U.S. SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, D.C. 20549

                                    FORM 10-QSB

(Mark One)

[X]      Quarterly report under Section 13 or 15(d) of the Securities and
         Exchange Act of 1934

                      For the quarterly period ended June 30, 1997

[   ]   Transition report under Section 13 or 15(d) of the Securities and
        Exchange Act of 1934

                  For the transition period from ___ to ___
 
                      COMMISSION FILE NUMBER 33-97876

                          ILLUMINET HOLDINGS, INC.
                         (f/k/a USTN HOLDINGS, INC.)
      (Exact name of small business issuer as specified in its charter)


              Delaware                                        36-4042177
           (State or other                                 (I.R.S. Employer
           jurisdiction of                                Identification No.)
           incorporation or
            organization)


           4501 Intelco Loop, Lacey,                            98503
                Washington
            (Address of principal                             (Zip code)
              executive office)

                                   (360) 493-6000
                   (Issuer's telephone number, including area code)

Check whether the issuer:  (1) filed all reports required to be filed
by Section 13 or 15(d) of the Exchange Act during the past 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 past 90 days.  Yes    X    No

At June 30, 1997,  5,266,890 shares of common stock,  $0.01 per share par value,
and 2,632 shares of Series A convertible  preferred  stock,  $0.01 per share par
value, were outstanding.

Transitional Small Business Disclosure Format (check one):  Yes
No    X



<PAGE>

                          ILLUMINET HOLDINGS, INC.

                      INDEX TO 10-QSB FOR THE QUARTERLY
                         PERIOD ENDED JUNE 30, 1997

<TABLE>
<CAPTION>
<S>                                                                                                    <C>
                                                                                                       Page

PART I:  FINANCIAL INFORMATION

ITEM 1:  FINANCIAL STATEMENTS

         Illuminet Holdings, Inc. Consolidated Balance Sheet - June 30, 1997                             2

         Illuminet Holdings, Inc. Consolidated Statements of Income -
         Six Months and Three Months ended June 30, 1997 and 1996                                        4

         Illuminet Holdings, Inc. Consolidated Statements of Cash Flows -
         Six Months ended June 30, 1997 and 1996                                                         5

         Notes to Consolidated Financial Statements - June 30, 1997                                      6

ITEM 2:  MANAGEMENT'S DISCUSSION AND ANALYSIS
         OR PLAN OF OPERATIONS                                                                           8

PART II: OTHER INFORMATION

ITEM 1:  LEGAL PROCEEDINGS                                                                              15

ITEM 2:  CHANGES IN SECURITIES                                                                          15

ITEM 3:  DEFAULTS UPON SENIOR SECURITIES                                                                15

ITEM 4:  SUBMISSION OF MATTERS TO A VOTE OF SECURITY-HOLDERS                                            15

ITEM 5:  OTHER INFORMATION                                                                              15

ITEM 6:  EXHIBITS AND REPORTS ON FORM 8-K                                                               15

         SIGNATURES                                                                                     16
</TABLE>

        
                                       1


<PAGE>


                                  PART I
                           FINANCIAL INFORMATION


ITEM 1:  FINANCIAL STATEMENTS
<TABLE>
<CAPTION>

                          ILLUMINET HOLDINGS, INC.

                         Consolidated Balance Sheet

                                June 30, 1997

<S>                                                                                  <C>

                     ASSETS                                                              1997
                     ------                                                              ----
Current assets:
    Cash and cash equivalents                                                        $11,756,314
    Accounts receivable, less allowance
       for doubtful accounts of $594,000                                              25,170,973
    Prepaid expenses and other405,846
                                                                                      ----------
       Total current assets                                                           37,333,133
                                                                                      ----------
Property and equipment:
    Land                                                                                 911,765
    Building and leasehold improvements                                                6,912,736
    Equipment and furniture                                                            2,674,438
    Network assets                                                                    25,010,299
    Capitalized network costs                                                          8,215,385
    Computer hardware and software                                                    16,486,442
                                                                                      ----------
                                                                                      60,211,065
    Less:  Accumulated depreciation and amortization                                  29,603,237
                                                                                      ----------
       Total property and equipment                                                   30,607,828
                                                                                      ----------

Computer software product costs, less
    accumulated amortization of $942,000                                               1,916,234
Other assets, net of accumulated
    amortization of $93,000                                                            2,733,071
                                                                                      ----------
Total assets                                                                         $72,590,266
                                                                                      ==========

</TABLE>


        See  accompanying  notes  to  consolidated  financial statements

                                       2


<PAGE>
<TABLE>
<CAPTION>


                          ILLUMINET HOLDINGS, INC.

