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 June 30, 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: June 30, 2000  20,080,584 shares, $0.01 par value.

<PAGE>


                         Datastream Systems, Inc.

                                FORM 10-Q

                       Quarter ended June 30, 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 June 30, 2000
                Assets                                                 4
                Liabilities and Stockholders' Equity                   5

           Consolidated Statements of Operations -
                for the Three Months ended June 30,  1999 and 2000     6

           Consolidated Statements of Operations -
                for the Six Months ended June 30,  1999 and 2000       7

           Consolidated Statement of Changes in Stockholders' Equity
                and Comprehensive Income -
                for the Six Months ended June 30, 2000                 8

           Consolidated Statements of Cash Flows -
                for the Six Months ended June 30, 1999 and 2000        9

           Notes to the Consolidated Financial Statements              10

Item 2.    Management's Discussion and Analysis of
           Financial Condition and Results of Operations               14

Item 3.    Quantitative and Qualitative Disclosures About              17
           Market Risk


Part II.   Other Information                                           18


Signature                                                              19
<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,        June 30,
                                                       1999             2000
                                                       ----             ----
                                                                     (unaudited)
Current assets:
   Cash and cash equivalents                        $17,912,797     $13,411,460
   Accounts receivable, net of allowance
        for doubtful accounts
         of $3,388,719 and $ 3,191,893,
         respectively                                30,221,995      23,625,533
   Unbilled receivables                               2,311,247       2,672,959
   Investments                                          250,790             160
   Prepaid expenses                                   1,392,028       2,059,772
   Inventories                                          109,453          91,978
   Income tax receivable                                      -       8,933,814
   Deferred income taxes                              1,410,000       1,410,000
   Other assets                                       1,710,019       1,670,264
                                                     ----------      ----------
        Total current assets                         55,318,329      53,875,940

Investments                                           4,200,000       6,140,000
Property and equipment, net                          13,583,471      14,905,909
Goodwill, net                                        15,073,239      13,562,408
Other long term assets                                        -         481,250
                                                    -----------     -----------

        Total assets                                $88,175,039     $88,965,507
                                                    ===========     ===========

See accompanying notes to consolidated financial statements.

<PAGE>

                  Datastream Systems, Inc. and Subsidiaries

                   Consolidated Balance Sheets (Continued)

                    Liabilities and Stockholders' Equity

                                                  December 31,        June 30,
                                                       1999             2000
                                                       ----             ----
                                                                     (unaudited)
Current liabilities:
   Accounts payable                                   $3,919,404     $5,155,967
   Other accrued liabilities                           7,387,417      7,726,802
   Income taxes payable                                  120,928              -
   Current portion of long-term debt                     650,578              -
   Unearned revenue                                    8,587,980     10,795,621
                                                      ----------     ----------
        Total current liabilities                     20,666,307     23,678,390

Long-term debt, less current portion                     224,285        229,332
                                                      ----------     ----------
        Total liabilities                             20,890,592     23,907,722

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,
        20,485,584 shares issued at June 30, 2000       196,742         204,856
   Additional paid-in capital                        70,533,683      78,475,686
   Retained earnings (deficit)                          760,050      (8,567,123)
   Other accumulated comprehensive income (loss)       (153,265)     (1,002,871)
   Treasury stock, 405,000 shares at cost            (4,052,763)     (4,052,763)
                                                      ----------     ----------
        Total stockholders' equity                   67,284,447      65,057,785
                                                     -----------     -----------

        Total liabilities and stockholders' equity  $88,175,039     $88,965,507
                                                    ===========     ===========

See accompanying notes to consolidated financial statements.

<PAGE>
                     Datastream Systems, Inc. and Subsidiaries

                  Consolidated Statements of Operations
                               (unaudited)
                 Three months ended June 30, 1999 and 2000

                                                     June 30,         June 30,
                                                       1999             2000
                                                       ----             ----

Revenues:
   Product                                         $ 10,594,653    $  5,574,687
   Professional service                              14,181,376      11,573,680
   Support                                            5,768,104       5,862,630
                                                    -----------     -----------
      Total revenues                                 30,544,133      23,010,998

