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

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

                                      FORM 10-Q

                                 --------------------
     
     (Mark One)
     [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES 
                                 EXCHANGE ACT OF 1934
                   For the quarterly period ended December 26, 1997
                                          OR
     [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
                                 EXCHANGE ACT OF 1934
                      For the transition period from_____ to______ 

                            Commission file number 0-28654
                              --------------------------

                           CLAREMONT TECHNOLOGY GROUP, INC.
                (Exact name of registrant as specified in its charter)

               OREGON                                       93-1004490
(State or other jurisdiction of                          (I.R.S. Employer
 incorporation or organization)                         Identification No.)
          
     1600 NW COMPTON DRIVE, SUITE 210
          BEAVERTON, OREGON                                    97006
(Address of principal executive offices)                     (Zip Code)
          
         Registrant's telephone number, including area code:  503-690-4000

                    -----------------------------------------
                            
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.

Common stock without par value                              8,521,221
          (Class)                             (Outstanding at January 30, 1998)

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<PAGE>

                         CLAREMONT TECHNOLOGY GROUP, INC.
                                     FORM 10-Q
                                       INDEX 



PART I - FINANCIAL INFORMATION                                             Page
------------------------------                                             ----
          
Item 1.   Financial Statements                                                

          Consolidated Balance Sheets -December 31, 1997 and
          June 30, 1997                                                     2
                                                                             
          Consolidated Statements of Operations - Three Months and
          Six Months Ended December 31, 1997 and 1996                       3

          Consolidated Statements of Cash Flows - Six Months Ended
          December 31, 1997 and 1996                                        4
                                                                             
          Notes to Consolidated Financial Statements                        5
                                                                             
Item 2.   Management's Discussion and Analysis of Financial Condition
          and Results of Operations                                         7


PART II - OTHER INFORMATION                                                  
---------------------------

Item 4.   Submission of Matters to a Vote of Security Holders              11
                                                                             
Item 6.   Exhibits and Reports on Form 8-K                                 11
                                                                             
Signatures                                                                 12


                                       1

<PAGE>

ITEM 1. FINANCIAL STATEMENTS


                        CLAREMONT TECHNOLOGY GROUP, INC. AND SUBSIDIARIES
                                   CONSOLIDATED BALANCE SHEETS
                                           (Unaudited)

<TABLE>
<CAPTION>
                                                                        December 31,             June 30,
                                                                           1997                    1997
                                                                        ------------            ---------
<S>                                                                  <C>                   <C>
ASSETS
Current Assets:
    Cash and cash equivalents                                        $       4,403         $      15,240 
    Receivables:
       Accounts receivable, net of allowances of $217 and $136              15,622                13,975 
       Revenue earned in excess of billings                                 11,624                 6,537 
       Other                                                                   163                   179 
    Prepaid expenses and other current assets                                  739                   745 
    Refundable income taxes                                                  2,397                 2,745 
    Deferred income taxes                                                      958                 1,048 
                                                                         ---------             ----------
        Total Current Assets                                                35,906                40,469 

Property and equipment, net of accumulated depreciation 
   of $6,399 and $4,487                                                      6,815                 5,844 
Software development costs, net of accumulated amortization
  of $1,305 and $554                                                        11,003                 8,554 
Goodwill, net of accumulated amortization of $319 and $89                    3,061                    30 
Other non-current assets, net of accumulated amortization 
  of $805 and $500                                                           2,818                 1,244 
                                                                         ---------             ----------
        Total Assets                                                 $      59,603         $      56,141 
                                                                         ---------             ----------
                                                                         ---------             ----------

LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
    Accounts payable                                                 $       2,539         $       1,975 
    Current installments of long-term debt                                     893                   993 
    Accrued payroll and related liabilities                                  3,596                 3,158 
    Accrued profit sharing                                                     362                   366 
    Other accrued expenses                                                      30                    40 
    Deferred revenue                                                           376                   763 
                                                                         ---------             ----------
        Total Current Liabilities                                            7,796                 7,295 

