UNITED STATES  
SECURITIES AND EXCHANGE COMMISSION  
Washington, D.C. 20549  
FORM 10-Q  
  
Quarterly Report Pursuant to Section 13 or 15(d) of the   
Securities Exchange Act of 1934  
  
For the quarterly period ended           September 30, 1996  
  
Commission file Number     1-13424  
  
Data Systems Network Corporation                  
  
        Michigan                   				38-2649874      
(State or other jurisdiction of   				(I.R.S. Employer  
incorporation or organization)  				 Identification No.)  
  
34705 W. 12 Mile Rd., Suite 300               				48331
Farmington Hills, Michigan       
(Address of principal executive offices) 		   (Zip Code)  
  
Registrant's telephone number, including area code:  
(810)489-7117   
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 by check mark whether the registrant has filed all documents and
reports required to be filed by Section 12,13, or 15(d) of the Securities 
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by the court.

YES [X]        NO [ ] 
 

Indicate the number of shares outstanding of each of the issuer's classes of 
common stock, as of the latest practical date:  
Common Stock, $.01 Par Value -  3,255,000  shares as of   September 30, 1996 



Part I  Financial Information
Item 1.   Financial Statements
<TABLE>
<CAPTION>
                       		DATA SYSTEMS NETWORK CORPORATION
                       CONSOLIDATED STATEMENT OF OPERATIONS
                              (Unaudited)  			
        Three months ended September 30,       Nine months ended September 30,

                    	   1996           1995              		1996        	1995 
<S>               <C>           <C>                <C>          <C>
Net product sales $5,015,491     $7,792,443	      	 $14,815,940 	$20,798,782
Service revenue    1,360,273        461,580           2,872,262    1,580,084
               	 -----------   ------------	       ------------    ---------
Total revenues     6,289,612      8,254,023	     	   17,688,202	  22,378,866

Cost of product 
 sales             4,509,696      7,421,474          13,184,103   18,897,272
Cost of services     806,088        289,807           1,367,774      936,900
        	         ----------      ---------          ----------    ---------
Total cost of     	
  revenues         5,315,784      7,711,281         14,551,877	   19,834,172
                ------------    -----------         -----------  -----------
Gross profit       1,059,980       542,742    	     3,136,325     2,544,694
 
Selling expenses     897,423        487,062	         1,932,164     1,479,498
General and 
 administrative 
  expenses           608,696        325,219          1,462,501       815,926
                  ----------      --------- 	        ---------     ---------

Total operating  
  expenses         1,506,119        812,281     	     3,394,665	   2,295,424
                 -----------     ----------        ------------  -----------
Income (loss)  from
  operations        (446,139)      (269,539)           (258,340)     249,270

Other income(expenses):            
Interest expense    (142,704)        (88,380)          (337,448)    (279,008)
Interest income       82,248          47,254            218,164      136,846
Other income	        208,194                            304,122

             	    ----------        --------- 	       ---------     ---------
Income(loss)
before minority 
interest and extraordinary
items               (297,121)       (310,665)           (73,563)     107,108



Minority interest in 
subsidiary  	         44,147                              3,000

Income (loss)  before
extraordinary items (252,976)   	    (310,665)          (70,563)     107,108

Extraordinary items (Note 5):
Loss on settlement
of Bankruptcy        (164,666)		             	         (164,666)        	

Gain recognized upon 
extinguishment of debt 75,494                            75,494
                     --------        ---------	        ---------   ----------
Net income(loss)    $(342,146)     $ (310,665)	       $(159,735)     $107,108
	                     ========      =========	         =========     ========

<CAPTION>
		                               Three Months  Ended September 30,		 
	    		                     1996                     1995			
                              --------------------------  
                                     Primary 	  Primary
<S>                                 <C>          <C>                       					
Loss per common
share before extraordinary items:    ($0.10)     ($0.12)	
Extraordinary items	               	 ($0.03)
Net loss                             ($0.13)     ($0.12)
Weighted number of                    ======      ======
shares outstanding:                2,665,993   2,670,000

