<PAGE>   1
                                  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 March 31, 1998

                         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:
(248) 489-8700

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 [ ]        NO [X]

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 - 4,859,224 shares as of May 31, 1998


<PAGE>   2


PART I. - FINANCIAL INFORMATION

ITEM I. - FINANCIAL STATEMENTS.

DATA SYSTEMS NETWORK CORPORATION
 CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>

                                                               MARCH 31,       DECEMBER 31,
                                                                 1998              1997
                                                              UNAUDITED           AUDITED
                                                            ------------       ------------
<S>                                                         <C>                <C>
                      ASSETS
CURRENT ASSETS:
   Cash and cash equivalents                                $  4,391,647       $      5,349
   Investments                                                        --          6,203,361
   Accounts receivable (net of allowance of $696,710
      and $800,000 at March 31, 1998 and December 31,
      1997 respectively)                                      15,439,704         27,098,823
   Notes receivable                                              228,775            197,133
   Inventories                                                   744,873            680,673
   Other current assets                                          237,793            537,781
                                                            ------------       ------------
         Total current assets                                 21,042,792         34,723,120

SERVICE PARTS                                                    293,954            320,677

PROPERTY AND EQUIPMENT, net                                    2,544,494          2,583,437

GOODWILL, net                                                  4,017,431          4,072,207

OTHER ASSETS                                                   1,863,164          1,514,125
                                                            ------------       ------------
TOTAL ASSETS                                                $ 29,761,835       $ 43,213,566
                                                            ============       ============
       LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
   Bank line of credit (Note 3)                             $ 10,245,966       $ 17,296,558
   Accounts payable (Note 3)                                  12,061,871         16,220,200
   Accrued liabilities                                         1,937,228          2,288,198
   Capitalized lease obligations - current portion                81,575             79,988
   Deferred maintenance revenues                               1,280,921            927,154
                                                            ------------       ------------
         Total current liabilities                            25,607,561         36,812,098


CAPITAL LEASE OBLIGATIONS - NON CURRENT                          136,842            157,551


STOCKHOLDERS' EQUITY
   Preferred stock, authorized 1,000,000 shares,
      none outstanding
   Common stock ($.01 par value; authorized 10,000,000 
      shares; issued and outstanding 4,859,224 and 4,857,974 
      shares at March 31, 1998 and December 31,1997, 
      respectively)                                               48,592             48,580
   Additional paid-in capital                                 17,946,219         17,945,606
   Accumulated deficit                                       (13,977,379)       (11,750,269)
                                                            ------------       ------------
         Total stockholders' equity                            4,017,432          6,243,917
                                                            ------------       ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                  $ 29,761,835       $ 43,213,566
                                                            ============       ============
</TABLE>

        See accompanying notes to the consolidated financial statements.

<PAGE>   3



                        DATA SYSTEMS NETWORK CORPORATION
                     CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>

                                                        FOR THE THREE MONTHS ENDED MARCH 31,
                                                                             1997 
                                                                            RESTATED &
                                                               1998         UNAUDITED
                                                            UNAUDITED        (NOTE 5)
                                                          ------------    ------------
<S>                                                       <C>             <C>
REVENUES:
   Net sales                                              $ 13,892,297    $ 14,486,465
   Service revenue                                           4,981,529       3,685,009
                                                          ------------    ------------
        Total revenues                                      18,873,826      18,171,474

COST OF REVENUES:
   Cost of sales                                            11,188,418      11,848,943
   Cost of service revenue                                   5,339,579       3,462,596
                                                          ------------    ------------
        Total cost of revenues                              16,527,997      15,311,539

GROSS PROFIT                                                 2,345,829       2,859,935

OPERATING EXPENSES:
   Selling expenses                                          2,775,071       2,359,772
   General and administrative expenses                       1,632,556       1,492,824
                                                          ------------    ------------
        Total operating expenses                             4,407,627       3,852,596

LOSS FROM OPERATIONS                                        (2,061,798)       (992,661)