Long-term debt, excluding current installments                                 197                   585 
Deferred income taxes                                                        2,856                 2,856 
                                                                         ---------             ----------
        Total Liabilities                                                   10,849                10,736 

Commitments and Contingencies

Shareholders' Equity:
    Preferred stock, no par value.  Authorized 10,000
       shares; no shares issued or outstanding                                   -                   -   
    Common stock, no par value.  Authorized 25,000 shares;
       8,496 and 8,257 shares issued and outstanding at
       Decebmer 31 and June 30, 1997, respectively                          35,815                33,343 
    Retained earnings                                                       13,091                12,043 
    Cumulative translation adjustment                                         (152)                   19 
                                                                         ----------            ----------
         Total Shareholders' Equity                                         48,754                45,405 
                                                                         ----------            ----------
         Total Liabilities and Shareholders' Equity                  $      59,603         $      56,141 
                                                                         ----------            ----------
                                                                         ----------            ----------
   See accompanying notes to unaudited consolidated financial statements.
</TABLE>

                                       2

<PAGE>

                                            CLAREMONT TECHNOLOGY GROUP, INC.
                                                     AND SUBSIDIARIES 
                                          CONSOLIDATED STATEMENTS OF OPERATIONS
                                          (in thousands, except per share data)
                                                       (Unaudited)
                                                                     
<TABLE>
<CAPTION>

                                                            Three Months Ended December 31,         Six Months Ended December 31,
                                                            -------------------------------         -----------------------------
                                                                  1997              1996                1997           1996
                                                               ---------          ---------          ---------       --------- 
<S>                                                            <C>                <C>                <C>             <C>
Revenue:
    Professional fees                                          $  20,856          $  15,566          $  41,258       $  29,103 
    Resold products and services                                     387                149                747             491 
    Other revenue                                                  1,028                 20              1,970              20 
                                                               ---------          ---------          ---------       --------- 
        Total revenue                                             22,271             15,735             43,975          29,614 
                                                               ---------          ---------          ---------       --------- 

Costs and expenses:
    Project costs and expenses                                    12,057              7,862             24,036          14,921 
    Resold products and services                                     364                142                 68             452 
    Other costs of revenue                                           402                  -                747             -   
    Selling, general and administrative                            8,763              5,396             16,627          10,193 
                                                               ---------          ---------          ---------       --------- 
        Total costs and expenses                                  21,586             13,400             42,090          25,566 
                                                               ---------          ---------          ---------       --------- 

        Income from operations                                       685              2,335              1,885           4,048 
                                                               ---------          ---------          ---------       --------- 

Other income (expense):
    Interest income                                                   58                189                153             348 
    Interest expense                                                 (24)               (43)               (64)           (113)
    Other, net                                                         -                (22)              (151)            (14)
                                                               ---------          ---------          ---------        --------- 
        Total other income (expense)                                  34                124                (62)             221 
                                                               ---------          ---------          ---------        --------- 

        Income before income taxes                                   719              2,459              1,823            4,269 

Income tax expense                                                   306              1,009                775            1,752 
                                                               ---------          ---------          ---------        --------- 
        Net income                                             $     413          $   1,450          $   1,048        $   2,517 
                                                               ---------          ---------          ---------        --------- 
                                                               ---------          ---------          ---------        --------- 

        Basic net income per common share                      $    0.05          $    0.19          $    0.12        $    0.35 
                                                               ---------          ---------          ---------        --------- 
                                                               ---------          ---------          ---------        --------- 

        Diluted net income per common share                    $    0.04          $    0.15          $    0.10        $    0.26 
                                                               ---------          ---------          ---------        --------- 
                                                               ---------          ---------          ---------        --------- 

Shares used in basic calculation                                   8,485              7,554              8,449            7,099 
                                                               ---------          ---------          ---------        --------- 
                                                               ---------          ---------          ---------        --------- 

Shares used in diluted calculation                                10,114              9,973             10,074            9,552 
                                                               ---------          ---------          ---------        --------- 
                                                               ---------          ---------          ---------        --------- 

</TABLE>
      See accompanying notes to unaudited consolidated financial statements.
                                                                     
