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 September 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:  September 30, 2000  20,134,576  shares,  $0.01 par
value.
<PAGE>



                         Datastream Systems, Inc.

                                FORM 10-Q

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

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

           Consolidated Statements of Operations -
                for the Nine Months ended
                September 30,  1999 and 2000                            7

           Consolidated Statement of Changes in Stockholders' Equity
                and Comprehensive Income (Loss) -
                for the Nine Months ended September 30, 2000            8

           Consolidated Statements of Cash Flows -
                for the Nine Months ended September 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               16
           Market Risk


Part II.   Other Information                                            17


Signature                                                               18

<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 sell  larger  and more  complex  software  solutions;  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;   the  Company's   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
                                (unaudited)
                                   Assets

                                                  December 31,     September 30,
                                                       1999             2000
                                                       ----             ----
Current assets:
   Cash and cash equivalents                        $17,912,797     $13,361,935
   Accounts receivable, net of allowance
        for doubtful accounts of
        $3,388,719 and $ 3,193,521, respectively     30,221,995      22,764,262
   Unbilled receivables                               2,311,247       2,456,282
   Investments                                          250,790             160
   Prepaid expenses                                   1,392,028       1,884,195
   Inventories                                          109,453          53,665
   Income tax receivable                                      -      11,596,330
   Deferred income taxes                              1,410,000       1,410,000
   Other assets                                       1,710,019       1,160,577
                                                    -----------     -----------
        Total current assets                         55,318,329      54,687,406

Investments                                           4,200,000       2,000,000
Property and equipment, net                          13,583,471      14,802,927
Goodwill, net                                        15,073,239      12,806,993
Other long term assets                                        -         412,500
                                                    -----------     -----------

        Total assets                                $88,175,039     $84,709,826
                                                    ===========     ===========

See accompanying notes to consolidated financial statements.
<PAGE>

                  Datastream Systems, Inc. and Subsidiaries

                   Consolidated Balance Sheets (Continued)
                                 (unaudited)
                    Liabilities and Stockholders' Equity

                                                  December 31,     September 30,
                                                       1999             2000
                                                       ----             ----

Current liabilities:
   Accounts payable                                 $ 3,919,404     $ 3,248,904
   Other accrued liabilities                          7,387,417      11,660,234
   Income taxes payable                                 120,928               -
   Current portion of long-term debt                    650,578               -
   Unearned revenue                                   8,587,980       9,739,756
                                                    -----------     -----------
        Total current liabilities                    20,666,307      24,648,894
Long-term debt, less current portion                    224,285         222,430
                                                    -----------     -----------
        Total liabilities                            20,890,592      24,871,324

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,
        20,539,576 shares issued
                at September 30, 2000                   196,742         205,396
   Additional paid-in capital                        70,533,683      79,048,270
   Retained earnings (deficit)                          760,050     (14,335,229)
   Other accumulated comprehensive (loss)              (153,265)     (1,027,172)
   Treasury stock, 405,000 shares at cost            (4,052,763)     (4,052,763)
                                                    -----------     -----------
        Total stockholders' equity                   67,284,447      59,838,502
                                                    -----------     -----------

        Total liabilities and stockholders' equity  $88,175,039     $84,709,826
                                                    ===========     ===========

See accompanying notes to consolidated financial statements.
<PAGE>

                    Datastream Systems, Inc. and Subsidiaries

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


                                                   September 30,   September 30,
                                                       1999             2000
                                                       ----             ----
Revenues:
   Product                                         $  8,420,398    $  7,745,758
   Professional service                              14,958,040      11,054,268
   Support                                            5,856,972       5,616,873
                                                    -----------     -----------
      Total revenues                                 29,235,410      24,416,899

Cost of revenues:
   Cost of product revenues                             495,067         548,898
   Cost of professional service revenues              9,587,786       7,805,348
   Cost of support revenues                           1,393,936       1,672,529
   Amortization of capitalized software               1,439,943               -
                                                    -----------     -----------
      Total cost of revenues                         12,916,732      10,026,775