OTHER INCOME (EXPENSE):
   Interest expense                                           (240,236)       (288,797)
   Interest income                                              70,332          32,282
   Other income                                                  4,592
                                                          ------------    ------------
        Other expense-net                                     (165,312)       (256,515)

LOSS BEFORE INCOME TAXES                                    (2,227,110)     (1,249,176)

INCOME TAXES                                                        --              --
                                                          ------------    ------------       
NET LOSS                                                  ($ 2,227,110)   ($ 1,249,176)
                                                          ============    ============

                                                              Basic           Basic
                                                              -----           -----
LOSS PER COMMON SHARE                                     ($      0.46)   ($      0.36)
                                                          ============    ============

WEIGHTED AVERAGE NUMBER OF
   SHARES OUTSTANDING                                        4,858,524       3,466,118
                                                          ============    ============


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




<PAGE>   4
                        DATA SYSTEMS NETWORK CORPORATION
                      CONSOLIDATED STATEMENTS OF CASH FLOWS


<TABLE>
<CAPTION>

                                                                  FOR THE THREE MONTHS ENDED MARCH 31,
                                                                                         1997
                                                                                       RESTATED &
                                                                           1998        UNAUDITED
                                                                        UNAUDITED       (NOTE 5)
                                                                     ------------    ------------
<S>                                                                    <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net  loss                                                           (2,227,110)     (1,249,176)
   Adjustments to reconcile net loss
      to net cash provided by (used in) operating activities:
      Depreciation and amortization                                       266,533         238,888
      Changes in assets and liabilities that provided (used) cash,
         net of effects of acquisition:
         Investments                                                    6,203,361
         Accounts receivable                                           11,659,119      (7,354,019)
         Notes receivable                                                 (31,642)         41,292
         Inventories                                                      (64,201)     (1,209,939)
         Other current assets                                             299,987        (202,877)
         Service parts                                                     26,723         392,484
         Other assets                                                    (349,039)       (178,740)
         Accounts payable                                              (4,158,329)        119,160
         Accrued liabilities                                             (350,970)        808,622
         Deferred maintenance revenues                                    353,768         511,161
                                                                     ------------    ------------
            Net cash provided by (used in) operating activities        11,628,200      (8,083,144)
                                                                     ------------    ------------

CASH FLOWS FROM INVESTING ACTIVITIES :
   Acquisition of property and equipment, net                            (172,814)       (525,856)
   Redemption of warrants and exercise of stock options, net                  625       7,324,633
                                                                     ------------    ------------
            Net cash provided by (used in) investing activities          (172,189)      6,798,777
                                                                     ------------    ------------

CASH FLOWS FROM FINANCING ACTIVITIES:
       Net current borrowings (repayment)  under bank line of credit   (7,050,592)      6,503,091
       Net proceeds from capital lease obligation financing               (19,122)        291,553
                                                                     ------------    ------------
            Net cash provided by (used in) financing activities        (7,069,714)      6,794,644
                                                                     ------------    ------------

NET INCREASE IN CASH AND CASH EQUIVALENTS                               4,386,297       5,510,277

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                            5,349       1,522,434
                                                                     ------------    ------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD                           $  4,391,647    $  7,032,711
                                                                     ============    ============
SUPPLEMENTAL DISCLOSURES OF CASH FLOWS:
     Cash paid during the period for:
                 Interest                                            $    377,099    $    262,085
                                                                     ============    ============
                 Income taxes                                                None            None
                                                                     ============    ============
</TABLE>

        See accompanying notes to the consolidated financial statements.

<PAGE>   5


                        DATA SYSTEMS NETWORK CORPORATION
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - MARCH 31, 1998
                                 (UNAUDITED)




1.  BASIS OF PRESENTATION - The consolidated financial statements included 
herein have been prepared by Data Systems Network Corporation ("Company")
without audit, pursuant to the rules and regulations of the Securities and
Exchange Commission. Certain information and footnote disclosures normally
included in the financial statements prepared in accordance with generally
accepted accounting principles have been omitted pursuant to such rules and
regulations.

