangible net worth and interest coverage ratio of the
subsidiary.  DynTek  Services  is not in  compliance  with the  covenants  as of
December 31, 2002. In  connection  with  Foothill's  consent for the merger with
DynCorp  Management  Services,  Inc.  ("DMR"),  the  Company  agreed to raise an
additional $3 million of capital  investment  within 30 days of the consummation
of the merger. The company has raised $2.1 million of such amount as of December
31, 2002.  The Company has received a waiver from  Foothill,  as of December 31,
2002, for non compliance with the financial  covenants and an extension to March
15, 2003 in receiving the additional capital investment requirement.

5.       Marketable Securities

Marketable  securities  have been classified as available for sale securities at
December 31, 2002 and,  accordingly,  the unrealized loss resulting from valuing
such  securities  at market value is  reflected as a component of  stockholders'
equity. At December 31, 2002, the unrealized loss on securities was $178,000.

6.       Commitments, Contingencies, and Other Agreements

On July 28,  2000,  a judgment  was entered  against Data Systems in favor of J.
Alan Moore in Mecklenburg  County Superior Court Division,  North Carolina.  The
plaintiff was awarded a judgment of $572,000 plus  reasonable  attorney fees and
interest,  and the award was affirmed on appeal. An accrual has been established
in an aggregate amount of approximately $700,000. The Company has entered into a
payment plan  agreement with the plaintiff of $100,000 cash on January 24, 2002,
$200,000 cash on February 15, 2003 and $400,000 in either cash or stock on April
15,  2003.  The Company did not issue the  February  15, 2003  payment and is in
negotiations with the plaintiff to amend the payment plan.

On  July  10,  2000,  the  Company  was  named  as  a  nominal  defendant  in  a
stockholder's  derivative  action  brought in the Supreme Court of New York, New
York County,  on behalf of DynTek by Paul Miletich.  On August 20, 2002, a final
order approving  settlement and dismissing  action by Paul Miletich was filed in
the New York County Clerk's Office.  The settlement  approved a stipulation that
The Rubin Family Trust  transfer to DynTek 300,000 shares of DynTek common stock
and 125,000 shares of MedEmerg  common stock,  as full settlement of a guarantee
provided by Mr. Rubin  pertaining to a  transaction  with  StyleSite  Marketing.
Additionally, the insurance underwriters for DynTek paid the Company $300,000 on
behalf of the director  defendants.  DynTek reimbursed  plaintiff's  counsel for
fees and expenses of $330,000,  of which 20% was paid in MedEmerg  stock (80,488
shares). The shares of DynTek common stock were received and will be retired and
the  remaining  shares of  MedEmerg  common  stock are being held as  marketable
securities. No gain or loss was recorded in connection with the settlement.

                                        7
<PAGE>

On  December  31,  2002,  the Company  settled all amounts due of  approximately
$713,000 net of a related  receivable of $187,000,  under the previous agreement
to purchase the assets of Exodus  Communications,  Inc.  ("Exodus")  for a total
amount of $100,000,  payable over three months ending March 31, 2003. The amount
is included in accrued expenses as of December 31, 2002.

On January  29,  2002,  the Company was named as a  third-party  defendant  in a
matter brought by Computer  Associates  International,  Inc.  ("CA") against the
City  of  Boston  ("COB"),   in  United  States  District  Court,   District  of
Massachusetts  (Case Number  01-10566-EFH).  CA filed suit against COB alleging,
among others,  that COB breached a contract with CA, that COB violated copyright
laws, and that COB owes the balance due under a multi-phase  purchase agreement.
While CA has not  asserted  a specific  damages  amount,  the total  multi-phase
contract was in an amount of  approximately $2 million.  COB subsequently  named
the  Company  as a  third-party  defendant,  alleging  that COB is  entitled  to
indemnification  from the  Company  based on an  alleged  contract  between  the
Company and COB, that COB is entitled to  contribution  from the Company for any
amounts COB is ordered to pay CA, and that the Company  misrepresented  material
facts with  respect  to CA's  product,  services,  and cost.  COB's  third-party
complaint  against  the Company  seeks all damages as a result of the  Company's
alleged acts. The matter is currently in the discovery stage. Company management
believes  that COB's claims  against the Company are without  merit and that the
matter will be resolved  favorably  for the  Company,  either  through  trial or
settlement.  However,  there is no assurance  that the resolution of this matter
will be favorable for the Company.

Effective  December  15,  2002 the  Company  entered  into a  mutual  Settlement
Agreement to cancel a contract to provide non-emergency transportation brokerage
services in certain regions of the  Commonwealth  of Virginia.  The terms of the
Settlement  Agreement  provide that the Company  issue  certain  payments due to
transportation  provider  vendors  according to an agreed-upon  schedule,  which
extends  through  June 11,  2003.  The  Company  has  included  the  third-party
transportation  provider  liabilities in its accounts payable as of December 31,
2002,  and believes  that it is in compliance  with the terms of the  Settlement
Agreement. The remaining payments due to transportation provider vendors will be
made in accordance with the Settlement  Agreement terms.  Several of the vendors
that  provided  transportation  services in the  Commonwealth  of Virginia  have
initiated  legal  demands to  accelerate  the payment for  services,  before the
payment dates  stipulated in the Settlement  Agreement with the  Commonwealth of
Virginia,  citing the terms of the individual  subcontracts  between the Company
and the providers have been breached. Some of the demands, either in whole or in
part,  have been disputed by the Company as being without merit.  As of December
31, 2002,  actions for  collection by 4 provider  vendors have  commenced for an
aggregate claim amount of  approximately  $728,000,  a portion of which has been
disputed  based on  billings  for  services  that  were not  provided  under the
agreements.  The Company  believes  that these  claims  will be fully  resolved,
following  evaluation  of the claims  against those  services  authorized by the
Company.

On March 20, 2002,  two actions were  commenced  against the Company by Stride &
Associates (Stride) in Civil Court of New York,  regarding the alleged breach of
two contracts in the aggregate amount of $40,000, for amounts due this placement
firm from the alleged hiring of two  consultants  by the Company.  Additionally,
the two consultants  have commenced  separate  actions in the Civil Court of New
York for  compensation  due in the  aggregate  amount of  $53,000.  The  Company
believes that neither of these  consultants  was hired by the Company,  and that
the actions by Stride are without merit. Additionally, the work performed by the
consultants  pertained to a project  undertaken  by the  Company's  former Chief
Technology  Officer,  which was  separate  from any projects  undertaken  by the
Company.  The  Company  believes  that,  to the extent  that any  damages may be
awarded, the costs shall be indemnified by the former Chief Technology Officer.

In a matter  relating to a prior business of the Company,  divested in 1998, one
of the Company's discontinued  wholly-owned  subsidiaries was issued a Letter of
Demand  for $1.3  million,  as a result  of an  audit  by the  California  State
Controller's  Office,  Division of Audits,  that was  conducted on behalf of the
California Department of Health Services. Additionally,  accrued interest on the
amount  demanded was also sought.  On January 20, 1999, the California  Superior
Court recommended that the Demand be upheld. On January 26, 2000, the California
Court of Appeals  upheld the demand.  The Company has provided a reserve for the
principal amount of $1,340,000 plus $555,000 in accrued interest,  or $1,895,000
in total as of  December  31,  2002.  The  Company has decided not to appeal the
decisions.  The  California  Department  of Health  Services has not taken legal
action to  obtain a  judgment  against  the  Company  in order to  collect  this
obligation.

                                        8
<PAGE>

On October 11, 2002, Merisel Americas, Inc. filed a breach of contract complaint
in Superior Court of California,  Southwest  District.  The complaint arose from
the  Company's  failure  to make  payments  within  the  terms  of the  reseller
agreement. The Company does not dispute the claim of $483,000 and is negotiating
payment terms. This amount is included in the Company's accounts payable.

