SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549


                                    FORM 10-Q

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

                 For the quarterly period ended SEPTEMBER 30, 1996

                                       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:   0-25590


                            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:    SEPTEMBER 30,
1996;  8,517,298 shares, $0.01 par value.


<PAGE>





                            Datastream Systems, Inc.

                                    FORM 10-Q

                        Quarter ended September 30, 1996

                                      Index

                                                                        Page No.

Part I.     Consolidated Financial Information

Item 1.     Consolidated Financial Statements (unaudited)

            Consolidated Balance Sheet-  September 30, 1996
                  Assets                                                      3
                  Liabilities and Owners Equity                               4

            Consolidated Income Statement-
                  for the Three Months ended September 30, 1996               5
                  for the Nine Months ended September 30, 1996                6

            Consolidated Statement of Changes in Stockholders Equity-
                  for the Three Months ended September 30, 1996               7

            Consolidated Statement of Cash Flows-
                  for the Nine Months ended September 30, 1996                8

            Notes to the Consolidated Financial Statements                    9

Item 2.     Management's Discussion and Analysis of
            Financial Condition and Results of Operations                    10


Part II.    Other Information                                                13


Signature                                                                    14


                                   2
<PAGE>

PART I:  CONSOLIDATED FINANCIAL INFORMATION

ITEM 1:  Consolidated Financial Statements

                            Datastream Systems, Inc.

                           Consolidated Balance Sheets

                                     Assets

                                                     December 31, September 30,
                                                         1995          1996
                                                                   (unaudited)

Current assets:
   Cash and cash equivalents                       $   1,184,092 $   3,175,674
   Accounts receivable, net of allowance for
      doubtful accounts of $244,475 and
      $380,000, respectively                           4,589,254     6,536,031
   Investments held to maturity                       17,335,907    12,538,755
   Accrued interest receivable                           309,375       156,671
   Prepaid expenses                                      162,779       281,592
   Inventories                                           250,931       261,338
   Deferred income taxes                                 181,000       181,000
   Other assets                                          110,127       194,519
                                                    ------------  ------------
   Total current assets                               24,123,465    23,325,580

Investments held to maturity                          20,319,024    24,553,441

Property and equipment
   Land and Land Improvements                            450,000       465,981
   Building                                            3,009,509     4,077,269
   Computer equipment                                  2,152,780     3,681,893
   Furniture and fixtures                                562,073       896,088
                                                      ----------    ----------
                                                       6,174,362     9,121,231
   Less accumulated depreciation                         877,300     1,471,461
                                                      ----------     ---------
   Net property and equipment                          5,297,062     7,649,770
Capitalized software development costs, net of
   accumulated amortization of $987,261 and
   $1,335,491, respectively                              952,618     2,236,792
                                                      ----------     ---------

   Total assets                                    $  50,692,169 $  57,765,583
                                                   ============= =============

See Notes to Consolidated Financial Statements
                                   3         
<PAGE>

                            Datastream Systems, Inc.

                     Consolidated Balance Sheets (Continued)


                      Liabilities and Stockholders' Equity

                                                     December 31, September 30,
                                                         1995          1996
                                                                   (unaudited)

Current liabilities:
   Accounts payable                                 $    199,428  $    564,793
   Other accrued liabilities                             431,484       350,485
   Income taxes payable                                  699,201       984,119
   Current portion of long-term debt                      20,000        20,000
   Unearned revenue                                    2,808,348     3,469,056
                                                       ---------     ---------
      Total current liabilities                        4,158,461     5,388,453
Long-term debt, less current portion                      21,667         6,667
Deferred income taxes                                    478,000       478,000
                                                      ----------    ----------


Stockholders' equity:
   Preferred stock, $1 par value, 1,000,000 shares
      authorized; none outstanding                             -             -
   Common stock, $.01 par value, 15,000,000 shares
      authorized; 8,405,488 shares issued and outstanding
      at December 31, 1995, 8,517,298 shares issued
      and outstanding at September 30, 1996               84,055        85,173
   Additional paid-in capital                         40,738,355    41,575,811
   Retained earnings                                   5,211,631    10,231,479
                                                     -----------    ----------

      Total stockholders' equity                      46,034,041    51,892,463
                                                      ----------    ----------

      Total liabilities and stockholders' equity   $  50,692,169 $  57,765,583
                                                   ============= =============

See Notes to Consolidated Financial Statements
                                   4
<PAGE>

                            Datastream Systems, Inc.