    The information provided in this report reflects all adjustments (consisting
of normal recurring accruals) which are, in the opinion of management, necessary
for the fair presentation of the Company's financial position as of March 31,
1998 and the results of its operations and its cash flows for the three month
periods ended March 31, 1998 and 1997. These consolidated financial statements
should be read in conjunction with the Company's financial statements for the
year ended December 31, 1997 as filed with the Securities and Exchange
Commission.

    Results for the interim period are not necessarily indicative of results
that may be expected for the entire year.


2.  SIGNIFICANT ACCOUNTING POLICIES

ORGANIZATION   The accompanying consolidated financial statements include the
accounts of Data Systems Network Corporation and its 70% - owned subsidiary,
Unified Network Services, Inc. ("UNS"). The principal activities of Data
Systems Network Corporation (the "Company") involve the sales of microcomputer
and network hardware and software and the performance of maintenance and
advance services, such as network management, imaging and systems consulting,
to major corporate and state and local government customers in the United
States. The Company's corporate headquarters are in Michigan. Additionally,
there are two technical centers, one in Michigan and one in North Carolina, and
20 direct sales offices located throughout the United States. 


CASH AND CASH EQUIVALENTS include liquid investments with maturities of three
months or less and cash received and deposited into an escrow account. The
escrow account was established to receive monies for payment of maintenance
services from a single customer. Funds are released to the Company on a monthly
basis based upon a predetermined schedule.


PRODUCT RETURNS AND SERVICE ADJUSTMENTS are estimated based upon historical
data. Actual credits are recorded against the established reserve in the month
they are authorized and accepted. The Company's customers have no contractual
rights to return products. The Company determines whether to accept product
returns on a case by case basis and will generally accept product returns only
upon payment of a restocking fee and/or if the products may be returned to the
manufacturer. The Company offers no warranty separate from the product
manufacturers' warranties. As of March 31, 1998 and December 31, 1997 the
Company had recorded a reserve of $500,000 for potential product returns and
service adjustments. 

<PAGE>   6


                        DATA SYSTEMS NETWORK CORPORATION
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - MARCH 31, 1998
                                 (UNAUDITED)


EARNINGS (LOSS) PER COMMON SHARE -  In February 1997, the Financial Accounting
Standards Board issued Statement No. 128, "Earnings per Share" ("SFAS 128").
SFAS 128 specifies the computation presentation and disclosure requirements for
earnings per share ("EPS") of entities with publicly held common stock or
potential common stock. SFAS 128 defines two EPS calculations, basic and
diluted. The objective of basic EPS is to measure the performance of an entity
over the reporting period by dividing income available to common stock by the
weighted average of shares outstanding. The objective of diluted EPS is
consistent with that of basic EPS while giving effect to all dilutive potential
common shares that were outstanding. All potential common shares were excluded
from the computations of diluted earnings per share for the periods ended March
31, 1998 and 1997 because the effect would have been anti-dilutive.


RECENT ACCOUNTING PRONOUNCEMENTS - On January 1, 1998, the Company adopted
Statement of Financial Accounting Standards ("SFAS") No. 130, Reporting
Comprehensive Income. SFAS No. 130 establishes standards for reporting and
displaying of comprehensive income and its components. For the three months
ended March 31, 1998 and 1997, the Company had no items of comprehensive income,
and as a result the Company's reported net income was the same as comprehensive
income. In June 1997, the Financial Accounting Standards Board issued SFAS No.
131, "Disclosures About Segments of and Enterprise and Related Information."
SFAS No. 131 establishes standards for the way that public business enterprises
report information about operating segments and related information in interim
and annual financial statements. The Company intends to provide financial and
descriptive information about its reportable operating segments to conform to
the requirements in its annual financial statements for 1998 and quarterly
thereafter.