7.       Stockholders' Equity

On August 14, 2001, the Company's  preferred stock became  convertible  into the
Company's  Class  A  common  stock,  at a rate of 2.5  common  shares  for  each
preferred share tendered.  As of December 31, 2002,  582,265 of such shares were
converted  into  1,454,614  shares of Class A common stock,  with a remainder of
1,607,535  shares not yet  converted.

In connection with the settlement of the Miletich Derivative Action, the Company
received  300,000  shares of its Class A Common Stock.  Such shares were held as
treasury  stock at December 31, 2002, and the Company plans to retire the shares
shortly.  The treasury shares have been recorded by the constructive  retirement
method of accounting.

In June 2002,  the Company sold  1,389,293  shares of Common Stock for $1.50 per
share to  accredited  investors,  and  converted  short-term  notes payable into
1,042,039  shares of Class A Common  Stock  for  $1.50  per share to  accredited
investors.  Part of the share  issuances  were  completed in June 2002,  and the
remaining  shares were  issued  during  July 2002.  During the six months  ended
December  31,  2002,  1,511,844  shares of Class A Common  Stock were  issued in
connection with this placement and conversion of short-term notes.

In July 2002, 24,534 shares of Class A Common Stock were issued to an accredited
investor as an extinguishment of an account payable.

During August 2002, the Company  repurchased and retired 8,000,000 shares of its
Class B Common Stock (see note 8), and converted the remaining 10,336,663 shares
of Class B Common Stock into the same number of Class A Common Stock shares.

During the quarter ended December 31, 2002 8,862 shares of Preferred Stock were
converted into 22,155 Class A Common shares. An additional 72,562 previously
retired shares were reissued.

8.  Dyncorp Settlement Agreement

On August 20, 2002,  DynTek entered into the  Settlement  Agreement with DynCorp
its principal  stockholder,  pursuant to which each of DynTek and DynCorp agreed
to settle all disputes  between them,  including  those  resulting from DynTek's
acquisition  by merger  of  DynCorp's  former  wholly-owned  subsidiary,  DMR in
December  2001.  As part of the  Settlement  Agreement,  DynCorp  sold to DynTek
8,000,000  shares of DynTek  Class B common stock at a price of $.625 per share,
converted its remaining  10,336,663 shares of Class B common stock (constituting
the balance of all  outstanding  Class B common  stock) to DynTek Class A common
stock,  paid to DynTek $5 million to defray  losses  incurred by DynTek from its
operations  under the terms of a  contract  with the  Commonwealth  of  Virginia
acquired by DynTek in  connection  with the DMR merger,  and  provided a general
release to DynTek and its affiliates  from any and all claims that it might have
against such persons.  Such  reimbursement  of $5 million has been treated as an
offset to costs  incurred  under the  Virginia  contract.  Under the  Settlement
Agreement,  DynTek  agreed to pay for the Class B common stock  shares  acquired
from DynCorp with a $5 million principal  unsecured,  subordinated note maturing
on January 2, 2007,  bearing  interest  at 15%.  DynTek  also agreed to issue to
DynCorp warrants to acquire 7,500,000 shares of Class A common stock exercisable
for three years at $4.00 per share (the "Warrants"),  grant demand  registration
rights with respect to the Warrants  and  DynCorp's  Class A common stock shares
(including  those to be acquired upon Warrant  exercise),  and provide a general
release to DynCorp and its affiliates from any and all claims that it might have
against such persons.

                                        9
<PAGE>

9.       Business Segments

The following table provides actual selected financial data for our business
segments (in thousands):
<TABLE>
<CAPTION>

                                                                  Reportable Business Segments
                                                      --------------------------------------------------
                                                        Business
                                                        Process                Network
                                                       Outsourcing             Services            Total
Six months ended December 31, 2002
<S>                                                     <C>                    <C>               <C>
Sales to external customers                             $   26,333             $ 20,632          $ 46,965
Depreciation and amortization expense                          446                1,168             1,614
Operating income (loss)                                       (433)              (1,320)           (1,753)
Net interest expense (income)                                  438                  140               578
Total assets                                                40,602               25,925            66,527
Capital expenditures                                             5                    1                 6

Three months ended December 31, 2002

Sales to external customers                             $   12,764             $  8,946          $ 21,710
Depreciation and amortization expense                          224                  581               805
Operating income (loss)                                        (79)                (682)             (761)
Net interest expense (income)                                  349                   63               412
Total assets                                                40,602               25,925            66,527
Capital expenditures                                             -                    -                 -
</TABLE>

During the three months and six months  ended  December 31, 2001 the Company did
not  have  segment  reporting,  since  the only  business  segment  was  Network
Services.


10.      Related-Party Transactions

In March 2001, the Company purchased 25% of the equity in LaborSoft  Corporation
("LaborSoft"),  a company providing labor relations software to labor unions and
commercial customers to supplement other market segment services. As a result of
its investment, the Company assigned one of its directors to become the chairman
of the board of directors of LaborSoft.  The Company has a service  agreement to
provide  infrastructure  services to LaborSoft,  on a cost plus  fee-for-service
basis which is common in the industry  and can  terminate  services  upon 30 day
notification.  As of December 31, 2002, the Company had outstanding  receivables
for such services in the total amount of $500,000,  representing  unpaid charges
since April 2001 and an allowance reserve of $200,000.  The Company accounts for
its  investment  under  the  equity  method  of  accounting,  and has  therefore
recognized its pro-rata portion of the losses incurred by this affiliate,  since
March 2001,  in the amount of  $383,000.  Such losses have  reduced the carrying
value of its investment to $73,000 at December 31, 2002.

                                       10
<PAGE>

11. Subsequent Event

In January 2003, the Company  commenced  discussions and negotiations  regarding
the  sale  of  its  remaining  non-emergency  medical  transportation  brokerage
services   contracts,   which  includes  three   contracts  with  the  State  of
Connecticut, the State of Illinois and with the city of Arlington,  Virginia. In
December  2002,  the Company  had  previously  canceled  its  contract  with the
Commonwealth  of Virginia for the  provision of such  services.  While the final
terms of the sale of the  remaining  contracts  have  not  been  finalized,  the
Company believes that there is reasonable possibility that a transaction will be
consummated during the quarter ending March 31, 2003.

During the quarter  ended  December 31,  2002,  the  operating  results from the
services provided under the  non-emergency  transportation  brokerage  contracts
were included in the business process  outsourcing  segment reporting.  Provided
that the remaining contracts are sold, the Company will commence classifying any
operating results of this asset group as discontinued  operations during periods
following  December  31,  2002.  Results  from the  operations  of the  services
provided under non-emergency transportation brokerage contracts during the three
and six months ended December 31, 2002 are as follows:
<TABLE>
<CAPTION>

                                                                   Other             Total
                                            Non-Emergency         Business         Business
                                            Transportation        Process           Process
                                              Brokerage         Outsourcing       Outsourcing
                                               Services           Services          Services
                                            -------------       -----------       ------------
Three Months ended December 31, 2002
<S>                                         <C>                  <C>              <C>
Revenues                                    $       9,869        $    2,895       $     12,764
Depreciation and amortization                         101               113                214
Operating income (loss)                              (144)               65                (79)

Six Months ended December 31, 2002

Revenues                                    $      20,977        $    5,356       $     26,333
Depreciation and amortization                         202               244                446
Operating income (loss)                              (427)               (6)              (433)
</TABLE>


                                       11


<PAGE>





ITEM 2.     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
            OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS

Forward-Looking Statements

     When used in the Form 10-Q and in future  filings by the  Company  with the
Securities  and Exchange  Commission,  the words or phrases "will likely result"
and "the Company  expects,"  "will  continue,"  "is  anticipated,"  "estimated,"
"project,"  or  "outlook"  or  similar  expressions  are  intended  to  identify
"forward-looking  statements"  within  the  meaning  of the  Private  Securities
Litigation  Reform Act of 1995.  The  Company  wishes to caution  readers not to
place  undue  reliance  on any such  forward-looking  statements,  each of which
speaks only as of the date made.  Such  statements  are subject to certain risks
and  uncertainties  that could cause actual  results to differ  materially  from
historical earnings and those presently anticipated or projected. Such risks and
uncertainties  include,  among others,  success in reaching  target  markets for
services and products in a highly  competitive market and the ability to attract
future customers, the size and timing of additional significant orders and their
fulfillment,  the success of the  Company's  business  emphasis,  the ability to
finance and sustain operations, including the ability to maintain and extend the
Foothill  Agreement  when it becomes due and the ability to raise equity capital
in the future,  despite  continuing losses from operations and a "going concern"
opinion from our auditors,  the Company's  ability to arrange  successfully  for
extended payment terms for certain overdue obligations and judgments against the
Company,  the ability to fulfill the  Company's  obligations  to third  parties,
including  the  ability  to obtain  performance  bonds to support  certain  such
contractual  obligations,  the size and timing of additional  significant orders
and their fulfillment, the ability to turn contract backlog into revenue and net
income,  the  continuing  desire of state and local  governments to outsource to
private  contractors and the ability of the Company to obtain  extensions of the
profitable DMR contracts at their  maturity,  the  performance  of  governmental
services,  the ability to develop and  upgrade  our  technology,  the ability to
successfully  integrate the operations of DMR with DynTek,  and the continuation
of general  economic and business  conditions that are conducive to governmental
outsourcing  of service  performance.  The Company has no obligation to publicly
release the results of any revisions,  which may be made to any  forward-looking
statements  to reflect  anticipated  or  unanticipated  events or  circumstances
occurring after the date of such statements.

RESULTS OF OPERATIONS

The three  months  ended  December  31, 2002 (the "2002 Three Month  Period") as
compared  to the three  months  ended  December  31, 2001 (the "2001 Three Month
Period").

     Revenues  for the  2002  Three  Month  Period  increased  to  approximately
$21,710,000  from  approximately  $12,230,000  for the 2001 Three Month  Period,
primarily due to the December 27, 2001 merger with DynCorp Management  Resources
(DMR).  The revenue mix of product and services  was 23% and 77%,  respectively,
for the 2002 Three Month Period, as compared to 49% and 51%,  respectively,  for
the 2001 Three Month Period.  This change in revenue mix is primarily due to the
increased service revenues from business process  outsourcing  contracts assumed
in the merger with DMR.

     Cost of revenues for the 2002 Three Month Period increased to approximately
$19,125,000 from  approximately  $9,521,000 for the 2001 Three Month Period, due
to the  December 27, 2001 merger of DMR.  The overall  gross  margin  percentage
decreased  to 13% for the 2002 Three  Month  Period  from 22% for the 2001 Three
Month Period.  This decrease was primarily due to lower margin business  assumed
in the December 27, 2001 DMR merger.

                                       12
<PAGE>

     Selling,  general  and  administrative  expenses  for the 2002 Three  Month
Period decreased to approximately  $2,543,000 from approximately  $3,315,000 for
the 2001 Three Month Period. The royalty  settlement with Exodus  communications
of $425,000 during the 2002 Three Month Period accounts for 55% of the decrease.
The Company has realized cost savings from consolidating administration centers,
personnel  and  management  that were assumed in the December 27, 2001 merger of
DMR. As a percentage of total  revenues,  such costs decreased to 12% during the
2002 Three Month Period, from 27% in the prior 2001 Three Month Period.

Application  development  expense  for the  2002  Three  Month  Period  was zero
compared  to  approximately  $152,000  for the  2001  Three  Month  Period.  The
elimination of such costs was primarily due to a restructuring of the Company to
reduce software development activities related to new products,  notwithstanding
the continuation of normal software  development  services provided to customers
under ongoing service agreements.  Depreciation and amortization expense for the
2002 Three Month Period increased to approximately  $805,000 from  approximately
$566,000  for  the  2001  Three  Month   Period.   This  increase  is  primarily
attributable  to the addition of amortizable  intangible  assets recorded in the
December 27, 2001 merger of DMR.

Interest  income for the 2002 Three  Month  Period  decreased  to  approximately
$8,000  from  approximately  $9,000 for the 2001 Three  Month  Period.  Interest
expense for the 2002 Three Month Period was approximately  $420,000, as compared
to $1,440,000  during the 2001 Three Month Period.  This decreased  expense is a
result of interest on the short-term  convertible  notes payable incurred during
the 2001 Three  Month  Period  that did not recur  during  the 2002 Three  Month
Period.  The interest  from the  Foothill  line of credit  borrowings  decreased
$12,000  during the 2002 Three Month Period.  During the 2001 Three Month Period
we realized a loss of $1,241,000 on the sale of marketable  securities  whereas,
we did not have such losses in 2002.

We  recognized  our  pro-rata  portion of the losses  incurred by an  affiliate,
LaborSoft,  in the amount of $35,000 during the 2002 Three Month Period compared
to $85,000  during the 2001 Three Month Period.  The decrease is a result of the
improvement of LaborSoft's operations resulting in a decreased loss for the 2002
Three  Month  Period.  Such  losses  have  reduced  the  carrying value of our
investment in LaborSoft to $73,000 at December 31, 2002.

Net loss decreased to $1,208,000 for the 2002 Three Month Period, as compared to
a loss of  $4,081,000  for the 2001 Three Month  Period.  The loss  reduction of
$2,873,000  is  attributed  to primarily to the 2001 loss on sale of  marketable
securities and interest on the short-term  convertible  notes, both of which did
not recur  during  the 2002 Three  Month  Period,  and to a decrease  of selling
expenses.

The six months ended December 31, 2002 (the "2002 Six Month Period") as compared
to the six months ended December 31, 2001 (the "2001 Six Month Period").

     Revenues  for the  2002 Six  Month  Period  increased  to  approximately  $
46,965,000  from  approximately  $ 23,815,000  for the 2001 Six Month Period The
increase is primarily  due to the December 27, 2001 merger with DMR. The revenue
mix from product sales and services was 24% and 76%, respectively,  for the 2002
Six Month  Period,  as compared to 53% and 47%,  respectively,  for the 2001 Six
Month  Period.  This change in revenue  mix is  primarily  due to the  increased
service  revenues from business  process  outsourcing  contracts  assumed in the
merger with DMR.

     Cost of revenues for the 2002 Six Month Period  increased to  approximately
$41,044,000 from  approximately  $18,670,000 for the 2001 Six Month Period.  The
overall gross margin  percentage  decreased to 13% for the 2002 Six Month Period
from 22% for the 2001 Six Month Period. This decrease was primarily due to lower
margin business assumed in the December 27, 2001 DMR merger.

                                       13
<PAGE>

     Selling,  general and administrative expenses for the 2002 Six Month Period
decreased to approximately $6,060,000 from approximately $6,198,000 for the 2001
Six Month Period.

     Product  development  expense for the 2002 Six Month Period eliminated from
approximately  $492,000  for  the  2001  Six  Month  Period.  This  is  due to a
restructuring of the Company to reduce software  development  activities related
to new products, notwithstanding the continuation of normal software development
services  provided to customers under ongoing service  agreements.  Depreciation
and   amortization   expense  for  the  2002  Six  Month  Period   increased  to
approximately  $1,614,000 from  approximately  $1,110,000 for the 2001 Six Month
Period.  This increase is primarily  attributable to the addition of amortizable
intangible assets recorded in the December 27, 2001 merger of DMR.

     Interest  income for the 2002 Six Month Period  decreased to  approximately
$16,000 from approximately  $21,000 for the 2001 Six Month Period. This decrease
is   attributable   to  a  decrease  in  the  amount  of   interest   earned  on
interest-bearing  investments,  due to  lower  amounts  of funds  available  for
working  capital on deposit  and lower  interest  rates paid on those  deposits.
Interest expense for the 2002 Six Month Period was  approximately  $594,000,  as
compared  to  $1,626,000  during the 2001 Six Month  Period.  This  decrease  in
interest  expense  was a result of a decrease  in  interest  on short term notes
payable,  which included non-cash charges for the beneficial  conversion feature
($763,000) and the amortization of debt discount ($323,000).

