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 March 31, 1998

                                       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, 1998
18,822,594 shares, $0.01 par value.

<PAGE>



                            Datastream Systems, Inc.

                                    FORM 10-Q

                          Quarter ended March 31, 1998

                                      Index

                                                        Page No.

Part I.    Consolidated Financial Information

Item 1.    Consolidated Financial Statements (Unaudited)

           Consolidated Balance Sheets - December 31,
           1997 And March 31, 1998
                Assets                                        3
                Liabilities And Stockholders' Equity          4

           Consolidated Statements Of Income -
           For The Three Months Ended March 31,
           1997 And 1998                                      5

           Consolidated Statement Of Changes In
           Stockholders' Equity - For The Three
           Months Ended March 31, 1998                        6

           Consolidated Statement Of Cash Flows -
           For The Three Months Ended March 31,
           1997 And 1998                                      7

           Notes To The Consolidated Financial Statements     8

Item 2.    Management's Discussion And Analysis Of
           Financial Condition And Results Of Operations      10

Item 3.    Quantitative And Qualitative Disclosures About13
           Market Risk


Part Ii.   Other Information                                  14


Signature                                                     15

<PAGE>

PART I.  CONSOLIDATED FINANCIAL INFORMATION


ITEM 1.  Consolidated Financial Statements

                    Datastream Systems, Inc. And Subsidiaries

                           Consolidated Balance Sheets

                                     Assets

                                         December 31,   March 31,
                                               1997      1998
                                               ----      ----
                                                      (unaudited)
Current assets:
   Cash and cash equivalents            $ 2,409,387    $4,448,095
   Accounts receivable, net of
     allowance for doubtful
     accounts of $1,589,910
     and $1,755,529, respectively        21,968,539    23,676,930
   Unbilled receivables                   2,271,375     3,043,344
   Investments                            9,735,585     5,670,266
   Prepaid expenses                         614,447     1,208,650
   Inventories                              369,486       385,684
   Deferred income taxes                    796,000       796,000
   Other assets                             619,448     1,151,053
                                         ----------    ----------
        Total current assets             38,784,267    40,380,022

Investments                               6,637,286     6,587,975
Property and equipment, net              10,166,101    12,056,294
Goodwill                                  6,545,747    12,049,193
Capitalized software development
 costs, net of accumulated
 amortization of $1,197,177
 and $2,239,941, respectively             2,963,842     3,160,596
                                        -----------   -----------
        Total assets                  $  65,097,243  $ 74,234,080

See notes to Consolidated Financial Statements

<PAGE>




                    Datastream Systems, Inc. And Subsidiaries

                     Consolidated Balance Sheets (Continued)

                      Liabilities And Stockholders' Equity

                                       December 31,      March 31,
                                             1997          1998
                                             ----          ----
                                                       (unaudited)
Current liabilities:
      Accounts payable                 $  2,696,240   $  3,355,963
      Other accrued liabilities           4,135,258      5,502,627
      Income taxes payable                2,816,800      3,799,901
      Current portion of long-term debt     346,197        266,894
      Unearned revenue                    6,499,953      8,784,831
                                         ----------     ----------
           Total current liabilities     16,494,448     21,710,216
Long-term debt, less current portion        603,098      1,334,041
Deferred income taxes                       892,000        892,000
                                         ----------     ----------
           Total liabilities             17,989,546     23,936,257

Stockholders' equity:
      Preferred stock, $1 par value,
        1,000,000 shares authorized;             -              -
        none outstanding
      Common stock, $.01 par value,
        40,000,000 shares authorized;       185,855        188,226
        18,585,518 share issued and
        outstanding at December 31,
        1997, 18,822,594 shares issued
        and outstanding at March 31,
        1998
      Additional paid-in capital         58,049,212     61,235,493
      Accumulated deficit              (11,375,601)   (11,138,408)
      Other accumulated comprehensive
        income                              248,231         12,512
                                         ----------     ----------
           Total stockholders' equity    47,107,697     50,297,823
                                         ----------     ----------
           Total liabilities and
              stockholders' equity     $ 65,097,243   $ 74,234,080
                                         ==========     ==========

See Notes to Consolidated Financial Statements

<PAGE>
                    Datastream Systems, Inc. And Subsidiaries

                        Consolidated Statements Of Income
                                   (unaudited)
                   Three months ended March 31, 1997 and 1998

                                           March 31,     March 31,
                                             1997          1998
                                             ----          ----
Revenues:
   Product                            $   6,148,014 $   7,365,099
   Professional service                   5,783,723     8,955,524
   Support                                2,750,674     3,808,038
                                         ----------    ----------
      Total revenues                     14,682,411    20,128,661

