<PAGE>   1

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q


              [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
                  For the quarterly period ended March 31, 2001

                                       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: 000-20709

                            D&E Communications, Inc.
             (Exact name of registrant as specified in its charter)

                                  PENNSYLVANIA
                         (State or other jurisdiction of
                         incorporation or organization)


                I.R.S. Employer Identification Number: 23-2837108

                            Brossman Business Complex
                              124 East Main Street
                                  P. O. Box 458
                           Ephrata, Pennsylvania 17522
                    (Address of principal executive offices)


                  Registrant's Telephone Number: (717) 733-4101

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

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.

              Class                                Outstanding at May 4, 2001

Common Stock, par value $.16 per share             7,386,519  Shares

<PAGE>   2

Form 10-Q

                    D&E Communications, Inc. and Subsidiaries

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
Item No.                                                                                                        Page
--------                                                                                                        ----
<S>                                                                                                             <C>
                          PART I. FINANCIAL INFORMATION

     1.  Financial Statements

                  Consolidated Statements of Operations --
                           For the three months ended
                           March 31, 2001 and 2000 .......................................................        1

                  Consolidated Balance Sheets --
                           March 31, 2001 and December 31, 2000 ..........................................        2

                  Consolidated Statements of Cash Flows --
                           For the three months ended
                           March 31, 2001 and 2000 .......................................................        3

                  Consolidated Statement of Comprehensive Income --
                           For the three months ended
                           March 31, 2001 and 2000 .......................................................        4

                  Notes to Consolidated Financial Statements .............................................        5

     2.  Management's Discussion and Analysis of Financial
                  Condition and Results of Operations.....................................................        9

     3.  Quantitative and Qualitative Disclosure
                  about Market Risks .....................................................................       15

                           PART II. OTHER INFORMATION

     1.   Legal Proceedings ..............................................................................       16

     6.   Exhibits and Reports on Form 8-K ...............................................................       17

            SIGNATURES....................................................................................       18
</TABLE>


                                       i
<PAGE>   3

Form 10-Q Part I - Financial Information
Item 1. Financial Statements

                   D & E Communications, Inc. and Subsidiaries
                      Consolidated Statements of Operations
                    (in thousands, except per-share amounts)
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                      Three Months Ended
                                                                           March 31
                                                                                  2000
     OPERATING REVENUE                                            2001          (Restated)
                                                                  ----          ---------
<S>                                                             <C>             <C>
   Communication service revenues .......................       $ 17,436        $ 13,814
   Communication products sold ..........................          3,005           2,872
   Other ................................................            401             332
                                                                --------        --------
      Total Operating Revenues ..........................         20,842          17,018
                                                                --------        --------

OPERATING EXPENSE

   Communication service expenses (exclusive of
      depreciation and amortization below) ..............          8,680           6,501
   Cost of communication products sold ..................          2,449           2,156
   Depreciation and amortization ........................          3,529           2,638
   Marketing and customer services ......................          2,094           1,384
   General and administrative services ..................          3,767           2,854
                                                                --------        --------
      Total Operating Expenses ..........................         20,519          15,533
                                                                --------        --------
           Operating Income .............................            323           1,485
                                                                --------        --------

OTHER INCOME (EXPENSE)

   Allowance for funds used during construction .........             21              11
   Equity in net losses of affiliates ...................         (3,555)         (2,818)
   Interest expense .....................................           (453)           (389)
   Other, net ...........................................            316             481
                                                                --------        --------
      Total Other Income (Expense) ......................         (3,671)         (2,715)
                                                                --------        --------
           Loss before income taxes, dividends on utility
              preferred stock, extraordinary item and
              cumulative effect of accounting change ....         (3,348)         (1,230)

INCOME TAXES AND DIVIDENDS ON
    UTILITY PREFERRED STOCK

   Income taxes .........................................           (563)             78
   Dividends on utility preferred stock .................             16              16
                                                                --------        --------
      Total income taxes and dividends
         on utility preferred stock .....................           (547)             94
                                                                --------        --------
           Loss before extraordinary item and
                cumulative effect of accounting change ..         (2,801)         (1,324)

   Extraordinary item, tax benefit of $107 ..............            107              --
   Cumulative effect of change in accounting
       principle, net of tax benefit of $267 ............             --            (912)
                                                                --------        --------
NET LOSS ................................................       $ (2,694)       $ (2,236)
                                                                ========        ========
   Weighted average common shares outstanding ...........          7,384           7,339

BASIC AND DILUTED EARNINGS (LOSS)
   PER COMMON SHARE
   Net loss before extraordinary item
       and accounting change ............................       $  (0.38)       $  (0.18)
   Extraordinary item ...................................           0.02            0.00
   Cumulative effect of accounting change ...............           0.00           (0.12)
                                                                --------        --------
       Net loss per common share ........................       $  (0.36)       $  (0.30)
                                                                ========        ========
   Dividends per common share ...........................       $   0.13        $   0.10
                                                                ========        ========
</TABLE>

                 See notes to consolidated financial statements.


