================================================================================
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-K

     Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934
                   FOR THE FISCAL YEAR ENDED DECEMBER 31, 2000
                           Commission File No.00-24055
                            DA CONSULTING GROUP, INC.
               (Exact name of registrant as specified in charter)

TEXAS                                                       76-0418488
(State  or other jurisdiction of                            (IRS employer
incorporation  or  organization)                            identification  No.)

ONE  EXETER  PLAZA,  4TH  FLOOR
BOSTON,  MASSACHUSETTS                                      02116
(Address  of principal executive office)                    (Zip Code)

      Registrant's telephone number, including area code:   (617) 375-2800

           Securities Registered Pursuant to Section 12(b) of the Act:
                                      NONE

           Securities Registered Pursuant to Section 12(g) of the Act:

                                 Title of Class:
                                 ---------------

                     COMMON SHARES, PAR VALUE $.01 PER SHARE

     Indicate  by  check  mark  whether the Registrant (1) has filed all reports
required  to  be  filed by Section 13 or 15(d) of the Securities Exchange Act of
1934  during  the  preceding  12  months  (or  for  such shorter period that the
Registrant  was required to file such reports), and (2) has been subject to such
filing  requirements  for  the  past  90  days.
Yes  X  No
    ---    ---

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

     As of March 29, 2001 the aggregate market value of the voting stock held by
     non-affiliates  was  $5,060,000.
     As  of  March  30, 2001, 8,418,604 shares of common stock were outstanding.

                       DOCUMENTS INCORPORATED BY REFERENCE

Specified portions of the definitive Proxy Statement for the 2001 Annual Meeting
           of Stockholders of DA Consulting Group, Inc. are incorporated
                    by reference in Part III of this report.
================================================================================


                                      -1-
<PAGE>
<TABLE>
<CAPTION>
                                       DA CONSULTING GROUP, INC.
                                               FORM 10-K

                                           TABLE OF CONTENTS

                                                PART I

<S>                                                                                                 <C>
Item 1.     Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   3
Item 2.     Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  14
Item 3.     Legal Proceedings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  15
Item 4.     Submission of Matters to a Vote of Security Holders. . . . . . . . . . . . . . . . . .  15


                                                PART II

Item 5.     Market for the Registrant's Common Equity and Related Stockholder Matters  . . . . . .  15
Item 6.     Selected Financial Data  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  16
Item 7.     Management's Discussion and Analysis of Financial Condition and Results of Operations.  17
Item 7A.    Quantitative and Qualitative Disclosures About Market Risk . . . . . . . . . . . . . .  23

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

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


                                               PART III

Item 10.    Directors and Executive Officers of the Registrant . . . . . . . . . . . . . . . . . .  23
Item 11.    Executive Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  24
Item 12.    Security Ownership of Certain Beneficial Owners and Management . . . . . . . . . . . .  24
Item 13.    Certain Relationships and Related Transactions . . . . . . . . . . . . . . . . . . . .  24


                                               PART IV

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

SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  26
</TABLE>


                                      -2-
<PAGE>
                                     PART I

ITEM  1.     BUSINESS

     DA  Consulting  Group,  Inc. ("DACG(TM) together with its subsidiaries, the
"Company")  is  a  leading  international  provider  of  employee  education and
software  solutions  to  companies investing in business information technology.
Through  its  offices in seven countries, DACG delivers customized services for:

     -    documentation  and  training  necessary for implementation of extended
          enterprise  software  applications;
     -    technical and non-technical employee education and continuous learning
          programs;
     -    e-Learning  applications  such as computer-based-training and learning
          management  systems;  and
     -    consulting  on human resource management, change management and change
          communications.

     Since  1988,  the  Company  has  provided  services  to  over  650 clients,
including  more  than  125  of  the  Fortune Global 500. Customers have included
companies  such  as  Guinness,  Compaq,  BASF,  Nabisco,  Eastman Kodak, Corning
Consumer  Products, Scott Paper Limited, Comp USA, Great Spring Water of America
(Perrier Worldwide) and McKessonHBOC.  The Company's client base is diversified,
with  its  largest  client representing less than 8% of the Company's revenue in
2000. Recognizing the global nature of the information technology market and the
importance  of being able to serve multi-national clients, the Company has built
a  substantial  international  presence  and provides services in North America,
Europe  and  Asia-Pacific.  The  Company has offices in the U.S., Canada, United
Kingdom,  France,  Germany,  Australia  and  Singapore.

     DACG  was  founded in 1984 in Houston, Texas as an employee support company
providing  documentation  services  to  the  oil  and gas industry. In 1988, the
Company expanded its employee support services to include training in connection
with one of the first major English language installations of SAP AG software in
the world. During the 1990's, enterprise resource planning (ERP) represented the
substantial  market  opportunity  for  the  Company's  services.  DACG  made ERP
end-user  support  its primary focus. In 2000, revenue from clients implementing
SAP  software  represented  90%  of  the Company's billed consulting revenue. By
focusing  on  end-user  support  services,  the  Company  has been successful in
institutionalizing  its knowledge base and has developed proprietary content and
reference  materials,  the  DA  Foundation(TM),  that  are applied in developing
customized  solutions  for  each  client.  DACG  has  also  developed  DA
Cornerstone(TM),  the  Company's  methodology  for  delivering consistently high
quality  service  to  its clients. DACG has broadened its complement of end-user
support  services  by  also  providing  Customer  Relationship  Management (CRM)
solutions  for  the  major  CRM  applications, including SAP, Vantive and Seibel
systems. During the fourth quarter of 2000, the Company introduced its web-based
learning management system - Dynamic IQ(TM), a flexible learning environment for
web-enabled,  extended-enterprise  continuous  learning  solutions.

MARKET

     DACG  participates in three marketplaces - education, software and end-user
support  for  applications  in  enterprise  resource  planning  (ERP),  customer
relationship  management  (CRM)  and e-Learning.  According to industry experts,
these  markets  had a combined value in excess of $8 billion, worldwide in 2000.
Growth of these marketplaces is estimated at a compound 11% for ERP, 33% for CRM
and  more  than  60%  for  e-Learning.  There  are many service providers in the
education  and  end-user support markets and the providers that directly compete
with  the  Company  include  software  developers,  computer training companies,
consulting  firms,  and  internet-based  learning  companies.  DACG  also  has
competitive  pressure from large international system integrators and technology
vendors  that  provide end-user support programs to supplement their proprietary
software.

     The Company's growth in past years was directly impacted by the significant
growth  experienced within the ERP market for first time implementations. DACG's
ability  to  increase  revenue  in  the ERP and CRM training markets is directly
correlated  to  the  respective new and upgrade ERP and CRM license sales in the
countries  in  which  it operates. The Company believes the turn-down in the ERP
marketplace  in  the  second half of 1999 and through the first half of 2000 was
caused  by  the  diversion  of  resources  to Y2K compliance. This resulted in a
significantly  negative  impact on the demand for DACG's services. The worldwide
trend  for  ERP  solutions  has  moved  towards  upgrades that take advantage of
web-enabled  software  and  applications  which  link  the  back-office with the
front-office  and  the  extended  enterprise.  Growth  in Europe is additionally
driven  by  the  regulatory  need  for  companies  operating within the European
Monetary Union (EMU) region to implement EMU-compliant systems by February 2002.


                                      -3-
<PAGE>
     Most  of DACG's current revenue stems from major upgrades to ERP systems as
well  as  new  implementations  of  CRM  applications.  DACG  is  deriving
proportionately  increased  revenue  from its proprietary software applications,
including  electronic  performance  support systems, computer-based learning and
CD-ROM  based  learning  applications.

     E-Learning is a major new marketplace for DACG.  The marketplace is divided
into  software,  content  and  services  and  there  are few companies providing
complete  solutions  across  all  three  areas.  Software  includes  learning
management  systems  (LMS) as well as computer-based-training (CBT) applications
and  virtual classrooms.  Content services are further divided into technical or
"hard"  skills  and  non-technical or "soft" skills.  Services include technical
implementation,  content  customization  and  human  resource  consulting.  Most
growth  is  forecast  to  occur  in  services  and  in  soft  skills  content.

     During  2000,  the Company invested significantly in the development of its
own proprietary learning management system, Dynamic IQ(TM).  The Company intends
to  leverage  its  relationship  with  the  world's  largest  companies to drive
implementations  of its software and related services.  In the fourth quarter of
2000,  the  Company  signed an agreement with SkillSoft to distribute their soft
skills content via its LMS implementations.  The Company expects to sign further
content  distribution  agreements  during  2001.

BUSINESS  STRATEGY

     The  Company's  mission  is  to enable the Global Fortune 2000 to transform
into  continuous  learning  organizations  through  the deployment of education,
change  management  programs  and  supporting  infrastructure  and  learning
applications.  Its  execution  strategy  revolves  around  profitable growth and
diversification  within  its  chosen  markets  and  the niche of corporate adult
education.

Grow  Core  Business  and  Diversify  into  Related  Applications

     The  core  of  the  Company's  business  will  continue  to be professional
consulting  services  for  employee  development  and  performance  support  for
technology  systems  implementations. DACG will continue to support the roll-out
of  back  office  systems  such  as  SAP,  PeopleSoft, J. D. Edwards, and Oracle
software,  as  well  as  increasing  services  in  front  office systems such as
customer  relationship  management.  As  SAP  is  the largest ERP vendor and the
Company  has a significant portion of current core business in SAP training, the
Company's  business  is  dependent  on  the  continued  success  of  SAP.

     At $2.8 billion in 2000, the CRM training marketplace has overtaken the ERP
training  marketplace  in size and is forecast to grow at a compound 33% through
to 2004.  While there is a need for CRM technology implementation training, most
growth  will  occur  in the areas of CRM soft skills - areas such as negotiation
skills  and  customer care.  DACG will be positioning its CRM offering alongside
its  soft  skills  e-Learning content and its Dynamic IQ(TM) learning management
system  in  order  to  capitalize  on  this growth opportunity.  The Company was
engaged  in  three  CRM  projects  during 2000 and expects the proportion of its
revenue  derived  from  CRM  engagements  to  increase  during  2001.

     The  Company  maintains offices in the three principal geographies of North
America,  Europe  and  Asia-Pacific.  DACG believes that it must continue with a
global  presence  in  order  to attract contracts from multi-national and global
companies.  During  2000,  the Company ceased operations in South Africa, Mexico
and  Latin  America,  preferring  to focus management attention on the developed
economies  where  consulting  services  are  most  highly  valued.

     The  market  for the Company's core business has broadened from the Fortune
Global  500  to  include  the Fortune 2000, and during 2001 the Company plans to
diversify  further  into  the  middle  market.


                                      -4-
<PAGE>
Maintain  Independence  and  Leverage  Existing  Client  Relationships

     The  Company  provides  its consulting and software services independent of
the  marketplace  for  ERP,  CRM and e-Learning solutions providers. The Company
provides its customers with solutions that are best suited to their environment,
budget  and  technological  preferences.  DACG  continues  to  work  with  SAP,
PeopleSoft,  Centra,  Interwise  and  other  companies in the deliverance of its
solutions.

     Over nearly two decades, DACG has provided services to more than 650 of the
global  Fortune  2000  companies.  A  key  component  of  DACG's  strategy is to
leverage  these  relationships,  particularly  as  these  companies  determine
strategies  to  transform into continuous learning organizations.  Relationships
with  these  companies  have  proven  to  be  a key source of business leads and
referrals.  During  2000, around 50% of DACG's business was derived from past or
existing  customers.  The  Company  believes  that  its  brand  recognition  and
reputation  are  important  assets  in  the  learning  marketplaces  and are key
differentiators  with  its  e-Learning  competitors.  The main benefit of DACG's
market  position  is  translated  into  a proportionately lower need to spend on
sales  and  marketing.

Diversify  into  e-Learning

     The  Company  will  diversify  into  e-Learning  applications through rapid
deployment  of  its  Dynamic  IQ(TM) learning management software.  DACG is also
developing  Human  Resource  (HR)  services for performance-related employee and
extended  enterprise  management.  Additionally,  the  Company  is  developing
relationships  with  content providers, such as SkillSoft, to provide a complete
range  of  e-Learning  solutions.

     The  corporate  e-learning  marketplace  is  currently estimated to be $1.7
billion  in  the  U.S.  alone  and is forecasted to grow to $11 billion by 2003,
which  is  an  estimated  compound  annual  growth  rate (CAGR) of 65%. Industry
estimates  put the European marketplace for e-Learning services at $4 billion by
2004.  Development  of  the company's web-based learning system, Dynamic IQ(TM),
was the major focus for the research and development department during 2000. The
company  launched  Dynamic IQ(TM) during the fourth quarter of 2000. The Company
installed  its  first beta site with a client in France during the first quarter
of  2001  and  expects  to  derive  an increasing proportion of its revenue from
e-learning  software,  services  and  content.

PRODUCTS  AND  SERVICES

     The  Company  delivers  employee support solutions designed to maximize the
return on clients' business information technology investments while taking into
account  each  client's  individual  needs,  resources,  and  requirements.  New
business  software  has a significant direct impact on the working patterns of a
corporation,  which  must  be  managed in relation to both implementation of the
software and support of that software over time. The Company performs a thorough
review  of  the procedures and jobs that employees will need to perform and uses
this  information  to  develop  the  requisite end-user support solution for the
client.  The  Company  offers DA Passport for clients to provide their employees
context-sensitive  help  on-demand  at  their  desktop computers. Such solutions
utilize  the  Company's  proprietary  methodology,  DA  Cornerstone(TM),  in the
delivery  of  services  consisting  of  change  communications,  education,  and
performance  support  programs  developed  by  the  Company.

Learning  and  Change  Management

     During  2000,  DACG  expanded  its change communication services to provide
consulting  in  change  management  as  companies  transform  into  learning
organizations.  Companies  transforming  themselves  into  continuously learning
organizations  commit  themselves  to  long  term change. Clients' employees are
affected  by  this  change, seeing it on the desktop in the form of new software
functionality  and  in  day-to-day  business  activities  in  the  form  of  new
procedures  and  policies.  Typical  approaches to managing this change focus on
establishing  executive  management  support.  However,  the  key  to successful
cultural  transformation  is obtaining the support of employees and those within
the  extended enterprise, such as customers and suppliers. Effective utilization
of  technology  is  critical to the success of the learning organization. Common
change  communications  deliverables  provided  by  the  Company  to its clients
include  kick-off  meetings and speeches, facilitated collaborative work groups,
multimedia  presentations,  video  presentations,  and  newsletters.  These
deliverables,  in  addition  to providing critical information, help to ensure a
successful  and  ongoing  cultural  transformation.


                                      -5-
<PAGE>
Education

     The  Company develops educational programs specific to each client's needs,
taking  into account the client's infrastructure and resources, the scope of the
client's  information  technology system, and the client's language and cultural
requirements.  In order to influence the way an employee works and optimizes his
or  her  utilization  of  a  new system, educational programs are developed that
focus  on  specific  end-user  job  responsibilities,  as well as on the overall
business  processes  that impact the end-user. In developing educational content
for  a client, the Company utilizes its DA Foundation(R) library, which contains
training  content  to address job roles and processes common to complex business
software.

     The  Company consults with the client to determine the appropriate media to
use  for  delivering  the  educational  content:  instructor-led  training,
computer-based  training,  and/or distance learning. Virtually all the Company's
clients utilize instructor-led training courses, which the Company customizes to
meet  the  particular  client's  specifications  and  needs.

     Many  companies, particularly those with large and geographically dispersed
operations,  are  increasingly  seeking  ways  to use computer-based training to
decrease  costs  and  minimize employee time away from the job. DACG offers both
custom and standardized computer-based training modules, utilizing the resources
of  the  DA  Foundation  library  and  standardized courseware co-developed with
SmartForce  as  well  as  soft  skills  from  SkillSoft.

     DACG  offers  both  synchronous  and  asynchronous  capabilities  for
computer-based distance learning. Using Symposium software from Centra Software,
Inc.,  DACG  provides  synchronous  distance  learning,  where many students can
follow  a  single  event.  DACG  provides asynchronous distance learning through
custom  and  SmartForce courses that allow students to work independently and at
their  own  pace.  Both  of these methods are used by companies with remote user
audiences  and require only basic information technology infrastructures because
they  involve  distributing  content  by  using  wide  area  networks, corporate
intranets,  and  audio conferencing technology.  Typically a client implementing
an  ERP  system  or  another  new  business  technology  will  have the required
infrastructure.  Distance  learning  or  "e-learning" is effective in situations
where  travel,  time  away  from  work  and  cost  are  important.

Performance  Support

     A  critical  component  of  the  Company's end-user support solution is the
documentation of business processes that affect end-users. This documentation is
designed to assist workers in performing their jobs after training. In utilizing
a  new  system, end-users of technology frequently encounter situations in which
they require assistance. In order to limit workers' downtime and provide workers
with easy access to assistance, on-line references containing relevant policies,
processes,  and  procedures  are  utilized.  In  coordination with the design of
educational  programs,  the Company works with each client to assess the ongoing
documentation  and  performance  support  needs  of  the  particular audience of
end-users.  Utilizing  the  DA  Foundation,  the  Company  then develops support
content  for  the client, creating a clearly defined set of policies, processes,
and  procedures  relating  to  the  particular  business  software  application.

     Based  upon the client's information technology infrastructure, budget, and
timing  needs,  the  appropriate  media  for performance support are determined.
Quick  reference  guides  and  printed  documentation are used as hard copies to
deliver  performance  support  for  the employee. Those clients who have limited
time frames in which to develop an end-user support solution most often use this
type  of  performance  support  solution.  These  clients  can migrate to a more
technologically  advanced  solution  at  a  later  date.  More  sophisticated
performance  support  solutions  can be delivered through the client's corporate
intranet,  where  DACG  will  design  and  maintain a repository of the end-user
support  deliverables.

     DACG's  most  sophisticated  performance  support solution is an electronic
performance  support  system  ("EPSS")  which  provides  comprehensive  end-user
support on demand at the desktop so that end-users can minimize interruptions in
seeking  help  or  information  relating to a job task. End-users can access the
EPSS  from  their  own  desktop  and find the answers to the questions they have
about  a  particular  task.  Building  a  comprehensive  EPSS  solution  can  be
challenging  and  costly. To simplify its development, the Company has created a
proprietary  software technology, DA Passport. DA Passport is context sensitive,


                                      -6-
<PAGE>
which  means  it  can track the location of the client end-users in the client's
ERP  system,  in  order  to  provide support based on the particular application
being  run,  thereby  allowing  the  Company  to  create customized ERP end-user
support accessible at a transactional or task level. The Company can link system
tasks,  business  procedures, training, and computer-based training files to ERP
transactions  using  the DA Passport technology to provide sophisticated support
to  end-users.  A  DA Passport solution is typically recommended to clients with
corporate intranets, although the Company can consult with a client to construct
a  corporate  intranet  site  if  required.