Cost of revenues:
   Cost of product revenues                             530,778         567,789
   Cost of professional service revenues              8,181,861       8,989,728
   Cost of support revenues                           1,280,993       1,764,985
   Amortization of capitalized software                 765,645               -
                                                    -----------     -----------
      Total cost of revenues                         10,759,277      11,322,502
                                                    -----------     -----------
      Gross profit                                   19,784,856      11,688,495

Operating expenses:
   Sales and marketing                                7,972,922      12,408,519
   Product development                                3,944,607       4,744,996
   General and administrative                         2,463,502       3,428,367
   Goodwill amortization                                764,115         755,416
                                                    -----------     -----------
      Total operating expenses                       15,145,146      21,337,297
                                                    -----------     -----------
      Operating income (loss)                         4,639,710      (9,648,801)

Other income (expense):
   Interest and other income                            167,934         313,725
   Interest expense                                     (29,599)        (11,752)
                                                     -----------     -----------
      Net other income                                  138,335         301,973

                                                    -----------     -----------
      Income (loss) before income taxes               4,778,045      (9,346,828)

Income tax expense (benefit)                          1,767,700      (3,087,433)
                                                    -----------     -----------
Net income (loss)                                  $  3,010,345    $ (6,259,396)
                                                    ===========     ===========

   Basic net income (loss) per share               $        .16    $       (.31)
                                                    -----------     -----------
   Diluted net income (loss) per share             $        .15    $       (.31)
                                                    -----------     -----------

   Basic weighted average number of common and
      potential common shares outstanding            19,016,280      20,074,827
   Diluted weighted average number of common and
      potential common shares outstanding            19,842,144      20,074,827

See accompanying notes to consolidated financial statements.

<PAGE>

                     Datastream Systems, Inc. and Subsidiaries

                  Consolidated Statements of Operations
                               (unaudited)
                  Six months ended June 30, 1999 and 2000

                                                     June 30,         June 30,
                                                       1999             2000
                                                       ----             ----
Revenues:
   Product                                         $ 21,017,121    $ 13,127,616
   Professional service                              27,355,315      23,240,913
   Support                                           10,970,418      11,893,413
                                                    -----------     -----------
      Total revenues                                 59,342,854      48,261,942

Cost of revenues:
   Cost of product revenues                           1,065,865       1,029,930
   Cost of professional service revenues             14,871,773      17,944,520
   Cost of support revenues                           2,598,813       3,379,301
   Amortization and
    write-off of capitalized software                 1,349,036               -
                                                    -----------     -----------
      Total cost of revenues                         19,885,487      22,353,751
                                                    -----------     -----------
      Gross profit                                   39,457,367      25,908,191

Operating expenses:
   Sales and marketing                               15,628,497      23,884,805
   Product development                                6,841,627       8,972,042
   General and administrative                         5,106,808       6,435,261
   Amortization of goodwill                           1,528,230       1,510,831
                                                    -----------     -----------
      Total operating expenses                       29,105,162      40,802,940
                                                    -----------     -----------
      Operating income (loss)                        10,352,205     (14,894,748)

Other income (expense):
   Interest income                                      342,358         474,960
   Interest expense                                     (81,970)        (42,751)
                                                    -----------     -----------
      Net other income                                  260,388         432,209

                                                    -----------     -----------

      Income (loss) before income taxes              10,612,593     (14,462,540)

Income taxes                                          3,955,613      (5,135,367)
                                                    -----------     -----------

Net income (loss)                                  $  6,656,980    $ (9,327,173)
                                                    ===========     ===========


   Basic net income (loss) per share               $        .35    $       (.47)
                                                    -----------     -----------
   Diluted net income (loss) per share             $        .34    $       (.47)
                                                    -----------     -----------

   Basic weighted average number of common and
      potential common shares outstanding            19,109,761      19,838,839
   Diluted weighted average number of common and
      potential common shares outstanding            19,839,700      19,838,839

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 six months ended June 30, 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                            -             -    (9,327,173)           -            -       (9,327,173)
   Unrealized losses on
        securities available for sale  -             -             -     (102,622)           -         (102,622)
   Foreign currency
        translation adjustment         -             -             -     (746,984)           -         (746,984)
                                                                                                     ----------
Total comprehensive loss                                                                            (10,176,779)
                                                                                                     ----------

Exercise of stock options          7,940     5,735,309             -            -            -        5,743,249

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                       -       118,814             -            -            -          118,814