3. LINES OF CREDIT

As of March 31, 1998, the Company had a credit agreement ("Agreement") with NBD
Bank ("NBD"). The Agreement provided for a revolving line of credit not to
exceed $12 million, a discretionary line of credit not to exceed $8 million and
a discretionary lease line not to exceed $500,000, collateralized by an
interest in all of the Company's accounts receivable, inventory (other than
equipment financed through IBM Credit) and equipment. Borrowing limits under
the revolving and discretionary lines were determined based on a collateral
formula. The revolving line of credit was to expire September 30, 1999 and the
discretionary line was to expire September 30, 1998. The Agreement also
contained certain covenants including minimum current ratio and leverage
ratios. The Company was not in compliance with the covenants as of March 31,
1998.  The Company is currently negotiating a replacement line of credit with
NBD and investigating possible sources of alternative financing.  On June 15,
1998, the Company was verbally informed by NBD that its borrowing level was
temporarily capped, at approximately $6.7 million, pending completion of 
negotiations, and that it is currently in default under the Agreement.  In the
event that the Company is unable to negotiate a new line of credit or is
otherwise unable to borrow amounts necessary to fund its operations, or if
repayment of its obligations under the current line of credit is demanded by
NBD, the Company's financial position would be materially and adversely
affected.  In such event, there can be no assurance that the Company would be
able to obtain alternative working capital financing to continue its
operations.

The Company has also entered into a finance agreement with IBM Credit
Corporation. As of March 31, 1998, the agreement extended a maximum of
$2,000,000 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. As collateral
for payment of all debt incurred under this agreement, IBM Credit Corporation
was granted a first security interest in the Company's inventory equal to the
amount of the outstanding debt. This agreement allows for thirty (30) day
interest free financing of eligible inventory and a variable discount off of
invoice for eligible product purchases paid for within fifteen days from the
date of invoice. The Company or the lender can terminate this agreement at any
time. The terms and conditions of this financing agreement can be changed at the
discretion of IBM Credit Corporation. The amount outstanding at March 31, 1998
is approximately $1.6 million and has been included in accounts payable.

<PAGE>   7


                        DATA SYSTEMS NETWORK CORPORATION
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - MARCH 31, 1998
                                 (UNAUDITED)


4.  LEGAL PROCEEDINGS

In February, March and April 1998 civil actions were filed against the Company,
certain officers, and the Board of Directors. The complaints allege violations
of the Securities Exchange Act of 1934 resulting from alleged nondisclosures and
misrepresentations of information concerning the Company's financial results and
future prospects due to accounting irregularities. Management is unable to
assess the potential amount of any liability resulting from such class action
lawsuits, however, management currently believes that the resolution of these
proceedings will not have a material adverse effect on the Company's financial
position or results of operations. It is reasonably possible that future events 
and circumstances could alter management's belief, however.


5.  RESTATEMENT OF PRIOR FINANCIAL STATEMENTS

As announced on February 24, 1998, the Company became aware of certain
accounting errors and irregularities affecting previously issued financial
statements. Contemporaneously, the Company's independent accountants advised the
Company that their unqualified auditors' report on the Company's consolidated
financial statements as of December 31, 1996 and 1995 and for each of the years
ended in that two year period was being withdrawn and should no longer be relied
upon. On March 13, 1998, the Company's independent accountants informed the
Board of Directors that they were resigning.

A special committee of the outside members of the Company's Board of Directors
has investigated the accounting errors and irregularities. All known adjustments
to the prior year financial statements have been reflected in the restated 1997
financial statements presented, although such statements remain unaudited.


<PAGE>   8


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 financial statements
and notes thereto included under "Item 1. Financial Statements."

RESULTS OF OPERATIONS

REVENUES. Total revenues increased 3.9% to $18.9 million for the three months
ended March 31, 1998 from $18.2 million for the same period in 1997. The
increase was attributable primarily to the Company's continued expansion into
the eastern region of the United States and additional sales and service
revenue from the State of Michigan. The Company also experienced significant
growth in the southern region of the United States.

     Net sales decreased $0.6 million or 4.1% for the three months ended
March 31, 1998. Service revenues increased $1.3 million to 26% of total revenues
in the three months ended March 31, 1998 from 20% or $3.7 million in the
corresponding period of 1997. A significant percentage of the service revenue
increases resulted primarily from an increase in maintenance revenues from the
State of Michigan contract and secondarily from training, installation and
project service revenues generated from the eastern region.