Web-based  Learning  Management  System:  Dynamic  IQ(TM)

     Dynamic  IQ  is  designed  to  optimize  an  organization's  learning  and
development  process  in  order  to  maximize individual performance and achieve
defined  business  objectives.  It  is  a  customizable,  collaborative  and
interactive  system  that  will  help  organizations  make  their  investment in
employee  development  more  efficient,  effective  and  at  a lower cost, while
helping  individuals  meet  their  career  goals.

     Dynamic  IQ is designed to track and enhance employee performance, learning
and  development  through systematic assessment testing and engaging interactive
online  content.  The  primary  objective of Dynamic IQ is to leverage web-based
technologies  to  give  enterprises  a  competitive  advantage  by  increasing
measurable  workforce performance through competency-based training and tracking
tools.

     DACG's  competency-based  approach  to specific training links employees to
the  roles  they  perform.  Dynamic  IQ  is designed around building specialized
learning  plans  to  provide  targeted  courseware  and support learning objects
applicable  to each employee's job role.  For example, when a student enters the
system,  it displays a personalized development plan, listing only those courses
required  to  help  the  individual  meet  his  or  her  performance  goals.

     DACG's  unique  approach  includes:

     -    Customizable  web-front  end  where  the  users  will  log  in,  view
          personalized  development  plans  based  on  their  role  in  the
          organization,  as  well  as  register, enroll, launch courses and take
          associated  assessments.
     -    A  web-based  learning  management  system  that  will  manage  both
          customized  and  generic  content.
     -    An  Open-architecture  developed  on  a JAVA-based framework to ensure
          flexibility  and compatibility with interfaces to ERP and other legacy
          systems.
     -    Full  spectrum  of  consulting services on education, performance, and
          technical  issues  concerning:

          -    Pre-  and  post-assessment  of  employee  abilities;
          -    Performance  measurements;
          -    Migration  of  the client's proprietary training information into
               web-based  environment;
          -    Technical  systems  integration  to  connect  Dynamic  IQ  to the
               client's  human  resources  system;
          -    Customization  of  the  web  front  end;
          -    Customization  of  the  content;
          -    Partnership  service  to gather third-party courseware the client
               would  like  to  license;  and
          -    Maintenance  support.

     Dynamic  IQ  is  completely scaleable and customizable to meet the needs of
both Fortune 2000 and small-to-medium size enterprises.  It is suitable for both
a  small training rollout, requiring only a few hours of training and minimal IT
involvement,  or  larger-scaled  implementations  with expansive learning needs.

CLIENTS  AND  REPRESENTATIVE  ENGAGEMENTS

     The Company provides custom support solutions around the world to large and
mid-sized  companies,  many  of  which have information intensive, multinational
operations.  The  Company  has  provided  services  to  more  than  650 clients,
including  many  of  the  world's  leading  corporations  in  a  broad  range of
industries  such  as  oil  and  gas,  technology,  pharmaceutical and chemicals,
utilities  and  telecommunications,  consumer  products,  and manufacturing. The
following  is a selection of DACG's 2000 clients and representative engagements.


                                      -7-
<PAGE>
BIC  Consumer  Products  (BIC)

     BIC  Consumer  Products  is  a  division  of  BIC USA Inc., a subsidiary of
Societe  BIC of France.  BIC is one of the world's leading providers of consumer
goods  such  as  stationery,  lighters and shavers.  DACG was chosen to help BIC
educate  over 400 of its employees in the United States on the newly implemented
JD  Edwards OneWorld system.  DACG performed a detailed training needs analysis,
and developed a highly targeted and customized training program utilizing DACG's
Cornerstone  Methodology,  a  phased  and  flexible  guideline  used  to develop
education  programs  unique  to  each  client  that  has  been  used in over 750
implementations  worldwide.  During  the  course  of the six month project, DACG
developed customized training materials and tools that were delivered in various
forms,  including  instructor  led  in  a  classroom setting, over the company's
intranet  and  through  computer  based  courseware.

BP  Amoco

     BP  Amoco  is the third largest integrated energy company in the world.  BP
Amoco  turned  to  DACG  for  help  in  educating  over  600  employees on their
PeopleSoft  implementation  which  focused  on  multiple  modules  specific  to
accounting.  DACG  developed  computer  based  training courses, quick reference
guides, help cards and documentation exercises that were delivered via classroom
training  sessions,  the  intranet  and  to  BP  Amoco's "Super Users"; internal
employees  devoted  to learning specifics about the software and responsible for
assisting less experienced colleagues during and after implementation.  BP Amoco
was  directed  to DACG through the Company's reputation as a dependable provider
of  exceptional  training  and  education  services.

EDEKA  Minden-Hannover  (EDEKA)

     EDEKA  is  one  of  the  largest supermarket chains and food wholesalers in
Germany.  During  the  fiscal  year  ending  December  31,  1999, their turnover
equaled  approximately  7 billion DEM.  EDEKA decided to use the SAP 4.6c RETAIL
solution  in  2000  to  completely  integrate  its main functional areas such as
Finance,  Controlling and Material Management into one system, to accomplish the
ultimate  results in Material Management and Data Integration.  EDEKA chose DACG
to  educate  over  800  users  in 30 locations throughout Germany because of the
Company's  proven  competence  and focus on the education of the end user.  DACG
performed  an  initial training needs analysis and developed a targeted training
concept,  delivering  on-line  help  and  documentation  solutions  on  over 300
transactions and 60 business processes.  DACG also developed customized courses,
reference  based  training  and  a  train-the-trainer program aimed at educating
approximately  12  EDEKA  employees to deliver future training programs based on
materials  developed  by  DACG.  Currently,  this  is  the  largest  RETAIL
implementation  in  Europe.

Siemens  Information  and  Communication  Mobile  LLC  (Siemens)

     Siemens is a leading provider of multi-line, multi-user expandable cordless
phone  systems in the United States, and is a subsidiary of Siemens Corporation,
a  global  leader  in  electrical  engineering and electronics.  During the year
2000,  Siemens  realized  the need to upgrade their enterprise resource planning
system,  SAP,  and turned to DACG to support their Communication Devices Digital
Products  division's upgrade from SAP R/3 to the more user-friendly version, SAP
4.6.  Upon  completion  of  a  thorough  needs  analysis, DACG devised a unique,
multi-faceted  learning  program  for  Siemens.  DACG developed business process
flows,  walk  through  workbooks and help cards as well as provided Siemens with
its  highly  acclaimed  SAP  4.6  web-based training CD-ROM.  Upon completion of
development  of  these  materials,  DACG  delivered  these  tools  to  selected
individuals  within  Siemens  who  then  performed  the  necessary  training and
education  of  the  division.

     The  Company's  ten  largest  clients,  in  the  aggregate,  accounted  for
approximately  31%,  38%,  and 55% of its billed hour revenue in 1998, 1999, and
2000,  respectively.  No single client of the Company accounted for more than 8%
of  the  Company's  revenue  in  2000.


                                      -8-
<PAGE>
     The  following  is  a  sample  list  of  clients  that the Company provided
services  for  during  2000:

<TABLE>
<CAPTION>
<S>   <C>                         <C>                   <C>
      24/7                        Eirecom               Nokia
      Air Products                George Western Foods  Normandy Mining
      Australian Broadcasting     Georgia-Pacific       Nova Chemicals
      Australian Defence Finance  Gillette              Perrier
      Burton's Biscuits           Gleason Corporation   Philips Petroleum
      China Light and Power       Lloyds TSB            Singapore International Airlines
      Compaq                      Montell               Toyota of Australia
      Dun & Bradstreet            NatSteel              Unilever
</TABLE>

COMPANY  ORGANIZATION  AND  PROJECT  MANAGEMENT  METHODOLOGY

Organization

     The  Company  is  organized around three principal operating divisions: the
Americas  Division,  which  includes  its  operations in the USA and Canada; the
Europe  Division, which includes its operations in the UK, France and Germany as
well  as  mobile  services  provided  in  other European countries; and the Asia
Pacific  Division,  which  includes its operations in Australia and Singapore as
well  as  mobile  services  provided  in  Asia.

     Within  each  division  there  are  administrative, sales and marketing and
operations  functions.  Administration  consists  of  finance  and planning, and
operations  performs all of the functions of the consulting services and product
implementation  and  support.

     The  Company  has  two  corporate  functions:  research and development and
corporate  management.  Research  and  development  is  responsible for on-going
support  of software products as well as the development of new products such as
Dynamic  IQ.  Corporate  management consists of the offices of the CEO, CFO, COO
and  investor  relations.

Project  Methodology  Management

     The  Company's  DA  Cornerstone(TM) project management methodology is a key
component  in its delivery of quality end-user support solutions to its clients.
DA  Cornerstone  is DACG's comprehensive six phase, end-user support methodology
that  addresses  key  end-user  support  program  deliverables,  activities, and
milestones  throughout  the  lifecycle  of  a  business  information  technology
implementation.  Each  phase has associated tools that facilitate the completion
of  that  phase's  activities  and  deliverables.

     DA  Cornerstone  phases  include:

     Analyze:       DACG  analyzes the client needs, resources, and requirements
                    and  submits  to the client an end-user support strategy and
                    proposed  deliverables  for  approval.

     Prototype and  When  the strategies are approved, DACG designs deliverables
     Design:        and  sets  up appropriate development strategies. The client
                    must  approve  the  strategic  program  design.

     Develop:       DACG  executes  the  strategies and submits all deliverables
                    for  frequent  internal  and  client  review.

     Implement:     DACG  delivers  the  final  work  to  the  end-users.

     Evaluate:      After  implementation  and  as  part  of the services to the
                    client,  DACG  evaluates  the  effectiveness of the services
                    using  appropriate  tools.

     Support:       DACG  will  arrange  and  set up the post implementation and
                    long-term  maintenance strategy for the educational program,
                    end-user  support,  change  communications  or other program
                    created  by  DACG  for  the  client.

     The  Company's  project  staff  develops  each  end-user  support component
through  an  iterative  draft  and  review process that directly involves client
end-users  in  the  development  of content specific to their needs. This review
process  typically  consists  of  three  stages  and  has  quality control steps
embedded  in each stage as formal checkpoints. These checkpoints are intended to
ensure  that  the client is satisfied with the deliverables, that the content is
accurate  and  adheres  to  the Company's own standards, and that the project is
delivered  in a cost-effective and timely manner. The success of a given project
engagement  from  a  cost,  time,  and  client  satisfaction  standpoint  is the
responsibility  of  the  assigned  operations  and  project  managers.


                                      -9-
<PAGE>
SALES  AND  MARKETING

     The  Company  generates  business  through  a  field sales force that sells
directly  and  pursues referrals and trade show leads.  In addition, the Company
co-markets,  in the form of joint sales calls and marketing materials, with SAP,
PeopleSoft  and  other  ERP  vendors,  Interwise  Ltd., SkillSoft UK Limited and
others.

     The  Company's  direct  sales  efforts  are  performed  worldwide by its 22
full-time  sales  personnel,  each  of  whom  has  either  a branch territory or
regional  focus.  The  sales  personnel  generate  leads  from  several sources,
including  referrals  from the Company's existing clients and from attendance at
industry trade shows. Among its sales and marketing efforts, the Company's sales
force  has presented the Company's expertise at SAPPHIRE, the annual SAP America
conference  for  SAP  service  providers  and  end-users.  The  Company  also
participates  and has an opportunity to demonstrate its expertise at conferences
around the world with all leading ERP vendors as well as the numerous e-Learning
conferences.  The  Company  also  uses Internet-based marketing, tele-marketing,
direct  mail,  corporate  presentations,  joint marketing events, and networking
through  regional  business  communities  to  generate potential sources for new
business.  In 2001, the Company plans to focus its marketing on the ERP, CRM and
e-Learning  marketplaces.

     The  Company's  strategic  business  alliances, including relationships the
Company  maintains  with  SAP,  PeopleSoft,  J.D.  Edwards, and Interwise, are a
source  of new business. DACG is recognized by SAP, PeopleSoft, and J.D. Edwards
as  a  preferred  or  qualified  provider  of end-user support services. DACG is
recognized  as  a  Global  Consulting  Partner and a mySAP.com Global Consulting
Partner  by  SAP and a Global Education Services Alliance Partner by PeopleSoft.
In  addition,  the  Company  develops  and  delivers to potential clients, joint
proposals  in  collaboration  with  these  business  alliance partners, with the
proposals  covering software applications, software implementation services, and
end-user  support  solutions.  The  Company has been successful in obtaining new
business  through these joint proposals.   During 2000, DACG continued to expand
its capability to develop and manage partnerships.  This expanded capability has
shown  signs  of  bringing  a  larger partner community onboard with an expanded
focus,  including  not  only  referral  selling,  but  true value-added reseller
relationships.  In  this  capacity,  DACG  will  look  to  create bi-directional
revenue  derived  from  partners  selling DACG products and services and by DACG
reselling  partner  products  and  services.

     Through  a  business  alliance  with  InterWise  Ltd., the market leader in
business-to-business  live  e-Learning,  the  Company  will  integrate InterWise
Millennium  with its new e-Learning application, Dynamic IQ, the Company's total
learning  management  environment  launched  in  the  fourth  quarter  of  2000.
InterWise  Millennium  is  a  software-based  solution  enabling the transfer of
information,  relationship  management  with  customers, partners, suppliers and
distributors,  into the client's organizational learning system.  This agreement
enables  the  Company  to  provide  the  latest  technological  innovation  in
e-Learning,  allowing  the  Company  to  offer  its  courseware  quickly  and
efficiently,  regardless  of  the  time  of  day  or  location  of  instructors.

     Through  a  business alliance with SkillSoft UK Limited, the Company offers
its  clients the option of more than 400 e-Learning courses.  These courses span
twenty  various curricula, including but not limited to, management, leadership,
communication,  customer service, finance, marketing and sales.  The addition of
these  courses enhances the Company's bank of courseware and job aids available,
securing  a  more  robust  education  solution  for  the  client.

     The  Company's  services  require  a  substantial  financial  commitment by
clients  and,  therefore,  typically  involve a long sales cycle. Once a lead is
generated,  the  Company  endeavors to understand quickly the potential client's
business  needs  and objectives in order to develop the appropriate solution and
bid  accordingly.  The  Company's  operations  and project managers are involved
throughout  the  sales  cycle  to  ensure  mutual understanding of client goals,
including  time  to  completion and technological requirements. Sales cycles for
end-user  support  solution projects typically range from one to six months from
the  time the Company initially meets with a prospective client until the client
decides whether to authorize commencement of an engagement. The retention of the
Company  typically  occurs at the beginning of the design/prototype stage of the
software  implementation.


                                      -10-
<PAGE>
RECRUITING  AND  PROFESSIONAL  DEVELOPMENT

     As of March 31, 2001, DACG's personnel consisted of 263 billable employees,
29  sales  and  marketing  personnel,  7 development staff and 40 administrative
employees.  The  Company believes that its success depends mainly on its ability
to  attract, retain, and motivate talented, creative, and professional employees
at all levels. For core business, the Company seeks to hire personnel with prior
consulting  experience  in  end-user education programs, education professionals
with  a  background  in  information  technology,  and  information  technology
professionals with education or communication program experience. Strong project
management,  analytical  and  communications skills and international experience
are also considered. For the new programs such as e-learning and e-business, the
company  seeks  individuals  with  systems  design,  web  design,  and  system
architecture  capabilities.  Recruiting  is coordinated company-wide through the
Company's  human  resources  department.

     Training  and  mentoring  are  integral  parts  of  the  Company's  staff
development  program.  The  Company's  training  programs  ensure  that  its
professional  staff  understands  the impact of technology on people, is able to
communicate  effectively at all levels within a client organization, and has the
ability  to  communicate  with  its  clients' technical, business and management
staff to provide value-added content to its clients. Ongoing training includes a
blend  of  in-house  and  external  training.  In-house  training includes basic
training,  more  detailed  software  education,  project management, consultancy
skills,  and  leadership  training.  The  use of DA Foundation materials and the
application  of  performance  support  technologies such as DA Passport are also
covered.  In  addition,  all consultants are required to attend a DA Cornerstone
methodology  training  program,  and  to  be  approved  for its use before being
assigned  to any consulting project. External training programs focus on project
and  time  management  skills.

     The  Company believes that its culture is central to its ability to attract
and  retain  highly  skilled  and  motivated professionals. Extensive technical,
management,  and sales training enable DACG professionals to expand their skills
and  attain  increasing  levels  of  responsibility within the organization. The
technical  career  path  provides  opportunities  for  advancement  outside  the
traditional  management  career  ladder.  The  technical  career  path  builds
technical  skills,  provides  compensation  incentives,  and  at  a macro level,
supports the development of DACG's current and future core competencies. Through
planned  job  assignment  and  rotations,  special  projects  and  structural
development  events, high potential management candidates are prepared to assume
greater  management  roles.  The Company attracts and motivates its professional
and  administrative staff by offering competitive packages of base and incentive
compensation  and  benefits.  All  professional  staff  members are eligible for
bonuses.  The  Company appreciates the importance of recognition and a promotion
track  for  its  administrative  staff  and  fully integrates its staff into the
conduct  of its business. All of the Company's employees are eligible to receive
stock  options.

During  2000,  the  Company rolled-out its internal implementation of a learning
management system, eCampus, based on its Dynamic IQ platform.  Additionally, the
company  is  providing employees with access to SkillSoft courses as part of its
commitment  to  distribute  SkillSoft  content.  All  employees  have  received
training  on  e-Campus  and are developing personal development plans, including
mentoring  programs.

RESEARCH  AND  DEVELOPMENT

     DACG  established  a research and development department in 1995 to support
and  maintain  its end-user support content and consulting methodologies. During
2000,  the primary focus of this department was the development of Dynamic IQ, a
virtual  learning  environment  with  complementary consulting services, ongoing
maintenance of DA Passport, DA Foundation, and the Company's proprietary toolset
used  for rapid deployment of end-user support solutions. The department is also
responsible  for  developing  computer-based  training  in  collaboration  with
SmartForce  and  Centra  Software.

     The  Company's  research  and  development  department  continually applies
technology  developments  to  the  Company's  content  and  tools. As technology
advances,  DACG  has kept pace, expanding its deliverables from traditional hard
copy  materials  and  instructor  led training to include on-line documentation,
multimedia  training,  employee  performance support systems,  distance learning
and  web-based  education  and  performance  support solutions. The Company will
maintain its commitment to innovative and collaborative research and development
and  anticipates  a  broadening  of  this  function  through partnering in 2001.