                                --------   -----------   -----------    ---------  -----------      -----------
Balance at June 30, 2000        $204,856   $78,475,686   $(8,567,123) $(1,002,871) $(4,052,763)     $65,057,785
                                ========   ===========   ===========    =========  ===========      ===========

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

                  Consolidated Statements of Cash Flows
                               (unaudited)

                 Six months ended June 30, 1999 and 2000

                                                     June 30,         June 30,
                                                       1999             2000
                                                       ----             ----
Cash flows from operating activities:
   Net income (loss)                               $  6,656,980    $ (9,327,173)
   Adjustments to reconcile net income (loss)
    to net cash provided by (used in)
    operating activities:
      Depreciation                                    2,204,343       2,632,670
      Amortization of capitalized software
       development costs                              1,349,036               -
      Goodwill amortization                           1,528,230       1,510,831
      Other amortization                                      -          68,750
      Other accumulated comprehensive (loss)           (695,377)       (746,984)
      Accretion of investment discount, net                (320)              -
      Gain on disposal of fixed assets                  (57,760)              -
      Provision for doubtful accounts                   587,387        (192,326)
      Stock based compensation                           41,925         118,814
      Changes in operating assets and liabilities:
       Accounts receivable                             (372,847)      6,793,288
       Unbilled receivable                             (267,081)       (366,212)
       Accrued interest receivable                       21,826           4,888
       Prepaid expenses                                (276,026)       (667,744)
       Inventories                                      234,072          17,475
       Other assets                                    (444,900)         34,867
       Accounts payable                                 (98,247)      1,236,563
       Other accrued liabilities                     (1,233,819)        339,371
       Income taxes payable                           1,162,308      (7,203,742)
       Unearned revenue                                (323,839)      2,207,641
                                                     ----------      ----------
       Net cash provided by
          (used in) operating activities             10,015,891      (3,539,023)
                                                     ----------      ----------

Cash flows from investing activities:
   Purchase of investments                           (4,310,000)     (2,000,000)
   Proceeds from sale and maturities of investments   2,625,058         208,008
   Additions to property and equipment               (1,806,273)     (3,955,108)
   Purchase of customer list                                  -        (550,000)
   Capitalized software development costs              (967,007)              -
                                                      ---------       ---------
       Net cash used in investing activities         (4,458,222)     (6,297,100)
                                                      ---------       ---------

Cash flows from financing activities:
   Proceeds from exercise of stock options              472,616       5,743,249
   Proceeds from issuances of shares under employee
       stock purchase plan                              196,451         237,054
   Cash paid to acquire treasury stock               (2,554,637)              -
   Principal payments on long-term debt                (655,906)       (645,517)
                                                      ---------       ---------
       Net cash provided by (used in)
          financing activities                       (2,541,476)      5,334,786
                                                      ---------       ---------

Net increase (decrease) in cash and cash equivalents  3,016,193      (4,501,337)
Cash and cash equivalents at beginning of period      6,739,209      17,912,797
                                                      ---------       ---------
Cash and cash equivalents at end of period         $  9,755,402    $ 13,411,460
                                                   ============    ============

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,  governments 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  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
Argentina,  Australia,  Brazil, Canada, Chile, China, Denmark,  France, Germany,
Indonesia,  Ireland, Malaysia, Mexico, The Netherlands,  Norway, Peru, Portugal,
Singapore, South Africa, Sweden, the United Kingdom and Venezuela.

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,  except when
those shares result in  antidilution.  The  reconciliation  of basic and diluted
income per share is as follows:
<PAGE>
For the three months ended June 30,2000 and 1999

                                                               Per Share
                                             Income     Shares   Amount
    Three months ended June 30, 2000:
        Basic income per share         $ (6,259,396)  20,074,827    (.31)
        Effect of dilutive securities:
           Stock options                          -            -
                                         -----------  ----------
        Diluted income per share       $ (6,259,396)  20,074,827    (.31)
                                         ===========  ==========   =====

    Three months ended June 30, 1999:
        Basic income per share         $  3,010,345   19,016,280     .16
        Effect of dilutive securities:
           Stock options                          -      825,864
                                         -----------  ----------
        Diluted income per share       $  3,010,345   19,842,144     .15
                                         ===========  ==========   =====