                    Consolidated Balance Sheet, Continued

                                June 30, 1997

<S>                                                                                 <C>

LIABILITIES AND SHAREHOLDERS' EQUITY                                                      1997
---------------------------------                                                         ----
Current liabilities:
    Trade accounts payable                                                           $ 2,477,711
    Accrued expenses                                                                   1,738,808
    Due to customers                                                                  21,191,453
    Current portion of long-term debt                                                  2,236,820
        ----------
       Total current liabilities                                                      27,644,792
        ----------

Long-term debt, less current portion                                                  19,949,289
                                                                                      ----------
Shareholders' equity:
    Illuminet Holdings, Inc. Series A Convertible Preferred
       Stock, par value $.01 per share, authorized 4,416
       shares, issued and outstanding 2,632                                                   26
    Illuminet Holdings, Inc. Preferred Stock, par value $.01
       per share, authorized 95,584 shares, none issued
       or outstanding                                                                          -
    Illuminet Holdings, Inc. Common Stock, par value $.01
       per share, authorized 12,000,000 shares, issued and
       outstanding 5,266,890                                                              52,669
    Additional paid-in capital                                                        10,757,346
    Retained earnings                                                                 14,186,144
                                                                                      ----------
       Total shareholders' equity                                                     24,996,185
                                                                                      ----------
Total liabilities and shareholders' equity
                                                                                     $72,590,266
                                                                                      ==========
</TABLE>


        See  accompanying  notes  to  consolidated  financial statements.

                                       3


<PAGE>
<TABLE>
<CAPTION>



                            ILLUMINET HOLDINGS, INC.

                        Consolidated Statements of Income


<S>                                        <C>                 <C>                  <C>                <C>
                                                   Three Months Ended                      Six Months Ended
                                                        June 30,                              June 30,
                                                    1997        1996                       1997       1996
                                                   ------------------                     -----------------
                                                      (Unaudited)                            (Unaudited)

Revenues                                   $12,813,200         $10,396,663         $24,385,091          $16,363,574
                                            ----------          ----------          ----------           ----------
Expenses:
    Operating                                2,989,027           2,320,150           5,914,020            4,633,223
    Selling, general
       and administrative                    2,364,443           2,417,983           4,706,901            3,971,678
    Depreciation and
       amortization                          1,562,176           1,590,814           3,094,741            2,697,380
    Network operating
       expenses                              3,624,605           2,854,462           6,785,826            3,854,509
    Corporate realignment                            -                   -                   -              350,067
                                            ----------          ----------          ----------           ----------
Total expenses                              10,540,251           9,183,409          20,501,488           15,506,857
                                            ----------          ----------          ----------           ----------

Operating income                             2,272,949           1,213,254           3,883,603              856,717

Interest income                                129,916             120,767             260,937              209,857
Interest expense                              (407,131)           (378,007)           (760,830)            (558,077)
                                            ----------          ----------          ----------           ----------
Income before income
     taxes                                   1,995,734            956,014            3,383,710              508,497

Income tax expense                              39,914                   -              67,674                    -
                                            ----------          ----------          ----------           ----------
Net income                                 $ 1,955,820         $   956,014         $ 3,316,036          $   508,497
                                            ==========          ==========          ==========           ==========
Weighted average
     common shares                           5,270,694          5,161,152            5,273,942            4,688,226
                                             ==========         ==========          ==========           ==========
Primary earnings per
     common share                          $      0.37         $      0.19         $      0.63          $      0.11
                                            ==========          ==========          ==========           ==========
Fully diluted earnings
     per common share                      $      0.33         $      0.17         $      0.56          $      0.11
                                            ==========          ==========          ==========           ==========
</TABLE>

         See  accompanying  notes  to  consolidated  financial statements.

                                             4


<PAGE>
                            ILLUMINET HOLDINGS, INC.