                                      -11-
<PAGE>
COMPETITION

     The  global  markets for end-user performance support services for business
information  technology  and  e-Learning  services are large, highly fragmented,
change  rapidly,  and  are  subject  to  low barriers to entry. DACG has various
market  areas  for  competition,  including:
     -    Competition  from  the  ERP software developers and other applications
          developers, which includes the software that DACG trains on, including
          SAP  and  other  vendors;
     -    Competition  from large international systems integrators, such as the
          consulting  practices  of  the  large  international accounting firms,
          which  are  focused  principally  on  systems  integration  and
          implementation  but  also  provide  end-user  support  as  a secondary
          service;
     -    Competition  from  the  professional  services  groups  of  many large
          technology  and  management consulting companies and a large number of
          smaller  organizations  that  specialize in employee support services,
          generally  serving a limited geographic area and having a smaller base
          of  technical  and  managerial  resources;
     -    Competition  as clients may elect to use internal resources to satisfy
          their  needs  for  training  services  the  Company  provides;  and
     -    In  e-learning,  the company faces a number of competitors in the form
          of  software  start-ups, established software companies and consulting
          companies  as  well  as  other  niche  operators.

     In all markets, DACG faces competition for client assignments from a number
of  companies  having  significantly  greater  financial,  technical,  marketing
resources  and  name  recognition.  The Company believes key competitive factors
forming the basis upon which these companies compete are experience, reputation,
industry  focus,  international  presence, service and technology offerings, and
price  relative to the value of the services provided. The Company believes that
it  competes  effectively  and  will  continue to compete effectively worldwide.

INTELLECTUAL  PROPERTY  AND  OTHER  PROPERTY  RIGHTS

     The  Company  relies  upon  a  combination  of  nondisclosure  and  other
contractual  arrangements  and  trade  secret  laws  to  protect its proprietary
rights.  The  Company  generally enters into confidentiality agreements with its
key  employees and clients, thereby seeking to limit distribution of proprietary
information.  There  can  be no assurance that the steps taken by the Company in
this  regard  will  be  adequate  to  deter  misappropriation  of  proprietary
information  or  that the Company will be able to detect unauthorized use of and
take  appropriate  steps  to  enforce its intellectual property rights. Software
developed  and other materials prepared by the Company in connection with client
engagements  are  usually  assigned  to  the  Company's  clients  following  the
termination  of the engagement. The Company retains the right to use the general
know-how  developed  by  the  Company  in the course of the engagement, and this
accumulated  knowledge  is  the  basis  for  the DA Foundation. The Company also
retains  all  rights  to  certain  of its proprietary methodologies and software
(such as DA PASSPORT and computer-based training software), the benefit of which
the  Company  provides  to  the  client  by  royalty-free  license.

     Dynamic  IQ(R),  DA  Foundation(R),  DA  Team  Teach(R)  and  DA Consulting
Group(R)  are  registered  trademarks  and/or service marks of the Company.  The
Company  also  claims  common law trademark rights in DACG and design (new), the
globe  and  temple  logo,  Fast  Implementation Toolkit(TM), Fast Implementation
Toolset(TM),  DA  Cornerstone(TM),  and  DA  Passport(TM), for each of which the
Company  has  filed  an application for registration in the United States Patent
and  Trademark  Office.  Furthermore,  the  Company  claims common law trademark
rights  in  DACG(TM),  DA  FIT/Fast  Implementation  Toolkit(TM), FastED(TM), DA
ASK(TM),  DA  Quickweb(TM),  and  the  slogan  mark  "Solutions  for  People and
Technology"(TM), but as to these has decided at present not to file applications
for  trademark  registration.  The  Company  holds  no patents.  The Company has
registered  the  copyright  in  the  computer  programs  titled "DA Basic Skills
Training  for  SAP R/3" and "DA Basic Skills Training for SAP R/3 v2.0 US."  The
Company  also  claims  the  copyright  in  numerous other works and may elect to
register  such  copyrights  on  a  case-by-case  basis.


                                      -12-
<PAGE>
RISK  FACTORS

Our  business  operations  are  dependent  on  SAP  and the ERP software market.

     A  substantial  portion  of  our  revenue  is derived from the provision of
end-user support services in connection with ERP software implementations by our
clients.  These  relationships  and  authorizations  are  generally  subject  to
termination  on  short notice. In addition, these licensors could further modify
their  software  in order to make the implementation cycles for its new releases
shorter  and less complicated, thereby possibly reducing the need for customized
end-user  support,  or  they  could increase their provision of end-user support
services for their software applications.  They could also cease referring us to
their  customers  as a provider of end-user support services. Any one or more of
these  circumstances  could  have  a material adverse effect on our business and
revenue.

We  may  not  be  able  to  keep  up  with  rapid  technological  changes.

     Our  future  success  will  depend  on  our  ability  to  gain expertise in
technological  advances,  such as the latest releases from ERP software vendors,
and to respond quickly to evolving industry trends and client needs. Our efforts
to  gain  technological  expertise and to develop new technologies require us to
incur  significant expense. There can be no assurance that we will be successful
in  adapting  to  these  advances in technology or in addressing changing client
needs  on  a  timely  basis.  In  addition,  there  can be no assurance that the
services  or  technologies  developed  by  others  will not significantly reduce
demand  for  our  services  or  render  our  services obsolete.  Any significant
reduction  in the demand for our services will have a material adverse effect on
our  results  of  operations.

Our  stock  price  has  been  volatile.

     Stock  prices  may  be  subject to wide swings, particularly on a quarterly
basis,  in  response  to  variations  in  operating  and  financial  results,
fluctuations  in  earnings,  competitive  pressures,  market  place  conditions,
failure to meet revenue expectations and other similar factors.  It is difficult
to  forecast the timing of revenue because project cycles depend on factors such
as  the  size  and  scope  of  assignments, circumstances specific to particular
clients  or  industries,  the  number and nature of client projects commenced or
completed  during a period, and the utilization rates of our professional staff.
Were  we to fail to meet expectations of our anticipated revenue in a period, or
if  we  were  to  experience a negative change in our perceived long-term growth
prospects,  either  would  likely  have  an  adverse  effect on our stock price.

We  may  continue  to  experience  increased  competition  from competitors with
greater  resources  than  ours,  from  potential clients performing services "in
house"  and  from  suppliers  delivering  a complete package to their customers.

     The  information technology services industry is highly competitive.  It is
served  by  many  national, regional and local companies, including full service
agencies and specialized temporary service agencies.  It has limited barriers to
entry,  in  part  due to rapidly changing technologies.  Our primary competitors
come  from  a variety of market segments, including "Big Five" accounting firms,
large  systems  consulting and implementation firms and large general management
consulting  firms.  Many  of  these  competitors  have  significantly  greater
financial, technical and marketing resources and greater name recognition.  Such
advantages  may  enable  these  competitors  to attract more clients and provide
faster  service  at  less  cost.  In  addition,  our  potential  clients  have
increasingly decided to dedicate sufficient internal resources to performing the
services  that  we  provide  "in  house",  particularly  where  these  resources
represent  a  fixed  cost  to the client.  We are also increasingly finding that
software  licensors  are  implementing  their  own software packages, as well as
educating  their  customers' employees in how to use them.  Such competition may
impose  additional  pricing  pressures.  We expect that the level of competition
will  remain  high  in  the future.  Increased competition could have a material
adverse  effect  on  our  ability  to  profitably  operate  our  business.

We  may  not  be  able  to  attract  and retain qualified information technology
consultants.

     Our  continued success will depend in large part on our ability to attract,
retain  and motivate highly skilled employees, particularly project managers and
other senior technical personnel. The qualified project managers that we require
are  in  great  demand  and  are  likely  to  remain  a limited resource for the
foreseeable  future.  Many  of the companies with which we compete for qualified
professionals  have  substantially greater financial and other resources than we
do.  There  can  be  no  assurance that we will be able to recruit, develop, and
retain a sufficient number of highly skilled, motivated professionals to compete
successfully.  In addition, competition for qualified personnel may also lead to
increased  costs  for  such  personnel  which  we  may  not be able to offset by
increases  in  billing  rates.  The loss of a significant number of professional
personnel  is  likely  to have a material adverse effect on us, particularly our
ability  to  complete  existing  projects  or  secure  new  projects.


                                      -13-
<PAGE>
Failure  to  adequately  estimate  costs,  or  efficiently  manage fixed-bid and
not-to-exceed  projects  could  have  a  material  adverse  effect  on  our
profitability.

     Certain  of  our  projects are undertaken on a fixed bid basis, pursuant to
which  we charge our clients a flat rate for our services, or on a not-to-exceed
basis,  pursuant  to  which  we  limit  the  maximum fee that we will charge our
client.  For  the  year ended December 31, 2000, we realized the majority of our
revenue  from fixed-bid or not-to-exceed projects. Were we to fail to adequately
estimate  the  actual  cost  to  us of completing a project under the guaranteed
not-to-exceed  or fixed fee price set forth in certain of our contracts, or were
we  to  fail  to  efficiently  manage  these  projects  after  entering into the
not-to-exceed  or  fixed  fee contract, we could become exposed to unrecoverable
budget  overruns,  which  could  materially  adversely affect our profitability.
Additionally,  client  engagements  are  generally  terminable with little or no
notice  or penalty, and our failure to meet a client's expectations could damage
our  relationship  with  that  client  and  cause  the  client  to terminate our
engagement.  A  client's  unanticipated  decision  to  terminate  or  postpone a
project  may  result in higher than expected numbers of unassigned professionals
or  severance  costs,  which  could  materially  adversely affect our results of
operations.

We  do  not  have  any  patents to protect our intellectual property rights from
misappropriation.

     Our  success  in  the information technology services business depends upon
our  software  deployment  and  methodology  and  other proprietary intellectual
property  rights.  We do not hold any patents. We rely on a combination of trade
secret, nondisclosure and other contractual arrangements and technical measures,
and copyright and trademark laws to protect our proprietary rights. We generally
enter  into  confidentiality agreements with our employees, consultants, clients
and  potential  clients  and limit access to and distribution of our proprietary
information. There can be no assurance that the steps that we have taken will be
adequate to prevent misappropriation of our intellectual property rights or that
third parties will not independently develop functionally equivalent or superior
methodologies  or  software.  Moreover,  there  can  be  no assurance that third
parties  will not assert infringement claims against us in the future that would
result  in costly litigation or license arrangements regardless of the merits of
such  claims. Additionally, because our engagements are typically work- for-hire
based,  we  assign  ownership  of,  or  grant a royalty-free license to use, the
materials  that  we  develop  specifically for our clients to those clients upon
project  completion.

Significant  exposure  to  international  markets.

     We  currently  have  international  operations  in  Singapore,  Australia,
England,  France,  Germany  and  Canada.  As  of  December  31, 2000, 62% of our
revenue resulted from our international operations.  The successful operation of
such  geographically  dispersed  offices  requires  considerable  management and
financial  resources  and results in significant ongoing expense.  International
operations and the provision of services in foreign markets are subject to risks
involving  trade  barriers,  exchange  controls,  national  and  regional  labor
strikes,  civil  disturbances  and  war,  and  increases  in  duties, taxes, and
governmental  royalties,  multiple  and  possibly overlapping tax structures, as
well  as  changes  in  laws  and  policies governing operations of foreign-based
companies.  We  may  also  experience  difficulties  relating  to  the  global
administration of our business.  Any of such factors may have a material adverse
effect  on  the  Company.

ITEM  2.   PROPERTIES

     Recognizing  the global nature of the information technology market and the
importance  of being able to serve multi-national clients, the Company has built
a  substantial  international  presence  and provides services in North America,
Europe  and  Asia-Pacific.  The  Company has offices in the U.S., Canada, United
Kingdom,  France, Germany,  Australia and Singapore.  The Company's headquarters
is  at  One Exeter Plaza, 4th floor Boston, Massachusetts. This lease expires in
December  2005.  The Company also maintains domestic offices in the metropolitan
areas  of  Houston  and  Boston,  and foreign offices in Toronto, London, Paris,
Melbourne,  Sydney,  Singapore,  and  Canberra.  The  company  has operations in
Dallas,  Chicago,  Philadelphia  and  New  York but does not maintain a physical
office.  Each  operation  is located near one or more significant clients of the
Company, and the physical facilities have terms that will expire between one and
five  years  (exclusive  of renewal options exercisable by the Company).  All of
the  Company's  operations are electronically linked together and have access to
all  of the Company's capabilities and core consulting tools. From time to time,
the Company uses office space provided at client sites to facilitate performance
of its services and maximize client contact. Where the Company operates in areas
without  an  established  office,  operations are handled on a mobile basis with
corporate  support  being delivered from one of its regional centers in Houston,
London  or Sydney. The Company believes  its current facilities are adequate for
its  needs.  The  Company  is  in  the  process  of  subleasing  several  branch
facilities  that  were  vacated  as  a result of cost reduction measures and may
further  reduce  the  size  of  various  facilities.


                                      -14-
<PAGE>
ITEM  3.     LEGAL  PROCEEDINGS

     From  time  to  time,  the  Company is a party to routine litigation in the
ordinary  course  of business. The Company does not believe that such litigation
will  have  a  material  impact  on  the  financial  statements.

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

     At  the Company's Special Meeting of Shareholders held on October 12, 2000,
the  shareholders  of  the  Company  voted  on  the  following  matter:

     Approval of the Securities Purchase Agreement ("the Agreement") between the
Company  and  Purse  Holding Limited ("Purse"), a British Virgin Islands limited
company,  dated  August 2, 2000, and in connection therewith to approve, (i) the
issuance  to  Purse  of two million shares of common stock, (ii) the issuance to
Purse of warrants to purchase up to three million shares of common stock and the
exercisability  thereof,  and (iii) the Board of Directors representation rights
granted  to  Purse,  all  as  set  forth  in  the  Agreement.

     The  voting  results  were  as  follows:

                 Votes For     Votes Against     Votes Abstained
                 ---------     -------------     ---------------
                 3,517,036        486,426            74,900

                                     PART II

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

     The  Company's common stock has traded on the NASDAQ Stock Market under the
symbol  DACG.  The  following  table  sets  forth,  for  each  quarterly  period
indicated,  the high and low closing sale price for the common stock as reported
by  the  NASDAQ  National  Market.


                  1999         High    Low
                  --------------------------
                  1st Quarter  $21.00  $7.63
                  2nd Quarter   12.63   5.13
                  3rd Quarter    6.38   4.38
                  4th Quarter    5.06   3.00

                  2000
                  --------------------------
                  1st Quarter  $ 4.00  $2.50
                  2nd Quarter    2.63   1.31
                  3rd Quarter    2.75   1.50
                  4th Quarter    1.94   0.69

     No  dividends  were declared on the Company's common stock during the years
ended  December 31, 1999 and 2000, and the Company does not anticipate declaring
dividends  in  the  foreseeable  future.

     As  of  March  25, 2001 there were approximately 105 shareholders of record
and  greater  than  11,349  beneficial  shareholders.

     On  October  16,  2000,  the  Company consummated the sale to Purse Holding
Limited,  a British Virgin Islands limited company, of two million shares of the
Company's  common  stock  for  $4.8 million and warrants to purchase up to three
million  shares of the Company's common stock. The sale was effected pursuant to
a  Securities  Purchase Agreement, dated August 2, 2000, between the Company and
Purse.  The  Company credited its $2 million loan, received from Purse on August
3, 2000, toward the $4.8 million purchase price of the two million shares of its
common  stock.


                                      -15-
<PAGE>
     In  accordance  with  the  terms  of the Securities Purchase Agreement, the
Company  issued  (i)  two million shares of common stock at a price of $2.40 per
share  and  (ii)  warrants  to  purchase (a) two million shares of common stock,
exercisable  until October 16, 2003, at the greater of $3.00 per share or 85% of
the  market  price  per  share  of  the  Company's  common  stock at the time of
exercise, and (b) one million shares of common stock, exercisable for the period
of  time  after January 1, 2002, and until October 16, 2003, at $3.00 per share.

     The  sale of the securities was exempt from registration under Section 4(2)
of the Securities Act of 1933, as amended (the "Securities Act") and Rule 506 of
Regulation  D promulgated under the Securities Act, since the sale was made to a
single accredited investor who was acquiring the shares for investment without a
view  to  further  distribution. No underwriters were involved with the issuance
and  sale  of  the  securities.

ITEM  6.   SELECTED  FINANCIAL  DATA

     The following selected consolidated financial statement data as of December
31,  1999  and 2000 and for each of the three years in the period ended December
31,  2000  is  derived  from the audited consolidated financial statements of DA
Consulting  Group,  Inc. and its subsidiaries (the "Company") included elsewhere
herein.  This  information  should be read in conjunction with such Consolidated
Financial  Statements  and  related  notes  thereto.  The  selected  financial
information  as  of  December  31, 1996, 1997 and 1998 has been derived from the
audited  financial  statements of the Company that have been previously included
in the Company's reports under The Securities Exchange Act of 1934, that are not
included  herein.  See  "Management's  Discussion  and  Analysis  of  Financial
Condition  and  Results  of  Operations."

<TABLE>
<CAPTION>
                                                         YEARS ENDED DECEMBER 31,
                                         --------------------------------------------------
                                          1996      1997     1998      1999         2000
                                         -------  --------  -------  ---------  -----------
<S>                                      <C>      <C>       <C>      <C>        <C>
                                              (in thousands except per share amounts)
INCOME STATEMENT DATA:
 Revenue. . . . . . . . . . . . . . . .  $26,202  $44,204   $80,132  $ 70,295   $    30,989
 Cost of revenue. . . . . . . . . . . .   14,190   24,063    40,817    38,717        20,656
                                         -------  --------  -------  ---------  ------------
 Gross profit . . . . . . . . . . . . .   12,012   20,141    39,315    31,578        10,333
 Selling and marketing expense. . . . .    1,953    3,726     5,195     7,403         4,945
 Development expense. . . . . . . . . .    1,250    1,223     2,124     1,802         3,667
 General and administrative expense . .    6,597   12,436    24,877    33,461        16,884
 Amortization expense . . . . . . . . .      274       54        29       354           760
 Restructuring charge . . . . . . . . .        -        -         -         -         4,666
 Employee stock-related charge. . . . .    1,858      263         -       142             -
                                         -------  --------  -------  ---------  ------------
 Operating income (loss). . . . . . . .       80    2,439     7,090   (11,584)      (20,589)
 Other (expense) income, net. . . . . .       95     (135)       22       287            25
                                         -------  --------  -------  ---------  ------------
 Income (loss)  before taxes. . . . . .      175    2,304     7,112   (11,297)      (20,564)
 Provision (benefit)  for income taxes       141      896     2,813    (3,034)       (7,347)
                                         -------  --------  -------  ---------  ------------
 Net income (loss). . . . . . . . . . .  $    34  $ 1,408   $ 4,299  $ (8,263)  $   (13,217)
                                         =======  ========  =======  =========  ============
 Basic earnings (loss)  per share (1) .  $  0.01  $  0.29   $  0.72  $  (1.28)  $     (1.93)
 Weighted average shares outstanding. .    4,217    4,808     5,976     6,444         6,841

 Diluted earnings (loss) per share (1).  $  0.01  $  0.28   $  0.69  $  (1.28)  $     (1.93)
 Weighted average shares outstanding. .    4,462    5,053     6,233     6,444         6,841


BALANCE SHEET DATA:
 Cash and cash equivalents. . . . . . .  $ 2,199  $ 3,664   $ 9,971  $  5,795   $       949
 Working capital. . . . . . . . . . . .    1,629    4,101    25,585    11,007        (1,120)
 Total assets . . . . . . . . . . . . .    8,549   20,135    48,903    32,918        24,940
 Total debt . . . . . . . . . . . . . .      731    3,970         -         -           154
 Shareholders' equity . . . . . . . . .    3,071    7,943    34,944    25,238        16,291
</TABLE>


(1)  Basic  and  diluted  earnings per share for 1997 on a pro forma basis would
     have  been  $0.31  and  $0.29,  respectively, to give effect to the sale of
     Common Stock (at an initial public offering price of $14.50 per share, less
     underwriting  discounts and commissions and estimated offering expenses) to
     repay  indebtedness  and the associated reduction in interest expense as if
     such  repayment  had  occurred  on  January  1,  1997.