                        Consolidated Statements of Income
                 Three months ended September 30, 1995 and 1996

                                                    September 30, September 30,
                                                         1995          1996
                                                     (unaudited)   (unaudited)
Revenues:
   Product                                         $   2,431,968 $   3,651,553
   Applications engineering                            1,925,723     3,069,642
   Support                                             1,195,830     1,542,707
                                                       ---------     ---------
      Total revenues                                   5,553,521     8,263,902

Cost of revenues:
   Cost of product revenues                              341,469       472,718
   Cost of applications engineering revenues             957,061     1,715,819
   Cost of support revenues                              172,571       258,314
                                                      ----------    ----------
      Total cost of revenues                           1,471,101     2,446,851
                                                       ---------     ---------

      Gross profit                                     4,082,420     5,817,051

Operating expenses:
   Sales and marketing                                 1,295,737     2,268,547
   Product development                                   464,800       357,707
   General and administrative                            497,866       805,640
                                                      ----------    ----------
      Total operating expenses                         2,258,403     3,431,894
                                                       ---------     ---------

      Operating income                                 1,824,017     2,385,157

Other income (expense):
   Interest income                                       269,793       579,903
   Interest expense                                       (1,227)         (923)
   Other                                                   2,713        11,425
                                                       ---------   -----------
      Net other income                                   271,279       590,405
                                                      ----------    ----------

      Income before income taxes                       2,095,296     2,975,562

Income taxes                                             836,000     1,145,500
                                                      ----------     ---------

Net income                                           $ 1,259,296   $ 1,830,062
                                                     ===========   ===========

Per share data:
   Net income                                        $       .17   $       .21
                                                     -----------   -----------

   Weighted average number of common and
      common equivalent shares outstanding             7,550,549     8,919,505
                                                       =========     =========
See Notes to Consolidated Financial Statements
                                   5
<PAGE>

                            Datastream Systems, Inc.

                        Consolidated Statements of Income
                  Nine months ended September 30, 1995 and 1996
                                                    September 30, September 30,
                                                         1995          1996
                                                     (unaudited)   (unaudited)
Revenues:
   Product                                         $   6,337,199 $   9,983,265
   Applications engineering                            4,552,241     8,371,707
   Support                                             3,064,199     4,514,793
                                                     -----------   -----------
      Total revenues                                  13,953,639    22,869,765

Cost of revenues:
   Cost of product revenues                              789,259     1,327,546
   Cost of applications engineering revenues           2,292,813     4,333,540
   Cost of support revenues                              470,415       784,087
                                                      ----------    ----------
      Total cost of revenues                           3,552,487     6,445,173
                                                       ---------     ---------

      Gross profit                                    10,401,152    16,424,592

Operating expenses:
   Sales and marketing                                 3,483,900     6,630,284
   Product development                                 1,118,787     1,076,113
   General and administrative                          1,606,980     2,300,326
                                                       ---------     ---------
      Total operating expenses                         6,209,667    10,006,723
                                                       ---------    ----------

      Operating income                                 4,191,485     6,417,869

Other income (expense):
   Interest income                                       557,542     1,727,158
   Interest expense                                       (4,705)       (3,678)
   Other                                                  12,895        23,499
                                                     -----------   -----------
      Net other income                                   565,732     1,746,979
                                                      ----------     ---------

      Income before income taxes                       4,757,217     8,164,848

Income taxes                                           1,901,000     3,145,000
                                                       ---------     ---------

Net income                                           $ 2,856,217   $ 5,019,848
                                                     ===========   ===========

Per share data:
   Net income                                        $       .43   $       .57
                                                     -----------   -----------

   Weighted average number of common and
      common equivalent shares outstanding             6,677,145     8,850,754
                                                       =========     =========
See Notes to Consolidated Financial Statements
                                   6
<PAGE>

                            Datastream Systems, Inc.

