SECURITIES AND EXCHANGE COMMISSION
                         Washington, DC 20549


                               FORM 10Q

(Mark One)
__X__            QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                 SECURITIES EXCHANGE ACT OF 1934

            For the quarterly period ended March 31, 2000

                                  OR

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

                         For the transition period from
                      ________________to_________________


                   COMMISSION FILE NUMBER:   000-25590


                        DATASTREAM SYSTEMS, INC.

       Incorporated pursuant to the laws of the State of Delaware
               -------------------------------------------

   Internal Revenue Service  -- Employer Identification No. 57-0813674

                50 DATASTREAM PLAZA, GREENVILLE, SC 29605

                             (864) 422-5001
               -------------------------------------------

                             NOT APPLICABLE
       (Former Name, Former Address, if changed since last report)


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   ___

APPLICABLE  ONLY TO CORPORATE  ISSUERS:  Indicate the number of shares
outstanding   of  the   issuer's   common   stock  as  of  the  latest
practicable  date:  March  31,  2000  20,476,995  shares,   $0.01  par
value.
<PAGE>



                         Datastream Systems, Inc.

                                FORM 10-Q

                       Quarter ended March 31, 2000

                                  Index

                                                                        Page No.

Part I.    Consolidated Financial Information

           "Safe Harbor" Statement under the Private Securities
               Litigation Reform Act of 1995                            3

Item 1.    Consolidated Financial Statements (unaudited)

           Consolidated Balance Sheets-
               December 31, 1999 and March 31, 2000
                Assets                                                  4
                Liabilities and Stockholders' Equity                    5

           Consolidated Statements of Operations -
                for the Three Months ended March 31,  1999 and 2000     6

           Consolidated Statement of Changes in Stockholders' Equity
                and Comprehensive Income -
                for the Three Months ended March 31, 2000               7

           Consolidated Statements of Cash Flows -
                for the Three Months ended March 31, 1999 and 2000      8

           Notes to the Consolidated Financial Statements               9

Item 2.    Management's Discussion and Analysis of
           Financial Condition and Results of Operations                12

Item 3.    Quantitative and Qualitative Disclosures About               14
           Market Risk


Part II.   Other Information                                            15


Signature                                                               16
<PAGE>

PART I.     CONSOLIDATED FINANCIAL INFORMATION


               "SAFE HARBOR" STATEMENT UNDER THE PRIVATE
                 SECURITIES LITIGATION REFORM ACT OF 1995

     From time to time, Datastream Systems, Inc. ("Datastream" or the "Company")
makes  oral  and  written  statements  that  may  constitute   "forward  looking
statements"  (rather than historical facts) as defined in the Private Securities
Litigation  Reform Act of 1995 (the  "Act") or by the  Securities  and  Exchange
Commission (the "SEC") in its rules, regulations and releases, including Section
27A of the Securities Act of 1933, as amended (the "Securities Act") and Section
21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). The
Company desires to take advantage of the "safe harbor" provisions in the Act for
forward looking  statements made from time to time,  including,  but not limited
to, the forward looking  statements  made in this Quarterly  Report on Form 10-Q
(the "Report"), as well as those made in other filings with the SEC.

     Forward looking  statements can be identified by the use of forward looking
terminology  such  as  "may,"  "will,"   "expect,"   "anticipate,"   "estimate,"
"believe,"  "continue" or other similar words.  Such forward looking  statements
are based on  management's  current  plans and  expectations  and are subject to
risks and  uncertainties  that could cause actual  results to differ  materially
from those  described in the forward looking  statements.  In the preparation of
this Annual Report,  where such forward looking  statements  appear, the Company
has sought to accompany such statements with  meaningful  cautionary  statements
identifying  important  factors  that  could  cause  actual  results  to  differ
materially from those described in the forward looking statements.  Such factors
include,  but are not limited  to: the  ability of the  Company to  successfully
transition to the development of further Internet-based  products; the continued
acceptance   of  the  Internet  for  business   transactions;   our  ability  to
successfully   implement  an  application   service  provider   business  model;
increasing competition in the markets in which the Company competes; the ability
of the Company to enhance its current  products  and develop new  products  that
address  technological and market developments;  the stability of certain of the
Company's   strategic   relationships,   including   those  with   suppliers  of
maintenance,  repair and operations parts; increasing competition in markets for
the Company's  products;  the ability of the Company to protect its  proprietary
technology; risks associated with managing international operations,  including,
but not limited to, exposure to foreign exchange fluctuations and the ability of
the  Company  to  successfully  compete  in  foreign  markets;  fluctuations  in
quarterly  results due to seasonality and longer sales cycles in certain regions
where the Company  markets  its  products;  and  changes in economic  conditions
generally,  both domestic and  international.  The  preceding  list of risks and
uncertainties,  however, is not intended to be exhaustive, and should be read in
conjunction  with other  cautionary  statements made herein  including,  but not
limited  to, the "Risk  Factors"  set forth in the  Company's  Form 10-K for the
fiscal year ended December 31, 1999, as well as other risks identified from time
to time  in the  Company's  SEC  reports,  registration  statements  and  public
announcements.