                                      -16-
<PAGE>
ITEM  7.     MANAGEMENT'S  DISCUSSION  AND  ANALYSIS  OF FINANCIAL CONDITION AND
             RESULTS  OF  OPERATIONS

     This  Annual  Report  on Form 10-K contains certain statements that are not
historical  facts which constitute forward-looking statements within the meaning
of  the  Private Securities Legislation Reform Act of 1995 which provides a safe
harbor  for  forward-looking  statements.  These  forward-looking statements are
based  on  management's  belief  as  well as assumptions made by and information
currently  available  to  management,  and  are subject to substantial risks and
uncertainties  that  could  cause  the  Company's actual results, performance or
achievements  to  differ  materially  from  those  expressed or implied by these
forward-looking  statements.  When used in this report, the words "may," "will,"
"anticipate,"  "believe," "expect" and similar expressions as they relate to the
Company  or  its  management  are  intended  to  identify  such  forward-looking
statements.  Actual  future  results  and  trends  may  differ  materially  from
historical  results as a result of certain factors, including those set forth in
the  Risk Factors section of this report, in the Liquidity and Capital Resources
section  of  Management's  Discussion  and  Analysis  of Financial Condition and
Results of Operations section in this report and those risk factors set forth in
our  other  filings  with  the  Securities  and  Exchange  Commission.

BUSINESS

     The  Company  is a leading international provider of employee education and
support  solutions  to  companies  investing in business information technology.
Through  its  336 employees worldwide at December 31, 2000, the Company provides
employee  support solutions through customized change communications, education,
and  performance  support  services  to  clients.  Since  1988,  the Company has
provided  services  to  over 650 clients, including more than 125 of the Fortune
Global  500.

     The  Company  is  currently  organized  into  three divisions: the Americas
Division  which  includes  its  operations in North America; the Europe Division
which  includes  its  operations  in Europe; and the Asia Pacific Division which
includes  its  operations  in  Australia  and  Singapore. In 2000, the Americas,
Europe,  and  Asia  Pacific  Divisions represented 38%, 40%, and 22% of revenue,
respectively.  The  number  of  clients  served  by  the  Company  has increased
substantially from 52 in 1994 to approximately 650 in 2000. The Company's client
base  is diversified, with no single client representing more than 8% of revenue
in  2000.

     The  Company  derives  substantially  all  of  its  revenue  from  fees for
professional  services  related to supporting end-users in the implementation of
ERP  systems.  Revenue from clients implementing SAP software represented 90% of
billed  consulting  revenue  for  2000.  The  majority of the Company's projects
involve  from  three to ten consultants, are generally completed in three months
to  two  years, and result in revenue from $200,000 to $1.5 million. The Company
often  performs  multiple  projects  for  a  client  in  support  of  a  phased
implementation  of  the  business information technology. The Company's services
are  generally  provided pursuant to written contracts that can be terminated by
the  client  with  limited advance notice. In the event of such a termination by
the client, the client remains obligated to pay for the services rendered to the
client  to  the  termination  date.  The Company bills its clients weekly, twice
monthly  and monthly for the services provided by its consultants at agreed upon
rates,  and  where permitted, for expenses. The Company provides services to its
clients  primarily on a time and materials basis, although many of its contracts
contain  "not-to-exceed"  provisions  and  Company  performance obligations. The
remainder  of  the  Company's contracts are on a fixed-price basis, representing
approximately 18% of the Company's total revenue for 2000. Revenue from time and
materials  engagements,  as  well  as  revenue  from  fixed  price contracts, is
recognized  as  services  are  performed  and  the realization of the revenue is
assured.  The  Company  also  receives  a small percentage of total revenue from
license  fees  related  to  computer-based  training products and other software
products  that  are  developed independently or are co-developed by the Company.

     Cost  of  revenue  includes compensation and benefits paid to the Company's
professional  staff  and  all  direct  expenses  of performing project work. The
Company's  financial  performance  is highly dependent upon staff billing rates,
costs,  and  utilization  rates.  The  Company  manages  these  parameters  by
establishing and monitoring project budgets and timetables and tracking staffing
requirements  for  projects  in  progress  and  anticipated  projects.  Project
terminations,  completions,  and  scheduling  delays  may result in periods when
consultants  are  not  fully  utilized.  An  unanticipated  termination  of  a
significant  project  could  cause  the  Company  to  experience  lower  staff
utilization.  In  addition,  the  establishment  of new services or new regional
operations,  employee  vacations  and  training,  and increases in the hiring of


                                      -17-
<PAGE>
consultants  may  result  in  periods  of  lower  staff utilization and downward
pressure  on  gross  margins.  The  Company's  professional  staff are generally
employed  on  a  full-time basis, and therefore the Company incurs substantially
all  of  its  staff-related costs even during periods of low utilization. In the
past,  the  Company  has  experienced  some  seasonality  in  its business, with
somewhat  lower  levels  of  revenue  and  profitability in the first and fourth
quarters  of the year due to the timing of project start-ups and completions, as
well  as  holidays  and  vacations.  During 1999, the Company experienced both a
seasonal  downturn  in  business  during  the  fourth  quarter and a downturn in
business  demand during the third and fourth quarters due to the slowdown of ERP
spending  in  anticipation  of  Year  2000  issues.  During  2000 demand for the
companies  services  grew  in  quarters  two  through  quarter  four.

     Selling  and  marketing  expense  relates  principally  to compensation and
benefits  paid  to  the  Company's  dedicated  sales  staff and all direct costs
associated  with  the sales process. Development expense consists principally of
compensation  costs  for  the Company's in-house research and development. These
personnel  focus  on  development  of  methodologies  and  applications  of  new
technologies,  including  development  of computer-based training courseware and
performance  support  software  and  content.  Development expense also includes
personnel  who provide technical support for the Company's professional staff in
the field. Development expense in 2000 included the cost of creating a web based
learning  management  system  named  the Dynamic IQ.  General and administrative
expense  consists  principally of salaries and benefits for executive management
and for accounting, administrative, information technology, human resources, and
recruiting and training staff, as well as compensation for the senior management
in  each  of  the  Company's  divisions.

NEW  ACCOUNTING  PRONOUNCEMENTS

     In  June,  1998,  the  Financial Accounting Standards Board ("FASB") issued
Statement  of  Financial  Accounting Standards ("SFAS") No. 133, "Accounting for
Derivative  Instruments  and  Hedging Activities", which requires that companies
recognize  all  derivatives as either assets or liabilities in the balance sheet
and  measure  those instruments at fair value.  The FASB has subsequently issued
SFAS  No.  137,  "Accounting for Derivative Instruments and Hedging Activities -
Deferral  of  the  Effective  Date  of  FASB Statement No. 133," that defers the
requirements of SFAS No. 133 to fiscal years beginning after June 15, 2000.  The
Company  did  not hold any derivative or hedging instruments during the reported
periods.

     In  December  1999,  the  Securities  and  Exchange Commission issued Staff
Accounting  Bulletin  ("SAB")  No.  101,  "Revenue  Recognition  in  Financial
Statements."  The  bulletin  summarizes  certain  of  the  SEC  staff's  view in
applying  generally  accepted  accounting  principles  to revenue recognition in
financial  statements.  This  bulletin, through its subsequent revised releases,
SAB  No.  101A and SAB No. 101B, was effective for registrants no later than the
fourth  fiscal  quarter  of fiscal years beginning after December 15, 1999.  The
implementation of this bulletin did not have any impact on the Company's results
of  operations  or  equity.


                                      -18-
<PAGE>
RESULTS  OF  OPERATIONS

     The following table sets forth, for the periods indicated, income statement
data  expressed  as  a  percentage  of  revenue:

                                       PERCENTAGE OF REVENUE
                                      YEARS ENDED DECEMBER 31,
                                        1998    1999    2000
                                       ------  ------  ------
Revenue . . . . . . . . . . . . . . .  100.0%  100.0%  100.0 %
Cost of revenue . . . . . . . . . . .   50.9    55.1    66.7
                                       ------  ------  ------
Gross profit. . . . . . . . . . . . .   49.1    44.9    33.3
Selling and marketing expense . . . .    6.5    10.5    16.0
Development expense . . . . . . . . .    2.7     2.6    11.8
General and administrative expense. .   31.0    47.8    54.5
Amortization expense. . . . . . . . .    0.0     0.5     2.5
Restructuring charge. . . . . . . . .      -       -    15.1
                                       ------  ------  ------
Operating income (loss) . . . . . . .    8.8   (16.5)  (66.4)
Other (expense) income, net . . . . .    0.0     0.4     0.1
                                       ------  ------  ------
Income (loss) before taxes  . . . . .    8.8   (16.1)  (66.4)
Provision (benefit) for income taxes     3.5    (4.3)  (23.7)
                                       ------  ------  ------
Net income (loss) . . . . . . . . . .    5.3%  (11.8)% (42.7)%
                                       ======  ======  ======


YEAR  ENDED  DECEMBER  31,  2000  COMPARED  TO  YEAR  ENDED  DECEMBER  31,  1999

     Revenue.   Revenue decreased by $39.3 million, or 55.9%, from $70.3 million
in 1999 to $31.0 million in 2000. The decrease was substantially attributable to
a  decrease in demand for services that began during the latter part of 1999 and
continued throughout 2000, as a result of the downturn in the market for complex
computer  software  as  companies  focused on Year 2000 readiness and associated
pricing  pressures  as  competition for fewer assignments grew. Revenue from the
Americas  Division  decreased  by  71.6%  from  $41.5  million to $11.8 million;
revenue  from  the  EMEA Division decreased by 39.0% from $20.5 million to $12.5
million; and revenue from the Asia Pacific Division decreased by 19.3% from $8.3
million  to  $6.7  million.  The  Company  ended  the 2000 period with 336 total
employees,  down  from  535  employees  at  the  beginning  of  the  period.

     Gross  profit.   Gross  profit  decreased  by $21.3 million, or 67.4%, from
$31.6  million  in  1999  to  $10.3 million in 2000, and decreased from 44.9% of
revenue  in  1999  to  33.3%  of  revenue  in  2000.  The  decrease is primarily
attributable  to maintaining the consultant workforce at lower utilization rates
in  anticipation  of  future  demand  and  pricing  pressures  due  to increased
competition as demand slowed in the second half of 1999 and continued to slow in
2000.

     Selling and marketing expense.   Selling and marketing expense decreased by
$2.5  million,  or 33.8%, from $7.4 million in 1999 to $4.9 million in 2000. The
decrease  is  the  result  of cost  reduction  measures  implemented  during the
first  quarter  of  2000 and reduced  commissions expense related to the reduced
level  of  sales  in  2000  as  compared  to  the  same  period  of  1999.

     Development  expense.   Development  expense  increased by $1.9 million, or
105.6%,  from  $1.8  million  in  1999 to $3.7 million in 2000.  The increase in
costs  during  the  year  ended  December  31,  2000 is due to professional fees
incurred  for the  development  of the Company's web-enabled learning management
system  -  Dynamic IQ(TM), which was launched during the fourth quarter of 2000.
These  costs  were  offset  in  part by reduced headcount as a  result  of  cost
containment  plans  implemented  during  the latter half of 1999 and  the  first
quarter  of  2000.

     General  and  administrative  expense.   General and administrative expense
decreased  by  $16.7  million,  or  49.7%,  from  $33.6 million in 1999 to $16.9
million  in  2000.  The  decrease  in expense is due primarily to a reduction in
headcount in the areas of finance, information systems, administration and human
resources  as  a  result  of  the  cost containment plans implemented during the
latter half of 1999 and during 2000.  In addition, facilities costs were reduced
by  consolidating  locations  during  the  year.


                                      -19-
<PAGE>
     Restructuring  Charge.  During the three month period ended March 31, 2000,
the  Company  implemented a plan to address the dramatic decline in training and
documentation  activity  for  enterprise resource planning implementations.  The
plan  consisted  of  regional base consolidations and downsizing of billable and
non-billable  personnel.  Charges  included  the  costs  of involuntary employee
termination  benefits, write-down of certain property and equipment and reserves
for  leasehold abandonment.  The reduction in workforce consisted of 60 billable
consultants  and  44 non-billable administrative personnel. Substantially all of
the  employee  terminations were completed during the first quarter. The Company
recognized  approximately  $1.5  million  expense  attributable  to  involuntary
employee  termination  benefits during the first quarter, of which approximately
$1.2  million  has  been  paid at December 31, 2000. In addition the Company has
reserved  approximately  $0.9  million  related to the abandonment of leases and
approximately  $1.0  million related to the writedown of leasehold improvements,
furniture  and  equipment  held  by  its  Americas division in the first quarter
of  2000.   During  the  fourth  quarter  of  2000, due to weakening in the real
estate market, the Company recorded an additional $1.3 million reserve for lease
abandonment  resulting  in  a  total annual charge of $2.2 million.  Of the $2.2
million reserved for lease abandonment, approximately $0.8 Million has been paid
against the reserve.  At  December 31,  2000,  the  Company  believes  that  the
remaining provision  is  adequate to cover the future costs attributable to this
plan.  At  December  31,  2000  an  accrual  of  approximately  $0.3 million for
severance  pay  remained  related  to  severance  contracts  being  paid  over a
12-month period.  In addition, approximately  $1.4 million remained accrued  for
future  lease  payments  related  to  abandoned  leases.

     Amortization  expense.  Amortization  expense  increased  by  $406,000,  or
114.7%, from $354,000 in 1999 to $760,000 in 2000, and increased as a percentage
of  revenue  from  0.5%  in  1999  to  2.5%  in 2000. The increase is due to the
amortization of internal development costs associated with the SAP system placed
in  service in July 1999. These costs will be amortized over an 84-month period.

     Operating  income  (loss).   Operating  loss  increased  by $9.0 million or
77.6%,  from $11.6 million in 1999 to a loss of $20.6 million in 2000. Operating
loss,  exclusive  of  restructuring  charges  and  other  intangible  asset
amortization, was $15.2 million.  On the same basis the operating loss was $11.2
million  in  1999.

     Other  income  (expense), net.   Other income (expense), net decreased from
income  of  $287,000  in  1999  to  income  of  $25,000 in 2000. Interest income
decreased  from  $366,000  in  1999  to  $105,000 in 2000, reflecting investment
income  from  the  investment  of  proceeds  from  the  Company's initial public
offering  completed in April, 1998 (the "Offering".)  Prior to completion of the
Offering,  the  Company  borrowed  against  a  line  of  credit.

     Provision  for  income taxes.   The increase in the Company's effective tax
benefit  rate  from 26.9% in 1999 to a benefit rate of  35.7% in 2000, primarily
relates  to losses in lower income tax jurisdictions and non-deductible expenses
during 1999.  At December 31, 2000, the Company's deferred tax asset recorded on
its balance sheet was approximately $9.4 million, consisting primarily of future
tax  benefits  resulting  from  net  operating  loss ("NOL") carryforwards.  The
Company's  ability  to  recognize  the  entire benefit requires that the Company
achieve  certain  future  earnings  levels  prior  to  the expiration of the NOL
carryforwards.  The Company expects to generate the future earnings necessary to
utilize  the  NOL  carryforwards  through  implementation  of the reasonable tax
planning  strategies  and  future  income  projections.  The  Company  could  be
required  to  record  a valuation allowance for a portion or entire deferred tax
asset  if  the  market  conditions deteriorate and future earnings are below, or
projected  to  be  below,  current  estimates.

     At  December  31, 2000, the Company had NOL carryforwards of $26.7 million.
Of  that amount, $1.0 million expires in 2007, $5.0 million expires in 2019, and
$14.5  million  in  2020.  The  remaining  $6.2  million  have  no  expiration.

     Net  income (loss).   Net loss was $13.2 million in 2000 compared to a loss
of  $8.3  million  in  1999.


                                      -20-
<PAGE>
YEAR  ENDED  DECEMBER  31,  1999  COMPARED  TO  YEAR  ENDED  DECEMBER  31,  1998

     Revenue.   Revenue  decreased by $9.8 million, or 12.3%, from $80.1 million
in 1998 to $70.3 million in 1999. The decrease was substantially attributable to
a  decrease in demand for services during the second half of 1999 as a result of
the downturn in the market for complex computer software as companies focused on
Year  2000  readiness  and associated pricing pressures as competition for fewer
assignments  grew.  Revenue  from  the Americas Division decreased by 19.0% from
$51.2 million to $41.5 million; revenue from the EMEA Division decreased by 8.9%
from  $22.5 million to $20.5 million; and revenue from the Asia Pacific Division
increased by 29.7% from $6.4 million to $8.3 million. The Company ended the 1999
period with 535 total employees, down from 863 employees at the beginning of the
period.

     Gross  profit.   Gross  profit  decreased  by  $7.7 million, or 19.7%, from
$39.3  million  in  1998  to  $31.6 million in 1999, and decreased from 49.1% of
revenue  in  1998  to  44.9%  of  revenue  in  1999.  The  decrease is primarily
attributable  to maintaining the consultant workforce at lower utilization rates
in  anticipation  of  future  demand  and  pricing  pressures  due  to increased
competition  as  demand  slowed  in  the  second  half  of  1999.

     Selling and marketing expense.   Selling and marketing expense increased by
$2.2  million,  or  42.5%, from $5.2 million in 1998 to $7.4 million in 1999 and
increased  as  a  percentage  of revenue from 6.5% in 1998 to 10.5% in 1999. The
increase was primarily attributable to the expansion of the sales leadership and
global  marketing  efforts  as  the  Company  continued  its efforts to maximize
revenue.

     Development expense.   Development expense decreased by $322,000, or 15.2%,
from  $2.1  million  in 1998 to $1.8 million in 1999, and remained constant as a
percentage  of revenue at 2.7% in 1998 and 2.6% in 1999. Development expense was
significant  in  1998 due to the expenditures related to developing key products
including  DA  FIT  and  tools  to  facilitate  distance learning.  In addition,
development  expense  decreased  during  the  second  half  of  1999 due to cost
containment  measures.