<CAPTION>
                                Nine Months Ended September 30,
                                     1996           1995
                                     ----------------------
                                    Primary       Primary       Fully 
                                                               Diluted
<S>                                 <C>             <C>        <C>
Earnings (loss) per common
share before extraordinary items:   ($0.03)          $0.04       $0.04
Extraordinary items                  ($.03)
                                    --------       --------     -------
Net earnings (loss)                 ($0.06)           $0.04       $0.04
                                    =======         =======     =======
Weighted number of
shares outstanding:                 2,595,885        2,670,000   2,970,000

<CAPTION>
See Notes to Interim Consolidated Financial Statements  

                          DATA SYSTEMS NETWORK CORPORATION
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                               				    AS OF

                              September 30, 1996    December 31, 1995 
                                 	______________      ______________
		                                 (unaudited) 

                               ASSETS
<S>                                  <C>                 <C>
Current Assets   
  Cash and cash equivalents           $1,572,672          $3,171,544 
   Accounts receivable (net of
   allowance of $51,815 and
   $67,086 at September 30, 1996 and
    December 31, 1995, respectively) 	 5,751,677           5,249,771 
  Notes receivable    	                  648,548             692,387
  Inventories,net                      2,326,115             992,922 
  Other current assets                   742,616             294,296
                                  --------------    		 -------------- 
 Total current assets                 11,041,624          10,400,860
 
 Service parts, net                 		 1,609,708           1,169,781
 Property and equipment, net       		  1,736,861             297,029
 Other assets                             76,247              70,743
 Goodwill, net (note 3)                4,510,847
                  			           ----------------      -------------- 
TOTAL ASSETS            	            $18,975,287         $11,938,413 
                                      ==========        ============

                      LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities  
  Bank line of credit(Note 2)         $5,358,506          $3,956,000 
  Current portion of long-term debt      -0-                 213,039
  Accounts payable(Note 4)             5,337,200           3,449,520 
  Accrued liabilities                  1,001,805             514,693
  Deferred maintenance revenues        1,100,843             228,060 
                                      ----------          ----------         
Total current liabilities            $12,798,355          $8,361,312     

Long term debt, less current portion     100,000             100,000
 


                             Stockholders' Equity   
Preferred stock                            -0-                 -0-
Common stock par value $0.01 per share  
Authorized 10,000,000 shares
Issued and outstanding - 3,255,000 
  shares  at September 30, 1996; 2,715,000
  shares at December 31, 1995             32,550              27,150 
 Additional paid-in capital            9,139,153           6,385,047   
 Accumulated deficit                  (3,094,771)         (2,935,096)
                                     -----------         -----------    
Total Stockholders' Equity            $6,076,932          $3,477,101 
TOTAL LIABILITIES AND  
  STOCKHOLDERS' EQUITY               $18,975,287         $11,938,413 
                                     ===========         ===========
See Notes to Interim Consolidated Financial Statements  



 
<CAPTION>
                                  DATA SYSTEMS NETWORK CORPORATION
                                 CONSOLIDATED STATEMENT OF CASH FLOWS 
                                    	 FOR THE NINE MONTHS ENDED        					   
                                     SEPTEMBER 30, 1996 AND 1995

              		             	                1996            		1995
                					                     (Unaudited)
<S>                                      <C>               <C>
Cash Flows From Operating Activities:  
  Net income (loss)                    			$159,735           $107,108          
  Adjustments to reconcile net income  
   (loss) to net cash provided by 
   operating activities: 
  Minority interest in subsidiary           (3,000)  
  Depreciation and amortization            299,077            251,348
  Extraordinary gain 		                    (75,494)
  Provision for doubtful receivables  	     17,191             31,093
  Provision for inventory obsolescence      45,817             54,743
  Changes in assets and liabilities, net of effects
     from acquisitions:
  Accounts  receivable               		   (203,300)        (2,453,617)         
  Notes receivable              	         (561,235)
  Inventories            	              (1,379,010)          (554,833)
  Other current assets               	    (359,978)          (244,519)    
  Service parts                       	    (31,112)           136,719
  Other assets                              (5,504)          (195,265)      
  Accounts payable                       1,471,967          2,837,890       
  Accrued liabilities                		   (439,443)            46,021       
  Deferred maintenance revenues             13,071             34,382      
  Net cash provided by (used in)                                           
     operating activities             $ (1,370,688)           $50,070         
                                     				