                                       3

<PAGE>


                              CLAREMONT TECHNOLOGY GROUP, INC.
                                    AND SUBSIDIARIES 
                          CONSOLIDATED STATEMENTS OF CASH FLOWS
                                      (in thousands)
                                       (Unaudited)

<TABLE>
<CAPTION>
                                                                   Six Months Ended December 31,
                                                                  ------------------------------
                                                                      1997               1996
                                                                   ---------           --------
<S>                                                                 <C>                 <C>
Cash  flows from operating activities:
   Net income                                                       $ 1,048             $ 2,517
   Adjustments to reconcile net income to net cash 
      used in operating activities:
         Depreciation and amortization                                2,907               1,309
         Deferred income taxes                                         -                  1,400
         Non-cash expense recognized                                    361                -   
         Changes in assets and liabilities:
            Receivables                                              (5,999)             (5,660)
            Prepaid expenses                                             21                (246)
            Refundable income taxes, net                                395              (4,039)
            Accounts payable and accrued expenses                       444                 (58)
            Deferred revenue                                           (391)                151
                                                                    -------             -------
               Net cash used in operating activities                 (1,214)             (4,626)
                                                                    -------             -------
Cash flows from investing activities:
   Acquisition, net of cash acquired                                 (3,152)                -  
   Purchase of property and equipment                                (2,114)             (1,922)
   Expenditures for software development costs                       (3,201)             (3,513)
   Other non-current assets                                            (234)               (174)
                                                                    -------             -------
               Net cash used in investing activities                 (8,701)             (5,609)
                                                                    -------             -------
Cash flows from financing activities:
   Proceeds/(payments) on line of credit, net                          -                 (4,600)
   Payments of long-term debt                                        (1,149)               (464)
   Proceeds from common stock offering, net                            -                 26,867
   Proceeds from exercise of stock options                              177                 332
   Tax benefit related to stock option activity                        -                  3,478
   Payments (issuance) of notes receivable, net                        -   
                                                                    -------             -------
               Net cash provided by (used in) financing activities     (972)             25,613
                                                                    -------             -------
Effect of exchange rate on cash                                          50                   1
                                                                    -------             -------
               Net increase (decrease) in cash and cash equivalents (10,837)             15,379

Cash and cash equivalents at beginning of period                     15,240                 526
                                                                    -------             -------
Cash and cash equivalents at end of period                          $ 4,403             $15,905
                                                                    -------             -------
                                                                    -------             -------
</TABLE>

         See accompanying notes to unaudited consolidated financial statements.

                                       4
<PAGE>

                           CLAREMONT TECHNOLOGY GROUP, INC.
                     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
                       (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
                                     (UNAUDITED)

NOTE 1. BASIS OF PRESENTATION

The financial information included herein for the three-month and six-month
periods ended December 31, 1997 and 1996 is unaudited; however, such information
reflects all adjustments consisting only of normal recurring adjustments which
are, in the opinion of management, necessary for a fair presentation of the
financial position, results of operations and cash flows for the interim
periods.  The financial information as of June 30, 1997 is derived from the
audited financial statements included in Claremont Technology Group, Inc.'s (the
Company's) 1997 Annual Report on Form 10-K.  The interim consolidated financial
statements should be read in conjunction with the consolidated financial
statements and the notes thereto included in the Company's 1997 Annual Report on
Form 10-K. The results of operations for the interim period presented are not
necessarily indicative of the results to be expected for the full year.  For
ease of presentation, the periods ended December 26, 1997 and December 27, 1996
are referred to herein as ending December 31, 1997 and December 31, 1996,
respectively.