     The State of Michigan contract had been renewed to September 1998. 
The Company's sales management team has been meeting with representatives of 
the State of Michigan on a continual basis to improve the terms of the
current contract and to work towards securing an extension of the remainder of
the contract or the award of a new contract. As with all of the Company's
service contracts, there can be no assurance that the State of Michigan
contract will continue to be extended or that, if rebid, the Company will be
awarded a new contract on terms and conditions which are at least as favorable
to the Company as the current contract.


COST OF REVENUES.  The cost of revenues increased to 87.6% of total revenues 
for the three months ended March 31, 1998, from 84.3% during the corresponding
period of 1997. The cost of service revenue increased to 107% of service
revenues for the three months ended March 31, 1998, from 94% for the same       
periods in 1997. The increase was due primarily to the Company's continued
investment in additional technical personnel which increased both pre- and
post- sale field support headcount to prepare for the anticipated growth in
service offerings. The increase in the cost of service revenue for the three
months ended March 31, 1998 was also due to the utilization during the period
of third party subcontractors to support installations in areas where the
Company does not have a physical presence. The cost of net sales decreased to
80.5% for the three months ended March 31, 1998 compared to 81.8% for the same


<PAGE>   9

period in 1997. The Company attributes these decreases primarily to the success
of its efforts to negotiate discounts from key product suppliers.

OPERATING EXPENSES.  Selling, general and administrative expense increased to
23.4% of total revenue for the three months ended March 31, 1998 compared to
21.2% of total revenue of the same period in 1997. The increase was primarily
due to increases in customer service, accounting and distribution personnel and
the expansion of internal network and communication systems in anticipation of
the increase in revenues and business volume and to strengthen the Company's
accounting systems.  Additionally, legal and auditing expenses in the
first three months exceeded $250,000 due to the extraordinary efforts required
to complete year end 1997 reporting, and expenses incurred in connection with
the pending shareholder law suits, internal investigations of accounting
irregularities and pending regulatory actions.

OTHER (EXPENSE) INCOME.  Interest expense for the three months ended March 31,
1998 decreased $48,561 compared to the same periods in 1997. The decrease
reflects lower average borrowings in 1998 due to the Company's collection of
accounts receivables and repayment of bank indebtedness.


<PAGE>   10



FINANCIAL CONDITION

     As of March 31, 1998, the Company financed its business primarily through
funds generated internally through operations, trade credit and advances under
its $12 million revolving line of credit and $8 million discretionary line of
credit with NBD Bank (the "Bank").  The line of credit is secured by
substantially all of the Company's assets, with the exception of those
inventory assets acquired with financing under the IBM credit line, and is due
on demand by the Bank. The term of the revolving line of credit extends to
September 30, 1999, and the discretionary line extends to September 30, 1998.
The agreement is renewable annually and may be terminated at any time by the
Company or the Bank.  The agreement contains certain financial ratio covenants
and other covenants which require the Company's receivables to be genuine and
free of all other encumbrances and require the Company's inventory to be kept
only at certain locations and to be free of all other encumbrances.   As of
March 31, 1998, the line of credit bore interest at a rate of 7.88%.  Borrowing
under the line of credit was determined based on a collateral formula. As of
March 31, 1998, the formula permitted borrowings of up to $20.0 million, of
which $10.2 million was outstanding.

     At March 31, 1998 the Company was not in compliance with certain covenants
in its credit agreement regarding minimum current and leverage
ratios. The Company is currently negotiating a replacement line of credit with
the Bank and investigating possible sources of alternative financing.  On June
15, 1998, the Company was verbally informed by the Bank that its borrowing
level was temporarily capped, pending completion of negotiations, and that it
is currently in default under its credit agreement.  In the event that the
Company is unable to negotiate a new line of credit or is otherwise unable to
borrow amounts necessary to fund its operations, or if repayment of its
obligations under the current line of credit is demanded by the Bank, the
Company's financial position would be materially and adversely affected.  In
such event, there can be no assurance that the Company would be able to obtain
alternative working capital financing to continue its operations.