     During the quarter  ended  December 31, 2001,  marketable  securities  were
sold,  for net proceeds of $ 362,000 and a  recognized  loss of  $1,241,000,  of
which $980,000 was previously provided as a valuation reserve as unrealized loss
on securities.  The Company has  recognized  its pro-rata  portion of the losses
incurred  by an  affiliate,  in the amount of $62,000  during the 2002 Six Month
Period compared to $192,000 during the 2001 Six Month Period.

     The decrease in net loss to $2,394,000  for the 2002 Six Month  Period,  as
compared to a loss of $5,734,000  for the 2001 Six Month  Period,  is attributed
primarily to the 2001 loss on sale of marketable  securities and interest on the
short-term  convertible  notes,  both of which did not recur during the 2002 Six
Month Period.

Liquidity and Capital Resources

As of  December  31,  2002 the  Company  had a  working  capital  deficiency  of
approximately   $15,172,000   compared  to  a  working  capital   deficiency  of
$14,075,000 at June 30, 2002.  This decrease in working capital is primarily due
to losses from operations.

The credit agreement with Foothill Capital (the "Foothill  Agreement")  provides
for a revolving line of credit not to exceed $15,000,000.  The available line of
credit  at  December  31,  2002,   according  to  the  collateral  formula,  was
approximately  $5,148,000 of which $2,778,000 was outstanding.  Borrowing limits
are determined  based on a collateral  formula,  which includes 85% of qualified
trade receivables.  Also, borrowings bear interest at 1% over Norwest Bank prime
(4.25%  at  December  31,  2002)  with a  minimum  rate of 7%.  The  term of the
agreement  has been  extended  through March 31, 2004 under terms similar to the
current agreement.

In connection with the Foothill Agreement extension  amendment,  DynTek Services
is required to maintain certain financial covenants,  based upon defined EBITDA,
tangible  net  worth  and  interest  coverage  ratio of the  subsidiary.  DynTek
Services is not in  compliance  with the  covenants as of December 31, 2002.  In
connection  with  Foothill's  consent  for the merger  with  DynCorp  Management
Services,  Inc. ("DMR"), the Company agreed to raise an additional $3 million of
capital investment within 30 days of the consummation of the merger. The Company
has raised $2.1  million of such amount as of December 31,  2002,  however,  the
Company is in default  with regard to the  remaining  $904,000.  The Company has
received a waiver from  Foothill,  as of December 31, 2002,  for non  compliance
with the financial covenants and an extension to March 15, 2003 in receiving the
additional capital investment requirement per the agreement.

                                       14

On July 28,  2000,  a judgment  was entered  against Data Systems in favor of J.
Alan Moore in Mecklenburg  County Superior Court Division,  North Carolina.  The
plaintiff was awarded a judgment of $572,000 plus  reasonable  attorney fees and
interest, and the award was affirmed on appeal. An accrual was established in an
aggregate  amount of  approximately  $700,000.  The Company  has entered  into a
payment plan agreement with the plaintiff consisting of $100,000 cash on January
24,  2002,  $200,000  cash on February  15, 2003 and  $400,000 in either cash or
stock on April 15,  2003.  The Company was unable to issue the February 15, 2003
payment and is in negotiations with the plaintiff to amend the payment plan.

On December  31,  2002,  the Company  settled all amounts due under the previous
agreement to purchase the assets of Exodus Communications, Inc. ("Exodus") for a
total amount of $100,000, payable over three months ending March 31, 2003.

In a matter  relating to a prior business of the Company,  divested in 1998, one
of the Company's discontinued  wholly-owned  subsidiaries was issued a Letter of
Demand  for $1.3  million,  as a result  of an  audit  by the  California  State
Controller's  Office,  Division of Audits,  that was  conducted on behalf of the
California Department of Health Services. Additionally,  accrued interest on the
amount  demanded was also sought.  On January 20, 1999, the California  Superior
Court recommended that the Demand be upheld. On January 26, 2000, the California
Court of Appeals  upheld the demand.  The Company has provided a reserve for the
principal amount of $1,340,000 plus $555,000 in accrued interest,  or $1,895,000
in total as of  December  31,  2002.  The  Company has decided not to appeal the
decisions.  The  California  Department  of Health  Services has not taken legal
action to  obtain a  judgment  against  the  Company  in order to  collect  this
obligation.

On October 11, 2002, Merisel Americas, Inc. filed a breach of contract complaint
in Superior Court of California,  Southwest  District.  The complaint arose from
the  Company's  failure  to make  payments  within  the  terms  of the  reseller
agreement. The Company does not dispute the claim of $483,000 and is negotiating
payment terms.

We may  expand  the  scope of our  product  offerings  by  pursuing  acquisition
candidates  with  complementary  technologies,  services or products.  Should we
commence such acquisitions, we anticipate that we would finance the transactions
with a  combination  of working  capital and the issuance of  additional  equity
securities.  We would attempt to secure  additional  funding,  including  equity
financing  where  appropriate,  for  acquisitions.  There  can be no  assurance,
however,  that we will be  successful  in  identifying  appropriate  acquisition
candidates or that, if appropriate  candidates are  identified,  that we will be
successful in obtaining the necessary financing to complete the acquisitions.

We have had recurring losses from continuing  operations and negative cash flows
from operations.  Such losses have been funded primarily from cash received from
sales of stock,  cash received in 1999 from the sale of discontinued  operations
and cash received from DynCorp in  settlement of issues  resulting  from the DMR
merger. As additional funds are necessary,  we would consider reducing the scope
of our operations,  divesting of long-term  contracts or business  segments,  or
seeking other forms of financing. We received an explanatory paragraph about our
ability to continue as a going concern from our auditors in connection  with the
audit of our financial statements for the 2002 fiscal year end and since the end
of the 2002 fiscal year we have continued to generate losses from our continuing
operations  and negative cash flows from our  operations.  Such losses have been
funded primarily from cash received from the sales of stock in prior periods and
cash  received  from  DynCorp in  settlement  of issues  resulting  from the DMR
merger.

                                       15
<PAGE>

During the quarter ended December 31, 2002, we have reduced our operating  costs
by enacting staff  reductions and have been  successful in reducing the negative
cash flow derived from the operations under Virginia  transportation contract by
terminating  our  obligations  to perform  that  contract  under the terms of an
agreement  reached  in  December  2002.  The terms of the  Settlement  Agreement
provide that the Company issue certain payments due to  transportation  provider
vendors  according to an agreed-upon  schedule,  which extends  through June 11,
2003.  During  future  quarters,  we believe that losses and negative cash flows
from operations will be significantly  reduced or eliminated  through continuing
cost savings measures and increasing margin contributions.

In January 2003, the Company  commenced  discussions and negotiations  regarding
the  sale  of  its  remaining  non-emergency  medical  transportation  brokerage
services   contracts,   which  includes  three   contracts  with  the  State  of
Connecticut,  the State of Illinois  and with the city of  Arlington,  Virginia.
While  the  final  terms of the sale of the  remaining  contracts  have not been
finalized,  the Company  believes  that there is reasonable  possibility  that a
transaction  will be  consummated  during the quarter ending March 31, 2003.  If
consummated,  such  transaction is expected to create a material  improvement in
the Company's working capital position.

During the next 12 months,  however,  we will be required to make  payments that
may exceed the positive cash flows that may be generated from operations. We are
planning to negotiate extended payment terms wherever  possible,  including with
respect to the Moore judgment, the payments to Virginia  transportation vendors,
and Merisel America.  However, there is no assurance that extended payment terms
offered by us will be acceptable.