               The  Company  does  not  have,  and  expressly   disclaims,   any
obligation  to release  publicly  any  updates  or any  changes in the Company's
expectations  or  any  changes  in  events,  conditions  or circumstances on
which any forward-looking statement is based.
<PAGE>

ITEM 1.  Consolidated Financial Statements

                    Datastream Systems, Inc. and Subsidiaries

                           Consolidated Balance Sheets

                                     Assets

                                                   December 31,       March 31,
                                                       1999             2000
                                                       ----             ----
                                                                     (unaudited)
Current assets:
   Cash and cash equivalents                        $17,912,797     $20,599,692
   Accounts receivable, net of allowance
      for doubtful accounts of $3,388,719
      and $ 3,389,836, respectively                  30,221,995      28,079,762
   Unbilled receivables                               2,311,247       2,389,585
   Investments                                          250,790          85,340
   Prepaid expenses                                   1,392,028       1,912,449
   Inventories                                          109,453          91,766
   Income tax receivable                                      -       5,472,695
   Deferred income taxes                              1,410,000       1,410,000
   Other assets                                       1,710,019       2,185,635
                                                      ---------       ---------
        Total current assets                         55,318,329      62,226,924

Investments                                           4,200,000       6,170,000
Property and equipment, net                          13,583,471      14,428,266
Goodwill, net                                        15,073,239      14,317,824
                                                     ----------      ----------

        Total assets                                $88,175,039     $97,143,014
                                                    ===========     ===========

See accompanying notes to consolidated financial statements.
<PAGE>

                    Datastream Systems, Inc. and Subsidiaries

                     Consolidated Balance Sheets (Continued)

                      Liabilities and Stockholders' Equity

                                                   December 31,       March 31,
                                                       1999             2000
                                                       ----             ----
                                                                     (unaudited)

Current liabilities:
   Accounts payable                                  $3,919,404     $ 4,418,820
   Other accrued liabilities                          7,387,417       9,283,883
   Income taxes payable                                 120,928               -
   Current portion of long-term debt                    650,578           2,299
   Unearned revenue                                   8,587,980      11,482,772
                                                      ---------      ----------
        Total current liabilities                    20,666,307      25,187,774

Long-term debt, less current portion                    224,285         139,631
                                                        -------         -------
        Total liabilities                            20,890,592      25,327,405

Stockholders' equity:
   Preferred stock, $1 par value,
        1,000,000 shares authorized; none issued              -               -
   Common stock, $.01 par value,
        40,000,000 shares authorized;
        19,674,208 shares issued at December 31, 1999,
        20,476,995 shares issued at March 31, 2000      196,742         204,770
   Additional paid-in capital                        70,533,683      78,375,943
   Retained earnings (deficit)                          760,050      (2,307,728)
   Other accumulated comprehensive income (loss)       (153,265)       (404,613)
   Treasury stock, 405,000 shares at cost            (4,052,763)     (4,052,763)
                                                     ----------      ----------
        Total stockholders' equity                   67,284,447      71,815,609

        Total liabilities and stockholders' equity  $88,175,039     $97,143,014
                                                    ===========     ===========

See accompanying notes to consolidated financial statements.

<PAGE>
                    Datastream Systems, Inc. and Subsidiaries

                      Consolidated Statements of Operations
                                   (unaudited)
                   Three months ended March 31, 1999 and 2000

                                                     March 31,        March 31,
                                                       1999             2000
                                                       ----             ----

Revenues:
   Product                                          $10,422,468     $ 7,552,929
   Professional service                              13,173,938      11,667,233
   Support                                            5,202,315       6,030,782
                                                     ----------      ----------
      Total revenues                                 28,798,721      25,250,944

Cost of revenues:
   Cost of product revenues                             535,086         462,141
   Cost of professional service revenues              6,689,912       8,954,791
   Cost of support revenues                           1,317,820       1,614,316
   Amortization of capitalized software                 583,391               -
                                                     ----------      ----------
      Total cost of revenues                          9,126,209      11,031,248
                                                     ----------      ----------
      Gross profit                                   19,672,512      14,219,696

Operating expenses:
   Sales and marketing                                7,655,576      11,476,286
   Product development                                2,897,020       4,227,046
   General and administrative                         2,643,305       3,006,895
   Goodwill amortization                                764,115         755,416
                                                     ----------      ----------
      Total operating expenses                       13,960,016      19,465,643
                                                     ----------      ----------
      Operating income (loss)                         5,712,496      (5,245,947)

Other income (expense):
   Interest and other income                            174,423         161,235
   Interest expense                                     (52,370)        (31,000)
                                                     ----------      ----------
      Net other income                                  122,053         130,235

      Income (loss) before income taxes               5,834,549      (5,115,712)

Income tax expense (benefit)                          2,187,913      (2,047,934)
                                                     ----------      ----------
Net income (loss)                                   $ 3,646,636     $(3,067,778)
                                                    ===========     ===========

   Basic net income (loss) per share                $       .19     $      (.16)
                                                     ----------      ----------
   Diluted net income (loss) per share              $       .18     $      (.16)
                                                     ----------      ----------
   Basic weighted average number of common and
      potential common shares outstanding            19,203,241      19,602,852
   Diluted weighted average number of common and
      potential common shares outstanding            19,837,256      19,602,852

See accompanying notes to consolidated financial statements.