                                        1
<PAGE>   4

                   D & E Communications, Inc. and Subsidiaries

                           Consolidated Balance Sheets

                      (in thousands, except share amounts)

<TABLE>
<CAPTION>
                                                                            March 31,
                                                                               2001         December 31,
                               ASSETS                                      (Unaudited)          2000
                                                                          ------------      ------------
<S>                                                                       <C>               <C>
CURRENT ASSETS
       Cash and cash equivalents ...................................       $     607        $   3,527
       Temporary investments, including $8,667 and $8,667 restricted           8,667            8,670
       Accounts receivable .........................................          10,956           12,290
       Accounts receivable - affiliated companies ..................           2,783            5,714
       Inventories, lower of cost or market, at average cost .......           2,078            2,080
       Prepaid expenses ............................................           5,994            2,661
       Other .......................................................             558              575
                                                                           ---------        ---------
          TOTAL CURRENT ASSETS .....................................          31,643           35,517
                                                                           ---------        ---------
INVESTMENTS
       Investments available-for-sale ..............................           3,201            2,518
PROPERTY, PLANT AND EQUIPMENT
       In service ..................................................         151,246          147,263
       Under construction ..........................................          12,992            7,913
                                                                           ---------        ---------
                                                                             164,238          155,176
       Less accumulated depreciation ...............................          82,015           79,321
                                                                           ---------        ---------
                                                                              82,223           75,855
                                                                           ---------        ---------
OTHER ASSETS .......................................................           9,806           10,331
                                                                           ---------        ---------

       TOTAL ASSETS ................................................       $ 126,873        $ 124,221
                                                                           =========        =========
                  LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
       Notes payable ...............................................       $   8,231        $      --
       Long-term debt maturing within one year .....................             912              917
       Accounts payable and accrued liabilities ....................          14,636           18,975
       Accrued taxes ...............................................             356              387
       Accrued interest and dividends ..............................             538              431
       Advance billings, customer deposits and other ...............           5,896            3,672
                                                                           ---------        ---------
          TOTAL CURRENT LIABILITIES ................................          30,569           24,382
                                                                           ---------        ---------
LONG-TERM DEBT .....................................................          20,891           20,907
                                                                           ---------        ---------
OTHER LIABILITIES
       Equity in net losses of affiliates in excess of
           investments and advances ................................          10,582           11,435
       Deferred income taxes .......................................           7,193            6,696
       Other .......................................................           3,831            3,993
                                                                           ---------        ---------
                                                                              21,606           22,124
                                                                           ---------        ---------
PREFERRED STOCK OF UTILITY SUBSIDIARY, Series A 4 1/2%,
         par value $100, cumulative, callable at par, at the option
         of the Company, authorized 20,000 shares,
         outstanding  14,456 shares ................................           1,446            1,446
                                                                           ---------        ---------
COMMITMENTS
SHAREHOLDERS' EQUITY
       Common stock, par value $.16, authorized shares 30,000,000 ..           1,215            1,214
         Outstanding shares: 7,390,380 at March 31, 2001
         7,382,054 at December 31, 2000
       Additional paid-in capital ..................................          39,522           39,374
       Unrealized gain (loss) on investments .......................             931              467
       Retained earnings ...........................................          14,752           18,366
       Treasury stock at cost, 226,194 shares at March 31, 2001
                  and December 31, 2000 ............................          (4,059)          (4,059)
                                                                           ---------        ---------
                                                                              52,361           55,362
                                                                           ---------        ---------
       TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY ..................       $ 126,873        $ 124,221
                                                                           =========        =========
</TABLE>


                 See notes to consolidated financial statements.


                                        2
<PAGE>   5

                   D & E Communications, Inc. and Subsidiaries

                      Consolidated Statements of Cash Flows

                                 (in thousands)
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                           Three Months Ended
                                                                                 March 31
                                                                            2001            2000
                                                                            ----            ----
<S>                                                                     <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES ............................       $  5,933        $  2,065
                                                                        --------        --------

CASH FLOWS FROM INVESTING ACTIVITIES
        Capital expenditures, net of proceeds from sales
              and removal costs .................................        (13,011)         (3,412)
        Proceeds from sale of temporary investments .............          8,669          11,726
        Purchase of temporary investments .......................         (8,667)        (18,416)
        Increase in investments and advances to affiliates ......        (15,402)         (8,197)
        Decrease in investments and repayments from affiliates ..         12,119          18,095
                                                                        --------        --------
          Net Cash Used In Investing Activities .................        (16,292)           (204)
                                                                        --------        --------
CASH FLOWS FROM FINANCING ACTIVITIES
        Dividends on common stock ...............................           (859)           (684)
        Payments on long-term debt ..............................            (21)             --
        Net proceeds from (payments on) revolving lines of credit          8,231              --
        Proceeds from issuance of common stock ..................             88              80
        Purchase of treasury stock ..............................             --             (99)
                                                                        --------        --------
          Net Cash Provided By (Used In) Financing Activities ...          7,439            (703)
                                                                        --------        --------
INCREASE (DECREASE) IN CASH
     AND CASH EQUIVALENTS .......................................         (2,920)          1,158
CASH AND CASH EQUIVALENTS
     BEGINNING OF PERIOD ........................................          3,527           1,674
                                                                        --------        --------
     END OF PERIOD ..............................................       $    607        $  2,832
                                                                        ========        ========
</TABLE>


                 See notes to consolidated financial statements.