      Gross profit                                   16,318,678      14,390,124

Operating expenses:
   Sales and marketing                                8,676,118      10,374,715
   Product development                                3,912,895       3,733,767
   General and administrative                         3,060,840       3,384,588
   Amortization of goodwill                             764,115         755,416
                                                    -----------     -----------
      Total operating expenses                       16,413,968      18,248,486

      Operating income (loss)                           (95,290)     (3,858,362)

Other income (expense):
   Interest and other income                            142,020         159,274
   Interest expense                                     (39,997)        (15,801)
   Other expense                                              -      (4,703,423)
                                                    -----------     -----------
      Net other income (expense)                        102,023      (4,559,950)

                                                    -----------     -----------
      Income (loss) before income taxes                   6,733      (8,418,312)

Income tax expense (benefit)                              2,490      (2,650,206)
                                                    -----------     -----------
Net income (loss)                                  $      4,243    $ (5,768,106)
                                                    ===========     ===========

   Basic net income (loss) per share               $        .00    $       (.29)
                                                    -----------     -----------
   Diluted net income (loss) per share             $        .00    $       (.29)
                                                    -----------     -----------
   Basic weighted average number of common and
      potential common shares outstanding            19,007,096      20,113,107
   Diluted weighted average number of common and
      potential common shares outstanding            20,229,085      20,113,107

See accompanying notes to consolidated financial statements.
<PAGE>

                     Datastream Systems, Inc. and Subsidiaries

                  Consolidated Statements of Operations
                               (unaudited)
               Nine months ended September 30, 1999 and 2000

                                                   September 30,   September 30,
                                                       1999             2000
                                                       ----             ----
Revenues:
   Product                                         $ 29,437,519    $ 20,873,375
   Professional service                              42,313,355      34,295,181
   Support                                           16,827,390      17,510,286
                                                    -----------     -----------
      Total revenues                                 88,578,264      72,678,842

Cost of revenues:
   Cost of product revenues                           1,560,932       1,578,828
   Cost of professional service revenues             24,459,559      25,749,868
   Cost of support revenues                           3,992,749       5,051,829
   Amortization of capitalized software               2,788,979               -
                                                    -----------     -----------
      Total cost of revenues                         32,802,219      32,380,525

      Gross profit                                   55,776,045      40,298,317

Operating expenses:
   Sales and marketing                               24,304,616      34,259,520
   Product development                               10,754,522      12,705,809
   General and administrative                         8,167,647       9,819,850
   Amortization of goodwill                           2,292,345       2,266,246
                                                    -----------     -----------
      Total operating expenses                       45,519,130      59,051,425

      Operating income (loss)                        10,256,915     (18,753,108)

Other income (expense):
   Interest and other income                            484,376         634,234
   Interest expense                                    (121,965)        (58,553)
   Other expense                                              -      (4,703,423)
                                                    -----------     -----------
      Net other income (expense)                        362,411      (4,127,742)

                                                    -----------     -----------
      Income (loss) before income taxes              10,619,326     (22,880,850)

Income tax expense (benefit)                          3,958,103      (7,785,571)
                                                    -----------     -----------
Net income (loss)                                  $  6,661,223    $(15,095,279)
                                                    ===========     ===========

   Basic net income (loss) per share               $        .35    $       (.76)
                                                    -----------     -----------
   Diluted net income (loss) per share             $        .33    $       (.76)
                                                    -----------     -----------
   Basic weighted average number of common and
      potential common shares outstanding            19,075,539      19,930,262
   Diluted weighted average number of common and
      potential common shares outstanding            19,969,495      19,930,262

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 nine months ended September 30, 2000

<CAPTION>

                                                                           Other
                                             Additional   Accumulated   Accumulated                  Total
                                  Common      Paid-In      Earnings    Comprehensive   Treasury   Stockholders'
                                   Stock      Capital      (Deficit)       (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                            -             -   (15,095,279)           -            -      (15,095,279)
   Unrealized losses on
        securities available for sale  -             -             -     (102,622)           -         (102,622)
   Foreign currency
        translation adjustment         -             -             -     (771,285)           -         (771,285)
                                                                                                     ----------
Total comprehensive loss                                                                            (15,969,186)
                                                                                                     ----------