Cost of revenues:
   Cost of product revenues                 843,963       776,139
   Cost of professional service
     revenues                             3,529,973     4,144,932
   Cost of support revenues                 687,272       929,829
   Write off of capitalized
     software costs                               -       597,944
                                          ---------     ---------
      Total cost of revenues              5,061,208     6,448,844
                                          ---------    ----------
      Gross profit                        9,621,203    13,679,817

Operating expenses:
   Sales and marketing                    4,273,471     5,549,360
   Product development                      834,048     1,521,755
   General and administrative             2,235,040     2,029,787
   Write off of in process
     Research and development                     -     2,531,078
                                          ---------    ----------
      Total operating expenses            7,342,559    11,631,980
                                          ---------    ----------
      Operating income                    2,278,644     2,047,837

Other income (expense):
   Interest income                          262,510       205,790
   Interest expense                        (102,449)      (28,266)
   Other                                     47,279        75,988
                                            -------       -------
      Net other income                      207,340       253,512
                                            -------       -------
      Income before
        income taxes                      2,485,984     2,301,349

Income taxes                                507,787     2,064,156
                                          ---------     ---------
Net income                              $ 1,978,197     $ 237,193
                                        ===========     =========
   Basic net income per share           $       .11    $      .01
                                        -----------     ---------
   Diluted net income per share         $       .11    $      .01
                                        -----------     ---------
   Basic weighted average
     number of common and
     common equivalent shares
     outstanding                         18,262,850     18,640,122
   Diluted weighted average              ==========     ==========
     number of common and
     common equivalent shares
     outstanding                         18,767,970     20,246,844
                                         ==========     ==========

See Notes to Consolidated Financial Statements
<PAGE>
<TABLE>


                    Datastream Systems, Inc. And Subsidiaries

                     Consolidated Statement Of Changes In Stockholders' Equity
                                   (Unaudited)


                    For the three months ended March 31, 1998
<CAPTION>

                                                                            Other
                                            Additional    Accumulated    Accumulated      Total
                                   Common     Paid-In      Earnings     Comprehensive  Stockholders'
                                   Stock      Capital      (Deficit)       Income         Equity
                                   -----      -------      ---------       ------         ------
                                 <C>        <C>           <C>             <C>          <C>
Balance at December 31, 1997     $185,855   $58,049,212   $(11,375,601)   $248,231     $47,107,697

  Net income                            -             -        237,193           -         237,193

  Stock options exercised             962       488,142              -           -         489,104

  Shares issued for Employee
  stock Purchase Plan                 105        74,443              -           -          74,548

  Shares issued for acquisition     1,304     2,623,696              -           -       2,625,000

  Other accumulated
  comprehensive income                  -             -              -    (235,719)       (235,719)


Balance at March 31, 1998        $188,226   $61,235,493   $(11,138,408)    $12,512     $50,297,823
                                 ========   ===========   =============    =======     ===========
<FN>
See Notes to Consolidated Financial Statements
</FN>
</TABLE>
<PAGE>

                    Datastream Systems, Inc. And Subsidiaries


                      Consolidated Statements Of Cash Flows
                                   (unaudited)

              Three months ended March 31, 1997 and March 31, 1998

                                           March 31,   March 31,
                                             1997        1998
                                             ----        ----
Cash flows from operating activities:
   Net income                           $ 1,978,198   $ 237,193
   Adjustments to reconcile net
      Income to net cash provided by operating activities:
      Depreciation                          458,577     683,900
      Amortization of capitalized
         software development costs         275,203     195,133
      Amortization of goodwill              272,750     272,750
      Other accumulated comprehensive
         income                             373,672    (323,882)
      Loss on disposal of fixed assets       53,420           -
      Provision for doubtful accounts             -     282,377
      Write-off of in-process research
         and development                          -   2,531,078
      Write-off of capitalized
         Software costs                           -     597,944
      Changes in operating assets
            and liabilities:
       Accounts receivable               (2,918,021) (1,837,672)
       Accrued interest receivable          135,867     (24,194)
       Prepaid expenses                    (248,611)   (582,338)
       Inventories                           54,665     112,782
       Other assets                        (584,689) (1,209,510)
       Accounts payable                  (1,120,244)    659,629
       Other accrued liabilities         (2,511,796)    694,499
       Income taxes payable                 233,467     983,101
       Unearned revenue                   2,060,701   2,284,878
       Net cash provided by (used in)     ---------   ---------
         operating activities            (1,486,841)  5,557,668
                                          ---------   ---------
Cash flows from investing activities:
   Net proceeds from investments          2,045,000   4,420,854
   Additions to property and equipment     (832,569) (1,212,368)
   Proceeds from the sale of equipment            -           -
   Capitalized software
      development costs                    (292,076)   (806,836)
   Cash paid for acquisition, net
      of cash acquired                            -  (6,467,189)
       Net cash used in investing           -------   ---------
          activities                        920,355  (4,065,539)