                                       3
<PAGE>   6

                   D & E Communications, Inc. and Subsidiaries
                 Consolidated Statements of Comprehensive Income
                                 (in thousands)
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                  Three months ended
                                                        March 31
                                                  2001           2000
                                                  ----           ----
<S>                                            <C>            <C>
Net income (loss) ......................       $(2,694)       $(2,236)

Other comprehensive income:
  Unrealized gain on investments, net of
     taxes of $219 and $743 ............           464            882
                                               -------        -------
Total comprehensive income (loss) ......       $(2,230)       $(1,354)
                                               =======        =======
</TABLE>


                 See notes to consolidated financial statements.


                                       4
<PAGE>   7

Form 10-Q

                    D&E Communications, Inc. and Subsidiaries
                   Part I - Financial Information (continued)

               Item 1. Notes to Consolidated Financial Statements
               ---------------------------------------------------
                        (Dollar amounts are in thousands)
                                   (Unaudited)


(1)  BASIS OF PRESENTATION

                  D&E Communications, Inc. is a telecommunications holding
         company. The accompanying consolidated financial statements include the
         accounts of Denver and Ephrata Telephone and Telegraph Company (D&E
         Telephone); D&E Networks, Inc., (Networks) formerly D&E Telephone and
         Data Systems (TDS); D&E Wireless, Inc. (Wireless); D&E Investments,
         Inc. (Investments); and D&E Systems, Inc. (Systems). D&E
         Communications, Inc., including these subsidiary companies, is defined
         and referred to herein as (D&E). Certain prior year balances have been
         reclassified to conform to current year presentation.

                  The accompanying financial statements are unaudited and have
         been prepared by D&E pursuant to generally accepted accounting
         principles and the rules and regulations of the Securities and Exchange
         Commission (SEC). In the opinion of management, the financial
         statements include all adjustments (consisting of normal recurring
         adjustments) necessary to present fairly the results of operations,
         financial position, and cash flows of D&E for the periods presented.
         Certain information and footnote disclosures normally included in
         financial statements prepared in accordance with generally accepted
         accounting principles have been condensed or omitted pursuant to such
         SEC rules and regulations. The use of generally accepted accounting
         principles requires management to make estimates and assumptions that
         affect the reported amounts of assets and liabilities and disclosure of
         contingent assets and liabilities at the date of the financial
         statements and the reported amount of revenues and expenses during the
         reporting period. Actual results could differ from those estimates. D&E
         believes that the disclosures made are adequate to make the information
         presented not misleading. These financial statements should be read in
         conjunction with the financial statements and notes thereto included in
         the D&E Annual Report on Form 10-K for the fiscal year ended December
         31, 2000.


(2)   EQUITY INVESTMENTS IN AFFILIATED COMPANIES

         (a)      PCS ONE

                  D&E owns a fifty percent partnership interest in D&E/Omnipoint
         Wireless Joint Venture, L.P. (PCS ONE) that was formed in November 1997
         to provide PCS wireless communications services and equipment to
         customers in the Lancaster, Harrisburg, York/Hanover and Reading,
         Pennsylvania Basic Trading Areas. The results of operations of PCS ONE
         were as follows:

<TABLE>
<CAPTION>
                             Three months ended
                                   March 31
                             2001           2000
                          -------        -------
<S>                       <C>            <C>
Net sales .........       $ 9,674        $ 7,140
Net loss ..........       ($4,530)       ($3,454)
D&E's share of loss       ($2,265)       ($1,727)
</TABLE>


                                       5
<PAGE>   8

Form 10-Q

                    D&E Communications, Inc. and Subsidiaries
                   Part I - Financial Information (continued)

               Item 1. Notes to Consolidated Financial Statements
               ---------------------------------------------------
                        (Dollar amounts are in thousands)
                                   (Unaudited)

         (b)      EuroTel

                  D&E owns a one-third interest in EuroTel L.L.C. (EuroTel), a
         domestic corporation which holds a 100% investment in PenneCom B.V.
         (PenneCom), an international telecommunications company that holds a
         100% investment in Pilicka Telefonia, Sp.zo.o. (Pilicka). In April
         1999, PenneCom entered into an agreement to sell its entire investment
         in Pilicka to Elektrim S.A. (Elektrim) for $140,000 in cash and notes.
         In July 1999, Elektrim issued written notice to PenneCom that it was
         repudiating the purchase agreement. In August 1999, PenneCom filed an
         arbitration request with the International Court of Arbitration seeking
         specific performance of the agreement as well as compensatory and
         punitive damages. The discovery, briefing and hearing phases on all
         liability issues were completed during 2000. A hearing of claims for
         damages was conducted in January 2001, and the arbitration panel
         formally closed the arbitration. It is not possible to predict the
         outcome of the arbitration. See Item 1 of Part II of this Report.