<PAGE>
<TABLE>


                Datastream Systems, Inc. and Subsidiaries

 Consolidated Statement of Stockholders' Equity and Comprehensive Income(Loss)
                               (unaudited)

                For the three months ended March 31, 2000

<CAPTION>

                                                                           Other
                                             Additional   Accumulated   Accumulated                  Total
                                  Common      Paid-In      Earnings    Comprehensive   Treasury   Stockholders'
                                   Stock      Capital      (Deficit)    Income(Loss)     Stock       Equity
                                   -----      -------      ---------    -----------      -----       ------
<S>                                 <C>         <C>          <C>           <C>            <C>          <C>

Balance at December 31, 1999    $196,742   $70,533,683   $   760,050    $(153,265) $(4,052,763)     $67,284,447

Comprehensive (loss)
   Net loss                            -             -    (3,067,778)           -            -       (3,067,778)
   Unrealized losses on
        securities available for sale  -             -             -      (71,113)           -          (71,113)
   Foreign currency
        translation adjustment         -             -             -     (180,235)           -         (180,235)
                                                                                                     ----------
Total comprehensive loss                                                                             (3,319,126)
                                                                                                     ----------
Exercise of stock options          7,854     5,694,978             -            -            -        5,702,832

Tax benefit of options exercised       -     1,851,000             -            -            -        1,851,000

Stock issued for Employee
   Stock Purchase Plan               174       236,880             -            -            -          237,054

Amortization of compensatory
   stock options                       -        59,402             -            -            -           59,402

                                --------   -----------   -----------    ---------  -----------      -----------
Balance at March 31, 2000       $204,770   $78,375,943   $(2,307,728)   $(404,613) $(4,052,763)     $71,815,609
                                ========   ===========   ===========    =========  ===========      ===========

<FN>
See accompanying notes to consolidated financial statements.
</FN>
</TABLE>
<PAGE>
                    Datastream Systems, Inc. and Subsidiaries

                      Consolidated Statements of Cash Flows
                                   (unaudited)

                   Three months ended March 31, 1999 and 2000

                                                     March 31,        March 31,
                                                       1999             2000
                                                       ----             ----

Cash flows from operating activities:
   Net income                                       $ 3,646,636     $(3,067,778)
   Adjustments to reconcile net income to net cash
    provided by operating activities:
      Depreciation                                    1,140,395       1,272,672
      Amortization of capitalized software
       development costs                                583,391               -
      Goodwill amortization                             764,115         755,416
      Other accumulated comprehensive (loss)           (952,648)       (180,234)
      Accretion of investment discount, net                (320)              -
      Gain on disposal of fixed assets                  (32,809)              -
      Provision for doubtful accounts                   409,140           5,617
      Stock based compensation                                -          59,402
      Changes in operating assets and liabilities:
       Accounts receivable                           (1,264,504)      2,141,117
       Unbilled receivable                             (137,092)        (82,838)
       Accrued interest receivable                       10,237             298
       Prepaid expenses                                  10,224        (520,421)
       Inventories                                      121,849          17,687
       Other assets                                     (10,127)       (475,914)
       Accounts payable                                 625,635         499,416
       Other accrued liabilities                       (923,262)      1,896,466
       Income taxes payable                           1,729,047      (3,742,623)
       Unearned revenue                               1,487,233       2,894,792
                                                      ---------       ---------
       Net cash provided by operating activities      7,207,140       1,473,075
                                                      ---------       ---------
Cash flows from investing activities:
   Purchase of investments                           (4,310,000)     (2,000,000)
   Proceeds from sale and maturities of investments   2,575,058         124,337
   Additions to property and equipment                 (868,098)     (2,117,470)
   Capitalized software development costs              (967,007)              -
                                                      ---------       ---------
       Net cash used in investing activities         (3,570,047)     (3,993,133)
                                                      ---------       ---------

Cash flows from financing activities:
   Proceeds from exercise of stock options              112,528       5,702,832
   Proceeds from issuances of shares under employee
       stock purchase plan                              196,451         237,054
   Cash paid to acquire treasury stock                 (918,750)              -
   Principal payments on long-term debt                 (72,320)       (732,933)
                                                      ---------       ---------
       Net cash provided by (used in)
        financing activities                           (682,091)      5,206,953
                                                      ---------       ---------

Net increase in cash and cash equivalents             2,955,002       2,686,895
Cash and cash equivalents at beginning of period      6,739,209      17,912,797
                                                      ---------       ---------
Cash and cash equivalents at end of period          $ 9,694,211     $20,599,692
                                                    ===========     ===========

See accompanying notes to consolidated financial statements.