Cash Flows  From Investing Activities:  
Acquisition of property, 
  plant, and equipment		                 $(520,651)         $(292,710)         
Purchase of capital stock of subsidiary     (7,000)	
Cash paid for net assets acquired         (890,000)
Net cash used in investing activities  $(1,417,651)         $(292,710)

Cash Flows From Financing Activities:  
Net borrowings under bank line 
  of credit                             $1,402,506           $995,878
Payment of principal on long-term debt	   (394,644)          (630,241)
Increase in long-term debt                 181,605       
Net cash provided by financing 
  activities                            $1,189,467           $365,637
Net decrease in cash and          		  
  cash equivalents                      (1,598,872)           122,977 
Cash and cash equivalents  
   at beginning of period               $3,171,544         $3,196,038
                                     -------------     --------------
Cash and cash equivalents
   at end of period 		                  $1,572,672         $3,319,035
                                       ===========        =========== 
Supplemental disclosure
   cash paid during the 
   period for interest                    $337,448           $192,156 

</TABLE> 

Supplemental Schedule of Noncash Investing and Financing Activities

The Company purchased common stock of UNS for $7,000.  In conjunction with 
the acquisition, liabilities were assumed as follows:

Fair value of assets acquired	              $204,745
Goodwill acquired                           $999,078
Cash Paid for Capital Stock                  $(7,000)
Liabilities Assumed                       $1,196,823

The Company purchased the net assets of  The Network Systems Group (NSG) of 
Information Decisions, Inc., a wholly owned subsidiary of SofTech, Inc.  In 
conjunction with the acquisition, liabilities were assumed as follows:

Fair value of assets acquired             $1,857,742
Goodwill acquired		                      	$3,539,000
Common stock issued to seller            $(2,835,000)
Cash paid for net assets			                $(890,000)
Transactional costs-capitalized            $(160,850)
Liabilities Assumed                       $1,510,892

See Notes to Interim Consolidated  Financial Statements. 




                     DATA SYSTEMS NETWORK CORPORATION 
                       NOTES TO FINANCIAL STATEMENTS  
                             September 30, 1996
    
Note 1. Basis of Presentation
  
The accompanying unaudited interim consolidated financial statements of the 
Company have been prepared in accordance with generally accepted accounting 
principles for interim financial information and should be read in 
conjunction with the Company's audited financial statements and notes 
contained in the Company's Form 10-K for the year ended December 31, 
1995.  The condensed consolidated financial statements include all 
adjustments, consisting of normal recurring adjustments, necessary for a fair 
presentation of results of operations for the periods presented. The results 
of such interim periods are not necessarily indicative of the results of 
operations for the full year.
  
The consolidated financial statements include the financial statements of Data 
Systems Network Corporation and its majority-owned subsidiary, Unified 
Network Services ("UNS").  The statements also reflect the activity of the 
Network Services Group ("NSG") of Information Decisions Incorporated ("IDI"), 
a wholly owned subsidiary of SofTech, Inc.("SofTech") from the acquisition 
date of September 3, 1996.  All significant intercompany balances and 
transactions have been eliminated in consolidation. 


Note 2. Bank line of Credit

As of September 30, 1996, the Company has a bank line of credit of $7.5 million 
bearing interest at .75% over the bank's prime rate (effective rate of 9% at 
September 30, 1996).  The current agreement has been amended effective 
November 1, 1996 to, among other things, increase the maximum borrowing 
amount under the line of credit to $15 million and to reduce the interest 
rate to .25% over the bank's prime rate. The line of credit expires on 
February 1, 1997 and can be terminated at any time by the Company or the 
bank.  Borrowings under the line of credit are due on demand.  Borrowing 
limits are determined based on a collateral formula which includes 85% of 
qualified trade receivables less than 90 days old and 25% of eligible 
inventory and service parts.  The line is collateralized by substantially all 
of the Company's assets.  The line of credit agreement contains certain 
covenants requiring the Company's receivables to be genuine and free of all 
other encumbrances and requiring the Company's inventory financed under the 
term agreement to be kept at designated locations and free from all other 
encumbrances. The inventory covenants are restricted to apply solely to the 
inventory financed through this agreement, exclusive of any and all 
inventories financed under the IBM Credit Corporation Agreement (see Note 4).