Exercise of stock options          8,259     6,013,012             -            -            -        6,021,271

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

Stock issued for Employee
   Stock Purchase Plan               395       472,349             -            -            -          472,744

Amortization of compensatory
   stock options                       -       178,226             -            -            -          178,226


                                --------   -----------   -----------    ---------  -----------      -----------
Balance at September 30, 2000   $205,396   $79,048,270  $(14,335,229) $(1,027,172) $(4,052,763)     $59,838,502
                                ========   ===========   ===========    =========  ===========      ===========

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

                  Consolidated Statements of Cash Flows
                               (unaudited)

              Nine months ended September 30, 1999 and 2000

                                                  September 30,   September 30,
                                                       1999             2000
                                                       ----             ----
 Cash flows from operating activities:
   Net income (loss)                               $  6,661,223    $(15,095,279)
   Adjustments to reconcile
        net income (loss) to net cash
        provided by (used in)operating activities:
      Depreciation                                    3,383,373       3,945,926
      Amortization of capitalized
        software development costs                    2,788,979               -
      Goodwill amortization                           2,292,345       2,266,246
      Other amortization                                      -         137,500
      Amortization of compensatory stock options         83,850         178,226
      Other accumulated comprehensive (loss)           (269,004)       (771,285)
      Accretion of investment discount, net                (320)              -
      Gain on disposal of fixed assets                  (26,985)              -
      Provision for doubtful accounts                 1,039,500        (206,698)
      Deferred income taxes                            (416,800)              -
      Changes in operating assets and liabilities:
       Accounts receivable                             (910,777)      7,652,932
       Unbilled receivable                               87,703        (133,535)
       Accrued interest receivable                       23,889          19,362
       Prepaid expenses                                (146,614)       (492,167)
       Inventories                                      185,052          55,788
       Other assets                                      51,430         530,079
       Accounts payable                               1,572,818        (670,500)
       Other accrued liabilities                     (2,336,834)      4,272,817
       Income taxes payable/receivable               (1,539,013)     (9,866,258)
       Unearned revenue                                (116,436)      1,151,776
                                                     ----------      ----------
       Net cash provided by (used in)
        operating activities                         12,407,379      (7,025,070)
                                                     ----------      ----------
Cash flows from investing activities:
   Purchase of investments                           (4,310,000)     (2,000,000)
   Proceeds from sale and maturities of investments   2,655,058       4,348,008
   Additions to property and equipment               (3,693,366)     (5,165,382)
   Purchase of customer list                                  -        (550,000)
   Capitalized software development costs              (967,007)              -
                                                     ----------      ----------
       Net cash used in investing activities         (6,315,315)     (3,367,374)
                                                     ----------      ----------
Cash flows from financing activities:
   Proceeds from exercise of stock options            2,213,280       6,021,271
   Proceeds from issuances of shares under employee
       stock purchase plan                              349,398         472,744
   Cash paid to acquire treasury stock               (4,052,763)              -
   Principal payments on long-term debt                (667,459)       (652,433)
                                                     ----------      ----------
       Net cash provided by (used in)
                financing activities                 (2,157,544)      5,841,582
                                                     ----------      ----------

Net increase (decrease) in cash and cash equivalents  3,934,520      (4,550,862)
Cash and cash equivalents at beginning of period      6,739,209      17,912,797
                                                     ----------      ----------
Cash and cash equivalents at end of period         $ 10,673,729    $  13,361,935
                                                   ============    =============

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,  Japan,  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 September 30, 2000 and 1999

                                                              Per Share
                                          Income(Loss)  Shares   Amount
  Three months ended September 30, 2000:
      Basic income (loss) per share    $ (5,768,106)  20,113,107    (.29)
      Effect of dilutive securities:
         Stock options                            -            -
                                         -----------   ----------
      Diluted income(loss) per share   $ (5,768,106)  20,113,107    (.29)
                                       ============   ==========    ====