For the six months ended June 30, 2000 and 1999

                                                               Per Share
                                             Income     Shares   Amount
    Six months ended June 30, 2000:
        Basic income per share         $ (9,327,173)  19,838,839    (.47)
        Effect of dilutive securities:
           Stock options                          -            -
                                        -----------   ----------
        Diluted income per share       $ (9,327,173)  19,838,839    (.47)
                                        ===========   ==========   =====

    Six months ended June 30, 1999:
        Basic income per share         $  6,656,980   19,109,761     .35
        Effect of dilutive securities:
           Stock options                          -      729,939
                                        -----------   ----------
        Diluted income per share       $  6,656,980   19,839,700     .34
                                        ===========   ==========   =====


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 June 30, 1999, approximately $1,050,000 of the restructuring accruals were
utilized as follows:  $315,000 for  severance  and related  costs,  $279,000 for
costs of closing redundant  facilities and $456,000 for provisions for increased
credit risks.

D. 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 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.  Beginning  in the third  quarter of 2000,  the company
merged its two business segments and began operating, managing and reporting the
segments as one  business.  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 June 30, 1999 and 2000:
<CAPTION>
                                                                                      Asset
                        United                         Latin                       Maintenance     iProcure
                        States          Europe        America         Asia            Total           Total     Total
<S>                     <C>             <C>           <C>             <C>             <C>             <C>       <C>
June 30, 1999:

Total revenues          $21,274,045  $ 6,506,591    $   918,115     $ 1,843,263     $30,542,014   $   2,119  $30,544,133
Operating income (loss)   2,759,634    1,692,659         92,103         572,395       5,116,791    (477,081)   4,639,710
Total assets             68,565,035   16,076,030      1,600,346       3,517,192      89,758,603          NA   89,758,603

June 30, 2000:

Total revenues           15,433,303    4,782,376      1,607,286         977,071      22,800,036     210,962   23,010,998
Operating income (loss)  (4,615,351)    (346,571)       258,450        (344,031)     (5,047,503) (4,601,298)  (9,648,801)
Total assets             68,638,584   12,980,017      3,199,596       4,147,310      88,965,507          NA   88,965,507

For the six months ended June 30, 1999 and 2000:

<CAPTION>
                                                                                      Asset
                        United                         Latin                       Maintenance     iProcure
                        States          Europe        America         Asia            Total           Total     Total
<S>                     <C>             <C>           <C>             <C>             <C>             <C>       <C>
June 30, 1999:

Total revenues          $40,320,647  $13,905,181    $ 2,550,921     $ 2,563,786     $59,340,535   $   2,319  $59,342,854
Operating income (loss)   5,728,818    4,141,617        623,410         640,782      11,134,627    (782,422)  10,352,205
Total assets             68,565,035   16,076,030      1,600,346       3,517,192      89,758,603          NA   89,758,603

June 30, 2000:

Total revenues           31,938,044   10,578,784      2,958,168       2,551,634      48,026,630     235,312   48,261,942
Operating income (loss)  (6,627,469)    (377,652)       518,911        (385,980)     (6,872,190) (8,022,558) (14,894,748)
Total assets             68,638,584   12,980,017      3,199,596       4,147,310      88,965,507          NA   88,965,507
</TABLE>

E. 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.  In June 2000,  the FASB issued  Statement of
Financial  Accounting  Standards  No. 138  "Accounting  for  Certain  Derivative
Instruments and Certain Hedging  Activities,  an Amendment of FASB Statement No.
133"(Statement No. 138). Statement No. 138 proposed changes intended to simplify
the  accounting  required  under  Statement  No.  133.  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.

F. Commitments and Contingencies

On January 11, 1999, a class action  lawsuit was filed against the Company,  its
Chief  Executive  Officer  and its  former  Chief  Financial  Officer,  alleging
violations of federal securities laws and seeking  unspecified  damages.  During
the  second  quarter  of  2000,  the  Company   entered  into  a  Memorandum  of
Understanding  with  counsel  for the  plaintiff  setting  forth  a  non-binding
understanding  for a  possible  settlement  of the  class  action  lawsuit.  The
understanding reached is not binding either upon the Company or the class action
plaintiffs.  A settlement of the class action,  as outlined in the Memorandum of
Understanding,  would not occur unless and until several material conditions are
favorably  resolved,  including  discovery,  the  negotiation  of  a  definitive
settlement  agreement and court approval.  Thus, the Memorandum of Understanding
is not, in itself, a settlement of the litigation.