Note 3.  Acquisitions

On February 22, 1996, the Company purchased 70% (7,000 shares) of UNS for 
$7,000.  The purchase price was allocated to the net assets acquired based  
upon their estimated fair market value.  The excess of the purchase price 
over the estimated fair market value of the net assets acquired amounted to 
$999,078, which is being accounted for as goodwill and is being amortized 
over 20 years using a straight-line method.  Operating results of these 
acquired operations are included in the financial statements from the date 
of purchase.

Effective September 3, 1996, the Company purchased the operations of NSG, 
including certain assets and assumed certain liabilities from SofTech.  The 
acquisition has been accounted for as a purchase.  In exchange for certain 
assets and liabilities, SofTech received $890,000 in cash and 540,000 shares 
of the Company's common stock valued at approximately $2,835,000.  The 
purchase price was allocated to the net assets acquired based upon their 
estimated  fair market value.  The excess of the purchase price over the 
estimated fair market value of the net assets acquired amounted to 
$3,539,000, which is being accounted for as goodwill and is being amortized 
over 20 years using a straight-line method.

The allocations of the purchase prices have been made on a preliminary basis 
and are subject to change upon  final determination regarding the fair market 
values of assets acquired and liabilities assumed.

The following unaudited pro forma income statements were prepared to 
illustrate the effects of the acquisition as if it had occurred on 
January 1, 1995.  The pro forma adjustments are based on the available 
information and upon certain assumptions the Company believes are reasonable.  
The pro forma income statements do not purport to represent what the 
Company's income statements would actually have been if such transaction in 
fact had occurred on January 1, 1995, or to project the Company's income 
statements for any future period.  The information below reflects an 
adjustment for the amortization of goodwill based upon the new cost basis of 
the Company, as well as an adjustment to the income tax provision to reflect 
the tax effect of the aforementioned adjustment.  The 1996 amounts exclude the 
extraordinary items for purposes of comparability.
<TABLE>
<CAPTION> 
                             					Nine Months Ended September 30,
					                                     1996	   		1995
						                                    (in thousands)
<S>                                 <C>         <C>
Revenues	                          		$  37,888	 	$ 49,679
Cost of Revenues				                    30,589		   40,538
                                   -----------  ---------

Gross profit                  				       7,299	     9,141

Selling expenses              				       3,905	     3,580
General and administrative expenses	     3,338 	    3,173
Amortizatin of goodwill			                 133        133
                                    ----------  ---------
Income(loss) from operations	 	           (77)      2,255

Other income               				           185        (143)
                                    ----------   ---------
Income before income taxes                108       2,112
Income taxes                               37         510
                                    ----------  ----------
Net income                        $        71     $ 1,602
    					                              ======      ======
</TABLE>

Note 4.  Credit Line

On July 28, 1995, the Company entered into a secured financing agreement with 
IBM Credit Corporation.  For the period ending September 30, 1996, the 
current agreement extends a maximum of $1,250,000 in secured funds to be used 
exclusively for the acquisition of inventory for resale limited to those 
products manufactured by Apple, Compaq, Hewlett Packard, IBM and Lexmark. Use 
of this credit line is at the Company's option.  To secure payment of all 
current debt under this agreement, IBM Credit Corporation was granted a first 
security interest in the Company's inventory financed under this agreement 
equal to the amount of the outstanding debt.  This agreement allows for 
interest-free financing if paid within thirty days of invoicing.  The 
agreement also provides for a variable discount option, ranging from  .5% to 
1.0% off each invoice ,if  paid within fifteen days. This agreement  can be 
terminated at any time by the Company or the lender. The terms and conditions 
of this financing agreement can be changed at the discretion of  IBM Credit 
Corporation. 