    Three months ended September 30, 1999:
      Basic income per share           $      4,243   19,007,096     .00
      Effect of dilutive securities:
         Stock options                            -    1,221,989
                                         -----------  ----------
      Diluted income per share         $      4,243   20,229,085     .00
                                       ============   ==========     ===

For the nine months ended September 30, 2000 and 1999

                                                               Per Share
                                          Income(Loss)  Shares   Amount
 Nine months ended September 30, 2000:
      Basic income (loss) per share    $(15,095,279)  19,930,262    (.76)
      Effect of dilutive securities:
         Stock options                            -            -
                                         -----------  ----------
      Diluted income(loss) per share   $(15,095,279)  19,930,262    (.76)
                                       ============   ==========     ===

 Nine months ended September 30, 1999:
      Basic income per share           $  6,661,223   19,075,539     .35
      Effect of dilutive securities
         Stock options                            -      893,956
                                         -----------  ----------
      Diluted income per share         $  6,661,223   19,969,495     .33
                                       ============   ==========     ===

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. The restructuring was completed and the reserves
fully  utilized as of December 31, 1999;  therefore  there are no  restructuring
costs in 2000.

As of September 30, 1999, approximately $1,595,000 of the restructuring accruals
were utilized as follows: $359,000 for severance and related costs, $478,000 for
costs of closing redundant  facilities and $758,000 for provisions for increased
credit risks.

D.  Other Expense

During the third quarter of 2000, the Company reached a settlement  agreement in
its class action shareholder  lawsuit (see footnote (G) of Notes to Consolidated
Financial  Statements)  resulting  in  a  charge  for  the  settlement  and  the
associated legal fees, net of insurance benefit. Additionally,  during the third
quarter of 2000, the Company  reached  agreement,  subject to the execution of a
final  settlement  agreement,  to settle an escrow  dispute  related to its 1996
acquisition  of SQL  Systems.  The  settlement  calls for the issuance of 70,000
shares of Datastream Systems,  Inc. common stock.  Finally, the Company recorded
other  non-operating  expenses  primarily  related to realized  foreign exchange
losses and non-operating professional fees.

<PAGE>

E. Geographical and Segment Information

The Company  operates  principally in one business  segment,  which includes the
development,  marketing and selling and supporting of  Internet-based  solutions
for asset maintenance and industrial procurement.  Prior to the third quarter of
2000, the Company had identified two  reportable  industry  segments:  the asset
maintenance  division  ("asset  maintenance")  and  the  industrial  procurement
division  ("iProcure").  As reported in the  Company's  Form 10-Q for the period
ending June 30, 2000, 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,  asset  maintenance.  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.
Information about the Company's  operations in different geographic locations is
as follows:

<TABLE>
For the three months ended September 30, 1999 and 2000:
<CAPTION>
                        United                         Latin
                        States          Europe        America         Asia            Total
<S>                     <C>             <C>           <C>             <C>             <C>
September 30, 1999:

Total revenues          $20,658,978  $ 5,791,067    $ 1,506,565     $ 1,278,800     $29,235,410
Operating income (loss)  (1,074,470)     612,578        371,211          (4,609)        (95,290)
Total assets             66,989,955   15,845,788      1,973,789       3,151,295      87,960,827

September 30, 2000:

Total revenues           16,880,905    4,546,985      1,931,018       1,057,991      24,416,899
Operating income (loss)  (3,668,803)    (105,536)       226,299        (310,322)     (3,858,362)
Total assets             66,469,382   11,151,870      3,177,183       3,911,391      84,709,826

For the nine months ended September 30, 1999 and 2000:
<CAPTION>
                        United                         Latin
                        States          Europe        America         Asia            Total
<S>                     <C>             <C>           <C>             <C>             <C>
September 30, 1999:

Total revenues          $60,981,944  $19,696,248    $ 4,057,486     $ 3,842,586     $88,578,264
Operating income (loss)   3,871,926    4,754,195        994,621         636,173      10,256,915
Total assets             66,989,955   15,845,788      1,973,789       3,151,295      87,960,827

September 30, 2000:

Total revenues           49,054,262   15,125,769     4,889,186        3,609,625      72,678,842
Operating income (loss) (18,318,828)   (483,188)       745,210         (696,302)    (18,753,108)
Total assets             66,469,382  11,151,870      3,177,183        3,911,391      84,709,826
</TABLE>

F. Recent Accounting Pronouncements

In June 1998, the Financial  Accounting  Standards Board (FASB) issued Statement
of  Financial   Accounting   Standards  No.  133,   "Accounting  for  Derivative
Instruments and Hedging Activities"  (Statement No. 133). This standard requires
a public company to recognize all derivatives as either assets or liabilities in
the statement of financial position and measure those instruments at fair value.
In July 1999, the FASB issued  Statement of Financial  Accounting  Standards No.
137, "Accounting for Derivative Instruments and Hedging Activities - Deferral of
Effective  Date of FASB  Statement No. 133 - an amendment of FASB  Statement No.
133"  (Statement  No. 137).  Statement  No. 137 delayed the  effective  date for
Statement No. 133 for one year.  The Company is required to adopt  Statement No.
133 in the first  quarter of 2001.  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.

<PAGE>

G. Commitments and Contingencies

On January 11,  1999,  a class  action  lawsuit  was filed in the United  States
District Court for the District of South Carolina,  Greenville Division, 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 third quarter of 2000,  the parties  reached an  agreement,  which is
subject  to final  approval  by the  court,  that  would  operate  as a complete
settlement of the claims made against the Company and the individual defendants.
The  principal  financial  terms  of the  agreement  call for a  payment  to the
plaintiffs,  for the  benefit  of the  class,  of a  total  of $5  million  in a
combination  of $3.75  million  in cash  and  $1.25  million  in  shares  of the
Company's common stock. The Company's  insurance  carrier will fund $2.4 million
of the  settlement.  The parties have taken steps to secure final court approval
of the  settlement  and the  court  has  scheduled  a  hearing  on the  proposed
settlement  of the action.  The court has also approved the form of notice to be
mailed to the affected class members by the attorneys for the  plaintiffs.  This
legal  proceeding  was  reported in the  Company's  Form 10-K for the year ended
December  31, 1999 and Forms 10-Q for the period  ending  March 31, 2000 and the
period ending June 30, 2000.

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. Datastream's asset maintenance solutions optimize productivity of
assets through various  preventative  maintenance and asset management programs.
The Company's  industrial  procurement  solutions  enable  customers to automate
their industrial  procurement  resulting in reduced costs of maintaining assets.
The Company's  products  include  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  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 third quarter
of 2000.  Total  revenues  decreased 16% to  $24,416,899 in the third quarter of
2000 from  $29,235,410  in the third quarter of 1999, due to lower than expected
product  revenues and a related  decrease in services  revenue.  Total  revenues
decreased  18% to  $72,678,842  during  the  first  nine  months  of  2000  from
$88,578,264 in the first nine months of 1999.

     Product revenues  decreased 8% to $7,745,758 (32% of total revenues) in the
third  quarter  of 2000 from  $8,420,398  (29% of total  revenues)  in the third
quarter of 1999, as a result of changes within the sales organization  causing a
disruption in license sales.  Product revenues decreased 29% to $20,873,375 (29%
of total  revenues)  in the first nine months of 2000 from  $29,437,519  (33% of
total revenues) in the first nine months of 1999.

     Professional  service  revenues  decreased 26% to $11,054,268 (45% of total
revenues) in the third quarter of 2000 from  $14,958,040 (51% of total revenues)
in the third  quarter of 1999.  The decrease is a result of  decreased  software
license  sales  in  2000.   Professional   service  revenues  decreased  19%  to
$34,295,181  (47% of total  revenues)  in the  first  nine  months  of 2000 from
$42,313,355 (48% of total revenues) in the first nine months of 1999.