<PAGE>
The Memorandum of Understanding  reflects that, if approved as a full settlement
of the claims  against it and the other  defendants,  the  Company  would pay $5
million,  in a  combination  of cash and stock,  into a settlement  fund for the
benefit of the class.  In addition,  the Company  reached an agreement  with its
directors  and officers  liability  insurer for the insurer to  contribute  $2.4
million in cash to the settlement fund. There can be no assurance, however, that
the  litigation  will  settle  or, if it does  settle  that it would be on these
terms.  Due to the  contingent  nature of the Memorandum of  Understanding,  the
Company has not recorded a liability in connection with this lawsuit.

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.
<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  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 an 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 second quarter of
2000. Total revenues  decreased 25% to $23,010,998 in the second quarter of 2000
from  $30,544,133 in the second  quarter of 1999, due  principally to lower than
expected  product  revenues and a related  decrease in services  revenue.  Total
revenues  decreased 19% to $48,261,942  during the first six months of 2000 from
$59,342,854 in the first six months of 1999.

Product  revenues  decreased  47% to $5,574,687  (24% of total  revenues) in the
second quarter of 2000 from  $10,594,653  (35% of total  revenues) in the second
quarter of 1999, as a result of changes within the sales organization  causing a
disruption in license sales.  Product revenues decreased 38% to $13,127,616 (27%
of total  revenues)  in the first six  months of 2000 from  $21,017,121  (35% of
total  revenues)  in the first  six  months of 1999.  Product  revenues  include
approximately  $136,000 of revenue  attributed to the iProcure  division for the
second  quarter of 2000 and  approximately  $160,000 for the first six months of
2000.

Professional  service  revenues  decreased  18% to  $11,573,680  (50%  of  total
revenues) in the second quarter of 2000 from $14,181,376 (46% of total revenues)
in the second  quarter of 1999.  The decrease is a result of decreased  software
license  sales  in  2000.   Professional   service  revenues  decreased  15%  to
$23,240,913  (48% of total  revenues)  in the  first  six  months  of 2000  from
$27,355,315   (46%  of  total  revenues)  in  the  first  six  months  of  1999.
Professional   services  revenue  include   approximately   $75,000  of  revenue
attributed to the iProcure  division for both the second quarter of 2000 and the
first six months of 2000.

Support  services  revenues  for the  second  quarter  of 2000  increased  2% to
$5,862,630  (26% of total  revenues) from  $5,768,104 (19% of total revenues) in
the second  quarter of 1999,  primarily  due to the  expansion of the  Company's
installed base of systems during 1999. Support services revenues increased 8% to
$11,893,413  (25% of total  revenues)  in the  first  six  months  of 1999  from
$10,970,418 (19% of total revenues) in the first six months of 1999.

Cost of Revenues.  Cost of revenues  increased 5% to  $11,322,502  (49% of total
revenues)  in the second  quarter of 2000,  as compared to  $10,759,277  (35% 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 travel costs and expenses
incurred to support iProcure. Cost of revenues increased 12% to $22,353,751 (46%
of total revenues)  during the first six months of 2000 from $19,885,487 (34% of
total revenues) in the first six months of 1999.

Cost of product  revenues was 2% of total revenues in the second quarter of 2000
and first six months of 2000 and 2% of total revenues during the same periods in
1999.

Cost of  professional  service  revenues  was 39% of total  revenues  during the
second  quarter of 2000,  and 27% of total  revenues  during the same  period in
1999.  The  increase as a  percentage  of total  revenues  was due to  decreased
revenues,  lower  utilization  rates and increased  costs for iProcure.  Cost of
professional  service  revenues  includes  approximately  $549,000  of  expenses
attributed  to the  iProcure  division  for  the  second  quarter  of  2000  and
approximately $893,000 for the first six months of 2000.

Cost of support  service  revenues  was 8% of total  revenues  during the second
quarter of 2000 and 4% of total  revenues  during the same  period in 1999.  The
increase as a percentage  of total  revenues  was due to decreased  revenues and
increased  costs incurred in  establishing a European  support  center.  Cost of
<PAGE>
support service revenues was 7% of total revenues during the first six months of
2000 and 4% of total  revenues  during the same period in 1999.  Cost of support
service revenues includes  approximately  $51,000 of expenses  attributed to the
iProcure division for the second quarter of 2000 and  approximately  $86,000 for
the first six months of 2000.