               Consolidated Statement of Changes in Shareholders' Equity

                     For the period ended September 30, 1996
                                   (unaudited)



                                                       Additional     Total
                                 Common      Paid-In    Retained   Stockholders'
                                  Stock      Capital    Earnings      Equity


Balance at December 31, 1995   $ 84,055  $40,738,355  $ 5,211,631  $46,034,041

   Net income                         -            -    5,019,848    5,019,848

   Stock Options Exercised        1,118      837,456            -      838,574

Balance at September 30, 1996  $ 85,173  $41,575,811  $10,231,479  $51,892,463
                                =======  ===========  ===========  ===========



See Notes to Consolidated Financial Statements

                                   7               
<PAGE>

                            Datastream Systems, Inc.

                      Consolidated Statements of Cash Flows

              Nine months ended September 30, 1995 and September 30, 1996

                                                    September 30, September 30,
                                                         1995          1996
                                                      (unaudited)   (unaudited)
Cash flows from operating activities:
   Net income                                       $  2,856,217  $  5,019,848
   Adjustments to reconcile net income to net cash
     provided by operating activities:
      Depreciation                                       240,436       613,123
      Amortization of capitalized software
        development costs                                162,332       350,519
      Loss on disposal of fixed assets                    49,198          (213)
      Provision for doubtful accounts                    114,070       135,525
      Changes in operating assets and liabilities:      (827,652)     (572,851)
                                                      ----------    ----------
        Net cash provided by operating activities      2,594,601     5,545,951
Cash flows from investing activities:
   Net (purchase)/proceeds from investment maturities(14,178,698)      220,252
   Additions to property and equipment                  (984,855)   (2,974,781)
   Proceeds from the sale of equipment                         -         9,000
   Capitalized software development costs               (444,677)   (1,632,414)
        Net cash used in investing activities        (15,608,230)   (4,377,943)
                                                     -----------    ----------

Cash flows from financing activities:
   Net proceeds from initial public offering of
     common stock                                     13,560,213             -
   Proceeds from exercise of stock warrants               35,463             -
   Proceeds from exercise of stock options                     -       838,574
   Principal payments on long-term debt                  (21,667)      (15,000)
        Net cash provided by (used in)
            financing activities                      13,574,009       823,574
                                                      ----------     ---------

Net increase (decrease) in cash and cash equivalents     560,380     1,991,582
Cash and cash equivalents at beginning of period       1,151,977     1,184,092

Cash and cash equivalents at end of period          $  1,712,357  $  3,175,674
                                                    ============  ============

See Notes to Consolidated Financial Statements
                                   8
<PAGE>

Datastream Systems, Inc.

Notes to Consolidated Financial Statements

1)  Summary of significant Accounting Policies

A.  Organization and Basis of Presentation

Datastream  Systems,  Inc. (the "Company" or  "Datastream")  develops,  markets,
sells and supports  Microsoft  Windows-based  personal computer software for the
industrial  automation market.  Datastream's  software enables users to schedule
preventive  maintenance,  record equipment maintenance  histories,  organize and
control  spare  parts  inventories,   schedule  equipment  and  parts  inventory
purchases and deploy maintenance personnel.

The  interim  financial  information  included  herein  is  unaudited.   Certain
information  and  footnote  disclosures  normally  included in the  Consolidated
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. 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 filed with the SEC on April 1, 1996.  Other
than as  indicated  herein,  there  have been no  significant  changes  from the
Consolidated  Financial  data  published  in  that  report.  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.