Note 5.  Extraordinary Items

During the course of 1995 and 1996, the Company has negotiated with certain 
creditors to accelerate the payment of unsecured debt providing the creditors 
agree to certain terms, such as forgiveness of a portion of unsecured debt and 
contingent liabilities and of sale the fully paid warrants.  Under the terms 
of the 1992 Plan of Reorganization, the unsecured creditors were granted 
fully paid warrants of 170,000 shares of the Company's authorized common 
stock and contingent payments of up to a total of  $650,000.  This contingent 
liabiity was not previously recorded as the amount could not be reasonably 
estimated.   As a result of these extensive negotiations, the Company has 
purchased approximately 110,000 warrants in 1995 and 10,400 in 1996.  In 
addition, the Company requested the authority to settle claims and obtained 
final approval of the bankruptcy court to enter into a settlement agreement 
whereby aggregate payments of approximately $114,000 will be made subsequent 
to September 1996 to conclude the reorganization plan.  

The extraordinary gain of approximately $75,000 represents the purchase of 
the 10,400 warrants and the extinguishment of the related debt. The 
extraordinary loss of  approximately $165,000 represents the bankruptcy 
contingent liability payments to be made and the related professional fees 
incurred to conclude  the bankruptcy reorganization plan.  


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

The following analysis of financial condition and results of operations of the 
Company should be read in conjunction with the Company's consolidated 
financial statements and notes thereto included under Item 1. Financial 
Statements. 
Results of Operations  

Three Months Ended September 30, 1996 Compared to Three Months Ended September 
30, 1995. Revenues.  Total revenues decreased 23% to $6.3 million for the 
three months ended September 30, 1996 from $8.3 million for the same period 
in 1995. This decrease is primarily attributable the Company's  sales and 
sales management personnel decision to  shift their attention away from the 
current quarter's activity to address the needs of  both the NSG acquisition 
due diligence process and the resulting personnel training and orientation 
programs.  The Company believes that its decision to allocate considerable 
resources to the process of integrating the NSG employees into the Company's 
operations  is an important key to the Company's long term success and 
retention of these employees.  To a lesser degree, this decrease was a result 
of a net product sales decrease of  40%  resulting  primarily from the 
shifting of Company sales and support resources to UNS in an effort to 
support initial third quarter sales expectations.  The initial forecast for 
UNS included the  delivery and installation of certain  large projects that 
were either rescheduled for implementation in the fourth quarter, or canceled 
due to customer budgetary constraints.

Product returns and allowances decreased to $199,000 or 3% of total revenues in 
the three month period in 1996 from $223,000 or 3% of total revenues for the 
same period in 1995. Gross profits for the period increased to $1,060,000, or 
17% of total revenue, from $983,000, or 12% of total revenue, for the same 
period in 1995.  This increase is attributable to a 190% increase in service 
revenue in 1996 over the same period in 1995.

Service revenue increased $898,000 to 14% of total revenues in the three 
month period ended September 30, 1996 from 6% in the corresponding period of 
1995.  A majority of the service revenue increase resulted from the 
recognition of network installations, training and hardware maintenance 
income generated from the service base acquired with NSG.

Cost of Revenues.  The total cost of revenues decreased to 83% of total 
revenues for the three month period ended September 30, 1996 from 93% for the 
same period in 1995.  The cost of service revenue decreased to 59% of service 
revenues for the three month period ended September 30, 1996 from 63% for the 
same period in 1995, due to the significant increase in lower cost 
maintenance revenues which typically represent a more profitable revenue 
stream than time and materials revenues.  The cost of product sales decreased 
significantly to 90% of net sales  for the three month period ended September 
30, 1996 compared to 95% for the same period in 1995.  This decrease is 
primarily attributable to the increased sales mix of advanced technology 
products which typically result in higher gross margins than the sale of  
widely distributed commodity products.  This shift in mix is consistent with 
the Company's overall marketing plan to concentrate its efforts on leading 
edge technology, such as network management, remote network monitoring and 
imaging.
 