NOTE 2. NET INCOME PER SHARE

Beginning December 31, 1997, basic earnings per share (EPS) and diluted EPS are
computed using the methods prescribed by Statement of Financial Accounting
Standard No. 128, EARNINGS PER SHARE (SFAS 128).  Basic EPS is calculated using
the weighted average number of common shares outstanding for the period and
diluted EPS is computed using the weighted average number of common shares and
dilutive common equivalent shares outstanding.   Prior period amounts have been
restated to conform with the presentation requirements of SFAS 128.  Following
is a reconciliation of basic EPS and diluted EPS:

<TABLE>
<CAPTION>

Three Months Ended December 31,         1997                                    1996
-------------------------------         --------------------------------        --------------------------------
                                                                 Per                                     Per 
                                                                 Share                                   Share
BASIC EPS                               Income         Shares    Amount        Income          Shares    Amount
                                       ---------------------------------       ---------------------------------
<S>                                    <C>            <C>       <C>           <C>             <C>       <C>
Income available to Common
 Shareholders                          $  413          8,485    $  0.05       $  1,450         7,554    $  0.19
                                                                -------                                 -------
EFFECT OF DILUTIVE SECURITIES
Stock Options                               -          1,629                         -         2,419
                                       ---------------------                  ----------------------
DILUTED EPS
Income available to Common
 Shareholders                          $  413         10,114    $  0.04      $  1,450          9,973    $  0.15
                                                                -------                                 -------
</TABLE>

                                       5
<PAGE>

<TABLE>
<CAPTION>

Six Months Ended December 31,           1997                                    1996
-------------------------------         --------------------------------        --------------------------------
                                                                 Per                                     Per 
                                                                 Share                                   Share
BASIC EPS                               Income         Shares    Amount        Income          Shares    Amount
                                       ---------------------------------       ---------------------------------
<S>                                    <C>            <C>       <C>           <C>             <C>       <C>
Income available to Common
 Shareholders                        $  1,048          8,449      $0.12       $  2,517         7,099    $  0.35
                                                                  -----                                 -------
EFFECT OF DILUTIVE SECURITIES
Stock Options                               -          1,625                         -         2,453
                                     -----------------------                  ----------------------
DILUTED EPS
Income available to Common
 Shareholders                        $  1,048         10,074      $0.10       $  2,517         9,552    $  0.26
                                                                  -----                                 -------
</TABLE>

NOTE 3. SUPPLEMENTAL CASH FLOW AND NON-CASH INVESTING AND FINANCING INFORMATION

Supplemental disclosure of cash flow information is as follows:

<TABLE>
<CAPTION>
                                                             Six months ended
                                                                 December 31,
                                                            -------------------
                                                             1997        1996
                                                            ------      -------
<S>                                                         <C>         <C>
Cash paid during the period for income taxes                $  775      $  796
Cash paid during the period for interest                        48         135
Stock issued in connection with acquisition                  2,295           -
</TABLE>

NOTE 4.  ACQUISITIONS

In July 1997, the Company completed two business combinations that were
accounted for as purchases.  The Company purchased Communications Informatiques
Trilan Canada, Inc. ("Trilan") and OpTex, Inc. ("OpTex").  The results of
operations of each acquisition are included in the Company's results of
operations from the date of acquisition.  Trilan offers technology consulting
services specializing in network management, call and help center management and
outsourcing.  OpTex develops billing and customer management software for the
communications industry and provides customer service and complete billing
services through its fully functional service bureau for communications industry
clients.  The total purchase price for OpTex was $1,000 in cash and 240 shares
of unregistered common stock of the Company, with $360 of the purchase price
being allocated to in process research and development.  The purchase of Trilan
was not considered a significant acquisition and therefore, the purchase price
is not disclosed.

                                       6
<PAGE>

ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
          RESULTS OF OPERATIONS 

FORWARD LOOKING STATEMENTS

This report on Form 10-Q contains certain statements, trend analysis and other
information that constitute "forward-looking statements" within the meaning of
the Private Securities Litigation Reform Act, which involve risks and
uncertainties.  Actual results may differ materially from the results described
in the forward-looking statements.  Such forward looking statements include, but
are not limited to, statements including the words "anticipate," "believe,"
"estimate," "expect," "intend," "plan" and other similar expressions.  Such
statements reflect the current views of the Company with respect to future
events and are subject to certain risks, uncertainties and assumptions that
include, but are not limited to, those discussed in Items 1 and 7 of the
Company's 1997 Annual Report on Form 10-K and in the following Management's
Discussion and Analysis of Financial Condition and Results of Operations.