(3)   ACCOUNTING CHANGES

                  D&E adopted Securities and Exchange Commission Staff
         Accounting Bulletin No. 101, "Revenue Recognition in Financial
         Statements" (SAB101) in the fourth quarter of 2000, retroactive to
         January 1, 2000. SAB 101 provides guidance on recognition of certain
         non-recurring fees, such as service activation and installation fees,
         and associated incremental direct expenses over the expected term of
         the customer relationship. The cumulative effect of a change in
         accounting principle was reported in our Form 10-K for the year ended
         December 31, 2000. The previously reported quarterly information for
         the three months ended March 31, 2000 are restated in this Form 10-Q to
         reflect a $912 ($0.12 per share) cumulative effect of the change in
         accounting principle, net of tax benefit of $267 as of January 1, 2000.
         Also we have restated communication service revenues, communication
         service expenses and equity in net losses of affiliates for the impact
         of SAB 101. At December 31, 2000, D&E had $1,975 of deferred revenue
         and $1,317 of deferred costs. The impact increased the first quarter
         2000 revenue by $6, expenses by $72 and decreased operating income by
         $66. Additionally, D&E's share of EuroTel's impact was $521. The
         restatements resulted in a $1,011 increase in net loss ($0.14 per
         share).


(4)   DISCONTINUATION OF REGULATORY ACCOUNTING PRINCIPLES

                  In compliance with state statutes, commonly known as Chapter
         30, D&E Telephone joined in a petition to the Pennsylvania Public
         Utility Commission (PUC) in July 1998 for an alternative form of
         regulation. In response to the PUC's initial Chapter 30 Order, in
         January 2000, D&E Telephone filed a petition for reconsideration. On
         March 30, 2000, the PUC issued a revised Order. D&E accepted the PUC
         Order and filed an amended plan to accelerate network modernization.
         Various parties to the litigation filed exceptions to which D&E
         Telephone filed a reply. On December 21, 2000, the PUC entered an Order
         granting the exceptions in part. Subsequently, D&E Telephone filed a
         remodified Chapter 30 Plan on January 22, 2001 accepting a new
         ratemaking process in which, instead of a rate base/rate of return
         methodology, prices are


                                       6
<PAGE>   9

Form 10-Q

                    D&E Communications, Inc. and Subsidiaries
                   Part I - Financial Information (continued)

               Item 1. Notes to Consolidated Financial Statements
               ---------------------------------------------------
                        (Dollar amounts are in thousands)
                                   (Unaudited)

         adjusted in accordance with the Gross Domestic Product Price Index with
         a productivity offset.

                  During the periods when D&E Telephone's rates were set using a
         rate base/rate of return methodology, it had collected deferred income
         taxes from customers at rates higher than the current enacted tax rates
         and had established regulatory liabilities for the future return of
         those excess deferred taxes to customers. As a result of the acceptance
         of the new ratemaking process on January 22, 2001, D&E Telephone was no
         longer subject to the requirements of Statement of Financial Accounting
         Standards No. 71 (SFAS 71), "Accounting for the Effects of Certain
         Types of Regulation" and, therefore, it removed those regulatory
         liabilities from its accounts pursuant to SFAS 101, "Regulated
         Enterprises - Accounting for the Discontinuation of Application of FASB
         No. 71". As a result, the elimination of the regulatory liabilities,
         net of income taxes, resulted in an extraordinary income effect of $107
         in the quarter ended March 31, 2001.


(5)   CONTINGENCIES

                  D&E became party to a $40,000 loan agreement from a domestic
         bank to PenneCom in December 1999. PenneCom increased the loan to
         $50,000 in August 2000. D&E, along with the other two investors in
         EuroTel, each pledged investments of $8,667 as collateral for security
         on the loan. Management anticipates the loan, which was used primarily
         to refinance higher interest debt, will be repaid in conjunction with
         the sale of Pilicka. See footnote 2 (b).

                  On March 14, 2001, PCS ONE amended its May 2000 financing
         agreement with a bank to increase its credit facility from $70,000 to
         $82,000. The joint venture partners have no guarantee requirement in
         connection with this agreement. D&E and its joint venture partner must
         maintain contributed capital at a level of 66.7% of the funds borrowed.
         On March 31, 2001, the partners had an allowable capital contribution
         of $48,548 making $72,500 of the facility available.


(6)   BUSINESS SEGMENT DATA

                  Beginning in 2001, D&E restructured its internal reporting to
         manage the financial results through line of business managers. The
         measure of profitability was changed to operating income rather than
         net income because the business lines do not follow corporate structure
         as closely as the segments had previously. The prior year's results
         have been restated to reflect comparative results to the new line of
         business segments. The five segments are ILEC, CLEC, Networking
         Services, Internet Services and Wireless Services. Corporate, Other and
         Eliminations reconciles the segment amounts to the consolidated D&E
         total.