Operating Expenses.  Selling, general and administrative expense increased by 
$694,000 to 24% of  total revenue for the three month period ended 
September 30, 1996 compared to 10% of total revenues for the same period in 
1995. This increase was primarily attributable to costs associated with the 
Company's decision to expand its geographic presence into New York, 
Massachusetts, New Jersey, Rhode Island and Connecticut.   The Company's 
expansion plan targets geographic areas where significant government and 
institutional contract opportunities exist. An aggressive expansion posture 
and its related effect on operating expenses are expected to continue through 
the fourth quarter. The foregoing statement is a "forward looking statement" 
within the meaning of the Securities Exchange Act of 1934 and is subject to a 
number of risks and uncertainties. These include the continuance of  
favorable economic and business conditions, the availability of adequate 
financing from the Company's cash resources and bank line of credit, and the 
ability of the Company to continue to identify and recruit sales and service 
professionals within its future geographic target areas.

Other Income(Expense).  Other income for the quarter increased by $210,000 
resulting primarily from non-recurring services rendered by UNS not related 
to the Company's continuing operations and to a lesser degree to the Company's  
recognition of  an accrual established in 1991 to satisfy the unsecured 
creditors' debt liability.  Both interest income and interest expense 
remained relatively stable for the three month period ended September 30, 
1996 compared to the same period in 1995.   

Extraordinary Gain and Loss. The extraordinary gain of approximately $75,000 
represents the purchase of the 10,400 warrants and the extinguishment of the 
related debt. The extraordinary loss of  about $160,000 represents the 
bankruptcy contingent payments to be made and the related professional fees 
to conclude  the bankruptcy reorganization plan.

Nine Months Ended September 30, 1996 Compared to Nine Months Ended 
September 30, 1995.

Revenues.  Total revenues decreased 21% to $17.7 million for the nine months 
ended September 30, 1996 from $22 million for the same period in 1995.  This 
decrease was attributable to a 29% decrease in product sales, offset by an 
82% increase in service revenue. These results illustrate the continued 
success of the Company's ongoing effort to increase service revenues in both 
dollars and as a percentage of total sales. Returns and allowances remained 
stable at 3% percentage of total revenue for the nine months period in ended 
September 30, 1996 and 1995.  Product returns decreased in dollars to 
$383,000 for the nine months ended September 30,1996 from $649,000 for the 
same period in 1995.  Gross profit increased to 18% of total revenue from 11% 
for the same period in 1995, primarily attributable to the increase in 
service revenues as a percentage of total sales.

Service revenue increased by 82%  to 16% of total revenue in the nine month 
period ended September 30, 1996 from 7% in the corresponding period of 1995.  
The majority of the service revenue percentage increase resulted from the 
second quarter sale of project design and installation service generated from 
both DSNC and UNS activities,  and to a lessor degree to the third quarter  
maintenance, implementation and training revenues contributed by the newly 
acquired NSG operation.  The Company will continue to focus on increasing 
service revenue in dollars and percentage of sales as part of its 1996 
product mix strategy. The Company expects the NSG division to materially 
contribute to that strategy through increased state contract service revenue.

Cost of Revenue.  The cost of revenue decreased to 82% of total revenues for 
the nine month period ended September 30, 1996 from 89% for the same period 
in 1995.  The cost of service revenue decreased to 48% of service revenues 
for the nine month period ended September 30, 1996 from 59% for the same 
period in 1995. This significant decrease is primarily attributable to the 
successful marketing of maintenance contract revenue which provides the 
Company with more profitable recurring service revenue than time and material 
services. The cost of product sales decreased to 89% of net sales for the 
nine month period ended September 30, 1996 compared to 91% for the same 
period in 1995 primarily due to the Company's shift to an increased mix of 
higher margin advanced technology products.  

Operating Expenses.  Selling, general and administrative expense increased by 
$1,098,000 to 19% of total revenue for the nine month period ended 
September 30, 1996 compared to 10% of total revenue for the same period in 
1995.  This increase is attributable to a variety of factors in order of 
materiality, including the addition of the NSG staff, the increased costs 
associated with the UNS staff  recruitment and development, the increased 
travel expenses required to service a geographically expanding customer base, 
and to a lesser degree, to the third quarter sales office expansion activities.