<PAGE>
                    Datastream Systems, Inc. and Subsidiaries

                   Notes to Consolidated Financial Statements


1)  Summary of Significant Accounting Policies

A. Organization and Basis of Presentation

Datastream  Systems,  Inc. (the "Company" or "Datastream") is a leading provider
of Internet-based  solutions for asset  maintenance and industrial  procurement.
The Company's asset maintenance solutions allow businesses, government and other
organizations to optimize the productivity of high-value  capital assets through
increased maintenance  productivity and improved management of assets, personnel
and  other  resources.  Datastream's  business-to-business  electronic  commerce
industrial  procurement solutions provide companies an on-line marketplace where
they can  efficiently  manage  the  procurement  of a wide  range of  industrial
maintenance,  repair and  operations  ("MRO")  parts.  Combined,  the  Company's
solutions  offer a complete,  scaleable asset  management  solution that is more
unique to the market. In addition to its U.S. operations, the Company has direct
sales or distribution  offices in Canada,  the United Kingdom,  The Netherlands,
France, Germany,  Ireland,  Denmark, Sweden, Norway,  Portugal,  Mexico, Brazil,
Argentina, Chile, Venezuela, Peru, Malaysia,  Australia,  Indonesia,  Singapore,
China and South Africa.

The  interim  financial  information  included  herein  is  unaudited.   Certain
information  and  footnote   disclosures  normally  included  in  the  financial
statements have been condensed or omitted  pursuant to the rules and regulations
of the Securities and Exchange  Commission (SEC),  although the Company believes
that the  disclosures  made are adequate to make the  information  presented not
misleading.  In the opinion of management,  such unaudited  information reflects
all  adjustments,  consisting  only  of  normal  recurring  accruals  and  other
adjustments  as  disclosed  herein,  necessary  for a fair  presentation  of the
unaudited information. These consolidated financial statements should be read in
conjunction  with  the  consolidated  financial  statements  and  related  notes
contained in the Company's  Form 10-K for the year ended December 31, 1999 filed
with the SEC on March 30, 2000. Other than as indicated herein,  there have been
no significant changes from the financial data published in those reports.

Results for interim periods are not necessarily  indicative of results  expected
for the full year.

B.    Accounting Policies

Revenue Recognition

The  Company's  revenue,  which  consists  primarily of fees for product  sales,
professional  services and  support,  is  recognized  in  accordance  with AICPA
Statement of Position 97-2 ("SOP 97-2"),  "Software  Revenue  Recognition".  SOP
97-2  generally  requires  revenue  earned on  software  arrangements  involving
multiple elements (i.e., software products, upgrades/enhancements,  postcontract
customer support, installation,  training, etc.) to be allocated to each element
based on the relative fair values of the elements.  The fair value of an element
must be based on evidence which is specific to the vendor. The revenue allocated
to software products (including  specified  upgrades/enhancements)  generally is
recognized upon delivery of the products.  The revenue allocated to postcontract
customer  support  generally is recognized  ratably over the term of the support
and revenue  allocated to service  elements (such as training and  installation)
generally is recognized as the services are performed. If a vendor does not have
evidence of the fair value for all elements in a  multiple-element  arrangement,
all revenue from the arrangement is deferred until such evidence exists or until
all elements are delivered.

In December  1998,  the  American  Institute  of  Certified  Public  Accountants
("AICPA")  issued  Statement  of  Position  98-9,  "Modifications  of SOP  97-2,
Software  Revenue  Recognition,  With  Respect  to Certain  Transactions"  ("SOP
98-9"),  which amends SOP 97-2 and  supercedes  Statement of Position  98-4. SOP
98-9 requires the  recognition of revenue using the residual method with respect
to certain  transactions.  The Company  adopted SOP 98-9 in fiscal year 1999 and
there was no material effect on the financial position, results of operations or
cash flows.

The Company  continually  evaluates its obligations  with respect to warranties,
returns and refunds.  Based on historical trends and management's  evaluation of
current conditions,  any potential obligations that are inherent in the accounts
receivable  balance  are  adequately  provided  for through  the  allowance  for
doubtful accounts. The Company may in certain circumstances grant discounts when
a purchase  order is  received.  The  discounts  are  recognized  in the product
revenue at the time of shipment.