                                       7
<PAGE>   10

Form 10-Q

                    D&E Communications, Inc. and Subsidiaries
                   Part I - Financial Information (continued)

               Item 1. Notes to Consolidated Financial Statements
               ---------------------------------------------------
                        (Dollar amounts are in thousands)
                                   (Unaudited)


Financial results for D&E's five operating segments are as follows:

<TABLE>
<CAPTION>
                                 External Revenues            Intersegment Revenues       Operating Income (Loss)
                                Three months ended             Three months ended           Three months ended
                                     March 31,                       March 31,                    March 31,
         Segment                 2001          2000            2001           2000           2001           2000
         -------                 ----          ----            ----           ----           ----           ----
<S>                           <C>            <C>              <C>           <C>           <C>            <C>
ILEC                          $ 10,131       $ 9,422          $ 990         $ 429         $ 2,239        $ 2,159
CLEC                             1,412           853             38             9            (690)          (361)
Networking Services              5,699         2,992             24            26            (752)          (196)
Internet Services                  252             -              7             -            (654)             -
Wireless Services                2,687         2,156              -             -             236            129
Corporate, Other
   and Eliminations                661         1,595         (1,059)         (464)            (56)          (246)
                              --------       -------          -----         -----         -------        -------
Total                         $ 20,842      $ 17,018            $ -           $ -           $ 323        $ 1,485
                              ========       =======          =====         =====         =======        =======
</TABLE>

<TABLE>
<CAPTION>
                                 Segment Assets
                               March        December
         Segment             31, 2001      31, 2000
         -------             --------      --------
<S>                          <C>           <C>
ILEC                         $ 127,136     $ 118,898
CLEC                             6,136         7,715
Networking Services             18,616        16,664
Internet Services                  840            83
Wireless Services                4,937         6,885
Corporate, Other
   and Eliminations            (30,792)      (26,024)
                             ---------     ---------
Total                        $ 126,873     $ 124,221
                             =========     =========
</TABLE>


                                       8
<PAGE>   11

Form 10-Q

                    D&E Communications, Inc. and Subsidiaries
                   Part I - Financial Information (continued)

                 Item 2. Management's Discussion and Analysis of
                  Financial Condition and Results of Operations
                  ---------------------------------------------
                        (Dollar amounts are in thousands)

                  Monetary amounts presented in the following discussion are
         rounded to the nearest thousand dollars. Certain items in the financial
         statements for the three months ended March 31, 2000 have been
         reclassified for comparative purposes.

         RESULTS OF OPERATIONS

                  Summary. D&E's business units were previously aggregated into
         four reportable segments. Beginning in 2001, D&E restructured its
         internal reporting to manage the financial results through line of
         business managers. The reorganization was prompted by the need to
         integrate the operations of two companies acquired during 2000 and to
         manage a larger portion of the total company's operations outside of
         the regulated environment in a competitive market. Additionally, D&E
         reentered the internet service provider market as a new business line
         in the fourth quarter of 2000. The measure of profitability was changed
         to operating income rather than net income because the business lines
         do not follow corporate structure as closely as the segments had
         previously. The prior year's results have been restated to reflect
         comparative results to the new line of business segments.

                  D&E changed its reported segments to ILEC, CLEC, Networking
         Services, Internet Services and Wireless Services. Corporate, Other and
         Eliminations reconciles the segment amounts to the consolidated D&E
         total.

                  ILEC - Incumbent local exchange carrier - provides services in
         D&E's historical market area comprised of exchange services, custom
         calling features, directory publication and billing and collection
         services.

         CLEC -- Competitive local exchange carrier - provides exchange services
         and custom calling features in markets adjacent to the historical ILEC
         market.

         Networking Services - provides professional programming and technical
         services for integration of telephone systems sold and cabling with
         local and wide-area computer networks. D&E Telephone and Data Systems,
         Inc. and Alternate Solutions, Inc. merged into one corporation
         operating under the name D&E Networks, Inc.

         Internet Services -- D&E Jazzd, launched during 2000, provides Internet
         access and web page hosting services.

         Wireless Services - provides contract services to D&E's joint venture,
         D&E/Omnipoint Wireless Joint Venture, L.P. (PCS ONE).

                  Operating revenues increased 22.5% for the three months ended
         March 31, 2001 compared with the same period of 2000.

         - The ILEC exchange service business grew revenue 13%.

         - The increased revenues from the two computer services companies
         acquired during 2000 accounted for a 90% increase in Networking
         Services revenues.


                                       9
<PAGE>   12

Form 10-Q

                    D&E Communications, Inc. and Subsidiaries
                   Part I - Financial Information (continued)

                 Item 2. Management's Discussion and Analysis of
                  Financial Condition and Results of Operations
                  ---------------------------------------------
                        (Dollar amounts are in thousands)

         - CLEC Services, which began operations late in 1999, saw revenues
         increase 80% from the first quarter of 2000.

         - Internet Services, which started in the fourth quarter of 2000, had
         $258 in revenues with no matching amount in 2000.

         - Support services to the wireless affiliate PCS ONE increased 25%.

         - Corporate and other revenues reconciling to the consolidated total
         decreased primarily from a one-time revenue item related to the
         European operation in 2000.

                  Operating profit as a percentage of revenue decreased to 0.2%
         for the first quarter of 2001 compared to 8.7% for the first quarter of
         2000 as a result of the expenses related to the development of new
         businesses.