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

B.  Accounting Policies

Net income per share

Net income per share is computed by dividing net income by the weighted  average
number of common and common  equivalent  shares  outstanding.  Weighted  average
common and common  equivalent  shares  include  common  shares and stock options
using the treasury stock method.

C.  Public Offering of Common Stock

On April 5, 1995, the Company  closed its initial  public  offering of 1,633,000
shares of common stock (633,000 of which were sold by existing shareholders) for
$15.00 per share before giving effect to the two for one stock split referred to
in  the  following   paragraph.   The  Company  invested  the  net  proceeds  of
approximately $13.95M from the offering in U.S. Government securities.

Effective  September  12, 1995 the  Company  completed a two for one stock split
effected in the form of a stock  dividend.  All  references in the  accompanying
Consolidated Financial statements to the number of shares have been presented to
reflect this stock split.

On  October  3, 1995,  the  Company  closed its  secondary  public  offering  of
2,000,000  shares of common stock for $22.25 per share (1,085,670 of such shares
were sold by existing  shareholders).  The Company  invested the net proceeds of
approximately $19.12 million from the offering in U.S. Government securities. In
conjunction with the secondary offering, on October 17, 1995, the Company closed
on the  over-allotment  option of 300,000  shares of common  stock.  The Company
invested the net proceeds of approximately $6.28 million from the over-allotment
option in U.S. Government securities.
                                   9
<PAGE>

Datastream Systems, Inc.

PART I.  FINANCIAL INFORMATION

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.

Overview

     The  Company  offers  a  family  of  "computerized  maintenance  management
systems"  ("CMMS") to the maintenance,  repair and operations  ("MRO") industry,
including MP2 (DOS),  SideArm (DOS),  SideArm for Windows,  MP2 for Windows, MP2
for Client  Server,  MaintainIt  and  MaintainIt  Pro.  Datastream  supports its
software  products  through   applications   engineering   services,   including
installation,  consulting,  custom  programming and training.  Ongoing technical
support services are supplied  pursuant to renewable  annual  technical  support
contracts.

Results of Operations

     Total Revenues.  The Company reported higher revenues for the third quarter
of 1996.  Total revenues  increased  48.8% to $8,263,902 in the third quarter of
1996 from  $5,553,521  in the third  quarter  of 1995,  due  principally  to the
continued  acceptance of the  Company's  products in the  industrial  automation
market and the expansion of the Company's  sales,  applications  engineering and
technical  support  service  organizations.  Total revenues  increased  63.9% to
$22,869,765  during the first nine months of 1996 from  $13,953,639 in the first
nine months of 1995.

     Product revenues increased 50.1% to $3,651,553 (44.2% of total revenues) in
the third quarter of 1996 from $2,431,968 (43.8% of total revenues) in the third
quarter  of 1995,  as a result  of growth  in sales of the  Company's  Microsoft
Windows based products. Product revenues increased 57.5% to $9,983,265 (43.7% of
total revenues) in the first nine months of 1996 from $6,337,199 (45.4% of total
revenues) in the first nine months of 1995.

     Application  engineering  services  revenues  increased 59.4% to $3,069,642
(37.1% of total revenues) in the third quarter of 1996 from $1,925,723 (34.7% of
total  revenues)  in the third  quarter  1995.  The increase  resulted  from the
addition  of  application  engineering  personnel  to service  expansion  of the
Company's installed base of systems.  Application  engineering services revenues
increased 83.9% to $8,371,707 (36.6% of total revenues) in the first nine months
of 1996 from  $4,552,241  (32.6% of total  revenues) in the first nine months of
1995.