Net Income (Loss) Per Share

Basic net income  (loss) per share is computed by dividing net income  (loss) by
the weighted  average  number of common shares  outstanding.  Diluted net income
(loss) per share is  computed  by  dividing  net income  (loss) by the  weighted
average  number of common and  potential  dilutive  common  shares  outstanding.
Diluted  weighted  average common and potential  dilutive  common shares include
common  shares  and  stock  options  using  the  treasury   stock  method.   The
reconciliation of basic and diluted income per share is as follows:

<PAGE>

For the three months ended March 31, 1999 and 2000

                                                                Per Share
                                             Income     Shares   Amount
    Three months ended March 31, 1999:
        Basic income per share          $ 3,646,636   19,203,241   $ .19
        Effect of dilutive securities:
           Stock options                          -      634,015
                                         -----------  ----------
        Diluted income per share        $ 3,646,636   19,837,256   $ .18
                                        ===========   ==========   =====

    Three months ended March 31, 2000:
        Basic income (loss) per share   $(3,067,778)  19,602,852   $(.16)
        Effect of dilutive securities:
           Stock options                          -            -
                                         -----------  ----------
        Diluted income (loss) per share $(3,067,778)  19,602,852   $(.16)
                                        ===========   ==========   =====

As a result of the Company's  loss from  operations  during the first quarter of
2000, options to purchase  approximately 2.7 million shares of common stock were
excluded in the computation of diluted net income (loss) per share. The dilutive
effect of these  options  would be to increase  diluted  shares  outstanding  to
21,556,330.

C. Restructuring Charges

In 1998, the Company  determined that it was necessary to  aggressively  migrate
its  current and future  products to a new  web-based  technology  platform  and
developed  a plan to  restructure  certain  of its  operations  in  response  to
increased  competition and rapidly changing  technology.  The restructuring plan
required  the  discontinuance  of  certain  internally  developed  and  acquired
products  and  the  reorganization  of the  Company's  product  development  and
distribution structures domestically and internationally to improve efficiencies
and customer service and eliminate redundancy. As a result, the Company recorded
a  restructuring  charge at December  31,  1998 of  $3,977,000  and  established
certain reserves for the costs.

As of March 31, 1999,  approximately $679,000 of the restructuring accruals were
utilized as follows:  $120,000 for  severance  and related  costs,  $237,000 for
costs of closing redundant  facilities and $322,000 for provisions for increased
credit risks.

D. Capitalized Software Development Costs

Capitalized  software  development  costs  consist  principally  of salaries and
certain other expenses  related to  development  and  modifications  of software
products and are  capitalized in accordance  with the provisions of Statement of
Financial  Accounting  Standards No. 86,  "Accounting  for the Costs of Computer
Software to be Sold,  Leased,  or Otherwise  Marketed".  Capitalization  of such
costs begins only upon  establishment  of  technological  feasibility,  which is
defined by the Company as completion of a working model of the software and ends
when the resulting product is available for sale.

Amortization  of  capitalized  software  development  costs  is  provided  on  a
product-by-product  basis and begins  when the  product is  available  for sale.
Annual  amortization  is the greater of the amount  computed  using the ratio of
current product revenue to the total of current and anticipated  product revenue
or the  straight-line  basis over the remaining  estimated  economic life of the
software,  which  is  generally  from  six  months  to 36  months.  The  ongoing
assessment of the realizability of these costs requires considerable judgment as
to anticipated  future product revenues,  related  estimated  economic life, and
changes  in  hardware  and  software   technology.   Amortization   of  software
development  costs is included in cost of product  revenues in the  accompanying
statements of income.

E. Geographical and Segment Information

The  Company  has  identified  two  reportable  industry  segments:   the  asset
maintenance  division  provides  solutions that optimize  productivity of assets
through various  preventative  maintenance and asset management programs ("asset
maintenance")  and  the  business-to-business   electronic  commerce  industrial
procurement  division,  which  enables  customers to automate  their  industrial
procurement ("iProcure"). Asset information by industry segment is not reported,
as the Company does not produce such information internally. The Company manages
the asset maintenance segment across  geographically  reportable  segments.  The
principal areas of operation  include the United States,  Europe,  Latin America
and Asia.  The  iProcure  segment  operates in the United  States  market  only.
Information about the Company's  operations in different segments and geographic
locations is as follows:

<PAGE>
<TABLE>
For the three months ended March 31, 1999 and 2000:
<CAPTION>
                                                                                      Asset
                        United                         Latin                       Maintenance     iProcure
                        States          Europe        America         Asia            Total           Total     Total
<S>                     <C>             <C>           <C>             <C>             <C>             <C>       <C>
March 31, 1999:

Total revenues          $19,046,602  $ 7,398,590    $ 1,632,809     $  720,523      $28,798,524    $    197  $28,798,721
Operating income (loss)   2,969,184    2,448,958        531,307         68,390        6,017,839    (305,343)   5,712,496
Total assets             69,461,285   17,906,217      1,269,462      3,084,133       91,721,097          NA   91,721,097

March 31, 2000:

Total revenues           16,504,74    15,796,408      1,350,882      1,574,563       25,226,594      24,350   25,250,944
Operating income (loss) (2,012,118)      (31,081)       260,461        (41,949)      (1,824,687) (3,421,260)  (5,245,947)
Total assets            67,590,248    15,750,385      3,577,359      4,752,327       91,670,319          NA   91,670,319