                      Consolidated Statements of Cash Flows

                            Six Months ended June 30,

<TABLE>
                                                                                   
                                                             1997                 1996
                                                             ----                 ----
<S>                                                   <C>                   <C> 

Cash flows from operating activities:

    Cash received from customers                      $85,689,800           $71,316,169
    Interest received                                     252,200               231,568
    Cash paid to customers, suppliers
       and employees                                 (81,166,086)          (65,244,075)
    Income taxes paid                                   (167,921)                     -
    Income tax refund                                          -                173,795
    Interest paid                                       (910,350)             (599,291)
                                                     -----------              ---------
       Net cash provided by operating activities       3,697,643              5,878,166
                                                     -----------              ---------

Cash flows from investing activities:

    Cash acquired in acquisition of Independent
       Telecommunications Network, Inc.                        -                613,086
    Investment in Authentix, Inc.                              -              (400,000)
    Capital expenditures                              (3,417,692)           (1,607,734)
                                                      -----------             ---------
       Net cash used by investing activities          (3,417,692)           (1,394,648)
                                                      -----------             ---------
Cash flows from financing activities:

    Principal payments on notes payable                 (901,985)             (566,981)
    Payments to dissenting stockholders                 (136,159)           (1,197,919)
                                                      -----------             ---------
       Net cash used by financing activities          (1,038,144)           (1,764,900)
                                                     -----------              ---------

Net increase(decrease)in cash and cash equivalents      (758,193)             2,718,618

Cash and cash equivalents at:

    Beginning of year                                  12,514,507             6,992,206
                                                      -----------             ---------
    End of period                                    $11,756,314$             9,710,824
                                                       ==========            ==========
</TABLE>

       See  accompanying  notes  to  consolidated  financial statements.

                                                5

<PAGE>

                           ILLUMINET HOLDINGS, INC.

                   Notes to Consolidated Financial Statements

                            June 30, 1997 (Unaudited)



(1)  BASIS OF PRESENTATION

The consolidated financial statements of Illuminet Holdings,  Inc.(formerly USTN
Holdings,  Inc.), and its wholly-owned subsidiary Illuminet,  Inc.,(collectively
referred to as  "ILLUMINET")  presented  in this Form 10-QSB are  unaudited  and
reflect,  in the opinion of  management,  all  adjustments  (consisting  only of
normal recurring  adjustments)  necessary for a fair presentation of ILLUMINET's
financial position, results of its operations and its cash flows for each period
presented.  Certain  information and footnote  disclosures  normally included in
financial  statements  prepared in accordance with generally accepted accounting
principles have been condensed or omitted  pursuant to the rules and regulations
of  the  Securities  and  Exchange  Commission.   ILLUMINET  believes  that  the
disclosures made are adequate to make the information  presented not misleading.
The results of the  interim  periods are not  necessarily  indicative  of future
results.  These consolidated  financial statements should be read in conjunction
with the  consolidated  financial  statements and the notes thereto  included in
ILLUMINET's latest annual report on FORM 10-KSB.

(2)  EARNINGS PER COMMON SHARE

Earnings  per share is  computed  using the  weighted  average  number of common
shares and dilutive  common share  equivalents  outstanding  during each period.
Other potentially dilutive securities include Illuminet Holdings,  Inc. Series A
Preferred Stock and convertible  redeemable  subordinated  debentures,  which if
dilutive, are included in the calculation of fully diluted earnings per share.

In February 1997, the Financial  Accounting Standards Board issued Statement No.
128, "Earnings Per Share", which is required to be adopted on December 31, 1997.
At that time,  ILLUMINET will be required to change the method currently used to
compute  earnings  per share and to  restate  all prior  periods.  The impact of
Statement 128 on the calculation of primary and fully diluted earnings per share
for the six month and three  month  periods  ended June 30, 1997 and 1996 is not
expected to be material.

(3)  ACQUISITION

ILLUMINET was incorporated for the purpose of effecting the merger of U.S.
Intelco Holdings, Inc. ("U.S. Intelco") and Independent Telecommunications
Network, Inc. ("ITN") that was consummated effective February 23, 1996
("Merger").  The Merger was accounted for as a purchase business combination
in accordance with generally accepted accounting principles with U.S. Intelco
designated as the acquiring company.  The results of ITN's operations are
included in the consolidated financial statements prospectively from the date
of the Merger.

                                          6

<PAGE>

Assuming  that the  acquisition  of ITN had  taken  place on  January  1,  1996,
unaudited pro forma results of operations from continuing operations for the six
months ended June 30, 1996 would have been as follows:

       Revenues                             $20,172,801
                                             ==========
       Net income                           $   422,017
                                             ==========
       Income per common share              $      0.08
                                             ==========