                  Three months ended March 31, 2001 compared to the three months
                  ended March 31, 2000

                  Operating Revenues. Consolidated total operating revenues for
         the three months ended March 31, 2001 were $20,842, up 22.5% from
         $17,018 for the first quarter in 2000. The primary reason for this
         increase was the acquisition of CompuSpirit, Inc. (CSI) on April 28,
         2000 and Alternate Solutions, Inc. (ASI) on August 1, 2000.

                  ILEC segment revenues increased 12.9% to $11,121 in 2001 from
         $9,851 in 2000. The increase was primarily attributable to an increase
         of 27.5% in network access revenues from special access, intrastate
         access and switched message data access payments from other carriers.
         Local network services revenues increased 6.0% largely from an increase
         of 3.3% in the number of telephone access lines in service. Increased
         sales of custom calling features and the reversal of SAB 101 deferred
         revenue also contributed to the increase.

                  CLEC segment revenues increased 68.2% to $1,450 in 2001 from
         $862 in 2000 as a result of the addition of new customers in the
         business that began operations late in 1999.

                  Networking Services segment revenues increased 89.6% to $5,723
         in 2001 from $3,018 in 2000. The acquisitions of CSI in April 2000 and
         ASI in August 2000 primarily accounted for the increase. Professional
         programming and computer networking services revenues increased for
         commercial and government clients primarily from the acquired
         companies. Telephone equipment sales increased $77 during the first
         quarter of 2001 compared to the same period in 2000.

                  Internet Services segment revenues were $259 in 2001 with no
         comparative amount for the services which were initiated for single
         user, business, DSL and web hosting subscribers in the fourth quarter
         of 2000. Revenues increased 186.7% from $90 in the preceding quarter.

                  Wireless Services segment revenues increased 24.6% to $2,687
         in 2001 from $2,156 in 2000. The increase was the result of expansion
         of sales and customer support services provided to PCS ONE.


                                       10
<PAGE>   13

Form 10-Q

                    D&E Communications, Inc. and Subsidiaries
                   Part I - Financial Information (continued)

                 Item 2. Management's Discussion and Analysis of
                  Financial Condition and Results of Operations
                  ---------------------------------------------
                        (Dollar amounts are in thousands)

              Operating Expenses and Operating Income. Consolidated operating
         expenses for the three months ended March 31, 2001 were $20,519, up
         from $15,533 in 2000. The primary reason for the increase was the
         expenses related to CSI and ASI acquired during 2000. The continued
         development of the competitive local exchange services, and addition of
         internet access services through the launch of D&E Jazzd developed
         internally, caused expenses to increase over the same period last year.
         Support service costs for the PCS ONE affiliate also increased over
         2000 as the wireless business growth continued.

              ILEC segment operating expenses increased primarily in cost of
         network operations, depreciation, and general and administrative
         expenses. These increases were driven primarily by increased network
         administration, computer expenses, increased depreciation of plant
         additions and employee benefit costs. Operating income increased $80 or
         3.7% for the segment.

              The CLEC segment experienced all of its operating expense increase
         in the area of direct cost of network operations. Digital electronic
         switching and circuit equipment expenses increased as a result of
         expanding the network to accommodate a growing customer base. Network
         access expense increased from the growing volume of new subscribers
         being serviced. The operating loss for CLEC operations increased to
         $690 in 2001 from $361 in the first quarter of 2000 as a result of the
         system build out in advance of subscriber additions.

              Networking Services segment expenses increased primarily as a
         result of the larger number of employees providing services in the
         newly acquired companies and $420 for amortization of goodwill in 2001
         related to the acquisitions. Segment expenses also increased $145 from
         increased costs of telephony equipment sales. The operating loss for
         the segment was $752 in 2001, compared with $196 in the first quarter
         of 2000.

              Internet Services segment operating expenses were $912 for the
         quarter ended March 31, 2001. The expenses exceeded revenues as a
         result of developing operating capability ahead of the development of a
         customer base and as a result of advertising the new business service.
         The operating loss for the first quarter of 2001 was $654. Expenses
         increased 15.0% from the previous quarter resulting in a $49 decrease
         in operating loss from the fourth quarter of 2000.

              Wireless Services segment operating expenses increased as the
         demand from PCS ONE for support services increased. Certain legal
         expenses incurred in 2000 were not repeated in 2001, causing a smaller
         increase in expenses than in revenues. The operating income was $236
         for the first quarter of 2001, compared with $129 for the same period
         in 2000.

              Other Income (Expense). Other income (expense) for the three
         months ended March 31, 2001 was a net expense of $3,671, compared with
         a net expense of $2,715 in the first quarter of 2000. Equity in the net
         losses of affiliates was $3,555 in the first quarter of 2001, up from
         $2,818 in the first quarter of 2000. D&E's share in the increased
         losses of PCS ONE was $528 and of EuroTel was $209.


                                       11
<PAGE>   14

Form 10-Q

                    D&E Communications, Inc. and Subsidiaries
                   Part I - Financial Information (continued)

                 Item 2. Management's Discussion and Analysis of
                  Financial Condition and Results of Operations
                  ---------------------------------------------
                        (Dollar amounts are in thousands)

                  Interest expense increased 16.5% to $453 in 2001 from $389 in
         2000. Bank borrowing increased to cover the construction costs of a new
         building and other capital additions. The additional interest of larger
         borrowing was offset slightly by increased interest expense capitalized
         in connection with the building expansion. Additionally, along with the
         extraordinary change in accounting for estimated regulated liabilities,
         D&E Telephone discontinued recording interest credits to allowance for
         funds used during construction, and began to credit interest expense.