</TABLE>

F. Recent Accounting Pronouncements

In June 1998, the Financial  Accounting  Standards Board (FASB) issued Statement
of  Financial   Accounting   Standards  No.  133,   "Accounting  for  Derivative
Instruments and Hedging Activities"  (Statement No. 133). This standard requires
a public company to recognize all derivatives as either assets or liabilities in
the statement of financial position and measure those instruments at fair value.
In July 1999, the FASB issued  Statement of Financial  Accounting  Standards No.
137, "Accounting for Derivative Instruments and Hedging Activities - Deferral of
Effective  Date of FASB  Statement No. 133 - an amendment of FASB  Statement No.
133"  (Statement  No. 137).  Statement  No. 137 delayed the  effective  date for
Statement No. 133 for one year.  The Company is required to adopt  Statement No.
133 in the first  quarter of 2001.  The Company has not yet  assessed the impact
this standard  will have on its financial  condition or results of operations at
the time of adoption;  however,  the impact will ultimately depend on the amount
and type of derivative instruments held at the time of adoption, if any.


<PAGE>

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

     This Report contains certain forward-looking statements with respect to the
Company's  operations,   industry,  financial  condition  and  liquidity.  These
statements   reflect  the  Company's   assessment  of  a  number  of  risks  and
uncertainties.  The Company's  actual results could differ  materially  from the
results anticipated in these  forward-looking  statements as a result of certain
factors set forth in this Report.  An additional  statement made pursuant to the
Private Securities  Litigation Reform Act of 1995 and summarizing certain of the
principal risks and uncertainties inherent in the Company's business is included
in Part I of this Report under the caption  "'Safe Harbor'  Statement  Under the
Private  Securities  Litigation Reform Act of 1995".  Readers of this Report are
encouraged to read such statement carefully.

Overview

     Datastream  is a leading  provider of  Internet-based  solutions  for asset
management and industrial  procurement  for  businesses,  governments  and other
organizations.  The  Company  divides  its  business  into  two  main  segments.
Datastream's  asset  maintenance   division  provides  solutions  that  optimize
productivity  of  assets  through  various  preventative  maintenance  and asset
management programs. The Company's asset maintenance products includes solutions
for  virtually any size of operation,  from the large,  multi-site  organization
needing a full featured enterprise solution to the single, small shop with basic
requirements.  The Company's  iProcure  division  provides  business-to-business
electronic  commerce  industrial  procurement  solutions,  enabling customers to
automate their industrial  procurement resulting in reduced costs of maintaining
assets.

     The asset maintenance products consist of 3 major categories based on price
and functionality. MP2 Professional provides maintenance solutions for the small
to medium size facility,  MP2i offers enterprise-wide  maintenance solutions for
the large and mid-sized organizations that are required to manage capital assets
and personnel in multiple locations, and MP5i is designed for larger enterprises
with  asset   intensive   and  safety   critical   operations.   iProcure  is  a
business-to-business  Internet procurement application that enables customers to
automate their  industrial  procurement.  Datastream  supports its products with
professional and support services.

Results of Operations

     Total Revenues.  The Company  reported lower revenues for the first quarter
of 2000.  Total  revenues  decreased 12% to  $25,250,944 in the first quarter of
2000 from  $28,798,721  in the first quarter of 1999,  due  principally to lower
than  expected  software  license  revenues  and a related  decrease in services
revenue.

     Product revenues decreased 28% to $7,552,929 (30% of total revenues) in the
first  quarter of 2000 from  $10,422,468  (36% of total  revenues)  in the first
quarter of 1999, as a result of changes within the sales organization  causing a
disruption to license sales.

     Professional  service  revenues  decreased 11% to $11,667,233 (46% of total
revenues) in the first quarter of 2000 from  $13,173,938 (46% of total revenues)
in the first  quarter of 1999.  The decrease is a result of  decreased  software
license sales in the first quarter of 2000.  Professional  services  revenue for
the first quarter of 2000 includes  approximately  $24,000 of revenue attributed
to the iProcure division.

     Support  services  revenues for the first quarter of 2000  increased 16% to
$6,030,782  (24% of total  revenues) from  $5,202,315 (18% of total revenues) in
the first  quarter of 1999,  primarily  due to the  expansion  of the  Company's
installed base of systems during 1999.

     Cost of Revenues.  Cost of revenues  increased 21% to  $11,031,248  (44% of
total  revenues) in the first quarter of 2000, as compared to $9,126,209 (32% of
total  revenues)  in the  comparable  quarter of 1999.  The  increase in cost of
revenues is  attributed  to  increased  expenses  incurred  in the  Professional
Services  and  Support  Departments  related  to  increased  head  count to meet
customer  demand,  increased  travel  costs and  expenses  incurred  to  support
iProcure.

     Cost of product  revenues was 2% of total  revenues in the first quarter of
2000 and 2% of total revenues during the same period in 1999.