Other Income(Expense).  Interest expense increased for the nine months ended 
September 30, 1996 compared to the same period in 1995 resulting primarily 
from notes payable interest paid and an in the Company's business financing 
line of credit.  Interest income increased by $82,000 as a result of 
increased earnings from the investment of  the remaining proceeds of the 1994 
public offering and interest earned on notes receivable accounts.  Other 
income for the nine month period ended September 30, 1996 increased by 
$304,000 resulting primarily from non-recurring services rendered by UNS 
not related to the Company's continuing operations, and to a lesser degree to 
the Company's recognition of accruals for income taxes and unsecured 
creditors' debt liability established in prior years.

Financial Condition
The Company finances its business primarily through funds generated internally 
through operations, trade credit, and advances under its $7.5 million line of 
credit with NBD Bank N.A. (the "Bank").  The line of credit is secured by 
substantially all of the Company's assets, bears interest at .75% over the 
Bank's prime rate (effective rate of 9% at September 30, 1996) and is due on 
demand of the Bank. The current agreement has been amended effective November 
1, 1996 to, among other things, increase the maximum borrowing amount under 
the line of credit to $15 million and to reduce the interest rate to .25% 
over the bank's prime rate. The line of credit expires on February 1, 1997 
and can be terminated at any time by the Company or the bank.  Borrowing 
under the line of credit is limited by a formula determined from time to time 
by the Bank and currently is calculated as the sum of 85% of qualified 
receivables less than 90 days old and 25% of eligible inventory and service 
parts as designated by the bank.  The formula permitted total borrowings of 
up to $5,540,000 as of September 30, 1996 with $5,360,000 outstanding.  The 
Company believes that the current permitted borrowing formula which increases 
borrowing availability as the Company's sales growth generates new accounts 
receivable, will support the continued growth of the Company. The foregoing 
statement is a "forward looking statement" within the meaning of the 
Securities Exchange Act of  1934 and is subject to a number of risks and 
uncertainties.  These include the continuance of favorable economic and 
business conditions and the Company's future rate of sales growth.

In addition to the bank line of credit, the Company is utilizing a secured 
financing agreement with IBM Credit Corporation which offers thirty day 
interest free financing on certain products (Note 4) purchased by the Company 
for resale.  As of  September 30, 1996, IBM Credit Corporation purchase 
transactions accounted for $270,000 of the total accounts payable balance.

As of September 30, 1996, net cash flows decreased by $700,000 resulting from 
an increase in both the bank line of credit and accounts payable, materially 
offset by an increase in inventories and accounts receivable.  To a lesser 
degree, the decrease in working capital can be attributed to a $704,000 
increase in deferred maintenance revenue. Working capital as of September 30, 
1996 was ($1,601,000).

The Company has recorded the creditor committee settlement of approximately 
$114,000 as  a payable at September 30, 1996. This amount represents the 
negotiation of the potential  contingent payment due in 1997 of $650,000. The 
amounts will be paid to the creditors and the related warrants will be issued 
subsequent to September 30, 1996.

On  September 3, 1996 the Company acquired the operations of  the Network 
Systems Group (NSG) of Information Decisions Incorporated, a wholly owned 
subsidiary of SofTech.  In exchange for certain assets and liabilities, 
SofTech, Incorporated received $890,000 and 540,000 shares of Company common 
stock valued at approximately $2,835,000.  The purchase price was allocated 
to the net assets acquired based upon their estimated  fair market value.  
The excess of the purchase price over the estimated fair market value of the 
net assets acquired amounted to $3,539,000, which is being accounted for as 
goodwill and is being amortized over 20 years using a straight-line method.  
At the time of the acquisition, NSG had approximately 100 employees with 
operations in Michigan, North Carolina, and New York. 