     General  and  administrative  expense.   General and administrative expense
increased by $8.6 million, or 34.5%, from $24.9 million in 1998 to $33.5 million
in 1999, and increased as a percentage of revenue from 31.0% in 1998 to 47.6% in
1999.  During  the  first  half  of  1999, in response to the high growth of the
Company  in  the  prior  year,  the  Company built administrative infrastructure
including  staff,  systems  and facilities. Salaries and benefits increased $3.4
million and facilities costs increased $2.8 million as a result of the increased
infrastructure.  During 1999, the Company incurred approximately $1.9 million in
non-capitalized  costs  related  to  the  implementation  of  SAP as its primary
information  system.  The  Company  incurred severance and leasehold abandonment
expenses  related  to cost reduction programs implemented during the second half
of  1999. These costs were offset in part by reduced incentive compensation as a
result  of  slow  year  over  year  revenue  growth beginning late in the second
quarter  of  1999.  While the Company incurred no employee stock-related charges
in  1998,  the  Company  did  incur  charges of $142,000 in 1999, related to the
amendment  of  exercise  dates  of  certain stock options awarded to an employee
which  is  included  in  general  and  administrative  expenses.

     Amortization  expense.   Amortization  expense  increased  by  $325,000, or
1,120%,  from $29,000 in 1998 to $354,000 in 1999, and increased as a percentage
of  revenue  from  0.0%  in  1998  to  0.5%  in 1999. The increase is due to the
amortization of internal development costs associated with the SAP system placed
in service in July 1999.  These costs will be amortized over an 84 month period.

      Operating  income (loss).   Operating income decreased by $18.7 million or
263.4%,  from $7.1 million in 1998 to a loss of $11.6 million in 1999. Operating
loss,  exclusive  of  employee  stock-related charges and other intangible asset
amortization,  was  (15.8%)  of  revenue  in 1999.  On the same basis, operating
income  was  $7.1  million  in  1998  and  was  8.9%  of  revenue.

     Other  income  (expense), net.   Other income (expense), net increased from
income  of  $22,000  in  1998  to  income  of  $287,000 in 1999. Interest income
increased  from  $299,000  in  1998  to  $366,000 in 1999, reflecting investment
income  from  the  investment  of  proceeds  from  the  Company's initial public
offering  completed in April, 1998 (the "Offering".)  Prior to completion of the
Offering,  the  Company  borrowed  against  a  line  of  credit.

     Provision  for  income taxes.   The decrease in the Company's effective tax
rate  from  39.6% in 1998 to a benefit rate of  26.9% in 1999, primarily relates
to  losses  in  lower  income tax jurisdictions and non-deductible expenses.  At
December  31,  1999,  the  Company's  deferred tax asset recorded on its balance
sheet  was  approximately  $2.9 million, consisting primarily of $2.3 million of
future  tax  benefits  resulting  from net operating loss ("NOL") carryforwards.
The  Company's ability to recognize the entire benefit requires that the Company


                                      -21-
<PAGE>
achieve  certain  future  earnings  levels  prior  to  the expiration of the NOL
carryforwards.  The Company expects to generate the future earnings necessary to
utilize  the  NOL  carryforwards  through  implementation  of the reasonable tax
planning  strategies  and  future  income  projections.  The  Company  could  be
required  to  record  a valuation allowance for a portion or entire deferred tax
asset  if  the  market  conditions deteriorate and future earnings are below, or
projected  to  be  below,  current  estimates.

     At  December  31,  1999, the Company has NOL carryforwards of $6.7 million.
Of  the  $6.7 million, $5.4 million expires in 2019.  The remaining $1.3 million
have  no  expiration.

     Net  income  (loss).   Net loss was $8.3 million in 1999 compared to income
of  $4.3  million  in 1998. Net loss before  other intangible asset amortization
and  compensation charges related to stock options awarded to an employee, would
have  been  $7.8  million  in  1999.

Quarterly  Operating  Results

     The  Company's  quarterly  operating  results  are included in the notes to
consolidated  financial  statements.

LIQUIDITY  AND  CAPITAL  RESOURCES

      Since  its inception, the Company has historically financed its operations
with cash flow from operations, supplemented by the issuance of common stock and
short-term  borrowings  under  revolving  line  of  credit  arrangements.

     The  Company's  cash and cash equivalents were $0.9 million at December 31,
2000,  compared  to  $3.4  million  at December 31, 1999.  The Company's working
capital  deficit  was  $1.1  million  at  December  31, 2000 compared to working
capital  of  $11.0  million  at  December  31,  1999.

     The  Company's  operating activities required cash of $9.3 million for year
ended  December  31, 2000, compared to  $6.4 million used in operations in 1999.
The increase in cash used in operations primarily resulted from operating losses
incurred  in  2000  partially  offset  by  an  increase in deferred income taxes
offset  by  a  reduction in accounts receivable  and  income  taxes  receivable.

     Investing  activities  provided  cash  of  $2.4  million  in the year ended
December 31, 2000, compared to cash provided of $1.4 million for the same period
in 1999.  For the year ended December 31, 2000, $2.4 million was provided by the
sale  of  short-term  investments.  During  1999  the  Company  had net sales of
short-term investments of $7.6 million, offset by  $6.2 million for the purchase
of  property  and  equipment.

     Financing  activities  provided  cash  of  $4.9  million for the year ended
December  31,  2000 as a result of the sale to Purse Holding Limited  ("Purse"),
a  British  Virgin  Islands  limited  company,  of  two  million shares  of  the
Company's  common  stock  for  $4.8 million and warrants to purchase up to three
million shares of the Company's common stock.  The sale was effected pursuant to
a Securities Purchase Agreement ("the Agreement") dated August 2, 2000,  between
the  Company  and  Purse.  The  Agreement  was  approved  by  the  Company's
shareholders  at  a  special  meeting  held  on  October  12, 2000.  The Company
credited  its  $2  million  loan,  received from Purse on August 3, 2000, toward
the  $4.8  million purchase price of the two million shares of its common stock.
In  addition,  the  Company  borrowed $154,000 on a short-term  line  of  credit
during  the  period.  During  1999,  financing  activities  used  cash  of  $1.6
million  as  a  result  of the Company repurchasing  200,000  shares  of  common
stock for $1.9 million offset by $0.3 million  in  proceeds  from  stock  option
exercises.

     The  Company  has an agreement with a bank, which provides for financing of
eligible  U.S.  accounts  receivable  under  a  purchase and sale agreement. The
maximum  funds  available  under  this  agreement is $5 million. At December 31,
2000,  the  Company had sold $147,000 of receivables pursuant to this agreement.
In March 2000, the Company obtained a credit facility from a bank with a maximum
line  of  credit  of  approximately $750,000, based on eligible foreign accounts
receivable. At December 31, 2000, the Company had borrowed $154,000 against this
line.


                                      -22-
<PAGE>
     The  Company believes its current cash balances, receivable-based financing
and  cash provided by future operations will be sufficient to meet the Company's
working  capital and cash needs through 2001. However, there can be no assurance
that such sources of funds will be sufficient to meet these future expenses. The
Company  may  seek additional financing through a public or private placement of
equity.  The  Company's  need  for  additional  financing  will  be  principally
dependent  on the degree of market demand for the Company's services.  There can
be  no  assurance  that  the  Company will be able to obtain any such additional
financing  on  acceptable  terms,  if  at  all.

     The  Company  capitalizes software development costs beginning when product
technological  feasibility  is  established  and  concluding when the product is
ready  for  general  release.  At  such  time,  software  development  costs are
amortized  on  the  straight-line  basis  over  a  maximum of three years or the
expected  life  of  the  product,  whichever  is  less. During the year 2000 all
development  costs  for  the  companies  web  based  learning management system,
Dynamic  IQ  were  expensed.  During  1999,  the Company capitalized $184,000 of
software  development  costs  relating  to  computer-based  training  software
development  which  were  amortized  over  12  months. Research costs related to
software  development  are  expensed  as  incurred.

      In  1999  and 1998, respectively, the Company capitalized $3.3 million and
$728,000  of  implementation  costs related to the Company's primary information
system.  Such  development  costs  are  amortized  over  a  seven  year  period.

     Because  the  Company  has  been  and  is currently able to match the local
currency  component  of  client  engagements  to  the  amount of operating costs
transacted  in  local  currency,  the  Company  has  not  needed to and does not
currently  hedge  against  currency  fluctuations.

ITEM  7A.  QUANTITATIVE  AND  QUALITATIVE  DISCLOSURES  ABOUT  MARKET  RISK

     The Company from time to time holds short-term investments which consist of
variable  rate  municipal  debt  instruments.  The  Company  uses  a sensitivity
analysis  technique  to  evaluate the hypothetical effect that changes in market
interest  rates  may  have  on  the fair value of the Company's investments.  At
December  31,  2000  the  Company  did  not  hold  any  short-term  investments.

     We  are  subject to market risk related to fluctuations in the value of the
U.S.  dollar compared to certain foreign currencies.  We have subsidiaries which
operate  in  Canada,  the  United  Kingdom,  France,  Germany,  Australia,  and
Singapore.  We  attempt  to  maintain  a  balance between assets and liabilities
denominated in foreign currencies, however, such currency level fluctuations are
generally  not  significant.

     We  are  subject  to  market risk exposure related to interest rates on our
credit  facilities.  At December 31, 2000 our outstanding facility was $154,000.

ITEM  8.   FINANCIAL  STATEMENTS  AND  SUPPLEMENTARY  DATA

     The  consolidated financial statements of the Company are included in pages
33  through  48.

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

     There  were  no  changes  in  accountants,  disagreements,  or other events
requiring  reporting  under  this  item.

                                    PART III

ITEM  10.  DIRECTORS  AND  EXECUTIVE  OFFICERS  OF  THE  REGISTRANT

     Information  relating  to the Company's directors and executive officers is
included in the Company's definitive Proxy Statement in connection with its 2001
Annual  Meeting of Stockholders (the "2001 Proxy Statement), which will be filed
with the Securities and Exchange Commission within 120 days after the end of the
fiscal year ended December 31, 2000, under the captions "ELECTION OF DIRECTORS -
Nominees",  "Section 16(a) Beneficial Ownership Reporting Compliance" and "OTHER
INFORMATION  -  Directors  and Executive Officers" and is incorporated herein by
reference  in  response  to  this  Item  10.


                                      -23-
<PAGE>
ITEM  11.  EXECUTIVE  COMPENSATION

     Information  relating  to  executive  compensation is set forth in the 2001
Proxy  Statement  under  the  captions  "ELECTION OF DIRECTORS - Compensation of
Directors"  and "EXECUTIVE COMPENSATION" and is incorporated herein by reference
in  response  to  this  Item  11.

ITEM  12.  SECURITY  OWNERSHIP  OF  CERTAIN  BENEFICIAL  OWNERS  AND  MANAGEMENT

     Information  relating  to  ownership  of  Registrant's  Common  Stock  by
management  and  certain  other beneficial owners is set forth in the 2001 Proxy
Statement under the caption "SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT" and is incorporated herein by reference in response to this Item 12.

ITEM  13.  CERTAIN  RELATIONSHIPS  AND  RELATED  TRANSACTIONS

     Information  relating  to certain relationships and related transactions is
set  forth  in the 2001 Proxy Statement under the caption "CERTAIN RELATIONSHIPS
AND RELATED TRANSACTIONS" and is incorporated herein by reference in response to
this  Item  13.

                                     PART IV

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

     (a)  Documents  filed  as  a  part  of  this  Report.

          1.   The following financial statements of the Company and the related
               report  of  independent  accountants  are  filed  herewith:
<TABLE>
<CAPTION>
                                                                                            Page
                                                                                           ------
                                                                                           Number
                                                                                           ------
<S>                                                                                        <C>
Report of Independent Accountants . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    32
Consolidated Financial Statements:
  Balance Sheets at December 31, 1999 and 2000. . . . . . . . . . . . . . . . . . . . . . .    33
  Statements of Operations for the years ended December 31, 1998, 1999, and 2000. . . . . .    34
  Statements of Stockholders' Equity for the years ended December 31, 1998, 1999 and 2000 .    35
  Statements of Cash Flows for the years ended December 31, 1998, 1999 and 2000 . . . . . .    36
  Notes to Consolidated Financial Statements. . . . . . . . . . . . . . . . . . . . . . . .    37
</TABLE>

          2.   Schedules  for  which  provisions  were  made  in accordance with
               applicable  accounting regulations of the Securities and Exchange
               Commission  are  inapplicable  and  therefore  have been omitted.

(b)  Reports  on  Form  8-K.

On October 27, 2000 the Company filed a Current Report on form 8-K regarding the
consummation  of the sale to Purse Holding Limited of shares of common stock and
warrants to purchase shares of common stock on October 16, 2000, pursuant to the
Securities  Purchase  Agreement,  dated  August  2,  2000.


                                      -24-
<PAGE>
<TABLE>
<CAPTION>
(c)  Exhibits

EXHIBIT NO.                               DESCRIPTION
-----------                               -----------
<S>          <C>
       3.1*  -Amended and Restated Articles of Incorporation of the Company (incorporated by
                  reference to the Company's Form S-1A filed April 20, 1998).
       3.2*  -Restated By-Laws of the Company (incorporated by reference to the Company's Form
                  S-1A filed April 20, 1998).
       4.1*  -Specimen Stock Certificate (incorporated by reference to the Company's Form S-1A
                  filed April 20, 1998).
      10.1*  -Amended and Restated 1997 Stock Option Plan (incorporated by reference to the
                  Company's Form 10-K filed March 30, 2000).**
      10.2*  --Employment Agreement between John Mitchell and the Company dated April 4, 2000
                  (incorporated by reference to the Company" Form 10-Q filed August 14, 2000).**
      10.3*  -Securities Purchase Agreement dated August 2, 2000 between the Company and Purse
                  Holding Limited (incorporated by reference to Annex I to the Company's
                  Definitive Proxy Statement filed September 11, 2000).
      10.4*  -Change in Control Agreement between Dennis C. Fairchild and the Company dated
                  September 30, 1999 (incorporated by reference to the Company's Form 10-Q
                  filed November 13, 1999).**
       10.5  -Change in Control Agreement between Malcolm Wright and the Company dated
                  April, 10 2000**
       21.1* -Subsidiaries (incorporated by reference to the Company's Form S-1 filed January 1,
                  1998).
       23.1  -Consent of Independent Accountants
</TABLE>

     _________
     *  Incorporated  by  reference.
     **Management  contract  or  compensatory  benefit plan or arrangement.


                                      -25-
<PAGE>
                                   SIGNATURES

     Pursuant  to  the requirements of Section 13 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  on  March  28,  2001.

                                        DA  Consulting  Group,  Inc.
                                        (Registrant)

                                By:     /s/  John  E.  Mitchell
                                        -----------------------
                                        John  E.  Mitchell
                                        President and Chief Executive Officer

                                By:     /s/  Dennis  C.  Fairchild
                                        --------------------------
                                        Dennis  C.  Fairchild
                                        Chief Financial Officer, Executive Vice
                                        President, Secretary  and  Treasurer

     Pursuant  to  the requirements of the Securities Exchange Act of 1934, this
report  has  been  signed  below  by  the  following  persons  on  behalf of the
registrant  in  the  capacities  indicated  on  March  28,  2000.


      SIGNATURE                                        TITLE
      ---------                                        -----
/s/  JOHN  E. MITCHELL              Chief Executive Officer (Principal Executive
----------------------              Officer)
John  E.  Mitchell

/s/  DENNIS C. FAIRCHILD           Chief  Financial  Officer,  Executive  Vice
-------------------------          President, Secretary and Treasurer (Principal
Dennis  C.  Fairchild              Financial  and  Accounting  Officer)


/s/  NIGEL  W.E.  CURLET           Director
------------------------
Nigel  W.E.  Curlet

/s/  GUNTHER  E.  A.  FRITZE       Director
----------------------------
Gunther  E.  A.  Fritze

/s/  VIRGINIA  L.  PIERPONT        Director  and  Chair
---------------------------
Virginia  L.  Pierpont

/s/  RICHARD W. THATCHER, JR.      Director
------------------------------
Richard  W.  Thatcher,  Jr.

/s/  B. K. PRASAD                  Director
------------------
B. K.  Prasad


                                      -26-
<PAGE>
REPORT  OF  INDEPENDENT  ACCOUNTANTS

To the Board of Directors and Shareholders of
DA  Consulting  Group,  Inc.:

In  our  opinion,  the  accompanying consolidated balance sheets and the related
consolidated  statements  of  operations,  shareholders'  equity, and cash flows
present  fairly,  in  all  material  respects,  the  financial  position  of  DA
Consulting Group, Inc. and its subsidiaries (the "Company") at December 31, 1999
and  2000,  and the results of their operations and their cash flows for each of
the  three  years  in  the  period  ended  December 31, 2000, in conformity with
accounting principles generally accepted in the United States of America.  These
financial  statements  are  the  responsibility of the Company's management; our
responsibility  is  to express an opinion on these financial statements based on
our  audits.  We  conducted  our  audits  of these statements in accordance with
auditing  standards  generally  accepted  in  the United States of America which
require that we plan and perform the audits to obtain reasonable assurance about
whether  the  financial  statements are free of material misstatement.  An audit
includes  examining,  on  a  test  basis,  evidence  supporting  the amounts and
disclosures  in  the  financial  statements, assessing the accounting principles
used  and  significant  estimates made by management, and evaluating the overall
financial  statement  presentation.  We  believe  that  our  audits  provide  a
reasonable  basis  for  our  opinion.