Our lending  institution has provided waivers of the financial  covenants in our
lending  agreement,  in order to avoid  being  in  breach  of the  terms of that
agreement,  and has been receptive to periodic  re-negotiations  of the terms of
such covenants. There is no guarantee that we will be able to continue to obtain
such waivers in the future,  or that we will be able to obtain a refinancing  of
our  obligations  under that agreement at its maturity in March 2004, or earlier
upon an unwaived  breach of its terms.  Our  inability to do either would have a
material adverse effect on our business and future prospects.

As additional  funds are  necessary,  we would  consider  divesting of long-term
contracts or business  components  that are not core to our  business  expansion
plans,  reducing the scope of our  operations and business  development  efforts
requiring  investment,  or  seeking  other  forms of  financing.  Should  we not
generate   sufficient   cash  flow  from   operations  to  support  our  ongoing
obligations,  or if we are unable to arrange  successfully  for extended payment
terms for  those  obligations  or obtain  financing  from some  other  source or
arrange other waivers of  obligations as necessary,  our  continuing  operations
will be severely compromised.

                                       16

<PAGE>




ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Foothill  Agreement exposes the Company to the risk of earnings or cash flow
loss due to changes in market interest  rates.  The Foothill  Agreement  accrues
interest  at 1% over  Norwest  Bank prime  (4.25% at December  31,  2002) with a
minimum rate of 7%.

The table below provides  information  on the Foothill  Agreement as of December
31, 2002.
<TABLE>
<CAPTION>

                                                                                      Weighted Average
                                               Principal Balance             Interest Rate at December 31, 2002
                                               -----------------             ----------------------------------
<S>                                               <C>                                        <C>
Revolving credit facility                         $ 2,778,000                                7%
</TABLE>


ITEM 4.  CONTROLS AND PROCEDURES

Based on their evaluation as of a date within 90 days of the filing of this Form
10-Q, our Chief  Executive  Officer and Chief  Financial  Officer have concluded
that the our  disclosure  controls and  procedures  are effective to ensure that
information  required to be disclosed  in the reports that the company  files or
submits  under  the  Securities  Exchange  Act of 1934 is  recorded,  processed,
summarized and reported within the time periods  specified in the Securities and
Exchange Commission's rules and forms. There have been no significant changes in
our internal controls or in other factors that could significantly  affect those
controls subsequent to the date of their evaluation.

PART II - OTHER INFORMATION

ITEM 6.     EXHIBITS AND REPORTS ON FORM 8-K

     (a) Exhibits.

                  10.2     Virginia Department of Medical Assistance Settlement
                           Agreement

                  10.3     Exodus Settlement Agreement

                  99.1     Certification Pursuant to 18 U.S.C. Section 1350, as
                           Adopted Pursuant to Section 906 of the Sarbanes-
                           Oxley Act of 2002 of Steven Ross

                  99.2     Certification Pursuant to 18 U.S.C. Section 1350, as
                           Adopted Pursuant to Section 906 of the Sarbanes-
                           Oxley Act of 2002 of Steven Ross

     (b) Reports on Form 8-K

                           Current Report on Form 8-K filed December 18, 2002,
                           in connection with Settlement Agreement with the
                           Commonwealth of Virginia, Department of Medical
                           Assistance


                                       17

<PAGE>



                                    SIGNATURE


           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.


                                                     DYNTEK, INC.



                                                     By:/s/James Linesch
                                                     --------------------
                                                     James Linesch
                                                     Chief Financial Officer

                                                     Date: February 19, 2003

                                       18

<PAGE>



                                 CERTIFICATIONS

I, Steven J. Ross, certify that:

1.   I have reviewed this quarterly report on Form 10-Q of DynTek, Inc.;

2.   Based on my knowledge, this quarterly report does not contain any untrue
     statement of a material fact or omit to state a material fact necessary to
     make the statements made, in light of the circumstances under which such
     statements were made, not misleading with respect to the period covered by
     this quarterly report;

3.   Based on my knowledge, the financial statements, and other financial
     information included in this quarterly report, fairly present in all
     material respects the financial condition, results of operations and cash
     flows of the registrant as of, and for, the periods presented in this
     quarterly report;

4.   The registrant's other certifying officers and I are responsible for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

     a.   designed such disclosure controls and procedures to ensure that
          material information relating to the registrant, including its
          consolidated subsidiaries, is made known to us by others within those
          entities, particularly during the period in which this quarterly
          report is being prepared;

     b.   evaluated the  effectiveness of the registrant's  disclosure  controls
          and procedures as of a date within 90 days prior to the filing date of
          this quarterly report (the "Evaluation Date"); and

     c.   presented in this quarterly report our conclusions about the
          effectiveness of the disclosure controls and procedures based on our
          evaluation as of the Evaluation Date;

5.   The registrant's other certifying officers and I have disclosed, based on
     our most recent evaluation, to the registrant's auditors and the audit
     committee of registrant's board of directors (or persons performing the
     equivalent function):

     a.   all significant deficiencies in the design or operation of internal
          controls which could adversely affect the registrant's ability to
          record, process, summarize and report financial data and have
          identified for the registrant's auditors any material weaknesses in
          internal controls; and

     b.   any fraud, whether or not material, that involves management or other
          employees who have a significant role in the registrant's internal
          controls; and

6.   The registrant's other certifying officers and I have indicated in this
     quarterly report whether or not there were significant changes in internal
     controls or in other factors that could significantly affect internal
     controls subsequent to the date of our most recent evaluation, including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.

Date:  February 19, 2003
                                                 By:_/s/ Steven J. Ross_______
                                                         Steven J. Ross
                                                         Chief Executive Officer

                                       19
<PAGE>




I, James Linesch, certify that:

1.   I have reviewed this quarterly report on Form 10-Q of DynTek, Inc.;

2.   Based on my knowledge, this quarterly report does not contain any untrue
     statement of a material fact or omit to state a material fact necessary to
     make the statements made, in light of the circumstances under which such
     statements were made, not misleading with respect to the period covered by
     this quarterly report;

3.   Based on my knowledge, the financial statements, and other financial
     information included in this quarterly report, fairly present in all
     material respects the financial condition, results of operations and cash
     flows of the registrant as of, and for, the periods presented in this
     quarterly report;

4.   The registrant's other certifying officers and I are responsible for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

     a.   designed such disclosure controls and procedures to ensure that
          material information relating to the registrant, including its
          consolidated subsidiaries, is made known to us by others within those
          entities, particularly during the period in which this quarterly
          report is being prepared;

     b.   evaluated the  effectiveness of the registrant's  disclosure  controls
          and procedures as of a date within 90 days prior to the filing date of
          this quarterly report (the "Evaluation Date"); and

     c.   presented in this quarterly report our conclusions about the
          effectiveness of the disclosure controls and procedures based on our
          evaluation as of the Evaluation Date;

5.   The registrant's other certifying officers and I have disclosed, based on
     our most recent evaluation, to the registrant's auditors and the audit
     committee of registrant's board of directors (or persons performing the
     equivalent function):

     a.   all significant deficiencies in the design or operation of internal
          controls which could adversely affect the registrant's ability to
          record, process, summarize and report financial data and have
          identified for the registrant's auditors any material weaknesses in
          internal controls; and

     b.   any fraud, whether or not material, that involves management or other
          employees who have a significant role in the registrant's internal
          controls; and

6.   The registrant's other certifying officers and I have indicated in this
     quarterly report whether or not there were significant changes in internal
     controls or in other factors that could significantly affect internal
     controls subsequent to the date of our most recent evaluation, including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.

Date:  February 19, 2003
                                               By:  _/s/ James Linesch_______
                                                         James Linesch
                                                         Chief Financial Officer

                                       20
<PAGE>

                                                                    Exhibit 10.2

                              SETTLEMENT AGREEMENT

     This Settlement Agreement is entered into this ____ day of December 2002 by
DynTek  Services,  Inc.,  for itself and its  principals,  officers,  directors,
employees,  agents,  parent,  subsidiaries,  affiliates,  successors and assigns
("DynTek"),  and the Commonwealth of Virginia,  Department of Medical Assistance
Services ("DMAS"), for itself and its officers,  employees,  agents,  successors
and assigns.