                                          7

<PAGE>

ITEM 2:       MANAGEMENT'S DISCUSSION AND ANALYSIS OR
              PLAN OF OPERATIONS

BASIS OF PRESENTATION

Illuminet Holdings, Inc. (formerly USTN Holdings, Inc.), and its wholly-owned
subsidiary Illuminet, Inc., (collectively referred to as "ILLUMINET") were
incorporated in the State of Delaware on August 2, 1995, to effect the merger
of U.S. Intelco Holdings, Inc. ("U.S. Intelco") and Independent
Telecommunications Network, Inc. ("ITN").  In accordance with terms of the
merger, U.S. Intelco and ITN merged with and into USTN Services, Inc. ("USTN
Services") on February 23, 1996 (the "Merger").  USTN Services subsequently
changed its name to Illuminet, Inc.  The Merger was accounted for as a
purchase business combination with U.S. Intelco designated as the acquiring
company.  The results of ITN's operations are included in the consolidated
financial statements prospectively from the date of the Merger.  The pro forma
information presented in this Management's Discussion and Analysis or Plan of
Operations reflects the combined activities of U.S. Intelco and ITN as if the
Merger had occurred effective January 1, 1996.

RESULTS OF OPERATIONS

Six Months Ended June 30, 1997 and 1996

REVENUES.  The following table summarizes ILLUMINET's services and the effect
of the Merger on ILLUMINET revenues:

                                                 1997                 1996
                                                 ----                 ----
                                                 
Billing-and-collection services           $ 3,629,367          $ 4,222,444
Data base services                         4,150,504             3,530,194
Network usage measurement                  1,696,705                     -
Other services                                86,387               542,821
                                           ----------           ----------
                                           9,562,963             8,295,459
                                          ----------            ----------
Services acquired by Merger:
---------------------------
Intelligent network services              12,482,475            10,391,661
Wireless services                          2,339,653             1,485,681
                                          ----------            ----------
                                          14,822,128            11,877,342
                                          ----------            ----------
Pro forma revenue                         24,385,091            20,172,801
Financial statement reporting adjustment
   for operations prior to the Merger              -           (3,809,227)
                                          ----------            ----------
Revenues per statements of income        $24,385,091           $16,363,574
                                          ==========            ==========

Billing-and-collection  services  revenues  for 1997  decreased  primarily  as a
result of a $653,984,  or 19%, decrease in clearinghouse  product line revenues.
This  decrease  reflects a fourth  quarter 1996 price  decrease  offset by a 10%
increase  in messages  processed  from 31.0  million in 1996 to 35.8  million in
1997,  due to the  addition of a large  customer in the second  quarter of 1996.
Although  clearinghouse  volumes are expected to increase in 1997,  revenues are
expected to remain below 1996 levels due to the price decrease described above.

                                         8
<PAGE>


Data base services  revenues  increased,  reflecting an increase in Calling Name
Delivery ("CNAM")  partially offset by a reduction in Line Information Data Base
("LIDB") product line revenues.  CNAM revenues increased  $573,058,  or 303%, in
1997,  reflecting  growing market acceptance of the service  introduced in 1995.
CNAM queries  increased 156% from 47.5 million in 1996 to 121.8 million in 1997.
LIDB revenues decreased $205,324,  or 8%, in 1997,  reflecting a 14% decrease in
queries  processed  from 80.3  million  in 1996 to 69.4  million  in 1997 due to
increased market penetration by competing calling card service providers.

Network usage  measurement  revenues  derived from the sale of  ILLUMINET's  SS7
network traffic tracking and measurement  software products AMAT7(R) and CDR7(R)
increased in 1997 due to finalization of sales during the period.  Network usage
measurement  product  sales have long  sales  cycle  with each  individual  sale
normally  contributing  significant  revenue to the product  line. No sales were
completed in the corresponding 1996 period.

Other  services  revenues   decreased   primarily  due  to  the  termination  of
ILLUMINET's  contract  to  provide  voice  messaging  services  for the State of
Washington in September,  1996. Voice messaging contributed revenues of $413,705
for the 1996 period.

Intelligent  network services revenues for 1997 increased  primarily as a result
of a  $1,650,542,  or 77%,  increase  in trunk  signaling  and  related  service
revenues,  reflecting new customer  growth.  Network  connectivity  product line
revenues increased  $549,892,  or 14%, from growth in chargeable customer links.
Offsetting the revenue growth in these product lines,  LIDB switch and transport
revenues  decreased  $495,428,  or 23%, in 1997 due to lower  query  volumes and
reduced prices brought on by competition.

Wireless  services  revenue  increased  primarily  due to a  $710,216,  or  51%,
increase  in 1997 in  cellular  switch  and  transport  revenues.  The  increase
reflects  customer growth and increased  utilization of the network with message
volumes  increasing 101% from 473.0 million for the 1996 period to 951.4 million
for the comparable 1997 period.