On February 22, 1996, the Company purchased 70% (or 7,000 shares) of common 
stock of Unified Network Services, Inc. for $7,000 in cash and assumed 
approximately $1,200,000 in liabilities.  The acquisition of UNS was 
accounted for as a purchase.  Accordingly, the purchase price was allocated 
to the net assets acquired based upon their estimated fair market value.  The 
excess of the purchase price over the estimated fair market value of the net 
assets acquired amounted to approximately $999,078, which is being accounted 
for as goodwill and is being amortized over 20 years using a straight-line 
method.  This allocation was based on preliminary estimates and may be 
revised at a later date.

The Company believes that the combination of present cash balances, future 
operating cash flows, and credit facilities will be adequate to fund the 
Company's internal growth and current short and long term cash flow 
requirements.  The payment of the unsecured creditors' claims, pursuant to 
the recent settlement agreement, is expected to have minimal effect on the 
Company's cash flows.  Future trends for revenue and profitability continue 
to be difficult to predict.  The foregoing statement is a "forward looking 
statement" within the meaning of the Securities Exchange Act of 1934 and is 
subject to a number of risks and uncertainties. These include the continuance 
of favorable economic and business conditions, the financial requirements of 
the newly acquired operations and offices, and the success of the Company's 
strategy to shift its revenue mix away from product sales towards service 
revenue and thereby improve operating margin.  

PART II - OTHER INFORMATION  
Item #1 Legal Proceedings
None
Item #2  Change in Securities

On September 12, 1996, the Company issued 540,000 shares of its Common Stock 
and paid $890,000 in cash to SofTech, Inc. in connection with the Company's 
acquisition of certain of the assets and liabilities of SofTech's Network 
Systems Group.  The shares were issued in a transaction not involving a 
public offering which was exempt from registration under Section 4(2) of the 
Securities Act of 1933, as amended (the "Securities Act").  The exemption is 
available because: (1) the shares were issued to one accredited offeree and 
purchaser, (2) no general solicitation or advertising was utilized in making 
the offering, (3) the purchaser represented in writing that it was not 
acquiring the shares with a view to or for the transfer, assignment, resale 
or unregistered distribution except in compliance with the Securities Act or 
an exemption from registration thereform, (4) the purchaser received written 
disclosure that the securities have not been registered under the Securities 
Act and cannot be resold unless they are registered thereunder or unless an 
exemption from registration is available, and (5) the certificate evidencing 
the shares includes a legend stating that the shares have not been registered 
and referring to the restriction on transferability of the shares.


Item #4
None

Item #6 Exhibits and Reports on Form 8-K  
A.	Exhibits  
           
   Exhibit 2.1     Asset Purchase Agreement, dated September 12, 1996, by and 
                   among the Company, Information Decisions, Incorporated, 
                   System Constructs, Inc. and SofTech, Inc. (filed as 
                   Exhibit 2.2 to the Company's Current Report on Form 8-K  
                   filed September 27, 1996 and incorporated herein by 
                   reference)
   Exhibit 10.3(b) The Data Systems Network Corporation 1994 Stock Option
		                 Agreement (as amended and restated 	October 1996)
   Exhibit 10.4(b) Restated Business Financing Agreement-NBD Secured Credit 
                   Agreement 
   Exhibit 10.17   Registration Rights Agreement, dated as of September 12, 
                   1996 to the Compnay and SofTech, Inc. (filed as Exhibit 
                   10.17 to the Company's Current Report on Form 8-K filed 
                   September 27, 1996 and incorporated herein by reference)
   Exhibit 11      Computation of Earnings per share
   Exhibit 27       Financial Data Schedule
  

B. Reports on Form 8-K  

Item 2.    The Company filed a Report on Form 8-K on September 27, 1996
           disclosing information under Item 2.  The appropriate financial 
           statements will be filed by amendment to such Form 8-K.

 
DATA SYSTEMS NETWORK CORPORATION 
SIGNATURES  
  
Pursuant to the requirement 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.  
  
  
  
Data Systems Network Corporation          
Registrant  
  
November 14, 1996            /S/    Philip M. Goy                
Date                                Philip M. Goy                  
                                    Chief Financial Officer  
  
  
November 14, 1996           /S/     Michael W. Grieves              
Date                                Michael W. Grieves                
                                    President and Chief Executive Officer