     WHEREAS  the  purpose of this  Settlement  Agreement  is to  provide  final
resolution of all disputes and claims,  asserted or  otherwise,  arising from or
related  to  Contract  Number  80649  (the  "Contract")  for  the  provision  of
non-emergency transportation brokerage services in Regions 2, 3, 4, and 7 of the
Commonwealth of Virginia.

     WHEREAS on or about April 10,  2001,  DynTek and the  Commonwealth  entered
into the Contract for DynTek to provide non-emergency  transportation  brokerage
services in Regions 2, 3, 4 and 7 of the Commonwealth of Virginia;

     WHEREAS  DMAS  claims  that  DynTek  has not  complied  with the  terms and
conditions  of  the  Contract,   including,   but  not  limited  to,   providing
transportation services on a timely basis, paying transportation  providers on a
timely basis,  and providing DMAS with complete and timely  management  reports,
and that,  accordingly,  DynTek is in  material  breach of the  Contract,  which
claims DynTek denies;

     WHEREAS   DynTek   claims   that   DMAS   has   required   it  to   perform
extra-contractual    services    without    compensation   and   made   material
misrepresentations  to it in its request for proposal  which  induced  DynTek to
enter into the Contract at payment levels which were grossly  inadequate,  which
claims DMAS denies;

                                       21
<PAGE>

     WHEREAS  both  DynTek and the  Commonwealth  desire to cancel the  Contract
before the expiration of the Contract on June 30, 2003; and

     WHEREAS DynTek and the  Commonwealth  wish to resolve their disputed claims
in a fair and amicable  manner and to release each other from any and all claims
against  each other that may arise  related to the  Contract,  the  cancellation
thereof and all related  matters,  in accordance  with the terms and  conditions
hereafter set forth;

     NOW,  THEREFORE,  in  consideration of the factors stated above, the mutual
promises set forth below,  DynTek and the Commonwealth agree as follows:

1.   The "Cancellation  Date" shall be December 15, 2002.  Beginning  the first
     day after the "Cancellation Date," DynTek shall have no further
     responsibility to provide non-emergency transportation brokerage services
     under the Contract nor any right to receive any payment for any services
     rendered after said date.

2.   DynTek shall be obligated to provide non-emergency transportation brokerage
     services through and including the Cancellation Date. Unless hereafter
     directed in writing by DMAS, such service shall include scheduling, in the
     ordinary course of business, such trips as Medicaid recipients may seek
     to schedule but which will not actually occur until after the Cancellation
     Date; however, DynTek shall not be responsible for paying any provider for
     any such trip which occurs after such date, and DMAS or its designee shall
     be solely responsible for making payment to the authorized provider.

3.   Following  execution of this Settlement  Agreement by DynTek and DMAS (and
     without awaiting approvals required by Paragraph 14 hereof) , DynTek shall:

     (a)  Provide to DMAS or its designee, in hard copy and electronically, a
          list of all recipients receiving transportation services in Regions
          2, 3, 4 and 7 within the last year, which list shall include the name,
          address and phone number of each recipient;

                                       22
<PAGE>

     (b)  Provide to DMAS or its designee, in hard copy and electronically, a
          current list of all companies that are currently subcontracted with
          DynTek for Regions 2, 3,4 and/or 7, as well as a list of any companies
          not currently subcontracted but that were so subcontracted with DynTek
          at any time during the last year;

     (c)  Provide to DMAS or its designee, in hard copy and electronically,
          completed ACD reports for its call center(s) for the months of
          September and October 2002 as well as for any subsequent months or
          partial months for which such data is available to DynTek;

     (d)  Provide to DMAS or its designee, in hard copy and electronically, a
          current order list, which list shall include for the the next ninety
          (90) days the Medicaid number of the recipient, point of origin and
          destination, date of trip, and transportation provider and a list of
          all standing order Medicaid recipients by name, Medicaid number, and
          address;

     (e)  Provide to DMAS or its designee, in hard copy and electronically, a
          current facilities list;

     (f)  Provide DMAS or its designee documentsdescribed in subsections(a)
          through (e) hereof within two (2) business days after the execution
          of this Settlement Agreement;

     (g)  Reasonably cooperate with DMAS and its designee in the transition
          of non-emergency transportation brokerage services in Regions 2, 3, 4
          and 7 of the Commonwealth to another Contractor on December 16, 2002;
          and

     (h)  Immediately upon execution of the Settlement Agreement, DynTek shall
          begin the process of assigning, transferring and conveying to the
          Commonwealth or its designee all of its right, title and interest in
          its toll-free phone numbers for trip reservations, free and clear of
          all liens, debts and encumbrances to the extent permitted under its
          telephone contracts, and such assignment, transfer and conveyance
          shall be completed by the Cancellation Date.

                                       23
<PAGE>

4.   Within forty five (45) days of the approval of the Settlement Agreement by
     the Governor, DynTek shall pay not less than twenty percent (20%)of all
     transportation claims received by it for services which (i) were pre-
     authorized by DynTek, (ii) were provided prior to the Cancellation Date,
     (iii) have been verified by DynTek to be payable under the terms of the
     applicable provider contract and the Contract, to have been provided in
     conformance to DynTek's authorization, and to have no other legitimate
     basis for denying payment (the "Certified Claims"). Within ninety (90) days
     of the approval of the Settlement Agreement by the Governor, DynTek shall
     pay not less than fifty percent (50%) of the certified claims. Within one
     hundred and eighty (180) days of the approval of the Settlement Agreement
     by the Governor (the "Payment Period"), DynTek shall pay the balance of the
     Certified Claims.  Notwithstanding the release of DynTek by DMAS, if any
     Certified Claims remain unpaid by DynTek at the expiration of the Payment
     Period, DMAS shall have the right to enforce DynTek's payment obligations
     hereunder in an action for specific performance. Nothing contained herein
     shall be construed to release, discharge or otherwise diminish the
     obligations of DynTek to make payments of legitimate claims presented to it
     by providers of transportation services.

5.   Nothing contained herein shall be construed, and the parties shall take no
     action, to either waive, grant, diminish or expand any right, or to
     release, discharge or diminish or expand, create or increase any
     obligation, created by, secured by, or otherwise related to that certain
     bond #216933 issued by National Union Fire Insurance Company of Pittsburgh,
     PA and others and on which DMAS is the Obligee and Owner (the "bond").

6.   DynTek, for itself and its principals, officers, directors, employees,
     agents, affiliates, successors and assigns hereby releases and forever
     discharges any and all claims whatsoever, known or unknown, contingent
     or otherwise, in law or in equity, which DynTek has ever had, now has, or
     in the future may have against DMAS (and/or the Commonwealth), as well as
     its respective principals, officers, directors, employees, agents,
     affiliates, successors and/or assigns, based upon or resulting from any
     matter relating to or arising out of the Contract and further covenants and
     agrees not to institute any administrative or legal proceedings based upon
     or related to or arising out of the Contract; provided, however, that this
     release shall not apply to any claim based on or arising out of this
     Settlement Agreement.

7.   Once DynTek has complied with the obligations set forth in paragraph 2 and
     3 to DMAS' reasonable satisfaction, DMAS shall immediately execute a
     release of its claims against DynTek, which is attached hereto as Exhibit
     A, and shall forego all proceedings related to debarment in the
     Commonwealth. Nothing contained in this Settlement Agreement shall be
     construed to release DynTek from any claim for sums expended or damages
     suffered by DMAS in obtaining a new Contractor for Regions 2, 3 4 and 7
     unless and until DynTek has timely complied with the obligations under
     Paragraphs 2 and 3 The failure of DynTek to comply with said obligations
     shall entitle DMAS to assert against DynTek any and all claims and defenses
     that DMAS may be entitled to assert under this Settlement Agreement and/or
     that DMAS would be entitled to assert in the absence thereof, and DynTek
     shall be entitled to assert against DMAS any and all claims and defenses
     that it may be entitled to assert under this Settlement Agreement and/or it
     would be entitled to assert in its absence. In the event that DMAS does not
     execute the release attached as Exhibit A, and brings a claim that is
     barred by said release, if executed, then DynTek's release as set forth
     in Paragraph 6 shall be null and void.