     Support  services  revenues for the third  quarter of 2000  decreased 4% to
$5,616,873  (23% of total  revenues) from  $5,856,972 (20% of total revenues) in
the third quarter of 1999,  primarily due to decreased software license sales in
2000.  Support  services  revenues  increased  4% to  $17,510,286  (24% of total
revenues)  in the  first  nine  months of 1999  from  $16,827,390  (19% of total
revenues) in the first nine months of 1999.

     Cost of Revenues.  Cost of revenues  decreased 22% to  $10,026,775  (41% of
total revenues) in the third quarter of 2000, as compared to $12,916,732 (44% of
total  revenues)  in the  comparable  quarter of 1999.  The  decrease in cost of
revenues is due to no  amortization  expense for  capitalized  software costs in
2000 and cost savings  realized by the Professional  Services  Department due to
merging  the  Company's  business  segments.  Cost of revenues  decreased  1% to
$32,380,525  (45% of total  revenues)  during the first nine months of 2000 from
$32,802,219 (37% of total revenues) in the first nine months of 1999.

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

     Cost of professional  service revenues was 32% of total revenues during the
third quarter of 2000, and 33% of total revenues during the same period in 1999.
Cost of professional services revenues was 35% for the first nine months of 2000
and 28% in the first nine months of 1999.  The increase as a percentage of total
revenues  for the  first  nine  months  was  due to  decreased  revenues,  lower
utilization rates and increased costs for iProcure.

     Cost of support service  revenues was 7% of total revenues during the third
quarter of 2000 and 5% 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
support  service  revenues was 7% of total revenues during the first nine months
of 2000 and 5% of total revenues during the same period in 1999.
<PAGE>
     Amortization  of  capitalized  software  costs was  $1,439,943 (5% of total
revenues) in the third quarter of 1999 and $2,788,979 (3% of total revenues) for
the first nine 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 20% to
$10,374,715  (42% of total  revenues)  during  the  third  quarter  of 2000 from
$8,676,118 (30% of total revenues) during the third quarter of 1999, as a result
of an increased  number of sales  personnel  and  increased  sales and marketing
expenditures for new products,  including iProcure. Sales and marketing expenses
increased 41% to $34,259,520 (47% of total revenues) in the first nine months of
2000 from $24,304,616 (27% of total revenues) in the first nine months of 1999.

     Product  Development  Expenses.   Total  product  development  expenditures
decreased 5% to $3,733,767 (15% of total  revenues)  during the third quarter of
2000 from $ 3,912,895  (13% of total  revenues)  during the same period in 1999.
There was no  capitalized  portion of these  expenses in 2000.  The  decrease in
total product development expense resulted from cost savings realized during the
third quarter of 2000 upon  consolidation  of the Company's  business  segments.
Total product  development  expenditures  increased 18% to  $12,705,809  (17% of
total revenues)  during the first nine months of 2000 from  $10,754,522  (12% of
total revenues) during the same period in 1999. There was no capitalized portion
of these amounts in the first nine months of 2000 as compared to $967,007 in the
first nine months of 1999.

     General and Administrative  Expenses.  General and administrative  expenses
increased 11% to $3,384,588 (14% of total revenues)  during the third quarter of
2000 from  $3,060,840  (11% of total revenues) in the third quarter of 1999, due
to costs  associated with managing the iProcure  product and costs related to an
increased   international   infrastructure  costs.  General  and  administrative
expenses  increased 20% to $9,819,850 (14% of total  revenues)  during the first
nine months of 2000 from $8,167,647 (9% of total revenues) during the first nine
months of 1999.

     Amortization of Goodwill.  Amortization of goodwill expense decreased 1% to
$755,416 (3% of total  revenues)  during the third quarter of 2000 from $764,115
(3% of total revenues) in the third quarter of 1999, due to adjustments  made to
goodwill  balances in 1999.  Amortization  of goodwill  expense  decreased 1% to
$2,266,246  (3% of total  revenues)  during the first  nine  months of 2000 from
$2,292,345 (3% of total revenues) in the first nine months of 1999.