RESULTS OF OPERATIONS    

The following table sets forth, for the periods indicated, certain financial
data as a percentage of total revenue:

<TABLE>
<CAPTION>
                                                                   THREE MONTHS ENDED                         SIX MONTHS ENDED
                                                                      DECEMBER 31,                              DECEMBER 31,
                                                           --------------------------------             --------------------------
                                                            1997                1996                     1997                1996
                                                           ------              ------                   -------             ------
<S>                                                        <C>                 <C>                      <C>                 <C>
Revenue:
     Professional fees                                         94%                 99%                      94%               98%
     Resold products and services                               2                   1                        2                 2
     Other                                                      4                   -                        4                 -
                                                              ---                 ---                      ---               ---
        Total revenue                                         100                 100                      100               100
Costs and expenses:
     Project costs and expenses                                54                  50                       55                50
     Resold products and services                               2                   1                        2                 2
     Other costs of revenue                                     2                   -                        1                 -
     Selling, general and administrative                       39                  34                       38                34
                                                              ---                 ---                      ---               ---
        Total costs and expenses                               97                  85                       96                86
                                                              ---                 ---                      ---               ---
        Income from operations                                  3                  15                        4                14
Other income (expense), net                                     -                   1                        -                 -
                                                              ---                 ---                      ---               ---
        Income before income taxes                              3                  16                        4                14
Income tax expense                                              1                   7                        2                 6
                                                              ---                 ---                      ---               ---
        Net income                                              2%                  9%                       2%                8%
                                                              ---                 ---                      ---               ---
                                                              ---                 ---                      ---               ---
</TABLE>

The Company's revenue consists primarily of professional fees (including license
fees for Claremont's reusable software modules), and to a lesser extent resold
hardware and software products and resold contract services and other revenue. 
Other revenue consists of license fees and maintenance fees, which began in
December 1996 and service bureau revenue associated with the Company's
acquisition of OpTex in July 1997. The Company's professional fees increased 34%
to $20.9 million for the three months ended December 31, 1997 compared to $15.6
million for the three months ended December 31, 1996.  Professional fees
increased 42% to $41.3 million for the six months ended December 31, 1997
compared to $29.1 million for the six months ended December 31, 1996. 
Professional fees increased primarily due to an increase in the number of
projects performed, both for new and existing clients.  Revenues during the
quarter were adversely effected by a $2.0 million software license sale that the
Company believed would be recorded in December.  However, the state

                                       7
<PAGE>

to which the license was being sold has determined that it is required to 
follow a request for proposal process.  The state review of that issue will 
take some time to complete.  Revenue from foreign operations increased to 
$3.6 million for the six months ended December 31, 1997 compared to $2.5 
million for the six months ended December 31, 1996.  The increase resulted 
primarily from recent foreign acquisitions.  The Company's top five clients 
accounted for 47% of revenues for the six months ended December 31, 1997 
compared to 41% for the six months ended December 31, 1996.  Resold products 
and services are offered to clients on an as-needed basis and are resold with 
little or no mark-up.  The Company does not expect resold products and 
services to contribute materially to its income from operations, and 
generally expects to make little or no profit on such products and services.  
The Company expects to provide such products and services only as an 
accommodation to the Company's clients as requested for particular projects.

Project costs and expenses consist primarily of salaries and employee benefits
for personnel dedicated to client projects and associated overhead costs
including equipment depreciation and amortization.  Project costs and expenses
increased to $12.1 million and $24.0 million (58% and 58% of professional fees,
respectively) for the three and six month periods ended December 31, 1997 from
$7.9 million and $14.9 million (50% and 51% of professional fees, respectively)
for the comparable periods ended December 31, 1996.  The increase in project
costs and expenses was due primarily to the addition of project personnel
necessary to perform the larger number of client projects. The increase as a
percentage of professional fees is primarily a result of the hiring of several
new employees while certain anticipated projects have been delayed, therefore
lowering utilization rates during the quarter and year to date periods.  