                                       24
<PAGE>

8.   This Settlement Agreement shall be deemed the product of joint authorship
     and shall not be construed against any party upon the ground of authorship.

9.   The terms of this Settlement Agreement are contractual and not merely a
     recital, and there are no other agreements, understandings, or
     representations made by the parties, except as expressly stated in this
     document.

10.  This Settlement Agreement shall be governed by and interpreted and
     construed in accordance with the laws of the Commonwealth of Virginia.
     Each provision is intended to be severable. If any provision is held
     invalid, void or unenforceable by a court of competent jurisdiction for
     any reason whatsoever, such ruling shall not affect the validity of the
     remainder of the Settlement Agreement so long as such enforcement is
     practical and is otherwise supported by adequate consideration;
     provided, however, that DynTek's release shall always be void if DMAS'
     release is not issued or if it is held invalid, void or unenforceable
     for any reason as the mutual release of the parties is the essence of
     this Settlement Agreement.

11.  Any party shall be entitled to seek relief in the Circuit Court for the
     City of Richmond for the purpose of enforcing the provisions of this
     Settlement Agreement and that Court shall have exclusive original
     jurisdiction over disputes arising under this Settlement Agreement.

12.  This Settlement Agreement constitutes the entire agreement of the parties
     and may not be amended or modified orally.

13.  This Settlement Agreement and the rights and obligations of the parties set
     forth in the agreement shall be binding upon and inure to the benefit of
     the Commonwealth and DynTek and their respective successors and assigns.

14.  This Settlement Agreement shall become effective upon its execution by the
     parties and its approval by the Attorney General and the Governor of
     Virginia pursuant to Virginia Code Section 2.2-514. In the event said
     approval is not obtained within 15 days, DMAS shall pay DynTek the sum of
     $100, which sum DynTek agrees shall be sufficient to bind it to the terms
     of this Settlement Agreement for an additional period of 21 days pending
     such approval. If this Settlement Agreement is not so approved within this
     additional period, it shall be null and void unless otherwise agreed by the
     parties. DMAS represents and warrants that it will seek such approvals in
     good faith and is aware of no information which would preclude approval as
     of the date of the execution of this Settlement Agreement.

15.  It is agreed by and among each of the parties that nothing herein shall be
     deemed to be evidence, or an admission or concession on the part of any
     party, of any liability or wrongdoing whatsoever.

                                       25
<PAGE>

THE PERSONS SIGNING THIS SETTLEMENT AGREEMENT ARE AUTHORIZED REPRESENTATIVES OF
DYNTEK AND THE COMMONWEALTH AND ACKNOWLEDGE THAT EACH PARTY AGREES TO BE BOUND
BY THE TERMS AND CONDITIONS OF THE SETTLEMENT AGREEMENT.

DYNTEK SERVICES, INC.

By:
   -----------------------------------------------------------

Title:
      --------------------------------------------------------

Date:
     ---------------------------------------------------------

COMMONWEALTH OF VIRGINIA, DEPARTMENT OF
MEDICAL ASSISTANCE SERVICES


By:
   -----------------------------------------------------------

Title:
      --------------------------------------------------------

Date:
     ---------------------------------------------------------

                                       26

<PAGE>


                                    EXHIBIT A

                           RELEASE BY THE COMMONWEALTH

     The  Commonwealth of Virginia,  Department of Medical  Assistance  Services
("DMAS"),  on  behalf  of  itself  and  its  principals,   officers,  directors,
employees,  agents,  affiliates,  successors  and assigns  hereby  releases  and
forever discharges any and all claims whatsoever,  known or unknown,  contingent
or otherwise,  in law or in equity,  which DMAS has ever had, now has, or in the
future  may  have  against  DynTek  Services,   Inc.,  and/or  their  respective
principals,  officers,  directors,  employees,  agents,  affiliates,  successors
and/or  assigns,  based upon or resulting from any matter relating to or arising
out of Contract Number 80649  (the"Contract")  and further  covenants and agrees
not to institute any  administrative  or legal  proceedings,  including  without
limitation debarment proceedings, based upon or related to or arising out of the
Contract;  provided, however, that nothing contained in this Release shall apply
to any obligation or claim based on or arising out of the Settlement  Agreement,
including but not limited to, the obligations contained in paragraphs 4 and 5 of
the Settlement Agreement.

COMMONWEALTH OF VIRGINIA, DEPARTMENT OF
MEDICAL ASSISTANCE SERVICES


By:
   -----------------------------------------------------------

Title:
      --------------------------------------------------------

Date:
     ---------------------------------------------------------


                                       27

<PAGE>
                                                                    Exhibit 10.3

                                 PROMISSORY NOTE

$95,000.00                                                    December 31, 2002

     DynTek, Inc. (the "Maker"), for the value received, thereby promises to pay
to the order of EXDS,  Inc., or its  successors or assigns (the  "Holder"),  the
principal sum of Ninety-Five Thousand Dollars  ($95,000.00),  payable over three
(3) months in the  following  installments:  (i) February 10, 2003 the amount of
Twenty  Thousand  ($20,000),  (ii)  February 28, 2003 the amount of  Twenty-Five
Thousand  ($25,000) and (iii) March 31, 2003 the amount of Twenty-Five  Thousand
($25,000).

     All payments  hereunder  shall be made without  set-of or  counterclaim  by
Maker and shall be made to Holder in lawful  money of the  United  States and in
collected  funds on the date due at such  other  place as may be  designated  by
Holder to Maker in writing.

     Maker  waives  presentment  and  demand  for  payment,  protest,  notice of
protest,  notice  of  nonpayment,  notice  of  dishonor,  notice  of  intent  to
accelerate, notice of acceleration,  and diligence in collection and consents to
all extensions  without notice for any period or periods of time before or after
maturity,  without prejudice to Holder. Holder shall have the right to grant any
extensions of time for payment of any  indebtedness  hereunder,  or to grant any
other  indulgences  or  forebearances  whatsoever,  without  notice and  without
affecting  the  liability of Maker.  No delay or omission on the part of Holder,
nor shall any delay,  omission, or waiver on any one occasion be deemed a bar to
or waiver of the same or any other right on any future occasion.

     In the event Maker fails to make any installment  payment of principal when
due,  Holder shall give Maker  written  notice of default,  and if Maker has not
fully paid such past-due  payment within ten (10) days after such default notice
is given,  Holder  shall  have the right to  immediately  accelerate  the unpaid
balance  of this  Note.  If Holder  gives  Maker  notice of a default in payment
hereunder, and Maker has not cured such default within ten (10) days, all unpaid
amounts hereunder, whether or not such installments are themselves in default or
whether or not the unpaid balance of this Note has been accelerated,  shall bear
interest, compounded monthly, at the lesser of (i) ten percent (10%) or (ii) the
maximum interest rate allowed by law.

     This Note may be prepaid, in whole or in part, at any time without penalty;
provided that any partial  prepayment shall be applied to principal payments due
in inverse order of maturity.

     Maker  shall be  liable to Holder  and shall pay to Holder  immediately  on
demand,  as part of its  liability  under this Note,  all  reasonable  costs and
expenses of Holder,  including  reasonable  attorneys' fees and disbursements of
Holder's counsel,  incurred  subsequent to any payment default or enforcement of
Holder's  rights under this Note, or the attempted  collection or enforcement of
Holder's  rights under this Note,  whether within or apart from any legal action
or proceeding and whether or not suite is actually instituted.