     Technical  support  services  revenues for the third quarter 1996 increased
29.0% to $1,542,707  (18.7% of total revenues) from  $1,195,830  (21.5% of total
revenues) in the third  quarter of 1995,  primarily  due to the expansion of the
Company's  installed  base  of  systems.  Technical  support  services  revenues
increased 47.3% to $4,514,793 (19.7% of total revenues) in the first nine months
of 1996 from  $3,064,199  (22.0% of total  revenues) in the first nine months of
1995.
                                   10
<PAGE>

     Cost of Revenues.  Cost of revenues increased 66.3% to $2,446,851 (29.6% of
total  revenues) in the third quarter of 1996, as compared to $1,471,101  (26.5%
of total  revenues) in the  comparable  quarter of 1995. The increase in cost of
revenues as a percentage of sales is attributed to increased  expenses  incurred
in the  Applications  Engineering  Department  related to  salaries,  travel and
customer  reimbursed  travel  expenses.  Cost of  revenues  increased  81.4%  to
$6,445,173  (28.2% of total revenues)  during the first nine months of 1996 from
$3,552,487 (25.5% of total revenues) in the first nine months of 1995.

     Cost of product revenues was 5.7% of total revenues in the third quarter of
1996, and 6.1% of total revenues during the same period of 1995. The decrease as
a  percentage  of  total  revenues  was  due to  decreased  costs  of  packaging
associated  with  software  products  as a result of  shifting  media to CD from
floppy disk.

     Cost of  application  engineering  services  revenues  was  20.8%  of total
revenues  during the third quarter of 1996, and 17.2% of total  revenues  during
the same period in 1995.  The increase as a percentage of total revenues was due
to increased personnel and customer reimbursed travel costs.

     Cost of  technical  support  service  revenues  was 3.1% of total  revenues
during  the third  quarter  of 1996 and 3.1% of total  revenues  during the same
period in 1995.

     Sales and Marketing Expenses.  Sales and marketing expenses increased 75.1%
to $2,268,547  (27.5% of total  revenues)  during the third quarter of 1996 from
$1,295,737  (23.3% of total  revenues)  during the third  quarter in 1995,  as a
result of an increased number of sales personnel and commissions associated with
the increase in sales revenue,  and increased marketing expenses associated with
new product  introductions,  including  MP2 for Windows 95 and  MaintainIt  Pro.
Sales and  marketing  expenses  increased  90.3% to  $6,630,284  (29.0% of total
revenues)  in the first  nine  months of 1996  from  $3,483,900  (25.0% of total
revenues) in the first nine months of 1995.

     Product  Development  Expenses.   Total  product  development  expenditures
increased 58.0% to $1,089,505 (13.2% of total revenues) during the third quarter
of 1996 from $689,700 (12.4% of total revenues)  during the same period in 1995.
The   capitalized   portion  of  these   amounts  were  $731,798  and  $224,900,
respectively.  Giving effect to amounts capitalized, product development expense
decreased  23.0% to $357,707  (4.3% of total  revenues) in the third  quarter of
1996 from $464,800 (8.4% of total revenues)  during the same period in 1995. The
increase in total  product  development  expense  resulted from  increasing  the
number  of   development   personnel  to  support   continued   development   of
client/server  and other new products.  The net decrease in product  development
expense resulted from  capitalizing  development costs associated with the large
number of new products  entering the  capitalizable  portion of the  development
cycle.

     Total product development expenditures increased 70.2% to $2,708,516 (11.8%
of total revenues)  during the first nine months of 1996 from $1,591,783  (11.4%
of total revenues)  during the same period in 1995. The  capitalized  portion of
these  amounts were  $1,632,404  and  $472,997,  respectively.  Giving effect to
amounts  capitalized,  product  development expense decreased 3.8% to $1,076,113
(4.7% of total revenues) in the first nine months of 1996 from $1,118,787  (8.0%
of total revenues) during the same period in 1995.