Selling, general and administrative costs and expenses consist of costs
associated with the Company's executive staff, finance, facilities and human
resources departments (collectively, "Administrative Personnel"), travel and
business development costs. Selling, general and administrative costs and
expenses increased to $8.8 million and $16.6 million (42% and 40% of
professional fees, respectively) for the three and six month periods ended
December 31, 1997 from $5.4 million and $10.2 million (35% and 35% of
professional fees, respectively) for the comparable periods ended December 31,
1996. The increase is primarily due to increases in professional development and
recruiting expenses associated with the increased professional personnel,
increased facility expenses associated with increased space needs resulting from
increased software development efforts performed at Company facilities rather
than at client locations and increased numbers of Administrative Personnel. 
Selling, general and administrative costs and expenses in the first quarter of
fiscal 1998 also include $360,000 related to the write-off of purchased research
and development related to the OpTex acquisition.  Without the $360,000,
selling, general and administrative costs and expenses would have been 39
percent of professional fees for the six months ended December 31, 1997.  

The Company had a total of 887 professional and administrative personnel at
December 31, 1997.

Income tax expense represents combined federal, state and foreign taxes at an
effective rate of 42.5%, or $775,000, for the first six months of fiscal 1998
compared to 41.0%, or $1.8 million, for the comparable period ended December 31,
1996.  The Company's tax rate is

                                       8
<PAGE>

sensitive to shifts in income and losses among the various tax jurisdictions 
in which the Company's operations are conducted.

LIQUIDITY AND CAPITAL RESOURCES

Cash decreased $10.8 million during the first six months of fiscal 1998 
primarily as a result of  $1.4 million used in operations, $3.2 million 
related to an acquisition, $2.1 million for the purchase of property and 
equipment, $3.2 million for software development costs and $1.1 million 
payments on debt. 

At December 31, 1997, the Company had working capital of $28.1 million, 
including $4.4 million of cash and cash equivalents.  The Company's current 
ratio decreased to 4.6:1 at December 31, 1997 from 5.5:1 at June 30, 1997.

Accounts receivable increased $1.6 million to $15.6 million at December 31, 
1997 from $14.0 million at June 30, 1997 primarily as a result of growth in 
revenues. Days sales outstanding were 69 at December 31, 1997 compared to 66 
at June 30, 1997. The Company experienced an increase in past due accounts 
(defined as accounts outstanding more than 60 days) to $5.0 million at 
December 31, 1997 compared to $529,000 at June 30, 1997.  Of the $5.0 
million, $2.5 million was collected in January 1998.   At December 31, 1997, 
CalPERS represented $2.3 million of the $5.0 million past due and $1.0 
million of the January 1998 collections. 

Revenue earned in excess of billings, which represents amounts due to the 
Company under contracts, primarily from communications and government 
entities, that can not be billed until certain milestones are met, increased 
$5.1 million to $11.6 million at December 31, 1997 from $6.5 million at June 
30, 1997.  The Company continues to work closely with its clients to attempt 
to reduce the collection cycle of this asset group.

During the first six months of fiscal 1998, the Company had capital 
expenditures of $2.1 million, primarily related to furniture and personal 
computers, and $3.2 million associated with the capitalization of software 
development costs. As of December 31, 1997 the Company did not have any 
material commitments for capital expenditures. 

As of December 31, 1997, the Company had a total of $11.0 million of 
capitalized software development costs associated with the Company's reusable 
software modules, including CLARETY and PREMOST.  The Company expects 
capitalized software development costs to continue to increase during the 
remainder of fiscal 1998. To the extent capitalized software development 
costs are greater than the potential revenue associated with the developed 
software, the Company would be required to immediately expense such excess 
amount under SFAS 86.  The amount of the excess required to be expensed in 
any particular period may be as much as the total amount of capitalized 
software development costs then carried on the Company's balance sheet, 
depending on the potential revenue associated with the developed software at 
such time.  Recognition of such expenses, if any, could have a material 
adverse effect on the Company's results of operations.

Goodwill increased $3.0 million to $3.1 million at December 31, 1997 as a result
of acquisitions that occurred during the first quarter of fiscal 1998.