Cash flows from financing activities:
   Proceeds from exercise of
      stock options                         112,627     473,699
   Proceeds from issuance of
      shares under Employee stock
      purchase plan                               -      74,547
   Principal payments on long-term
      debt                               (2,907,269)     (1,667)
       Net cash provided by (used in)     ---------       -----
         financing activities            (2,794,642)    546,579

Net increase (decrease) in cash
   and cash equivalents                  (3,361,128)  2,038,708
Cash and cash equivalents at
   beginning of period                    6,315,719   2,409,387
                                          ---------   ---------
Cash and cash equivalents at
   end of period                       $  2,954,591 $ 4,448,095
                                          =========   =========

See 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")  develops,  markets,
sells  and  supports  Microsoft  and  Oracle  based  software  products  for the
industrial  automation  market.  These products serve the desktop,  file server,
client-server and enterprise-wide networking environments. 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.  In addition to its
U.S. operations, the Company has direct sales or distribution offices in Canada,
the United Kingdom, The Netherlands,  France, Germany,  Denmark, Sweden, Norway,
Portugal, Mexico, Brazil, Argentina,  Venezuela,  Peru, Malaysia,  Australia and
South Africa.

On December  31,  1996,  the  Company  acquired  SQL Group,  B.V.  ("SQL").  The
acquisition has been accounted for using the purchase method. The purchase price
has been  allocated to the  tangible and  intangible  assets  purchased  and the
liabilities assumed based on the fair values on the date of acquisition.

On March 31, 1998, the Company acquired Insta Instandhaltung Technischer Anlagen
GmbH, a German  corporation  headquartered  in Munich,  Germany  ("Insta").  The
acquisition has been accounted for using the purchase method. The purchase price
has been  allocated to the  tangible and  intangible  assets  purchased  and the
liabilities assumed based on the fair values on the date of acquisition.

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.   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 March 31, 1998. Other
than as  indicated  herein,  there  have been no  significant  changes  from the
financial data published in those  reports.  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

Revenue Recognition

On January 1, 1998, the Company  adopted  Statement of Position 97-2,  "Software
Revenue  Recognition" (SOP 97-2). The adoption of SOP 97-2 did not significantly
affect the Company's results of operations.


Net income per share

The Company  calculates  earnings  per share in  accordance  with  Statement  of
Financial  Accounting  Standards No. 128, "Earnings 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 common shares outstanding.  Diluted weighted average common
and potential  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:


                                                              Per Share
                                           Income    Shares     Amount
    March 31, 1998:                        ------    ------     ------
       Basic income per share           $ 237,193  18,640,122     .01
       Effect of dilutive securities:
           Stock options                      -     1,606,722
                                          -------  ----------
       Diluted income per share         $ 237,193  20,246,844     .01
                                          =======  ==========     ===

    March 31, 1997:
       Basic income per share         $ 1,978,197  18,262,850     .11
       Effect of dilutive securities:
           Stock options                      -       505,120
                                        ---------  ----------
       Diluted income per Share       $ 1,978,197  18,767,970     .11
                                        =========  ==========     ===

On March 31,  1998,  the  Company  issued  130,435  shares  of stock as  partial
consideration in the Insta acquisition. See Liquidity and Capital Resources.


Comprehensive Income

On January 1, 1998, the Company adopted Financial  Accounting Standards No. 130,
"Reporting  Comprehensive  Income." As required  by the  Statement,  the Company
displays the accumulated balance of other  comprehensive  income separately from
retained  earnings and additional  paid-in  capital in the equity section of the
Consolidated  Balance Sheet. Items considered to be other  comprehensive  income
include  adjustments made for foreign currency  translation (under Statement 52)
and unrealized holding gains and losses on available-for-sale  securities (under
Statement 115).  Comprehensive  income for the three months ended March 31, 1998
and 1997 is as follows:

    March 31, 1998:
        Net income                                $ 237,193
        Foreign currency translation
          Adjustment                               (204,763)
        Unrealized loss on securities
          available-for-sale                        (30,956)
                                                  ---------
        Comprehensive income                        $ 1,474
                                                  =========

    March 31, 1997:
        Net income                              $ 1,978,197
        Foreign currency translation
          Adjustment                                372,672
                                                  ---------
        Comprehensive income                    $ 2,350,869
                                                  =========

C.  Stock Split

Effective  January  30,  1998,  the  Company's  Board of  Directors  declared  a
two-for-one stock split effected in the form of a stock dividend. All share, per
share and conversion  amounts  relating to the common stock,  warrants and stock
options  included in the accompany  financial  statements  have been restated to
reflect this stock split.