     Cost of professional  service revenues was 36% of total revenues during the
first quarter of 2000, and 23% of total revenues during the same period in 1999.
The increase as a  percentage  of total  revenues  was due to lower  utilization
rates as a result of decreased  license  revenue sales and  increased  costs for
iProcure.  Cost of professional  services  revenue for the first quarter of 2000
includes approximately $341,000 of expenses related to the iProcure division.

     Cost of support service  revenues was 6% of total revenues during the first
quarter of 2000 and 5% of total revenues during the same period in 1999. Cost of
support  services  revenue for the first quarter of 2000 includes  approximately
$35,000 of expenses related to the iProcure division.

     Amortization  of  capitalized  software  costs  was  $583,391  (2% of total
revenues) in the first quarter of 1999. No amortization  expense was recorded in
the  first  quarter  of 2000  due to  capitalized  software  costs  being  fully
amortized as of December 31, 1999.

     Sales and Marketing Expenses. Sales and marketing expenses increased 50% to
$11,476,286  (45% of total  revenues)  during  the  first  quarter  of 2000 from
$7,655,576 (27% of total revenues) during the first quarter of 1999, as a result
of an increased  number of sales  personnel  and  increased  sales and marketing
expenditures for iProcure. Sales and marketing expenses for the first quarter of
2000 includes approximately $2.2 million of iProcure division expenses.
<PAGE>
     Product  Development  Expenses.   Total  product  development  expenditures
increased 9% to $4,227,046 (17% of total  revenues)  during the first quarter of
2000 from $  3,864,027(13%  of total  revenues)  during the same period in 1999.
There was no capitalized portion of these amount in the first quarter of 2000 as
compared to $967,007 in the first quarter of 1999. The increase in total product
development expense resulted from increasing the number of development personnel
to support continued development of MP5i and iProcure. Total product development
expenses  for the first  quarter  of 2000  includes  approximately  $627,000  of
iProcure division expenses.

     General and Administrative  Expenses.  General and administrative  expenses
increased 14% to $3,006,895 (12% of total revenues)  during the first quarter of
2000  from  $2,643,305  (9% of total  revenues)  in the first  quarter  of 1999,
primarily due to costs associated with the iProcure division.  Total general and
administrative  expenses for the first  quarter of 2000  includes  approximately
$266,000 of iProcure division expenses.

     Amortization of Goodwill.  Amortization of goodwill expense decreased 1% to
$755,416 (3% of total  revenues)  during the first quarter of 2000 from $764,115
(3% of total revenues) in the first quarter of 1999, due to adjustments  made to
goodwill balances in 1999.

     Interest and other income.  Interest and other income decreased to $161,235
in the first  quarter of 2000 from  $174,423 in the first  quarter of 1999.  The
decrease was due to do gains  recognized  on the disposal of fixed assets in the
first quarter of 1999.

     Interest  Expense.  Interest  expense  decreased  to  $31,000  in the first
quarter  of 2000 from  $52,370 in the first  quarter of 1999 due to lower  third
party debt balances.

     Tax Rate. The Company's effective tax rate was 40% for the first quarter of
2000 as compared to 37.5% for the first quarter of 2000.

     Net  Income.  Net income  decreased  184% to  ($3,067,778)  ((12%) of total
revenues) in the first quarter of 2000 from  $3,646,636  (13% of total revenues)
in the first  quarter of 2000.  The decrease is  attributed to lower than expect
sales and an increase in iProcure  division expenses during the first quarter of
2000.


Liquidity and Capital Resources

     The  Company  has  funded  its  operating  activities  entirely  from  cash
generated  from  operations.  The Company  ended its first  quarter of 2000 with
$20,599,692 in cash and cash equivalents  defined as securities maturing in less
than 90 days.  The Company  intends to re-invest  the proceeds of maturing  U.S.
Government securities in similar U.S. Government securities.

     In March 2000, the Company made a $2.0 million investment in Dovebid,  Inc.
("Dovebid"),  one of the world's leading auctioneers and operators of a business
to business  Internet  auction site. The  investment  will be accounted for on a
cost basis.

     The  Company's  principal  commitments  as of  March  31,  2000,  consisted
primarily of long term debt and there were no material  commitments  for capital
expenditures.  In March 2000, the Company entered into a 10-year operating lease
for   approximately  $1  million  for  improvements  to  the  Company's  heating
ventilation  and  air  conditioning  ("HVAC")  system  at  its  Greenville,   SC
headquarters. The Company believes that its current cash balances,  availability
under its line of credit and cash flow from  operations  will be  sufficient  to
meet its working capital and capital expenditure needs for the next 12 months.