Amortization  of capitalized  software costs was $765,645 (2% of total revenues)
in the second  quarter of 1999 and  $1,349,036  (2% of total  revenues)  for the
first six months of 1999.  No  amortization  expense was recorded in 2000 due to
capitalized software costs being fully amortized as of December 31, 1999.

Sales and  Marketing  Expenses.  Sales and marketing  expenses  increased 56% to
$12,408,519  (54% of total  revenues)  during  the  second  quarter of 2000 from
$7,972,922  (26% of total  revenues)  during  the second  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 increased 53%
to  $23,884,805  (49% of total  revenues)  in the first six  months of 2000 from
$15,628,497  (26% of total revenues) in the first six months of 1999.  Sales and
marketing expenses include  approximately  $3,078,000 of expenses  attributed to
the  iProcure  division  for  the  second  quarter  of  2000  and  approximately
$5,254,000 for the first six months of 2000.

Product Development Expenses.  Total product development  expenditures increased
20% to $4,744,996 (21% of total revenues) during the second quarter of 2000 from
$ 3,944,607 (13% of total revenues) during the same period in 1999. There was no
capitalized  portion of these  expenses in 2000.  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
expenditures  increased 31% to  $8,972,042  (19% of total  revenues)  during the
first  half of 2000 from  $6,841,627  (11% of total  revenues)  during  the same
period in 1999.  There was no capitalized  portion of these amounts in the first
six  months of 2000 as  compared  to  $967,007  in the first six months of 1999.
Total product development  expenses include  approximately  $654,000 of expenses
attributed  to the  iProcure  division  for  the  second  quarter  of  2000  and
approximately $1,280,000 for the first six months of 2000.

General  and  Administrative  Expenses.   General  and  administrative  expenses
increased 39% to $3,428,367 (15% of total revenues) during the second quarter of
2000 from  $2,463,502  (8% of total  revenues)  in the  second  quarter of 1999,
primarily  due to costs  associated  with the  iProcure  division.  General  and
administrative  expenses  increased  26% to $6,435,261  (13% of total  revenues)
during the first half of 2000 from $5,106,808 (9% of total revenues)  during the
first  half  of  1999.  Total  general  and   administrative   expenses  include
approximately  $480,000 of expenses  attributed to the iProcure division for the
second  quarter of 2000 and  approximately  $746,000 for the first six months of
2000.

Amortization  of  Goodwill.  Amortization  of goodwill  expense  decreased 1% to
$755,416 (3% of total revenues)  during the second quarter of 2000 from $764,115
(2% of total revenues) in the second quarter of 1999, due to adjustments made to
goodwill  balances in 1999.  Amortization  of goodwill  expense  decreased 1% to
$1,510,831 (3% of total revenues)  during the first half of 2000 from $1,528,230
(3% of total revenues) in the first half of 1999.

Interest and other  income.  Interest and other income  increased to $313,725 in
the second  quarter of 2000 from  $167,934  in the second  quarter of 1999.  The
increase was due to increased  investment  income  resulting from increased cash
and investment balances.  Interest and other income increased to $474,960 in the
first six months of 2000 from $342,358 in the first six months of 1999.

Interest Expense. Interest expense decreased to $11,752 in the second quarter of
2000 from  $29,599 in the second  quarter of 1999 due to lower  third party debt
balances.  Interest expense decreased to $42,751 in the first six months of 2000
from $81,970 in the first six months of 1999.

Tax Rate.  The Company's  effective  tax rate was 33% for the second  quarter of
2000 as compared to 37% for the second quarter of 1999. The Company's  effective
tax rate was 35.5% for the first six months of 2000 as  compared  to 37% for the
first six months of 1999.

Net Income. Net income decreased 308% to ($6,259,396)  ((27%) of total revenues)
in the second  quarter of 2000 from  $3,010,345  (10% of total  revenues) in the
second  quarter of 2000.  The decrease is  attributed to lower than expect sales
and an increase in iProcure  division  expenses.  Net income  decreased  240% to
($9,327,173)  ((19%) of total  revenues)  in the  first six  months of 2000 from
$6,656,980 (11% of total revenues) in the first six months of 1999.