                                       9
<PAGE>

On August 21, 1997, the Company signed a business loan agreement (the 
"Agreement") with a commercial bank. This Agreement includes a $2.0 million 
line of credit and a $750,000 standby letter of credit.  The line of credit 
and letter of credit bear interest at the bank's reference rate plus .25 
percent, or, at the Company's option, at rates based on the Offshore Rate or 
the LIBOR rate.  The expiration date of this Agreement is September 1, 1999.  
This Agreement also covers currently outstanding term loans for an original 
principal amount of $5.0 million, which had previously been covered under the 
Business Loan Agreement dated April 24, 1995.  The Agreement is secured by 
all machinery and equipment and receivables of the Company and contains 
certain financial ratio and other covenants.  As of the date of this report, 
the Company was in compliance with all such covenants.  

NEW ACCOUNTING PRONOUNCEMENTS

In June 1997, the FASB issued Statement of Financial Accounting Standard No. 
130, "Reporting Comprehensive Income" ("SFAS 130").  This statement 
establishes standards for reporting and displaying comprehensive income and 
its components in a full set of general purpose financial statements.  The 
objective of SFAS 130 is to report a measure of all changes in equity of an 
enterprise that result from transactions and other economic events of the 
period other than transactions with owners.  The Company expects to adopt 
SFAS 130 for its fiscal year beginning July 1, 1998 and does not expect 
comprehensive income to be materially different from currently reported net 
income.

In June 1997, the FASB issued Statement of Financial Accounting Standard No. 
131, "Disclosures about Segments of an Enterprise and Related Information" 
("SFAS 131").  This statement establishes standards for the way that public 
business enterprises report information about operating segments in interim 
and annual financial statements.  It also establishes standards for related 
disclosures about products and services, geographic areas and major 
customers. The Company expects to adopt SFAS 131 for its fiscal year 
beginning July 1, 1998. 

                                       10
<PAGE>

                            PART II - OTHER INFORMATION 

ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

The annual meeting of the shareholders of the Company was held on November 6,
1997, at which the following actions were taken:

1. The shareholders elected the six nominees for director to the Board of 
   Directors of the Company.  The six directors elected, along with the 
   voting results are as follows:

<TABLE>
<CAPTION>

      NAME          NO. OF SHARES VOTING FOR      NO. OF SHARES WITHHELD VOTING      TERM EXPIRES
      ----          ------------------------      -----------------------------      ------------
<S>                 <C>                           <C>                                <C>
Stephen M. Carson           6,673,181                       394,700                      2000
Paul J. Cosgrave            6,673,781                       394,100                      2000
Dennis M. Goett             6,673,581                       394,300                      1999
Neil E. Goldschmidt         6,673,481                       394,400                      1999
Marilyn R. Seymann          6,672,981                       394,900                      1998
Jerry L. Stone              6,673,581                       394,300                      1998
</TABLE>

2. The shareholders approved amendments to the Claremont Technology Group, Inc.
   1992 Stock Incentive Plan to, among other changes, increase the aggregate 
   number of shares of Common Stock that may be issued thereunder from 5,000,000
   to 5,500,000 (3,679,198 shares were voted affirmatively, 1,644,435 shares 
   were voted negatively, 20,821 shares abstained from voting and there were 
   1,723,427 broker non-votes).

3. The shareholders approved the appointment of KPMG Peat Marwick LLP as the
   independent accountants of the Company for the year ending June 30, 1998
   (7,062,643 shares were voted affirmatively, 3,400 shares were voted 
   negatively and 1,838 shares abstained from voting).

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K 

(a) The exhibits filed as part of this report are listed below:

          EXHIBIT NO. AND DESCRIPTION
          ---------------------------
          10   Amendment No. 2 to Business Loan Agreement
          27   Financial Data Schedule

(b) Reports on Form 8-K:
     None.

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<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.


Date:   February 5, 1998                CLAREMONT TECHNOLOGY GROUP, INC.

                                        By: /s/ STEPHEN M. CARSON              
                                           ------------------------------------
                                        Stephen M. Carson
                                        President, Chief Operating Officer and 
                                        Chief Financial Officer
                                        (Principal Executive Officer and
                                        Principal Financial and Accounting
                                        Officer)




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