EXPENSES.  The following table summarizes ILLUMINET's expenses and the
effect of the Merger on ILLUMINET expenses:

                                                1997                       1996
                                                ----                       ----
Operating                                $ 5,914,020                $ 4,989,024
Selling, general and administrative        4,706,901                  4,809,371
Depreciation and amortization              3,094,741                  3,146,329
Network operating                          6,785,826                  5,559,938
Corporate realignment                              -                    700,875
                                          ----------                 ----------
Pro forma expenses                        20,501,488                 19,205,537
Financial statement reporting adjustment
   for operations prior to the Merger              -                (3,698,680)
                                          ----------                 ----------
Expenses per statements of income        $20,501,488                $15,506,857
                                          ==========                 ==========

ILLUMINET's  primary costs are network operating  expenses,  which are primarily
comprised of leased  network  connectivity  charges  incurred to  establish  and
maintain  customer  connectivity  to the  company's  Signaling  System 7 ("SS7")

                                         9
<PAGE>

network, followed by personnel costs, depreciation and amortization of hardware,
software and facilities assets, and software maintenance expenses.

Operating expenses increased $924,996, or 19%, for 1997 primarily to support the
growth of  Illuminet's  SS7 network.  The  increase  was  comprised of increased
personnel expenses related to new positions, and increased maintenance costs for
new hardware and software.

Selling,  general and administrative  expenses decreased  $102,470,  or 2%, from
1996  levels  due  to  a  reduction  in  personnel   expenses   resulting   from
Merger-related position reductions. Selling, general and administrative expenses
savings were offset by increased  travel  expenses  and new  marketing  material
costs related to increased sales and marketing efforts.

Depreciation and amortization expenses were comparable for 1996 and 1997 but are
expected to increase with the placing into service of new network equipment.

Network  operating  expenses  increased  $1,225,888,  or 22%,  for  1997  due to
increased leased network connectivity, link, and LATA access charges incurred to
support growth in customer connectivity to the SS7 network.

Corporate   realignment  expenses  were  comprised  primarily  of  non-recurring
Merger-related severance expenses incurred in the first quarter of 1996.

INTEREST INCOME/INTEREST EXPENSE.  Interest income increased by $51,080, or 24%,
from  $209,857 for the 1996 period to $260,937 for the  comparable  1997 period.
This increase  resulted  primarily  from an increase in available  cash balances
over the two periods resulting from the Merger.

On a pro forma  basis,  interest  income  increased  by  $33,675,  or 15%,  from
$227,262 for the 1996 period to $260,937 for the 1997 period.

Interest expense increased  $202,753,  or 36%, from $558,077 for the 1996 period
to $760,830 for the comparable 1997 period.  The increase  reflects three months
of combined  interest  expense  resulting from the Merger and a higher aggregate
outstanding  debt  balance  resulting  from an  additional  loan  for a total of
approximately $2.7 million obtained from Rural Telephone Finance  Cooperative in
December, 1996.

On a pro forma  basis,  interest  expense was  comparable  for the 1996 and 1997
periods.

INCOME TAXES.  ILLUMINET has Federal income tax net operating loss carryforwards
available  to offset  future  taxable  income for  Federal  income tax  purposes
totaling  $20,964,492.  These carryforwards  expire in various amounts from 2006
through  2011.   ILLUMINET's   ability  to  utilize  such  net  operating   loss
carryforwards is dependent on ILLUMINET's ability to generate sufficient taxable
income from its  operations.  The current  1997 tax  provision  is  comprised of
Federal  alternative minimum taxes which cannot be completely offset by tax loss
carryforwards.

EARNINGS

ILLUMINET's  net income  increased  $2,807,539  from $508,497 for the six months
ended June 30, 1996, to $3,316,036 for the comparable 1997 period. This increase
primarily reflects an increase in network usage measurement revenues, the effect
of non-recurring  corporate  realignment  costs incurred during the 1996 period,

                                     10
<PAGE>
and the impact of the  post-Merger  operational  efficiencies  that have reduced
costs as a percentage of revenues.

On a pro forma basis, ILLUMINET's net income increased $2,894,019 from
$422,017 for the six months ended June 30, 1996, to $3,316,036 for the
comparable 1997 period. primarily resulting from positive revenue trends
and the completion of the Merger in 1996.