<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.

Overview

     The  Company  offers  a  complete  family  of   "computerized   maintenance
management  systems" ("CMMS") / "enterprise asset management  software" ("EAMS")
to the  maintenance,  repair and operations  ("MRO")  industry.  Generally these
products  consists  of 5 major  categories  based  on price  and  functionality.
Maintainit and Maintainit Pro are off-the-shelf, entry-level solutions for small
to medium businesses. MP2 Professional is a full featured integrated maintenance
system for small to mid-size companies.  MP2 Enterprise combines the benefits of
PC servers and PC  networks  with a Windows  graphical  user  interface  and SQL
relational  database.  MP5 (formally R5 CAMMS) is a high-end  client-server EAMS
product.   Datastream  supports  its  software  products  through   professional
services, including installation,  consulting,  integration,  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 first quarter
of 1998.  Total  revenues  increased 37% to  $20,128,661 in the first quarter of
1998  from  $14,682,411  in the  first  quarter  of  1997  due to the  continued
acceptance of the Company's products in the industrial automation market and the
expansion of the Company's  sales,  professional  service and technical  support
service organizations.

     Product revenues increased 20% to $7,365,099 (37% of total revenues) in the
first  quarter  of 1998 from  $6,148,014  (42% of total  revenues)  in the first
quarter of 1997, as a result of the growth in new product  sales,  including MP2
Enterprise and MP2 Professional - Access, and the growth in international sales.

     Professional  service  revenues  increased 55% to $8,955,524  (45% of total
revenues) in the first quarter of 1998 from  $5,783,723  (39% of total revenues)
in  the  first  quarter  1997.  The  increase  resulted  from  the  addition  of
professional  service personnel to service expansion of the Company's  installed
base of systems.

     Technical  support  services  revenues for the first quarter 1998 increased
38% to  $3,808,038  (19% of  total  revenues)  from  $2,750,674  (19%  of  total
revenues) in the first  quarter of 1997,  primarily  due to the expansion of the
Company's installed base of systems.

     Cost of Revenues.  Cost of revenues  increased  27% to  $6,448,844  (32% of
total  revenues) in the first quarter of 1998, as compared to $5,061,208 (34% of
total  revenues)  in the  comparable  quarter of 1997.  The  increase in cost of
revenues is  attributed  to  increased  expenses  incurred  in the  Professional
Services and Support  Departments  related to salaries  and customer  reimbursed
travel and the write off of capitalized  software rendered obsolete or redundant
by the acquisition of Insta on March 31, 1998.

     Cost of product  revenues was 4% of total  revenues in the first quarter of
1998, and 6% of total revenues during the same period of 1997. The decrease as a
percent  of  total  revenues  is due  to  lower  rate  of  capitalized  software
amortization and decreased costs of shipping and packaging related items.

     Cost of professional  service revenues was 21% of total revenues during the
first quarter of 1998, and 24% of total revenues during the same period in 1997.
The decrease as a percentage of total revenues was due to increased efficiencies
realized in the restructuring of the European  operations during 1997 and higher
utilization rates of consulting personnel.

     Cost of technical  support service revenues was 5% of total revenues during
the first  quarter of 1998 and 5% of total  revenues  during the same  period in
1997.

     Cost of revenue includes a $597,944  write-off of capitalized  software (3%
of total  revenues)  which  became  obsolete as a result of the  acquisition  of
Insta.

     Sales and Marketing Expenses. Sales and marketing expenses increased 30% to
$5,549,360  (28% of total  revenues)  during  the  first  quarter  of 1998  from
$4,273,471 (29% of total revenues) during the first quarter in 1997, 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 and one time charges for the Plant Engineering trade show.

     Product  Development  Expenses.   Total  product  development  expenditures
increased 107% to $2,328,591 (12% of total revenues) during the first quarter of
1998 from $1,126,123 (7% of total revenues)  during the same period in 1997. The
capitalized  portion of these amounts were $806,836 and $292,075,  respectively.
Giving effect to amounts capitalized,  product development expense increased 83%
to $1,521,755 (8% of total  revenues) in the first quarter of 1998 from $834,048
(6% of total  revenues)  during the same period in 1997.  The  increase in total
product  development  expense resulted from increasing the number of development
personnel to support continued  development of MP5, the increased use of outside
contractors for development  work,  foreign  language  development and other new
products.