     The secured financing agreement with IBM Credit Corporation continues to 
offer thirty days interest free financing up to $2.0 million on certain products
purchased by the Company for resale. As of March 31, 1998, IBM Credit
Corporation purchase transactions accounted for $1.6 Million of the total
accounts payable balance.

     For the three months ended March 31, 1998, the Company increased cash and 
cash equivalents by approximately $4.4 million primarily due to the 
$11.7 million decrease in accounts receivable and the liquidation of 
$6.2 million of investments. The increase was partially offset by the 
$7.1 million decrease in line of credit borrowings and the $4.2 million 
decrease in accounts payable. Working capital deficiency as of March 31, 1998 
was $4.6 million compared to a working capital deficiency of $2.1 million at 
December 31, 1997. The change was primarily due to the net loss from 
operations in the quarter.

     In February, March and April 1998 civil actions were filed against the 
Company, certain officers, and the Board of Directors. The complaints allege 
violations of the Securities Exchange Act of 1934 resulting from alleged 
nondisclosures and misrepresentations of information concerning the Company's 
financial results and future prospects due to accounting irregularities. 
Management is unable to assess the potential amount of any liability resulting 
from such class action lawsuits, however, management currently believes that 
the resolution of these proceedings will not have a material adverse effect on 
the Company's financial position or results of operations. It is reasonably 
possible that future events  and circumstances could alter management's belief,
however.

     The Company believes that the combination of present cash balances, future
cash flows, and working capital provided by the Bank credit facility or
alternative working capital financing secured by the Company will be adequate
to fund the Company's currently anticipated internal growth and current short
and long term cash flow requirements. 


YEAR 2000 COMPLIANCE

          The Company is in the process of addressing the effect of the Year
2000 problem on its computer systems. The Company is currently engaged in a
project to upgrade its information, technology, and accounting software to
programs that will consistently and properly recognize the Year 2000. Many of
the Company's systems include new hardware and packaged software recently
purchased from vendors who have represented that these systems are already "Year
2000 compliant". The Company is also obtaining assurance from other vendors that
timely updates will be made available to ensure the software they have provided
is Year 2000 compliant.

          The Company has initiated formal communications with all of its
significant suppliers and large customers to determine the extent to which the
Company may be vulnerable if those third parties fail to remediate their own
Year 2000 issues. The Company can give no assurance that the systems of other
companies on which the Company's systems rely will be converted on time or that
a failure to convert by another company or a conversion that is incompatible
with the Company's systems would not have a material adverse effect on the
Company.

          The Company will utilize both internal and external resources to
reprogram, replace and test its software for Year 2000 compliance, and the
Company expects to complete the project in early 1999. The total cost associated
with the required modification and conversion is not yet known but, based upon
current plans, such cost is not expected to be material to the Company's
consolidated results. Costs associated with Year 2000 modification and 
conversion will be expensed as incurred.



Forward-Looking Statement


          The foregoing discussion and analysis contain a number of "forward
looking statements" within the meaning of the Securities Exchange Act of 1934
and are subject to a number of risks and uncertainties.  These include general
business conditions, continuing favorable economic conditions, the failure of
Company's customers to fulfill contractual commitments, the ability of the
Company to recruit and retain qualified personnel, the ability of the Company
to develop and sustain new customers in geographic areas in which the Company
has recently begun to operate, the ability of management to implement new
systems to manage the Company's growth effectively and efficiently, the impact
of undetected errors or defects associated with year 2000 date functions on the
Company's current products and internal systems, the willingness of the
Company's bank lender to continue to lend under the credit facility or the
Company's ability to secure alternative working capital financing, the
relative uncertainties in the market direction of emerging technologies, the
ability of the Company to recruit and retain qualified personnel and the
potential loss of key personnel within the new regions, the Company's ability to
retain its commercial and governmental contracts (including the State of
Michigan contract) and a lack of market acceptance of the Company's products
and services.

<PAGE>   11


ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Not applicable.