/s/  PricewaterhouseCoopers  LLP
Houston,  Texas
March  19,  2001


                                      -27-
<PAGE>
<TABLE>
<CAPTION>
                                               DA CONSULTING GROUP, INC.
                                             CONSOLIDATED BALANCE SHEETS
                                         (IN THOUSANDS, EXCEPT SHARE AMOUNTS)


                                                                                                  DECEMBER 31,
                                                                                              -------------------
                                                                                                1999      2000
                                                                                              --------  ---------
                                            ASSETS
                                            ------
<S>                                                                                           <C>       <C>
Current Assets:
     Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $ 3,406   $    949
     Short-term investments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    2,389         --
     Accounts receivable, net. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    8,578      5,226
     Unbilled revenue. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      434        206
     Income taxes receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    2,979         --
     Deferred tax asset. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      445        708
     Prepaid expenses and other current assets . . . . . . . . . . . . . . . . . . . . . . .      456        440
                                                                                              --------  ---------
          Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   18,687      7,529
     Property and equipment, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   12,368      8,130
     Other assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .       --        254
     Deferred tax asset. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    1,464      8,647
     Intangible assets, net. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      399        380
                                                                                              --------  ---------
          Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $32,918   $ 24,940
                                                                                              ========  =========

                         LIABILITIES AND SHAREHOLDERS' EQUITY
                         ------------------------------------
Current Liabilities:
     Revolving line of credit. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $    --   $    154
     Accounts payable. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    1,955      1,840
     Accrued expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    5,613      6,655
     Deferred income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      112         --
                                                                                              --------  ---------
          Total current liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . .    7,680      8,649
                                                                                              --------  ---------
Commitments and contingencies (Note 10)

Shareholders' equity:
     Preferred stock, $0.01 par value: 10,000,000 shares authorized. . . . . . . . . . . . .       --         --
     Common stock, $0.01 par value: 40,000,000 shares authorized; 6,571,777 and
       8,571,777 shares issued and 6,418,604 and 8,418,604 shares outstanding, respectively        65         85
     Additional paid-in capital. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   29,355     34,039
     Accumulated deficit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   (1,865)   (15,082)
     Accumulated other comprehensive loss. . . . . . . . . . . . . . . . . . . . . . . . . .     (795)    (1,229)
     Treasury stock, at cost: 153,173 shares . . . . . . . . . . . . . . . . . . . . . . . .   (1,522)    (1,522)
          Total shareholders' equity . . . . . . . . . . . . . . . . . . . . . . . . . . . .   25,238     16,291
               Total liabilities and shareholders' equity. . . . . . . . . . . . . . . . . .  $32,918   $ 24,940
                                                                                              ========  =========
</TABLE>


     The accompanying notes are an integral part of the consolidated financial
                                   statements.


                                      -28-
<PAGE>
<TABLE>
<CAPTION>
                                DA CONSULTING GROUP, INC.
                          CONSOLIDATED STATEMENTS OF OPERATIONS
                        (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

                                                             YEARS ENDED DECEMBER 31,
                                                          ------------------------------
                                                            1998      1999       2000
                                                          --------  ---------  ---------
<S>                                                       <C>       <C>        <C>
Revenue. . . . . . . . . . . . . . . . . . . . . . . . .  $80,132   $ 70,295   $ 30,989
Cost of revenue. . . . . . . . . . . . . . . . . . . . .   40,817     38,717     20,656
                                                          --------  ---------  ---------
     Gross profit                                          39,315     31,578     10,333
Selling and marketing expense. . . . . . . . . . . . . .    5,195      7,403      4,945
Development expense. . . . . . . . . . . . . . . . . . .    2,124      1,802      3,667
General and administrative expense . . . . . . . . . . .   24,877     33,603     16,884
Amortization expense . . . . . . . . . . . . . . . . . .       29        354        760
Restructuring charge . . . . . . . . . . . . . . . . . .       --         --      4,666
                                                          --------  ---------  ---------
     Operating income (loss) . . . . . . . . . . . . . .    7,090    (11,584)   (20,589)
Interest income, net . . . . . . . . . . . . . . . . . .      299        366         31
Other expense, net . . . . . . . . . . . . . . . . . . .     (277)       (79)        (6)
                                                          --------  ---------  ---------
     Total other income, net                                   22         87         25
                                                          --------  ---------  ---------
        Income (loss) before provision for income taxes.    7,112    (11,297)   (20,564)
                                                          --------  ---------  ---------
Provision for income taxes:

     Current provision (benefit) . . . . . . . . . . . .    2,867       (960)        --
     Deferred(benefit) . . . . . . . . . . . . . . . . .      (54)    (2,074)    (7,347)
                                                          --------  ---------  ---------
          Provision (benefit) for income taxes . . . . .    2,813     (3,034)    (7,347)
                                                          --------  ---------  ---------
          Net income (loss). . . . . . . . . . . . . . .  $ 4,299   $ (8,263)  $(13,217)
                                                          ========  =========  =========

Basic earnings (loss) per share. . . . . . . . . . . . .  $  0.72   $  (1.28)  $  (1.93)
Weighted average shares outstanding. . . . . . . . . . .    5,976      6,444      6,841

Diluted earnings (loss) per share. . . . . . . . . . . .  $  0.69   $  (1.28)  $  (1.93)
Weighted average shares outstanding. . . . . . . . . . .    6,233      6,444      6,841
</TABLE>


     The accompanying notes are an integral part of the consolidated financial
                                   statements.


                                      -29-
<PAGE>
<TABLE>
<CAPTION>
                                              DA CONSULTING GROUP, INC.

                                   CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
                                                   (IN THOUSANDS)


                                                       ADDITIONAL    RETAINED       ACCUMULATED
                                         COMMON STOCK   PAID-IN      EARNINGS         OTHER         TREASURY STOCK
                                         ------------              (ACCUMULATED    COMPREHENSIVE   -----------------
                                         NUMBER  PAR    CAPITAL      DEFICIT)          LOSS        NUMBER     COST
                                         ------  ----  ---------  --------------  ---------------  -------  --------
<S>                                      <C>     <C>   <C>        <C>             <C>              <C>      <C>

BALANCE AS OF DECEMBER 31, 1997 . . . .   4,829  $ 48  $  6,449   $       2,099   $          (59)      21   $   (91)
     Issuance of common stock . . . . .   1,743    17    21,129              --               --       --        --
     Income tax expense related to
     restricted stock plan. . . . . . .      --    --     1,781              --               --       --        --
     Employee stock repurchases . . . .      --    --        --              --               --        1       (25)
     Repayment of stockholder notes
     receivable . . . . . . . . . . . .      --    --        --              --               --       --        --
     Net income . . . . . . . . . . . .      --    --        --           4,299               --       --        --

     Foreign currency translation
     adjustment, net of taxes of $459 .      --    --        --              --            (703)       --        --
---------------------------------------  ------  ----  ---------  --------------  ---------------  -------  --------

BALANCE AS OF DECEMBER 31, 1998 . . . .   6,572    65    29,359           6,398             (762)      22      (116)

     Stock repurchases. . . . . . . . .      --    --        --              --               --      200    (1,943)
     Exercise of employee stock options      --    --      (146)             --               --      (69)      537
     Employee stock compensation. . . .      --    --       142              --               --       --        --
     Net loss . . . . . . . . . . . . .      --    --        --          (8,263)              --       --        --
     Foreign currency translation
     adjustment, net of taxes of $22  .      --    --        --              --              (33)      --        --
---------------------------------------  ------  ----  ---------  --------------  ---------------  -------  --------

BALANCE AS OF DECEMBER 31, 1999 . . . .   6,572    65    29,355          (1,865)            (795)     153    (1,522)
     Issuance of common stock . . . . .   2,000    20     2,446              --               --       --        --
     Issuance of warrants . . . . . . .      --    --     2,238              --               --       --        --

     Net loss . . . . . . . . . . . . .      --    --        --              --          (13,217)      --        --
   Foreign currency translation
     adjustment, net of taxes of $241 .      --    --        --              --             (434)      --        --
---------------------------------------  ------  ----  ---------  --------------  ---------------  -------  --------

BALANCE AS OF DECEMBER 31, 2000 . . . .   8,572  $ 85  $ 34,039   $     (15,082)  $       (1,229)     153   $(1,522)
---------------------------------------  ------  ----  ---------  --------------  ---------------  -------  --------


                                             NOTES
                                           RECEIVABLE        TOTAL
                                              FROM        SHAREHOLDERS'
                                          SHAREHOLDERS       EQUITY
---------------------------------------  --------------  ---------------
<S>                                      <C>             <C>

BALANCE AS OF DECEMBER 31, 1997 . . . .  $        (503)  $        7,943
     Issuance of common stock . . . . .             --           21,146
     Income tax expense related to
     restricted stock plan. . . . . . .             --            1,781
     Employee stock repurchases . . . .             --              (25)
     Repayment of stockholder notes
       receivable . . . . . . . . . . .            503              503
     Net income . . . . . . . . . . . .             --            4,299
     Foreign currency translation
     adjustment, net of taxes of $459 .             --             (703)
---------------------------------------  --------------  ---------------

BALANCE AS OF DECEMBER 31, 1998 . . . .             --           34,944

     Stock repurchases. . . . . . . . .             --           (1,943)
     Exercise of employee stock options             --              391
     Employee stock compensation. . . .             --              142
     Net loss . . . . . . . . . . . . .             --           (8,263)
     Foreign currency translation
     adjustment, net of taxes of $22. .             --              (33)
---------------------------------------  --------------  ---------------

BALANCE AS OF DECEMBER 31, 1999 . . . .             --           25,238

     Issuance of common stock . . . . .             --            2,466
     Issuance of warrants . . . . . . .             --            2,238

     Net loss . . . . . . . . . . . . .             --          (13,217)
   Foreign currency translation
     adjustment, net of taxes of $241 .             --             (434)
---------------------------------------  --------------  ---------------

BALANCE AS OF DECEMBER 31, 2000 . . . .             --   $       16,291
---------------------------------------  --------------  ---------------
</TABLE>


     The accompanying notes are an integral part of the consolidated financial
                                   statements.


                                      -30-
<PAGE>
<TABLE>
<CAPTION>
                                            DA CONSULTING GROUP, INC.

                                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                  (IN THOUSANDS)

                                                                                      YEARS ENDED DECEMBER 31,
                                                                                   ------------------------------
                                                                                     1998       1999      2000
                                                                                   ---------  --------  ---------
<S>                                                                                <C>        <C>       <C>
Cash flows from operating activities:
     Net income (loss). . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $  4,299   $(8,263)  $(13,217)
     Adjustments to reconcile net income (loss) to net cash provided by (used in)
        operating activities:
          Depreciation and amortization . . . . . . . . . . . . . . . . . . . . .     1,138     2,560      3,010
          Provision for doubtful accounts . . . . . . . . . . . . . . . . . . . .       773       435        662
          Writedown of property and equipment and reserve for leasehold
               abandonment. . . . . . . . . . . . . . . . . . . . . . . . . . . .         -         -      3,195
          Stock option compensation expense . . . . . . . . . . . . . . . . . . .         -       142          -
          Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . .       (54)   (2,074)    (7,347)
          (Gain) loss on sale on property and equipment . . . . . . . . . . . . .        (1)       80        237
          Changes in operating assets and liabilities:
               Accounts receivable and unbilled revenue . . . . . . . . . . . . .    (5,998)    8,157      2,918
               Prepaid expenses and other current assets. . . . . . . . . . . . .      (376)      170         16
               Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . .      (193)      182       (254)
               Accounts payable and accrued liabilities . . . . . . . . . . . . .     4,499    (4,289)    (1,367)
               Deferred income. . . . . . . . . . . . . . . . . . . . . . . . . .     1,033    (1,233)      (112)
               Income taxes payable . . . . . . . . . . . . . . . . . . . . . . .       730    (2,261)     2,979
                                                                                   ---------  --------  ---------

                    Total Adjustments . . . . . . . . . . . . . . . . . . . . . .     1,551     1,869      3,937
                                                                                   ---------  --------  ---------

                    Net cash provided by  (used in) operating activities. . . . .     5,850    (6,394)    (9,280)
                                                                                   ---------  --------  ---------

Cash flows from investing activities:
     Proceeds from sale of property and equipment . . . . . . . . . . . . . . . .        39        19        263
     Sale of short-term investments . . . . . . . . . . . . . . . . . . . . . . .         -     7,721      2,389
     Purchases of short-term investments. . . . . . . . . . . . . . . . . . . . .   (10,033)      (77)         -
     Purchases of property and equipment. . . . . . . . . . . . . . . . . . . . .    (7,398)   (6,249)      (253)
                                                                                   ---------  --------  ---------

                    Net cash (used in)provided by  investing activities . . . . .   (17,392)    1,414      2,399
                                                                                   ---------  --------  ---------

Cash flows from financing activities:
     Net proceeds from (repayments of) revolving line of credit . . . . . . . . .    (3,208)        -        154
     Proceeds from (repayments of) note payable . . . . . . . . . . . . . . . . .      (762)        -          -
     Repayments of notes receivable from shareholders . . . . . . . . . . . . . .       503         -          -
     Issuance of stock and warrants . . . . . . . . . . . . . . . . . . . . . . .    25,268         -      4,800
     Stock repurchases. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .       (25)   (1,943)         -
     Proceeds from stock option exercises . . . . . . . . . . . . . . . . . . . .         -       391          -
     Offering costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    (3,224)        -        (96)
                                                                                   ---------  --------  ---------

                    Net cash provided by (used in) financing activities . . . . .    18,552    (1,552)     4,858
                                                                                   ---------  --------  ---------

Effect of changes in foreign currency exchange rate on cash and cash equivalents.      (703)      (33)      (434)
                                                                                   ---------  --------  ---------
                    Increase (decrease)  in cash and cash equivalents . . . . . .     6,307    (6,565)    (2,457)
Cash and cash equivalents at beginning of year. . . . . . . . . . . . . . . . . .     3,664     9,971      3,406
                                                                                   ---------  --------  ---------

Cash and cash equivalents at end of year. . . . . . . . . . . . . . . . . . . . .  $  9,971   $ 3,406   $    949
                                                                                   =========  ========  =========
</TABLE>


     The accompanying notes are an integral part of the consolidated financial
                                   statements.


                                      -31-
<PAGE>
                            DA CONSULTING GROUP, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.     SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES

Nature  of  Operations  &  Basis  of  Presentation

     DA Consulting Group, Inc. and its subsidiaries (the "Company") is a leading
international  provider  of employee education and end-user support solutions to
companies  which  are implementing enterprise resource planning software systems
and  other  business  information  technology.  The  consolidated  financial
statements  include  the  accounts  of  DA  Consulting  Group,  Inc.  and  all
majority-owned  subsidiaries.  Intercompany  balances and transactions have been
eliminated  in  consolidation.

Management  Estimates

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

Cash  and  Cash  Equivalents

      The  Company  considers  all  highly  liquid investments purchased with an
original  maturity  of  three  months  or  less  to  be  cash  equivalents.

Short-Term  Investments

     Short-term  investments  are  those,  that  when purchased, have maturities
greater  than  three months. The short-term investments consist of variable rate
municipal  debt  instruments.  As  the  Company  does  not  intend  to  hold the
investments  until  their  stated maturity dates, the Company has classified all
investments  as  available-for-sale.  The  Company  records  its  short-term
investments  at  cost,  which  approximates  market  value  determined using the
specific  identification  method.

Property  and  Equipment

     Property  and  equipment  are  stated at cost. Expenditures for substantial
renewals  and  betterments  are  capitalized,  while repairs and maintenance are
charged  to  expense  as incurred. Assets are depreciated or amortized using the
straight-line  method  for  financial reporting purposes and accelerated methods
for  tax  purposes  over  their  estimated  useful lives.  Computer equipment is
depreciated over a useful life of three to five years.  Furniture is depreciated
over  a  seven  year  useful  life.  Purchased  software  and  internal software
development  costs  related  to  the  Company's  primary  information system are
amortized  over  a seven year period. Gains or losses from disposals of property
and  equipment  are  reflected  in  operations.

Software  Development  Costs

     The  Company  capitalizes software development costs beginning when product
technological  feasibility  is  established  and  concluding when the product is
ready  for  general  release.  At  such  time,  software  development  costs are
amortized  on  a  straight-line  basis  over  the  lessor  of three years or the
expected life of the product. Research costs related to software development are
expensed as incurred.  During 1999, the Company capitalized $184,000 of software
development costs relating to computer-based training software development which
was  expensed over 12 months.   All software development costs for the company's
web  based  learning management system, Dynamic IQ, was expensed during the year
2000.

     In  1999  the  Company  capitalized  $3.3  million  in implementation costs
related  to  the  Company's  primary  information  system.  Such costs are being
amortized  straight-line  over  seven  years.

Income  Taxes

     The  Company  recognizes  deferred income taxes for the expected future tax
consequences  of  events  that have been included in the financial statements or
tax  returns.  Under  this method, deferred income taxes are determined based on
the  difference between the financial statement carrying amount and tax basis of
assets  and  liabilities using enacted tax rates in effect in the years in which
the  differences  are expected to reverse.  A valuation allowance, if necessary,
is provided against deferred tax assets based upon management's assessment as to
their  realization.


                                      -32-
<PAGE>
Foreign  Currency  Translation

     For  the  Company's  foreign  subsidiaries,  the  local  currency  is  the
functional  currency. Assets and liabilities are translated at year-end exchange
rates,  and  related revenue and expenses are translated at the average exchange
rates  in  effect  during  the  period.  Resulting  translation  adjustments are
recorded  as  a  separate  component in shareholders' equity. For countries with
highly  inflationary  currencies,  the  Company  uses  the  U.S.  dollar  as the
functional  currency.

Concentration  of  Credit  Risk

     Financial  instruments  that  potentially  subject  the  Company  to
concentrations  of credit risk consist principally of cash and cash equivalents,
short-term investments and trade accounts receivable. The Company maintains cash
deposits  and  short-term  investments from time to time, which exceed Federally
insured  limits,  with  several  major  financial  institutions.  Management
periodically  assesses the financial condition of the financial institutions and
investees  and  believes  that  any possible credit risk is minimal. The Company
performs  ongoing  credit  evaluations  of  its  clients  and generally does not
require collateral for services. Bad debts have not been significant in relation
to  the  volume  of  revenue.

Fair  Value  of  Financial  Instruments

     The  carrying amounts of cash and cash equivalents, short-term investments,
accounts  receivable  and  accounts  payable  approximate fair values due to the
short-term  nature  of  these  instruments.  The  estimated fair values of these
instruments  have  been  determined  by  the  Company  using  available  market
information.

Allowance  for  Doubtful  Accounts

     The  Company provides an allowance for accounts receivable that it believes
may  not  be  fully  collectible or realizable.  The balance of the allowance at
December  31,  1998,  1999  and  2000,  was  $650,000,  $964,000  and  $498,000,
respectively.

Intangible  Assets

     Prior  to  July  1995,  the  Company's  business  was operated through four
separate  companies  located  in  the  United  States, the United Kingdom, South
Africa  and  Australia (the "Predecessor Companies").  All of the Companies were
under common management.  As a result of a stock exchange transaction on July 1,
1995, the Predecessor Companies became wholly-owned subsidiaries of the Company.
In  the  exchange  transaction, the net assets of the three acquired Predecessor
Companies were recorded at fair market value.  As a result, the Company recorded
$485,000  of  goodwill,  which  is  being  amortized over 25 years.  Accumulated
amortization of goodwill was $86,000 and $105,000 at December 31, 1999 and 2000,
respectively.