     General and Administrative  Expenses.  General and administrative  expenses
increased 61.8% to $805,640 (9.7% of total revenues) during the third quarter of
1996  from  $497,866  (9.0% of total  revenues)  in the third  quarter  of 1995,
primarily due to increased salaries expense, salary related costs, and insurance
cost. General and  administrative  expenses increased 43.1% to $2,300,326 (10.1%
of total revenues)  during the first nine months of 1996 from $1,606,980  (11.5%
of total revenues) in the first nine months of 1995.
                                   11
<PAGE>

     Miscellaneous  Income.  Miscellaneous  income  increased  to $11,425 in the
third quarter of 1996 from $2,713 in the third quarter of 1995. The increase was
due to higher rental income in the third quarter of 1996.  Miscellaneous  income
increased  to $23,499 in the first nine months of 1996 from $12,895 in the first
nine months of 1995.

     Interest  Income/(Expense).  Interest  income  increased to $579,903 in the
third quarter of 1996 from $269,793 in the third quarter of 1995,  due to higher
investment  balances  realized  upon  completion  of the  Company's  initial and
secondary   public   offerings  of  stock  in  April  1995  and  October   1995,
respectively.  Interest  expense  decreased to $923 in the third quarter of 1996
from $1,227 in the third  quarter of 1995,  due to lower  balances  remaining on
notes payable.  Interest income increased to $1,727,158 in the first nine months
of 1996  from  $557,542  in the first  nine  months  of 1995.  Interest  expense
decreased  to $3,678 in the first nine  months of 1996 from  $4,705 in the first
nine months of 1995.

     Tax Rate. The Company's  effective tax rate was 38.5% for the third quarter
of 1996 as  compared  to 39.9%  for the third  quarter  of 1995.  The  Company's
effective  tax rate was 38.5% in the first nine  months of 1996 as  compared  to
40.0% in the first nine months of 1995.

     Net  Income.  Net  income  increased  45.3% to  $1,830,062  (22.1% of total
revenues) in the third quarter of 1996 from $1,259,296 (22.7% of total revenues)
in the third quarter of 1995. Net income increased 75.8% to $5,019,848 (21.9% of
total revenues) in the first nine months of 1996 from $2,856,217 (20.5% of total
revenues) in the first nine months of 1995.


Liquidity and Capital Resources

     The Company has funded its  activities  entirely from cash  generated  from
operations.  The Company ended its third quarter of 1996 with $3,175,674 in cash
and cash equivalents.  The Company intends to re-invest the proceeds of maturing
government securities in similar government securities.

     The Company  completed  renovating and assumed occupancy of its new offices
at 50 Datastream Plaza, Greenville, SC 29605 during April 1996.

     The  Company's  principal  commitments  as  of  June  30,  1996,  consisted
primarily  of  leases  on  its  former  headquarters  facilities  and  operating
equipment, and there were no material commitments for capital expenditures.  The
Company  completed its initial public offering in April 1995,  raising proceeds,
net of  underwriting  discounts  and  commission  (but  before  payment of other
expenses of $389,787) of  $13,950,000.  Proceeds from the offering were invested
in U.S.  government  securities.  The Company  completed  its  secondary  public
offering in October 1995,  raising proceeds,  net of underwriting  discounts and
commission  (but before payment of other  expenses of $255,064) of  $25,400,000.
Proceeds  from the offering  were invested in U.S.  government  securities.  The
Company believes that its current cash balances,  availability under its line of
credit,  cash flow from operations and the proceeds of the Company's most recent
public  offering  will be  sufficient  to meet its  working  capital and capital
expenditure needs for at least the next 12 months.
                                   12
<PAGE>


PART II.    OTHER INFORMATION

Item 1.     Legal Proceedings

            Not Applicable

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

            No reports on form 8-K were filed during the period.

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<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/ Daniel H. Christie
Date:   11/14/96                    ______________________
                                    Daniel H. Christie
                                    Chief Financial Officer (principal
                                    financial and accounting officer)



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