Liquidity and Capital Resources

The Company has funded its operating  activities  entirely  from cash  generated
from  operations.  The Company ended its second quarter of 2000 with $13,411,460
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 is accounted for on a cost
basis.

The Company's principal  commitments as of June 30, 2000, consisted primarily of
long term debt and there were no material commitments for capital  expenditures.
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.
<PAGE>
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.

<PAGE>
ITEM 3.  Quantitative and Qualitative Disclosures about Market Risk


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

<PAGE>
PART II.     OTHER INFORMATION

Item 1.    Legal Proceedings

On January 11, 1999, a class action  lawsuit was filed against the Company,  its
Chief  Executive  Officer  and its  former  Chief  Financial  Officer,  alleging
violations of federal securities laws and seeking  unspecified  damages.  During
the  second  quarter  of  2000,  the  Company   entered  into  a  Memorandum  of
Understanding  with  counsel  for the  plaintiff  setting  forth  a  non-binding
understanding  for a  possible  settlement  of the  class  action  lawsuit.  The
understanding reached is not binding either upon the Company or the class action
plaintiffs.  A settlement of the class action,  as outlined in the Memorandum of
Understanding,  would not occur unless and until several material conditions are
favorably  resolved,  including  discovery,  the  negotiation  of  a  definitive
settlement  agreement and court approval.  Thus, the Memorandum of Understanding
is not, in itself, a settlement of the litigation.

The Memorandum of Understanding  reflects that, if approved as a full settlement
of the claims  against it and the other  defendants,  the  Company  would pay $5
million,  in a  combination  of cash and stock,  into a settlement  fund for the
benefit of the class.  In addition,  the Company  reached an agreement  with its
directors  and officers  liability  insurer for the insurer to  contribute  $2.4
million in cash to the settlement fund. There can be no assurance, however, that
the  litigation  will  settle  or, if it does  settle  that it would be on these
terms.  Due to the  contingent  nature of the Memorandum of  Understanding,  the
Company has not recorded a liability in connection with this lawsuit.

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 and Use of Proceeds

           Not Applicable

Item 3.    Defaults Upon Senior Securities

           Not Applicable

Item 4.    Submission of Matters to a Vote of Stockholders

The 2000 Annual Meeting of Stockholders  was held on June 9, 2000, at which time
certain  matters were  submitted to the  stockholders  of Datastream for a vote.
Present in person or by proxy at the meeting were holders of  18,737,804  shares
of the  issued  and  outstanding  shares of  Datastream's  common  stock,  which
represents 92% of the 20,374,007  shares of common stock issued and  outstanding
as of April 21, 2000, the record date for the Annual  Meeting.  Below is a brief
description  of each matter,  as well as the number (and  percentage)  of shares
represented  at the  meeting and  entitled  to vote and voting  for,  against or
abstaining as to each matter.

      1.   The stockholders elected the following class of director to serve a
           three-year term expiring 2003 by the following vote:

           Name                         For                  Withhold Authority
           Kenneth D. Tracy         18,031,742 (96.2%)          706,062 (3.8%)

           Each of the following directors continued their term of office
           as a director after the Annual Meeting: Larry G. Blackwell,
           Richard T. Brock, Ira D. Cohen, and John M. Sterling, Jr.

      2.   The stockholders approved a proposal to increase the number of
           shares of common stock reserved for issuance under the
           Datastream Systems, Inc. 1998 Stock Option Plan by 1,500,000
           shares by the following vote:

           For                  Against                   Abstain
           8,857,932 (47.3%)    5,939,457 (31.7%)         31,830 (0.2%)

      3.   The stockholders approved a proposal to increase the number of
           shares of common stock reserved for issuance under the Amended
           and Restated Datastream Systems, Inc. Employee Stock Purchase
           Plan by 200,000 shares by the following vote:

           For                  Against                   Abstain
           14,509,959 (77.4%)   285,777 (1.5%)           33,483(0.2%)

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:   8/10/00                ______________________
                               C. Alex Estevez
                               Chief Financial Officer (principal
                                financial and accounting officer)
<PAGE>
                              EXHIBIT INDEX



Exhibit Number                 Description

27                        Financial Data Schedule


<PAGE>