PART II - OTHER INFORMATION

ITEM 1 - LEGAL PROCEEDINGS

         On or about February 26, 1998, Plaintiff Tony DiFatta filed civil
action, Case No. 98CV70854 DT (the "DiFatta Complaint"), in the United States
District Court for the Eastern District of Michigan, Southern Division, against
the Company and individual defendants Michael W. Grieves and Philip M. Goy. 
Mr. DiFatta seeks to represent a class of all purchasers of the Company's stock
on the open market between March 5, 1997 and February 24, 1998, excluding the
individual defendants and any officer, director or control person of the
Company and members of their immediate families.  The DiFatta Complaint alleges
violation of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934,
15 U.S.C. Sections 78j(b) and 78t(a), and SEC Rule 10b-5, through nondisclosure
and misrepresentations of information concerning the Company's financial
results and future prospects.  In particular, DiFatta claims that press
releases and SEC filings by the Company were materially false and misleading in
that they overstated revenues and earnings for the year and quarter ended
December 31, 1996, and for the quarters ended March 31, 1997, June 30, 1997 and
September 30, 1997 due to accounting irregularities.

         On or about March 17, 1998, Plaintiff Jeffrey P. Emrich filed civil
action, Case No. 98CV1223 DT (the "Emrich Complaint"), in the United States
District Court for the Eastern District of Michigan, Southern Division, against
the Company and individual defendants Grieves and Goy.  On or about April 17,
1998, Plaintiff David L. Ronick filed a civil action, Case No. 98-71644 DT (the
"Ronick Complaint") in the same court against the Company and individual
defendants Grieves, Goy, Walter J. Aspatore and Jerry A. Dusa.  The Emrich
Complaint and the Ronick Complaint each seek to certify an essentially
identical class of purchasers of the Company's stock as the class proposed in
the DiFatta Complaint, and present essentially identical claims.

         On or about June 10, 1998, the DiFatta, Emrich and Ronick Complaints
were consolidated for all purposes under the caption In Re: Data Systems
Network Corporation Securities Litigation, Case No. 98-70854.

ITEM 3 - DEFAULT UPON SENIOR SECURITIES

         At March 31, 1998 the Company was not in compliance with certain 
covenants of its bank credit agreement regarding minimum current and 
leverage ratios. The Company is currently negotiating a replacement line of
credit with the Bank and investigating possible sources of alternative
financing.  On June 15, 1998, the Company was verbally informed by the Bank
that its borrowing level was temporarily capped, pending completion of
negotiations, and that it is currently in default under its credit agreement. 
In the event that the Company is unable to negotiate a new line of credit or is
otherwise unable to borrow amounts necessary to fund its operations, or if
repayment of its obligations under the current line of credit is demanded by
the Bank, the Company's financial position would be materially and adversely
affected.  In such event, there can be no assurance that the Company would be
able to obtain alternative working capital financing to continue its
operations.  See "Item  2 - Management's Discussion and Analysis of Financial
Condition and Results of Operations - Financial Condition."

Item 6 - EXHIBITS AND REPORTS ON FORM 8-K

(a)      EXHIBITS

27.      Financial Data Schedule

(b)      REPORTS ON FORM 8-K

         The following filings occurred in the first and second quarters of 
         1998:

               Date                 Information Reported

               February 24, 1998    Items 5 and 7

               March 19, 1998       Items 4 and 7

               March 31, 1998       Items 4, 5, and 7

               May 7, 1998          Items 5 and 7

               May 21, 1998         Items 5 and 7

         No financial statements were filed with these Reports on Form 8-K.

<PAGE>   12
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

     June 17, 1998                /s/ John O. Lychos, Jr.
                                  -------------------------------------
                                  John O. Lychos, Jr.
                                  Vice President - Finance, Treasurer and Chief
                                  Financial Officer
                                  (principal financial officer)

     June 17, 1998                /s/ Michael W. Grieves
                                  -------------------------------------
                                  Michael W. Grieves
                                  President and Chief Executive Officer
                                  (duly authorized officer)



<PAGE>   13




                                 Exhibit Index
                                 -------------


<TABLE>
<CAPTION>

Exhibit                      Description
-------                      -----------
<S>                          <C>                      
   27                        Financial Data Schedule

</TABLE>