     General and Administrative  Expenses.  General and administrative  expenses
decreased 9% to $2,029,787 (10% of total  revenues)  during the first quarter of
1998 from  $2,235,040  (15% of total  revenues)  in the first  quarter  of 1997,
primarily due to efficiencies  realized during the restructuring of the European
operations.

     Write-off  of  in-process  research  and  development  costs.  The  company
expensed $2,531,078 of in-process  research and development  acquired as part of
the acquisition of Insta.

     Miscellaneous  Income.  Miscellaneous  income  increased  to $75,988 in the
first  quarter of 1998 from $47,279 in the first  quarter of 1997.  The increase
was due to increased  rental income  generated from leasing a greater portion of
the Company's building in Greenville, South Carolina.

     Interest  Income/(Expense).  Interest  income  decreased to $205,790 in the
first quarter of 1998 from  $262,510 in the first quarter of 1997,  due to lower
investment  balances realized upon completion of the SQL acquisition in December
1997.  Interest  expense  decreased to $28,266 in the first quarter of 1998 from
$102,449 in the first quarter of 1997, due to lower debt balances in 1998.

     Tax Rate. The Company's effective tax rate was 38% for the first quarter of
1998 as compared to 20% for the first quarter of 1997.

     Net Income.  Net income decreased 88% to $237,193 (1% of total revenues) in
the first quarter of 1998 from  $1,978,197  (13% of total revenues) in the first
quarter of 1997.  This  decrease is directly  attributed  to the charges for the
acquisition of INSTA on March 31, 1998. Without the acquisition  related charges
net income would have increased 70% to $3,366,214 (17% of total revenues).

Liquidity and Capital Resources

     The Company has funded its  activities  entirely from cash  generated  from
operations. The Company ended its first quarter of 1998 with $ 4,448,095 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.

     The Company  completed  renovating and assumed occupancy of its new offices
at 50 Datastream Plaza, Greenville, SC 29605 during April 1997.

     The  acquisition  of SQL was completed  for $31 million,  consisting of $17
million in cash and $14 million in common stock issued pursuant to Regulation S.
In connection  with the  acquisition,  the Company also deposited into escrow an
additional $3 million in common stock, and assumed certain of SQL's  outstanding
liabilities.   Following  the   acquisition,   SQL's   long-term  debt  totaling
approximately  $2.7  million was repaid by the Company  and  additional  working
capital  infusions of approximately  $2.5 million were required to sustain SQL's
operations and pay current liabilities.

     In July 1997,  the  Company  made a $2 million  investment  in  Distinction
Software,  Inc.  ("Distinction") This investment represents less than 20% of the
outstanding  equity  interests  of  Distinction  and is  included  in long  term
investments on the balance sheet.

     The  acquisition  of Insta was  completed on March 31, 1998 for $7 million,
consisting of $4,375,000 in cash and $2,625,000 (130,435 shares) in common stock
issued pursuant to Regulation S. In connection with the acquisition, the Company
deposited  into escrow  34,783 shares of common  stock,  and assumed  certain of
Insta's outstanding liabilities.

     The  Company's  principal  commitments  as of  March  31,  1998,  consisted
primarily of long term debt assumed in the acquisition of SQL, and there were no
material  commitments for capital  expenditures.  The Company  believes that its
current cash  balances,  availability  under its line of credit,  cash flow from
operations  and  available for sale  investments  will be sufficient to meet its
working capital and capital expenditure needs for at least the next 12 months.

<PAGE>

ITEM 3.  Quantitative and Qualitative Disclosures about Market Risk


     Pursuant to the general  instructions  to Rule 305 to SEC  Regulation  S-K,
quantitative and qualitative  disclosures called for by this Item 7A and by Rule
305 of SEC Regulation S-K are inapplicable to the Company at this time.


<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

                The company filed a Current Report on Form 8-K on April 14, 1998
                to report the Company's  acquisition of all of the capital stock
                and equity interests of Insta on March 31, 1998.
<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: 05/13/98                 ------------------------
      --------                 Daniel H. Christie
                       Chief Financial Officer (principal
                        financial and accounting officer)

<PAGE>
                                  EXHIBIT INDEX



Exhibit Number                 Description
--------------                 -----------

27                        Financial Data Schedule