Revenue  Recognition

     The  majority of the Company's contracts with clients are based on time and
expenses  incurred  with the remainder of the revenue generated from fixed price
contracts.  Accordingly,  service  revenue  under  both  types  of  contracts is
recognized  as  services  are  performed  and  the realization of the revenue is
assured.  Contract  costs  include direct labor costs and reimbursable expenses,
and those indirect costs related to contract performance such as indirect labor.
Selling,  general  and  administrative costs are charged to expense as incurred.
Provisions  for estimated losses on uncompleted contracts are made in the period
in  which such losses are determined. Changes in job performance, job conditions
and  estimated profitability may result in revisions to costs and income and are
recognized in the period in which the revisions are determined. Unbilled revenue
represents  the  revenue  earned in excess of amounts billed and deferred income
represents  billings  in excess of revenue earned. Revenue includes reimbursable
expenses  directly  incurred  in  providing  services  to  clients.  Revenue
attributable to reimbursable expenses amounted to $7.7 million, $4.9 million and
$1.8 million for the years ended December 31, 1998, 1999 and 2000, respectively.
The Company recognizes product revenue upon shipment to the client if no further
services  are  required.

Significant  Clients

     No  individual  client  accounted for more than 10% of consolidated revenue
for  any  period  presented.


                                      -33-
<PAGE>
Earnings  Per  Share

     Basic  earnings per share, which is based on the weighted average number of
common  shares  outstanding,  replaces  primary  earnings  per  share.  Diluted
earnings  per share, which is based on the weighted average number of common and
dilutive  potential  common  shares outstanding, replaces fully diluted earnings
per  share  and  utilizes  the  average market price per share as opposed to the
greater  of  the average market price per share or ending market price per share
when applying the treasury stock method in determining dilutive potential shares

Accounting  for  Stock  Options

     In  October 1995, the Financial Accounting Standards Board issued Statement
of  Financial  Accounting  Standards  No.  123,  Accounting  for  Stock-Based
Compensation  ("SFAS  No.  123"),  which  sets  forth  accounting and disclosure
requirements  for  stock  option  and  other stock-based compensation plans. The
statement  encourages,  but  does  not  require, companies to record stock-based
compensation  expense using a fair-value method, rather than the intrinsic-value
method  prescribed  by  Accounting  Principles Board ("APB") Opinion No. 25. The
Company  has  adopted  only  the disclosure requirements of SFAS No. 123 and has
elected  to  continue  to  record  stock-based  compensation  expense  using the
intrinsic-value  approach  prescribed  by  APB  No. 25. Accordingly, the Company
computes  compensation  cost as the amount by which the fair market price of the
Company's  common  stock  exceeds  the  exercise price on the date of grant. The
amount  of  compensation  cost,  if  any,  is charged to income over the vesting
period.

Comprehensive  Income

     Comprehensive  income  consists  of  net  income  and  foreign  currency
translation  adjustments  and  is  presented  in  the  Company's  statements  of
shareholders'  equity.

New  Accounting  Pronouncements

     In  June,  1998,  the  Financial Accounting Standards Board ("FASB") issued
Statement  of  Financial  Accounting Standards ("SFAS") No. 133, "Accounting for
Derivative  Instruments  and  Hedging Activities", which requires that companies
recognize  all  derivatives as either assets or liabilities in the balance sheet
and  measure  those instruments at fair value.  The FASB has subsequently issued
SFAS  No.  137,  "Accounting for Derivative Instruments and Hedging Activities -
Deferral  of  the  Effective  Date  of  FASB Statement No. 133," that defers the
requirements of SFAS No. 133 to fiscal years beginning after June 15, 2000.  The
Company  did  not hold any derivative or hedging instruments during the reported
periods.

     In  December  1999,  the  Securities  and  Exchange Commission issued Staff
Accounting  Bulletin  ("SAB")  No.  101,  "Revenue  Recognition  in  Financial
Statements."  The  bulletin  summarizes  certain  of  the  SEC  staff's  view in
applying  generally  accepted  accounting  principles  to revenue recognition in
financial  statements.  This  bulletin, through its subsequent revised releases,
SAB  No.  101A and SAB No. 101B, was effective for registrants no later than the
fourth  fiscal  quarter  of fiscal years beginning after December 15, 1999.  The
implementation of this bulletin did not have any impact on the Company's results
of  operations  or  equity.

2.     LIQUIDITY

     The  company  believes  its  current  cash  balances, financing agreements,
receivable-based  financing  and  cash  provided  by  future  operations will be
sufficient  to  meet  the  Company's  working capital and cash needs through the
foreseeable  future.  However  there  is no assurance that such sources of funds
will  be  sufficient  to  meet  these  future expenses and our future needs. The
Company  may  seek additional financing through a public or private placement of
equity.  The  Company's  need  for  additional  financing  will  be  principally
dependent  on the degree of market demand for the Company's services.  There can
be  no  assurance  that  the  Company will be able to obtain any such additional
financing  on  acceptable  terms,  if  at  all.


                                      -34-
<PAGE>
3.     PREPAID  EXPENSES  AND  OTHER  CURRENT  ASSETS

     The components of prepaid expenses and other current assets were as follows
(in  thousands):
                                                DECEMBER 31,
                                                ------------
                                                1999   2000
                                                -----  -----

Prepaid rent . . . . . . . . . . . . . . . . .  $  57  $  86
Deposits . . . . . . . . . . . . . . . . . . .    311     99
Other. . . . . . . . . . . . . . . . . . . . .     88    255
                                                -----  -----
     Prepaid expenses and other current assets  $ 456  $ 440
                                                =====  =====

4.     PROPERTY  AND  EQUIPMENT,  NET

     The  components  of  property and equipment were as follows (in thousands):

                                                   DECEMBER 31,
                                                -------------------
                                                  1999      2000
                                                --------  ---------

Computer equipment and software. . . . . . . .  $ 5,246   $  4,444
Automobiles. . . . . . . . . . . . . . . . . .       65          9
Furniture and fixtures . . . . . . . . . . . .    2,624      1,590
Leasehold improvements . . . . . . . . . . . .    1,176        782
Software development and implementation costs.    4,199      4,187
Purchased software . . . . . . . . . . . . . .    3,129      3,186
                                                --------  ---------
     Property and equipment. . . . . . . . . .   16,439     14,198

Less accumulated depreciation and amortization   (4,071)   ( 6,068)
                                                --------  ---------
      Property and equipment, net. . . . . . .  $12,368   $  8,130
                                                ========  =========


5.     DEBT

Revolving  Line  of  Credit

     In  March  2000,  the  Company  signed  a credit facility agreement with an
available  line  of  approximately  $750,000, based on eligible foreign accounts
receivable.  At  December  31, 2000, the Company had drawn down $154,000 of this
line.  The  interest rate on this line of credit was 7.75% at December 31, 2000.

Accounts  Receivable  Financing

     In  March 2000, the Company signed an agreement with a bank, which provides
for  financing  of  eligible  U.S. accounts receivable under a purchase and sale
agreement.  The  maximum  funds available under the agreement is $5 million.  At
December 31, 2000, the Company had sold $147,000 in accounts receivable pursuant
to  this  agreement.


                                      -35-
<PAGE>
6.     ACCRUED  EXPENSES

The  components  of  accrued  expenses  were  as  follows  (in  thousands):

                                    DECEMBER 31,
                                   --------------
                                    1999    2000
                                   ------  ------

Compensation and related expenses  $1,272  $1,067
Bonuses . . . . . . . . . . . . .     731     972
Professional fees . . . . . . . .     659     856
Vacations . . . . . . . . . . . .     689     544
Other taxes . . . . . . . . . . .   1,556   1,518
Leasehold abandonment reserve . .     283   1,410
Other . . . . . . . . . . . . . .     423     288
                                   ------  ------
     Accrued expenses . . . . . .  $5,613  $6,655
                                   ======  ======


7.     INCOME  TAXES

     The  following  is a summary of the significant components of the Company's
deferred  income  taxes  (in  thousands):

                                             DECEMBER 31,
                                            ---------------
                                             1999    2000
                                            ------  -------

Deferred tax assets:
     Net operating loss carryforward . . .  $2,348  $ 9,645
     Accrued expenses . . . . . . . . . .      444    1,073
     Other . . . . . . . . . . . . . . . .     122      171
          Deferred tax assets. . . . . . .   2,914   10,889

Deferred tax liabilities:
     Cash to accrual temporary differences     221        -
     Property and equipment. . . . . . . .     784    1,534

          Deferred tax liabilities . . . .   1,005    1,534
          Net, deferred tax assets . . . .  $1,909  $ 9,355


     At  December  31,  2000,  for US Federal income tax reporting purposes, the
Company  had  $19.5  million  of  unused  net  operating  losses  available  for
carryforward  to  future  years.  The  benefit  from  carryforward  of  such net
operating  losses  will  expire  in  2019 and 2020. The Company believes it will
generate  sufficient  taxable  income  to  ensure  realization  of  the benefit,
accordingly,  no  valuation  allowance  has  been  provided.

     At  December  31,  2000,  the  Company  also had foreign net operating loss
carryforwards  totaling  $7.2  million  with  $1.0 million expiring in 2007. The
remaining  $6.2  million  have  no expiration date. The Company believes it will
generate  sufficient  income  to  utilize  all of the foreign net operating loss
carryforwards.  Accordingly,  no  valuation  allowance  has  been  provided.

     The  benefit from utilization of net operating loss carryforwards could be
subject  to  limitations  if significant ownership changes occur in the Company.
The  Company's  ability  to realize the entire benefit of its deferred tax asset
requires  that  the  Company achieve certain future earnings levels prior to the
expiration  of its NOL carryforwards.  The Company could be required to record a
valuation  allowance  for  a  portion or all of its deferred tax asset if market
conditions  deteriorate and future earnings are below, or projected to be below,
its  current  estimates.


                                      -36-
<PAGE>
The  components  of the Company's provision for income taxes were as follows (in
thousands):

                                                         DECEMBER 31,
                                                 ---------------------------
                                                  1998      1999      2000
                                                 -------  --------  --------

United States federal and state:

     Current provision (benefit). . . . . . . .  $2,073   $  (562)  $
     Deferred benefit . . . . . . . . . . . . .    (182)   (1,774)   (5,121)
                                                 -------  --------  --------
                                                  1,891    (2,336)   (5,121)
                                                 -------  --------  --------

Foreign:

     Current  provision (benefit) . . . . . . .     794      (398)        -
     Deferred  provision (benefit). . . . . . .     128      (300)   (2,226)
                                                 -------  --------  --------
                                                    922      (698)   (2,226)
                                                 -------  --------  --------
          Provision (benefit) for income taxes   $2,813   $(3,034)  $(7,347)
                                                 =======  ========  ========


     The  difference  between the effective federal income tax rate reflected in
the  provision  (benefit)  for income taxes and the statutory federal income tax
rate  are  summarized  as  follows:


                                                       DECEMBER 31,
                                                 ------------------------
                                                  1998    1999     2000
                                                 ------   ------   ------

U.S. statutory rate . . . . . . . . . . . . . .    34.0%  (34.0)%  (34.0)%
Write-off of investment in foreign subsidiaries      --    (2.3)      --
State and local . . . . . . . . . . . . . . . .     2.1    (3.1)    (2.7)
Foreign . . . . . . . . . . . . . . . . . . . .     2.9     8.5      0.5
Other . . . . . . . . . . . . . . . . . . . . .     0.6     4.0      0.5
                                                 ------   ------   ------
     Effective tax rate. . . . . . . . . . . .     39.6%  (26.9)%  (35.7)%
                                                 ======   ======   ======

     The  U.S.  components  of  income (loss) before taxes were $5.0, $(3.9) and
$(13.7) million in 1998, 1999 and 2000, respectively, and the foreign components
were  $2.1,  $(7.4)  and  $(6.9)  million  in 1998, 1999 and 2000, respectively.

8.     STOCK-BASED  COMPENSATION  PLANS

Stock  Options

     The  Company's  1997  Stock  Option  Plan, as amended in December 1999 (the
"Option  Plan"),  is a stock-based incentive compensation plan. Under the Option
Plan,  the  Company  is  authorized  to  issue  1,960,000 shares of common stock
pursuant to "awards" granted in the form of incentive stock options (intended to
qualify  under Section 422 of the Internal Revenue Code of 1986, as amended) and
non-qualified  stock  options  not intended to qualify under Section 422. Awards
may  be  granted  to selected employees, directors, independent contractors, and
consultants  of  the  Company  or  any  subsidiary.  Stock  options granted have
contractual  terms  of  10  years. Unless otherwise specified in the terms of an
award,  all  options  vest on a schedule: 33% per year for 3 years, beginning on
the  second  anniversary  of the date of grant. Options granted under the Option
Plan  are  at  prices equal to the fair market value of the stock on the date of
the  grant, as determined by the Company's Board of Directors. To date, no stock
options  have  been  granted  to  independent contractors and consultants of the
Company.

     During  the  year  ended  December  31,  1998,  the Company recognized $1.8
million in compensation expense for excess book versus tax stock option basis as
a result of certain changes to restrictions related to these stock options.  The
charge  was  recognized  as  a  charge  to  additional  paid-in  capital.


                                      -37-
<PAGE>
The  following  table  sets  forth  pertinent information regarding stock option
transactions  and  stock option prices during the years ended December 31, 1998,
1999  and  2000:

<TABLE>
<CAPTION>
                                                                       NUMBER OF   WEIGHTED
                                                                       SHARES OF    AVERAGE
                                                                      UNDERLYING   EXERCISE
                                                                        OPTIONS     PRICES
                                                                      -----------  --------
<S>                                                                   <C>          <C>

Outstanding at December 31, 1997 . . . . . . . . . . . . . . . . . .     438,089   $   5.93
Granted. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     450,620      14.39
Forfeited. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     (97,279)      9.71
                                                                      -----------  --------
Outstanding at December 31, 1998 . . . . . . . . . . . . . . . . . .     791,430      10.28
Granted. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     541,140       9.20
Exercised. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     (68,530)      5.71
Forfeited. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    (222,980)     12.12
                                                                      -----------  --------
Outstanding at December 31, 1999 . . . . . . . . . . . . . . . . . .   1,041,060       9.63
Granted. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   1,038,699       1.98
Exercised. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .          --         --
Forfeited. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    (750,162)      9.48
                                                                      -----------  --------
Outstanding at December 31, 2000 . . . . . . . . . . . . . . . . . .   1,329,597       3.61
Exercisable at December 31, 1998 . . . . . . . . . . . . . . . . . .          --         --
Exercisable at December 31, 1999 . . . . . . . . . . . . . . . . . .      94,593       6.14
Exercisable at December 31, 2000 . . . . . . . . . . . . . . . . . .     262,430       6.04
                                                                      ===========  ========
Weighted average fair value of options granted during the year ended
    December 31, 2000. . . . . . . . . . . . . . . . . . . . . . . .               $  1.98
                                                                                   ========
</TABLE>

     The  fair  value  of  each stock option granted is estimated on the date of
grant  using  the  minimum value method of option pricing based on the following
weighted-average  assumptions:  dividend  yield  of 0%; risk-free interest rates
ranging  from  4.81%  to  6.13%;  expected  life  of  5  years.

The  following  table sets forth pertinent information regarding the outstanding
stock  options  at  December  31,  2000:

<TABLE>
<CAPTION>
                              Options Outstanding              Options Exercisable
                  -----------------------------------------  -----------------------
                                   Weighted      Weighted-                Weighted-
                                   Average        Average                  Average
Actual Range of     Number        Remaining       Exercise     Number      Exercise
Exercise Prices   Outstanding  Contractual Life    Price     Exercisable    Price
<S>               <C>          <C>               <C>         <C>          <C>
0.78-  1.88           732,749               9.4  $     1.56       15,999  $     1.88
2.19-  3.25           243,750               8.9        3.07       57,500        3.25
3.44-  4.50            88,250               6.3        3.80       50,200        3.73
 . . .5.37-
  6.55                130,236               5.2        5.89       96,006        5.99
9.75-15.25            134,612               6.6       13.43       42,725       14.19
0.78-15.25          1,329,597               8.4        3.61      262,430        6.04
</TABLE>


                                      -38-
<PAGE>
Pro  Forma  Net  Income  and  Earnings  Per  Share

     Had  the  compensation cost for the Company's stock-based compensation plan
been  determined  consistent  with SFAS No. 123, the Company's net income (loss)
per  share  at  December 31, 1998, 1999 and 2000 would approximate the pro forma
amounts  below  (in  thousands  except  per  share  amounts):

                              1998     1999      2000
                             ------  --------  ---------
Net income (loss):
  As reported                $4,299  $(8,263)  $(13,217)
  Pro forma                   3,891   (9,082)   (13,319)

Diluted earnings per share:
  As reported . . . . . . .  $ 0.69  $ (1.28)  $  (1.93)
  Pro forma . . . . . . . .    0.62    (1.41)     (1.95)

The  effects  of  applying  SFAS  No.  123  in this pro forma disclosure are not
indicative  of  future  amounts.

9.     SHAREHOLDERS'  EQUITY

Initial  Public  Offering

     In  connection with the consummation of the Company's Offering on April 24,
1998,  the  Company sold 1.7 million shares of its common stock, par value $0.01
per share.  Additionally, on May 28, 1998, the Company sold 42,586 shares of its
common stock pursuant to and in connection with the underwriters' over-allotment
option.  The  Company  received  net  proceeds of $21.1 million from the sale of
such  shares,  after  deducting  the  underwriting  discount  and other offering
expenses.

     Additionally,  in  connection with the Offering, the Company effected a 4.2
for  one  stock split.  All share data included in the accompanying consolidated
financial  statements  and  notes thereto are as if the stock split had occurred
prior  to  the  periods  presented.

Stock  Repurchase  Plan

     In  March  1999, the Company established a plan to repurchase up to 250,000
shares  of its outstanding common stock.  During the second quarter of 1999, the
Company  repurchased  200,000  shares  at an average of $9.70 per share totaling
$1.9  million.  The  Company suspended the plan at the end of the second quarter
of  1999.

Issuance  of  Common  Stock  and  Stock  Warrants

     On  October  16,  2000,  the  Company consummated the sale to Purse Holding
Limited  ("Purse"),  a  British  Virgin  Islands limited company, of two million
shares  of  the Company's common stock for $4.8 million and warrants to purchase
up to three million shares of the Company's common stock.  The sale was effected
pursuant  to  a  Securities Purchase Agreement ("the Agreement") dated August 2,
2000,  between  the  Company  and  Purse.  The  Agreement  was  approved  by the
Company's  shareholders  at  a  special  meeting  held on October 12, 2000.  The
Company  credited  its  $2  million loan, received from Purse on August 3, 2000,
toward  the  $4.8 million purchase price of the two million shares of its common
stock.

     In  accordance  with  the  terms  of  the Agreement, the Company issued two
million  shares of common stock at a price of $2.40 per share including warrants
to  purchase  (a)  two million shares of common stock, exercisable until October
16, 2003, at the greater of $3.00 per share or 85% of the market price per share
of  common  stock  at the time of exercise, and (b) one million shares of common
stock,  exercisable  for  the  period  of  time after January 1, 2002, and until
October  16,  2003,  at  $3.00  per  share.