                  Income taxes. Income taxes were a benefit of $563 for the
         three months ended March 31, 2001, compared to an expense of $78 in
         2000. The change was primarily related to the larger taxable loss in
         2001.

                  The extraordinary charge was the result of the reversal of
         certain tax liabilities established under regulatory accounting rules.
         As a result of moving to an alternative form of regulation during the
         first quarter of 2001, $107 of previously established liabilities was
         reversed. See Note 4 to the company's financial statements included in
         this report.


         FINANCIAL CONDITION

                  Liquidity and Capital Resources. D&E believes that it has
         adequate internal and external resources available to meet ongoing
         operating requirements, including expansion and modernization of the
         existing local exchange network and business development activities.
         D&E expects that foreseeable capital requirements for its existing
         businesses will be financed by a combination of internally generated
         funds, existing cash or temporary investments, and additional short or
         long-term debt or equity financing. Management has initiated a search
         for debt financing to fund growth of new business development
         activities and to enhance D&E's capital structure within management's
         guidelines.

                  Cash provided from operations was $5,933. Capital expenditures
         were $13,011. Capital addition expenditures included $4,528 for a new
         office building under construction and $3,623 for computer equipment
         and software purchased to upgrade the billing system. The remaining
         additions were primarily for central office switching and outside plant
         equipment. Investments in affiliates increased $3,283 for capital
         contributions to PCS ONE and EuroTel. The primary use of cash in
         financing activities was $859 for dividend payments. Cash balances
         decreased $2,225 and short-term debt increased $8,231 to cover the cash
         outflow.

                  At March 31, 2001, $8,667 was invested in U. S. Treasury
         securities held as collateral for a bank loan made to PenneCom. D&E
         also had $11,769 available from its total short-term lines of credit of
         $20,000. D&E's ratio of total debt to total debt plus capital increased
         to 35.8 % at March 31, 2001 from 27.8% at December 31, 2000.


                                       12
<PAGE>   15

Form 10-Q

                    D&E Communications, Inc. and Subsidiaries
                   Part I - Financial Information (continued)

                 Item 2. Management's Discussion and Analysis of
                  Financial Condition and Results of Operations
                  ---------------------------------------------
                        (Dollar amounts are in thousands)

         OTHER

                  D&E adopted Securities and Exchange Commission Staff
         Accounting Bulletin No. 101, "Revenue Recognition in Financial
         Statements" (SAB101) in the fourth quarter of 2000, retroactive to
         January 1, 2000. SAB 101 provides guidance on recognition of certain
         non-recurring fees, such as service activation and installation fees,
         and associated incremental direct expenses over the expected term of
         the customer relationship. The cumulative effect of a change in
         accounting principle was reported in our Form 10-K for the year ended
         December 31, 2000. The previously reported quarterly information for
         the three months ended March 31, 2000 are restated in this Form 10-Q to
         reflect a $912 ($0.12 per share) cumulative effect of the change in
         accounting principle, net of tax benefit of $267 as of January 1, 2000.
         Also we have restated communication service revenues, communication
         service expenses and equity in net losses of affiliates for the impact
         of SAB 101. At December 31, 2000, D&E had $1,975 of deferred revenue
         and $1,317 of deferred costs. The impact increased the first quarter
         2000 revenue by $6, expenses by $72 and decreased operating income by
         $66. Additionally, D&E's share of EuroTel's impact was $521. The
         restatements resulted in a $1,011 increase in net loss ($0.14 per
         share).

                  In compliance with state statutes, commonly known as Chapter
         30, D&E Telephone joined in a petition to the Pennsylvania Public
         Utility Commission (PUC) in July 1998 for an alternative form of
         regulation. In response to the PUC's initial Chapter 30 Order, in
         January 2000, D&E Telephone filed a petition for reconsideration. On
         March 30, 2000, the PUC issued a revised Order. D&E accepted the PUC
         Order and filed an amended plan to accelerate network modernization.
         Various parties to the litigation filed exceptions to which D&E
         Telephone filed a reply. On December 21, 2000, the PUC entered an Order
         granting the exceptions in part. Subsequently, D&E Telephone filed a
         remodified Chapter 30 Plan on January 22, 2001 accepting a new
         ratemaking process in which, instead of a rate base/rate of return
         methodology, prices are adjusted in accordance with the Gross Domestic
         Product Price Index with a productivity offset.