     Interest and other income.  Interest and other income increased to $159,274
in the  third  quarter  of 2000 from  $142,020  in the  third  quarter  of 1999.
Interest and other income increased to $634,234 in the first nine months of 2000
from  $484,376  in the  first  nine  months  of 1999.  The  increase  was due to
increased  investment  income  resulting  from  increased  cash  and  investment
balances.

     Interest  Expense.  Interest  expense  decreased  to  $15,801  in the third
quarter  of 2000 from  $39,997 in the third  quarter of 1999 due to lower  third
party debt  balances.  Interest  expense  decreased to $58,553 in the first nine
months of 2000 from $121,965 in the first nine months of 1999.

     Other  Expense.  Other expense  recorded in the third  quarter  consists of
primarily of costs incurred to settle the Company's  class action lawsuit and to
settle the escrow claims  dispute with the former  shareholders  of SQL Systems.
See footnote (D) of the Notes to the Consolidated Financial Statements.

     Tax Rate. The Company's effective tax rate was 31% for the third quarter of
2000 as compared to 37% for the third quarter of 1999.  The Company's  effective
tax rate was 34% for the first nine  months of 2000 as  compared  to 37% for the
first nine months of 1999.  The decrease in the effective tax rate is due to the
impact of the company's  permanent  book/tax  differences  when  considering the
operating losses in 2000.

     Net Income (loss).  Net income (loss)  decreased to $(5,768,106)  ((24%) of
total  revenues) in the third quarter of 2000 from $4,243 (0% of total revenues)
in the third  quarter of 2000.  The decrease is  attributed to lower than expect
sales and legal and  professional  fees incurred in settlement  agreements.  Net
income  decreased to  $(15,095,279)  ((21%) of total revenues) in the first nine
months of 2000 from  $6,661,223 (8% of total  revenues) in the first nine months
of 1999.

Liquidity and Capital Resources

     The  Company  has  funded  its  operating  activities  primarily  from cash
generated  from  operations in 1999. The Company ended its third quarter of 2000
with $13,361,935 in cash and cash equivalents  defined as securities maturing in
less than 90 days.

     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 September 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>

ITEM 3.  Quantitative and Qualitative Disclosures about Market Risk


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

<PAGE>

PART II.     OTHER INFORMATION

Item 1.    Legal Proceedings

     On January 11, 1999, a class action  lawsuit was filed in the United States
District Court for the District of South Carolina,  Greenville Division, 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 third quarter of 2000,  the parties  reached an  agreement,  which is
subject  to final  approval  by the  court,  that  would  operate  as a complete
settlement of the claims made against the Company and the individual defendants.
The  principal  financial  terms  of the  agreement  call for a  payment  to the
plaintiffs,  for the  benefit  of the  class,  of a  total  of $5  million  in a
combination  of $3.75  million  in cash  and  $1.25  million  in  shares  of the
Company's common stock. The Company's  insurance  carrier will fund $2.4 million
of the  settlement.  The parties have taken steps to secure final court approval
of the  settlement  and the  court  has  scheduled  a  hearing  on the  proposed
settlement  of the action.  The court has also approved the form of notice to be
mailed to the affected class members by the attorneys for the  plaintiffs.  This
legal  proceeding  was  reported in the  Company's  Form 10-K for the year ended
December  31, 1999 and Forms 10-Q for the period  ending  March 31, 2000 and the
period ending June 30, 2000.

     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

           None

Item 3.    Defaults Upon Senior Securities

           None

Item 4.    Submission of Matters to a Vote of Stockholders

           None

Item 5.    Other Information

           None

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:   11/13/00                    ______________________
                               C. Alex Estevez
                               Chief Financial Officer (principal
                                financial and accounting officer)
<PAGE>
                              EXHIBIT INDEX



Exhibit Number                 Description

27                        Financial Data Schedule


<PAGE>