                                      -39-
<PAGE>
Earnings  Per  Share

     The  following  table  summarizes the Company's computation of earnings per
share for the years ended December 31, 1998, 1999 and 2000 (in thousands, except
per  share  amounts).  The  calculation  of  diluted  weighted  average  shares
outstanding  excludes  0.8  million,  1.0 million, and 4.3 million common shares
pursuant  to  outstanding  options  and warrants for the year ended December 31,
1998,  1999,  and  2000,  respectively,  because  their effect was antidilutive.

<TABLE>
<CAPTION>
                                                                          YEARS ENDED DECEMBER 31,
                                                                          1998      1999      2000
                                                                         -------  --------  ---------
<S>                                                                      <C>      <C>       <C>
Basic earnings (loss) per share . . . . . . . . . . . . . . . . . . . .  $ 0.72   $ (1.28)  $  (1.93)
                                                                         =======  ========  =========
Net income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . .  $4,299   $(8,263)  $(13,217)
                                                                         =======  ========  =========
Weighted average shares outstanding . . . . . . . . . . . . . . . . . .   5,976     6,444      6,841
Computation of diluted earnings per share:
     Common shares issuable under outstanding stock options . . . . . .     767         -          -
     Less shares assumed repurchased with proceeds from exercise stock
          Options . . . . . . . . . . . . . . . . . . . . . . . . . . .    (510)        -          -
                                                                         -------  --------  ---------
     Adjusted weighted average shares outstanding . . . . . . . . . . .   6,233     6,444      6,841
                                                                         =======  ========  =========
     Diluted earnings (loss) per share. . . . . . . . . . . . . . . . .  $ 0.69   $ (1.28)  $  (1.93)
                                                                         =======  ========  =========
</TABLE>

10.     COMMITMENTS  AND  CONTINGENCIES

     The Company leases various office facilities under non-cancelable operating
lease agreements. Rent expense amounted to $1,129,000, $3,100,000 and $1,750,000
for  the  years  ended  December  31,  1998,  1999  and  2000,  respectively.

     At  December  31,  2000,  future lease payments under non-cancelable leases
with  terms  of  more  than  one  year  are  as  follows:
              2001 . . . . . . . . . . . . . . . . .     $2,279
              2002 . . . . . . . . . . . . . . . . .      2,258
              2003 . . . . . . . . . . . . . . . . .      1,828
              2004 . . . . . . . . . . . . . . . . .        752
              2005 . . . . . . . . . . . . . . . . .        202
              Thereafter . . . . . . . . . . . . . .         67
                                                       --------
                                                         $7,386
                                                       ========

     The Company has employment agreements with certain officers and key members
of  management of the Company, which automatically renew for one-year terms. The
agreements  provide  for  minimum  salary  levels,  incentive  bonuses  at  the
discretion  of the Company's Board of Directors and customary benefits including
insurance  coverage.  In addition, the employment agreements further provide for
severance  pay  ranging  from  six  months to two year's base salary, bonus, and
benefits,  depending on the cause of termination and in the event of a change in
corporate  control.

     From  time  to  time,  the  Company is a party to routine litigation in the
ordinary  course  of business. The Company does not believe that such litigation
will  have  a  material  impact  on  the  financial  statements.

11.     EMPLOYEE  BENEFIT  PLANS

401(k)  Plan

     The Company sponsors a 401(k) profit sharing plan (the "401(k) Plan") which
covers  substantially  all  of  its  U.S.  employees.  Employees are eligible to
participate  after  completing three months of service. The 401(k) Plan provides
for  elective  contributions by employees up to the maximum limit allowed by the
Internal  Revenue Code. The Company currently matches 50% of the amount deferred
by  participants,  on  deferral amounts up to 7.5% of compensation. Although the
Company  has  not made any profit sharing contributions, the 401(k) Plan permits
the  Company to make a discretionary profit sharing contribution which, if made,
is  allocated  to the accounts of participants who have been credited with 1,000
hours  of  service  during a plan year and who are employed on the last day of a
plan  year. The Company made matching contributions equal to $0.50 for the years
ended December 31, 1998, 1999 and 2000 for each dollar contributed to the 401(k)
Plan,  subject  to the limits noted above, by employees. These amounts have been
included in general and administrative expenses on the statements of operations.
An  employee  is  fully  vested in the matching contributions after six years of
employment,  or  earlier  upon  attainment  of  appropriate retirement age, upon


                                      -40-
<PAGE>
retirement  due  to disability, or upon death. The Company made contributions to
the 401(k) Plan aggregating approximately $385,000, $504,000 and $176,000 during
the  years  ended  December  31,  1998,  1999 and 2000, respectively. Payment of
benefits  is generally made in the form of a single lump sum or in installments.
The  Company  sponsors  similar  plans  in  Canada  and  the  United Kingdom and
previously  in  Mexico,  South Africa and Venezuela, pursuant to which employees
may  defer  specified percentages of compensation which the Company matches at a
rate  of  50-100%  on  the  first  3-5%  of  compensation  deferred.

Incentive  Compensation  and  Profit  Sharing  Policies

     The  Company  has  implemented  incentive  compensation  and profit sharing
policies that cover substantially all salaried employees. Employees in positions
at  project  manager or below, as well as administrative staff, are eligible for
discretionary profit sharing payments. Each employee's profit sharing payment is
based  on a formula and is contingent upon his or her level of salary and length
of  service. Employees in positions at project manager or above are eligible for
incentive  compensation payments based on satisfaction of applicable performance
criteria.  The  Company  sponsored  a profit sharing plan in the United Kingdom,
pursuant  to  which  9%  of  net  revenue  are  paid to employees on a partially
tax-deferred  basis.  This  plan  was  terminated in December 1998.  The Company
continued  a  discretionary profit sharing plan in the Americas division in 2000
and  United  Kingdom  division for 1999 and 2000.  The Company approved and made
incentive  compensation  and  profit  sharing payments aggregating approximately
$2,456,000,  $2,882,000,  and  $1,304,000 for the years ended December 31, 1998,
1999,  and  2000,  respectively,  which  are  included  in  sales,  general  and
administrative  expense.

12.      RESTRUCTURING  CHARGE

During  the  three  month period ended March 31, 2000, the Company implemented a
plan  to address the dramatic decline in training and documentation activity for
enterprise  resource  planning  implementations.  The plan consisted of regional
base  consolidations  and  downsizing  of  billable  and non-billable personnel.
Charges  included  the  costs  of  involuntary  employee  termination  benefits,
write-down  of  certain  property  and  equipment  and  reserves  for  leasehold
abandonment.  The  reduction  in  workforce consisted of 60 billable consultants
and  44 non-billable administrative personnel. Substantially all of the employee
terminations  were  completed  during  the first quarter. The Company recognized
approximately  $1.5  million  expense  attributable  to  involuntary  employee
termination  benefits  during  the  first  quarter,  of which approximately $1.2
million has been paid at December 31, 2000. In addition the Company has reserved
approximately  $0.9  million  related  to  the  abandonment  of  leases  and
approximately  $1.0  million related to the writedown of leasehold improvements,
furniture  and  equipment  held by its Americas division in the first quarter of
2000.   During  the  fourth  quarter of 2000 due to weakening in the real estate
market,  the  Company  recorded  an  additional  $1.3  million reserve for lease
abandonment  resulting  in  a  total annual charge of $2.2 million.  Of the $2.2
million reserved for lease abandonment, approximately $0.8 Million has been paid
against  the  reserve.  At  December  31,  2000,  the  Company believes that the
remaining  provision  is adequate to cover the future costs attributable to this
plan.  At  December  31,  2000  an  accrual  of  approximately  $0.3 million for
severance pay remained related to severance contracts being paid over a 12-month
period.  In  addition,  approximately  $1.4  million remained accrued for future
lease  payments  related  to  abandoned  leases.

13.     SUPPLEMENTAL  DISCLOSURES  OF  CASH  FLOW  INFORMATION

<TABLE>
<CAPTION>
                                       YEARS ENDED DECEMBER, 31
                                                                     1998     1999    2000
                                                                    -------  ------  ------
<S>                                                                 <C>      <C>     <C>
Cash paid (received) for interest and income taxes (in thousands):
     Interest                                                       $  271   $    -  $   74
     Income taxes. . . . . . . . . . . . . . . . . . . . . . . . .   2,137    1,198   2,697

Non-cash activities were (in thousands):
     Common stock issued for notes receivable. . . . . . . . . . .  $    -   $    -  $    -
     Exercise of stock options using company stock . . . . . . . .       -      146       -
     Deferred offering costs . . . . . . . . . . . . . . . . . . .    (898)       -       -
     Income tax expense related to restricted stock plan . . . . .   1,781        -       -
</TABLE>


                                      -41-
<PAGE>
14.     SEGMENT  REPORTING

     In  1998,  the Company adopted SFAS No. 131, "Disclosures about Segments of
an  Enterprise and Related Information."  SFAS No. 131 establishes standards for
reporting  information about operating segments and geographic areas.  Operating
segments  are  defined  as  components  of  an  enterprise  about which separate
financial  information is available that is evaluated regularly by the Company's
chief  decision  making group.  This group is comprised of senior management who
are  responsible  for  the  allocation  of resources and assessment of operating
performance.

     Because the Company's operations are geographically based, the organization
is divided into three operating divisions: the Americas Division, which includes
its  operations  in  North  America;  the  EMEA  Division,  which  includes  its
operations  in  Europe,  and  the  Asia  Pacific  Division,  which  includes its
operations  in  Australia,  Singapore  and  Asia.  The Company provides employee
education  and support services to companies investing in business technology in
all  geographic  regions.

     The  Company's  reportable  segment  information  was  as  follows:

<TABLE>
<CAPTION>
                                                    EUROPE,
                                                  MIDDLE EAST
(in thousands)                        AMERICAS     & AFRICA      ASIA PACIFIC     TOTAL
                                     ----------  -------------  --------------  ---------
<S>                                  <C>         <C>            <C>             <C>
YEAR ENDED DECEMBER 31, 2000
     Revenue. . . . . . . . . . . .  $  11,834   $     12,476   $       6,679   $ 30,989
     Operating income (loss). . . .    (12,363)        (5,033)         (3,193)   (20,589)
     Total assets . . . . . . . . .     14,872          6,440           3,628     24,940
     Capital expenditures . . . . .        151             34              68        253
     Depreciation and amortization.      1,530          1,076             404      3,010
YEAR ENDED DECEMBER 31, 1999
     Revenue. . . . . . . . . . . .  $  41,500   $     20,505   $       8,290   $ 70,295
     Operating income (loss). . . .     (7,703)        (2,306)         (1,575)   (11,584)
     Total assets . . . . . . . . .     24,409          6,432           2,077     32,918
     Capital expenditures . . . . .      4,739          1,310             200      6,249
     Depreciation and amortization.      2,190            298              72      2,560
YEAR ENDED DECEMBER 31, 1998
     Revenue. . . . . . . . . . . .  $  51,240   $     22,498   $       6,394   $ 80,132
     Operating income (loss). . . .      4,043          2,843             204      7,090
     Total assets . . . . . . . . .     39,083          7,641           2,179     48,903
     Capital expenditures . . . . .      7,005            339              54      7,398
     Depreciation and amortization.        904            178              56      1,138
</TABLE>


                                      -42-
<PAGE>
15.     QUARTERLY  OPERATING  RESULTS

     The  following tables set forth unaudited income statement data for each of
the  eight  quarters in the period beginning January 1, 1999 and ending December
31,  2000,  as well as the percentage of the Company's total revenue represented
by  each  item.  In  management's  opinion,  this unaudited information has been
prepared  on  a  basis  consistent  with  the Company's audited annual financial
statements  and  includes  all  adjustments (consisting only of normal recurring
adjustments)  necessary  for  a  fair  presentation  of  the information for the
quarters  presented,  when read in conjunction with the Financial Statements and
related  Notes  thereto  included  elsewhere in this Yearly Report Form 10K. The
operating  results for any quarter are not necessarily indicative of results for
any  future  period.

<TABLE>
<CAPTION>
                                                                              THREE MONTH PERIOD ENDED
                                            --------------------------------------------------------------------------------------
                                             MARCH 31,    JUNE 30,    SEPT. 30,    DEC. 31,    MARCH 31,    JUNE 30,    SEPT. 30,
                                               1999         1999        1999         1999        2000         2000        2000
                                            -----------  ----------  -----------  ----------  -----------  ----------  -----------
<S>                                         <C>          <C>         <C>          <C>         <C>          <C>         <C>
INCOME STATEMENT DATA:
                                                                     (in thousands except per share amounts)
     Revenue . . . . . . . . . . . . . . .  $   24,129   $  22,047   $   15,804   $   8,315   $    6,369   $   8,020   $    8,148
     Cost of revenue . . . . . . . . . . .      11,586      11,305        8,426       7,400        5,928       5,262        4,224
     Gross profit. . . . . . . . . . . . .      12,543      10,742        7,378         915          441       2,758        3,924
                                            -----------  ----------  -----------  ----------  -----------  ----------  -----------
     Selling and marketing expense . . . .       1,864       2,263        1,621       1,655        1,418       1,305        1,154
     Development expense . . . . . . . . .         640         434          350         379          469       1,732          923
     General and administrative expense. .       7,818       7,600        8,864       9,179        5,926       4,214        3,550
     Amortization expense. . . . . . . . .           4          53          148         148          192         191          189
     Restructuring charge. . . . . . . . .           -           -            -           -        3,354           -            -
     Employee stock-related charge . . . .           -         142            -           -            -           -            -
                                            -----------  ----------  -----------  ----------  -----------  ----------  -----------
     Operating income (loss) . . . . . . .       2,217         250       (3,605)    (10,446)     (10,918)     (4,684)      (1,892)
     Other income (expense), net . . . . .         104          25           90          68           26         (30)          58
                                            -----------  ----------  -----------  ----------  -----------  ----------  -----------
     Income (loss) before taxes. . . . . .       2,321         275       (3,515)    (10,378)     (10,892)     (4,714)      (1,834)
     Provision (benefit) for income taxes.         853         138       (1,318)     (2,707)      (3,423)     (1,641)        (950)
                                            -----------  ----------  -----------  ----------  -----------  ----------  -----------
     Net  income (loss). . . . . . . . . .  $    1,468   $     137   $   (2,197)  $  (7,671)  $   (7,469)  $  (3,073)  $     (884)
                                            ===========  ==========  ===========  ==========  ===========  ==========  ===========

     Basic earnings (loss) per share . . .  $     0.22   $    0.02   $    (0.34)  $   (1.20)  $    (1.16)  $    (.48)  $     (.14)
     Weighted average shares outstanding .       6,546       6,388        6,418       6,418        6,418       6,419        6,419

     Diluted earnings (loss) per share . .  $     0.22   $    0.02   $    (0.34)  $   (1.20)  $    (1.16)  $    (.48)  $     (.14)
     Weighted average shares outstanding .       6,737       6,489        6,418       6,418        6,418       6,419        6,419

                                                                               As a percent of revenue
     Revenue . . . . . . . . . . . . . . .       100.0%      100.0%       100.0%      100.0%       100.0%      100.0%       100.0%
     Cost of revenue . . . . . . . . . . .        48.0        51.3         53.3        89.0         93.1        65.6         51.8
                                            -----------  ----------  -----------  ----------  -----------  ----------  -----------
     Gross profit. . . . . . . . . . . . .        52.0        48.7         46.7        11.0          6.9        34.4         48.2
     Selling and marketing expense . . . .         7.7        10.3         10.3        19.9         22.3        16.3         14.2
     Development expense . . . . . . . . .         2.7         2.0          2.2         4.6          7.3        21.6         11.3
     General and administrative expense. .        32.4        34.4         56.1       110.4         93.0        52.5         43.6
     Amortization expense. . . . . . . . .           -         0.2          0.9         1.8          3.0         2.4          2.3
     Restructuring . . . . . . . . . . . .           -           -            -           -         52.7           -            -
     Employee stock-related charge . . . .           -         0.7            -           -            -           -            -
                                            -----------  ----------  -----------  ----------  -----------  ----------  -----------
     Operating income (loss) . . . . . . .         9.2         1.1        (22.8)     (125.6)      (171.4)      (58.4)       (23.2)
     Other income (expense), net . . . . .         0.5         0.1          0.6         0.8          0.4        (0.4)         0.7
                                            -----------  ----------  -----------  ----------  -----------  ----------  -----------
     Income (loss) before taxes. . . . . .         9.6         1.2        (22.2)     (124.8)      (171.0)      (58.8)       (22.5)
     Provision (benefit) for income taxes.         3.5         0.6         (8.3)      (32.6)       (53.7)      (20.5)       (11.7)
                                            -----------  ----------  -----------  ----------  -----------  ----------  -----------
     Net income (loss) . . . . . . . . . .         6.1%        0.6%      (13.9)%     (92.3)%     (117.3)%     (38.3)%       (10.8)
                                             ==========  ==========  ===========  ===========  ===========  =========  ===========


                                             DEC. 31,
                                               2000
                                            ----------
<S>                                         <C>
INCOME STATEMENT DATA:

     Revenue . . . . . . . . . . . . . . .  $   8,452
     Cost of revenue . . . . . . . . . . .      5,242
                                            ----------
     Gross profit. . . . . . . . . . . . .      3,210
     Selling and marketing expense . . . .      1,068
     Development expense . . . . . . . . .        543
     General and administrative expense. .      3,194
     Amortization expense. . . . . . . . .        188
     Restructuring charge. . . . . . . . .      1,312
     Employee stock-related charge . . . .          -
                                            ----------
     Operating income (loss) . . . . . . .     (3,095)
     Other income (expense), net . . . . .        (29)
                                            ----------
     Income (loss) before taxes. . . . . .     (3,124)
     Provision (benefit) for income taxes.     (1,333)
                                            ----------
     Net  income (loss). . . . . . . . . .  $  (1,791)
                                            ==========

     Basic earnings (loss) per share . . .  $    (.22)
     Weighted average shares outstanding .      8,093

     Diluted earnings (loss) per share . .  $    (.22)
     Weighted average shares outstanding .      8,093

     Revenue . . . . . . . . . . . . . . .      100.0%
     Cost of revenue . . . . . . . . . . .       62.0
                                            ----------
     Gross profit. . . . . . . . . . . . .       38.0
     Selling and marketing expense . . . .       12.6
     Development expense . . . . . . . . .        6.4
     General and administrative expense. .       37.8
     Amortization expense. . . . . . . . .        2.2
     Restructuring . . . . . . . . . . . .       15.5%
     Employee stock-related charge . . . .          -
                                            ----------
     Operating income (loss) . . . . . . .      (36.6)
     Other income (expense), net . . . . .       (0.3)
                                            ----------
     Income (loss) before taxes. . . . . .      (37.0)
     Provision (benefit) for income taxes.      (15.8)
                                            ----------
     Net income (loss) . . . . . . . . . .     (21.2)%
                                            ==========
</TABLE>


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