                                       28
<PAGE>

     All  notices,  requests  and  demands to or upon  Maker or Holder  shall be
effective when actually  received if made in writing and delivered by hand or by
overnight courier, or when confirmed receipt if transmitted by telex,  telegram,
telecopy,  e-mail or other form of rapid  transmission  if notices given by such
means  of  communication  are  capable  of  being  confirmed  upon  delivery  by
electronic  means,  or five days after being sent by first  class mail,  in each
case prepaid and addressed to the following  address or to such other address of
Holder or Maker as may be  hereunder  notified  by Holder or Maker to the other:
(i) if to Maker, at:
                           DynTek, Inc.
                           Suite 250
                           18881 Von Karman Avenue
                           Irvine, California 92612
                           Attention:  Chief Financial Officer
                           Fax No.:  949-203-8524

                           and (ii) if to Holder, at:
                           c/o Brook Taube
                           T3 Group LLC
                           440 Locust Street
                           San Francisco, CA 94118
                           Fax No.: 509-463-2274

     This Note shall  insure to the  benefit  of, and be  binding  upon,  Maker,
Holder,  any owner of this Note, and their  respective  successors and permitted
assigns. Whenever any of the parties hereto is referred to, such reference shall
be deemed to include the successors  and assigns of such party,  and in the case
of Holder, any other owner of this Note.

     No change, modification or amendment to this Note shall be effective unless
made by an instrument in writing  signed by both Maker and Holder,  and any such
change,  modification  and amendment  shall be narrowly  construed and effective
only to the extend expressly set forth in such instrument.

     This Note shall be governed as to validity,  interpretation,  construction,
effect and in all other  respects by the laws and  decisions of the State of New
York.
                               DynTek, Inc.
                               By:               /s/ James Linesch
                               ---------------------------------------
                               James Linesch
                               Executive Vice President, Chief Financial Officer

                                       29
<PAGE>




                              SETTLEMENT AGREEMENT

     THIS AGREEMENT,  entered into as of this 31st day of December, 2002, by and
between the estate of EXDS, Inc. ("EXDS"), and DynTek, Inc, ("DynTek");

     WHEREAS  effective  September  28, 2001,  EXDS and DynTek  entered into the
Exodus Alliance Accounts Receivable  Collection Agreement and the Asset Purchase
Agreement between Exodus Communications,  Inc. as Seller and TekInsight.com, Inc
(renamed  DynTek,  Inc. on December  27, 2002) as  Purchaser,  pursuant to which
DynTek agreed to assume the operations  and purchase the business  assets of the
Seller's Gulf Professional Services Business  (collectively,  the "AGREEMENTS");
and

     WHEREAS the Exodus Alliance Accounts Receivable  Collection Agreement ended
on  December  31,  2002,  with an amount due to DynTek,  and the Asset  Purchase
Agreement between Exodus  Communications,  Inc. and DynTek, Inc. was approved by
the United States  Bankruptcy  Court for the District of Delaware on February 6,
2002; and

     WHEREAS  DynTek  desires to  individually  settle and  resolve  any and all
claims other  liabilities  or causes of action that EXDS may have against  them,
and EXDS likewise wishes to settle all such claims, allegations,  liabilities or
causes of action that DynTek may have against them, all such  settlements  being
without admission of wrongdoing;

     NOW, THEREFORE, the parties, for good and valuable consideration identified
herein,  do hereby  agree to release and  discharge  each other from any and all
liabilities related to the AGREEMENTS, all as more specifically described in the
release contained in Section 2 below;

1.   Consideration

Within 2 days from the execution of this Agreement, DynTek shall deliver the
following consideration to EXDS:

     1.1  DynTek shall pay to EXDS the amount of $5,000 in cash, which payment
          shall be wired to EXDS's designated account;

     1.2  DynTek shall deliver to EXDS a DynTek promissory note, in the form
          attached hereto, under which it will be obliged to pay EXDS a total
          of $95,000 over three months. The install payments due are as follows:
                            February 10, 2003    $20,000
                            February 28, 2003    $25,000
                            March 31, 2003       $25,000

2.        Releases

Effective  upon  the  execution  of  this  Agreement  and  receipt  of  (A)  the
consideration  described on Section 1.1 above and (B) all payments due under the
promissory note referred to in Section 1.2 hereof,  the parties hereby agrees as
follows:

                                       30
<PAGE>

     2.1  EXDS hereby releases, discharges and forever excuses DynTek, its
          affiliated organizations, and all of their officers,
          directors, employees, representatives, stockholders and agents, from
          any and all liability, claim, or cause of action in any way related to
          or arising out of the AGREEMENTS, and agrees to defend and hold all of
          the aforementioned harmless from any released claim or liability that
          may be asserted against any of them by any subcontractor, vendor,
          affiliate, officer, employee, director, stockholder or other
          representative of EXDS, relating to the AGREEMENTS.

     2.2  DynTek hereby releases, discharges and forever excuses ESDS, its
          affiliated organizations, and all of their officers, directors,
          employees, representatives, stockholders and agents, from any and all
          liability, claim, or cause of action in any way related to or arising
          out of the AGREEMENTS.

     3.   Miscellaneous Provisions

     3.1  This Agreement shall be governed, and its terms construed, in
          accordance with the laws of the State of new York.

     3.2  This Agreement represents the only agreement among the parties
          concerning the subject matter described herein and supercedes and
          replaces all prior agreements concerning such matters, whether written
          or oral.

     3.3  No amendment to this Agreement shall be effective unless it is
          finalized in written form and signed by all the parties hereto.

     3.4  All parties acknowledge that they have been represented by counsel in
          the negotiation and finalization of this Agreement, and in particular
          the consequences of the releases contained herein.

     3.5  Facsimile copies of signatures on this Agreement shall be accepted by
          the parties hereto as original signatures.

         IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
         the year and date set forth above.

         DynTek, Inc.

         By:      /s/ James Linesch
                  James Linesch
                  Executive Vice President, Chief Financial Officer

         T3 Group LLC, as agent for the ESDS estate

         By:      /s/ Brook Taube
         Name:    Brook Taube
         Title:   Partner



                                       31

<PAGE>


                                                                    Exhibit 99.1

                Certification Pursuant to 18 U.S.C. Section 1350,
                    As Adopted Pursuant to Section 906 of the
                          Sarbanes - Oxley Act of 2002

In connection with the Quarterly Report of DynTek,  Inc., a Delaware corporation
(the "Company"),  on Form 10-Q for the quarter ended September 30, 2002 as filed
with the Securities and Exchange  Commission on the date hereof (the  "Report"),
the undersigned,  the Chief Executive  Officer,  hereby certifies pursuant to 18
U.S.C.  ss.1350 as adopted pursuant to Section 906 of the  Sarbanes-Oxley Act of
2002 that:

(1) the Report of the  Company  filed  today  pursuant  to Section  13(a) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), fully complies
with the requirements of Section 13(a) of the Exchange Act; and

(2) the  information  contained in the Report fairly  presents,  in all material
respects, the financial condition and results of operations of the Company.



                                                         /s/ Steven J. Ross
                                                         Steven J. Ross
                                                         Chief Executive Officer
                                                         February 19, 2003

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<PAGE>



                                                                    Exhibit 99.2

                Certification Pursuant to 18 U.S.C. Section 1350,
                    As Adopted Pursuant to Section 906 of the
                          Sarbanes - Oxley Act of 2002

In connection with the Quarterly Report of DynTek,  Inc., a Delaware corporation
(the "Company"),  on Form 10-Q for the quarter ended September 30, 2002 as filed
with the Securities and Exchange  Commission on the date hereof (the  "Report"),
the undersigned,  the Chief Financial  Officer,  hereby certifies pursuant to 18
U.S.C.  ss.1350 as adopted pursuant to Section 906 of the  Sarbanes-Oxley Act of
2002 that:

(1) the Report of the  Company  filed  today  pursuant  to Section  13(a) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), fully complies
with the requirements of Section 13(a) of the Exchange Act; and

(2) the  information  contained in the Report fairly  presents,  in all material
respects, the financial condition and results of operations of the Company.


                                                         /s/ James Linesch
                                                         James Linesch
                                                         Chief Financial Officer
                                                         February 19, 2003






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