Year 2000

     Many currently  installed  computer systems and software products are coded
to accept  only a  two-digit  format in the date  field.  These date code fields
needed to accept a four-digit format to distinguish 21st century dates from 20th
century  dates.  As a result,  computer  systems  and/or  software  used by many
companies needed to be upgraded to comply with such "Year 2000" requirements. To
address the Year 2000 issue,  the Company  organized a Year 2000  Committee with
the responsibility of determining the Company's Year 2000 readiness,  as well as
the Year  2000  readiness  of third  parties  upon  which  the  Company  relies,
including  suppliers  and vendors.  The Company  implemented a Year 2000 plan as
described  in our Form 10-Q for the quarter  ended  September  30,  1999.  As of
December 31, 1999, the Company had  implemented its Year 2000 plan. To date, and
with the January 1, 2000 date  rollover,  the Company  has not  experienced  any
material  disruptions  associated  with the Year 2000  issue  and the  Company's
internal systems,  products,  customers,  or suppliers and vendors.  The Company
does not expect to experience any material disruptions  associated with the Year
2000 issue in the  future.  As of  December  31,  1999,  the  Company  had spent
approximately  $1.4 million in  connection  with its Year 2000 plan.  Such costs
have  been  funded  with  operating  cash  flows  and cash on  hand.  Datastream
designates  all  statements  in this Report  regarding  its Year 2000 efforts as
"Year 2000  Readiness  Disclosures"  pursuant to the Year 2000  Information  and
Readiness Disclosure Act.

Earnings Per Share Calculation

     Because the Company  experienced  a net loss of  $(3,067,778)  in the first
quarter of 2000,  in  accordance  with FASB  Statement of  Financial  Accounting
Standards No. 128, "Earnings Per Share",  options to purchase  approximately 2.7
million  shares of common stock have been  excluded in  calculating  diluted net
loss per share $(.16) for the first quarter of 2000.  Such options were included
in the  diluted net loss per share  calculation  $(.14) in the  Company's  press
release of April 25, 2000.
<PAGE>

ITEM 3.  Quantitative and Qualitative Disclosures about Market Risk


     The Company did not experience  any material  changes in market risk in the
first quarter of 2000.


<PAGE>
PART II.     OTHER INFORMATION

Item 1.    Legal Proceedings

     On January 11, 1999,  several  shareholders  filed a putative  class action
complaint  in the  United  States  District  Court  for the  District  of  South
Carolina,  Greenville  Division,  naming as  defendants,  the Company,  Larry G.
Blackwell   and  the  Company's   former  Chief   Financial   Officer.   Several
substantially   similar   complaints  were  filed  in  the  same  court  shortly
thereafter. The complaints alleged violations of Sections 10(b) and 20(a) of the
Securities  Exchange  Act of  1934.  Plaintiffs  seek to  represent  a class  of
individuals who purchased the Company's common stock from April 1 to October 20,
1998. On June 25, 1999, the court ordered that the actions be  consolidated  and
that a  single  consolidated  complaint  be  filed.  On  August  13,  1999,  the
plaintiffs filed a consolidated amended class action complaint. The consolidated
amended complaint  alleges that defendants  artificially  inflated  Datastream's
earnings  and  stock  price  by  (i)  taking  certain  one-time  charges  not in
accordance with generally accepted accounting  principles ("GAAP") in connection
with Datastream's acquisitions of Insta and SIS and (ii) materially understating
the  Company's  reserves  for  doubtful  accounts  in  violation  of  GAAP.  The
plaintiffs  seek  compensatory  damages and  unspecified  equitable  relief.  On
September 13, 1999, the Company and the individual  defendants  moved to dismiss
the consolidated  amended complaint.  The court denied the defendants' motion to
dismiss on January 27, 2000.  The Company  filed its answer to the  consolidated
class action  complaint on February 24, 2000. The Company intends to defend this
action  vigorously,  but due to the  inherent  uncertainties  of the  litigation
process, the Company is unable to predict the outcome of this litigation. If the
outcome of the  litigation  is adverse to the Company,  it could have a material
adverse  effect on the Company's  business,  financial  condition and results of
operations.

     Datastream  is  occasionally  involved in other  claims  arising out of its
operations  in the  normal  course  of  business,  none of which  are  expected,
individually  or in the  aggregate,  to have a  material  adverse  affect on the
Company.

Item 2.    Changes in Securities

           Not Applicable

Item 3.    Defaults Upon Senior Securities

           Not Applicable

Item 4.    Submission of Matters to a Vote of Stockholders

           Not Applicable

Item 5.    Other Information

           Not Applicable

Item 6.    Exhibits and Reports on Form 8-K

(a)        Exhibits

                27   Financial Data Schedule

(b)   Reports on Form 8-K

                None.

<PAGE>

SIGNATURES



     Pursuant to the  requirements  of the Securities  Exchange Act of 1934, the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.



                               Datastream Systems, Inc.


                               /s/ C. Alex Estevez
Date:   5/09/00                ______________________
                               C. Alex Estevez
                               Chief Financial Officer (principal
                                financial and accounting officer)
<PAGE>
                              EXHIBIT INDEX



Exhibit Number                 Description

27                        Financial Data Schedule


<PAGE>