                  During the periods when D&E Telephone's rates were set using a
         rate base/rate of return methodology, it had collected deferred income
         taxes from customers at rates higher than the current enacted tax rates
         and had established regulatory liabilities for the future return of
         those excess deferred taxes to customers. As a result of the acceptance
         of the new ratemaking process on January 22, 2001, D&E Telephone was no
         longer subject to the requirements of Statement of Financial Accounting
         Standards No. 71 (SFAS 71), "Accounting for the Effects of Certain
         Types of Regulation" and, therefore, it removed those regulatory
         liabilities from its accounts pursuant to SFAS 101, "Regulated
         Enterprises - Accounting for the Discontinuation of Application of FASB
         No. 71". As a result, the elimination of the regulatory liabilities,
         net of income taxes, resulted in an extraordinary income effect of $107
         in the quarter ended March 31, 2001.

                  On March 14, 2001, PCS ONE amended its May 2000 financing
         agreement with a bank to increase its credit facility from $70,000 to
         $82,000. The joint venture partners have no guarantee requirement in
         connection with this agreement. D&E and its joint venture partner must
         maintain contributed capital at a level of 66.7% of the funds borrowed.
         On March 31, 2001, the partners had an allowable capital contribution
         of $48,548 making $72,500 of the facility available.


                                       13
<PAGE>   16

Form 10-Q

                    D&E Communications, Inc. and Subsidiaries
                   Part I - Financial Information (continued)

                 Item 2. Management's Discussion and Analysis of
                  Financial Condition and Results of Operations
                  ---------------------------------------------
                        (Dollar amounts are in thousands)


         FORWARD-LOOKING STATEMENTS

                  This quarterly report contains certain forward-looking
         statements as to the future performance of D&E and its various domestic
         and international joint venture investments. Actual results may differ
         as a result of factors over which D&E has no control, including, but
         not limited to, regulatory factors, uncertainties and economic
         fluctuations in the domestic and foreign markets in which the companies
         compete, foreign-currency risks and increased competition in domestic
         markets due in large part to continued deregulation of the
         telecommunications industry.


                                       14
<PAGE>   17

Form 10-Q

                    D&E Communications, Inc. and Subsidiaries
                   Part I - Financial Information (continued)

                 Item 3. Quantitative and Qualitative Disclosure
                               About Market Risks


                  D&E does not invest in derivative financial instruments or
         other market risk sensitive instruments for the purpose of managing its
         foreign currency exchange rate risk or for any other purpose.


                                       15
<PAGE>   18

                    D&E Communications, Inc. and Subsidiaries
                           Part II - Other Information


Item 1.  Legal Proceedings

Sale of Pilicka Telefonia S.A. to Elektrim S.A.

         In April 1999, PenneCom B.V. (PenneCom), a Netherlands limited
liability company which provides communications services in Central Europe and
is wholly-owned indirectly by EuroTel, L.L.C. (EuroTel), a domestic limited
liability company in which D&E Investments, Inc. has a one-third ownership
interest, signed an agreement to sell its shares of Pilicka Telefonia, Sp.zo.o.
(Pilicka), a Polish limited liability company, to Elektrim S.A. (Elektrim), a
Polish corporation, for $140 million in cash and notes. However, a few days
before the transaction was set to close, Elektrim issued written notice that it
was repudiating the purchase agreement, alleging that unspecified actions of
representatives of Pilicka and PenneCom constituted fraudulent inducement,
thereby rendering the purchase agreement void. On August 2, 1999, PenneCom filed
an arbitration request with the International Court of Arbitration at the
International Chamber of Commerce seeking specific performance of the agreement
as well as compensatory and punitive damages. On September 27, 1999, Elektrim
filed an answer and counterclaim alleging that its repudiation of the agreement
was justified because, among other things, Pilicka altered its normal course of
business, constituting a "material adverse change." In its counterclaim,
Elektrim requested a dismissal of all claims brought by PenneCom, a declaration
that the agreement was void or that Elektrim was justified in repudiating the
agreement, and a repayment by PenneCom of Elektrim's $10 million deposit. The
discovery, briefing and hearing phases on all issues were completed during 2000.
The arbitration panel then held a hearing on damages in January 2001. After the
conclusion of the damages hearing, the arbitration panel formally closed the
arbitration. PenneCom is awaiting a ruling, which is expected during the first
half of 2001. It is not possible at this time to express an opinion as to the
outcome of the arbitration.


         D&E is involved in other various legal proceedings arising in the
ordinary course of its business. In the opinion of management, the ultimate
resolution of these matters will not have a material adverse effect on D&E's
consolidated financial condition or results of operations.


                                       16
<PAGE>   19

                    D&E Communications, Inc. and Subsidiaries
                           Part II - Other Information


Item 6.  Exhibits and Reports on Form 8-K


(a)  Exhibits:


     No exhibits are filed herewith.


(b)  Reports on Form 8-K:

     No reports on Form 8-K were filed during the quarter ended March 31, 2001.


                                       17
<PAGE>   20

                    D&E Communications, Inc. and Subsidiaries


                                   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.



                                     D&E Communications, Inc.



Date: May 9, 2001
                                     By:   /s/  Anne B. Sweigart
                                           --------------------------------
                                     Anne B. Sweigart
                                     President, Chairman of the Board, and
                                     Chief Executive Officer



Date: May 9, 2001
                                     By:   /s/  Thomas E. Morell
                                           --------------------------------
                                     Thomas E. Morell
                                     Vice President, Chief Financial Officer
                                     and Treasurer


                                       18