ILLUMINET believes that it will continue to have positive earnings in the future
through new product and  customer  diversification  and  expansion  into related
telecommunications markets. ILLUMINET anticipates that increased expenditures in
the  development  of services and products  will  continue over the next several
years.  While it is anticipated  that the existing primary services and products
will continue to be profitable,  overall  profitability  in the immediate future
could be negatively impacted by delays in obtaining new product revenues coupled
with  related  increases  in new  product  start-up  costs.  A general  downward
pressure on price caused by increased  competition  may also  negatively  impact
profitability.

Three Months Ended June 30, 1997 and 1996

REVENUES.  The following table summarizes revenues for ILLUMINET's
services:

                                                     1997                  1996
                                                     ----                  ----
Billing-and-collection services               $ 1,868,070           $ 2,126,894
Data base services                              2,121,875             1,854,883
Network usage measurement                         912,296                     -
Other services                                     15,471               291,560
                                               ----------            ----------
                                                4,917,712             4,273,337
                                               ----------            ----------
Services acquired by Merger:
---------------------------
Intelligent network services                    6,757,269             5,182,796
Wireless services                               1,138,219               940,530
                                               ----------            ----------
                                                7,895,488             6,123,326
                                                ---------            ----------
Revenues per statements of income             $12,813,200           $10,396,663
                                               ==========            ==========

Billing-and-collection  services  revenues  for 1997  decreased  primarily  as a
result of a $327,041,  or 18%, decrease in clearinghouse  product line revenues.
This  decrease  reflects a fourth  quarter 1996 price  decrease  offset by a 10%
increase  in messages  processed  from 16.6  million in 1996 to 18.2  million in
1997,  due to the  addition of a large  customer in the second  quarter of 1996.
Although  clearinghouse  volumes are expected to increase in 1997,  revenues are
expected to remain below 1996 levels due to the price decrease described above.

Data base services revenues  increased,  reflecting an increase in CNAM revenues
partially  offset by a reduction in LIDB product line  revenues.  CNAM  revenues
increased  $281,321,  or 244%, in 1997,  reflecting growing market acceptance of
the service introduced in 1995. CNAM queries increased 152% from 27.2 million in
1996 to 68.6 million in 1997. LIDB revenues decreased $142,387, or 11%, in 1997,
reflecting a 14% decrease in queries processed from 41.1 million in 1996 to 35.2

                                          11
<PAGE>

million in 1997 due to increased  market  penetration by competing  calling card
service providers.

Network usage  measurement  revenues  derived from the sale of  ILLUMINET's  SS7
network traffic tracking and measurement  software products AMAT7(R) and CDR7(R)
increased in 1997 due to finalization of sales during the period.  Network usage
measurement  product  sales have long  sales  cycle  with each  individual  sale
normally  contributing  significant  revenue to the product  line. No sales were
completed in the corresponding 1996 period.

Other  services  revenues   decreased   primarily  due  to  the  termination  of
ILLUMINET's  contract  to  provide  voice  messaging  services  for the State of
Washington in September,  1996. Voice messaging contributed revenues of $223,406
for the 1996 period.

Intelligent  network services revenues for 1997 increased  primarily as a result
of a  $1,022,403,  or 92%,  increase  in trunk  signaling  and  related  service
revenues,  reflecting new customer  growth.  Network  connectivity  product line
revenues increased  $414,052,  or 21%, from growth in chargeable customer links.
Offsetting the revenue growth in these product lines,  LIDB switch and transport
revenues  decreased  $269,552,  or 24%,  in is due to lower  query  volumes  and
reduced prices brought on by competition.

Wireless  services  revenue  increased  primarily  due to a  $114,065,  or  13%,
increase  in 1997 in  cellular  switch  and  transport  revenues.  The  increase
reflects  customer growth and increased  utilization of the network with message
volumes  increasing  87% from 288.4 million for the 1996 period to 540.0 million
for the comparable 1997 period.

EXPENSES.  Operating expenses increased $542,049, or 22%, for 1997
primarily to support the growth of Illuminet's SS7 network.  The increase
was comprised of increased  personnel  expenses  related to new  positions,  and
increased maintenance costs for new hardware and software.

Selling,  general and  administrative  expenses were comparable for the 1996 and
1997 periods.  Reductions in personnel  expenses  resulting from Merger- related
position  reductions were offset by increased  travel expenses and new marketing
material costs related to increased sales and marketing efforts.

Depreciation and amortization expenses were comparable for 1996 and 1997 but are
expected to increase with the placing into service of new network equipment.

Network operating expenses increased $838,453, or 30%, for 1997 due to increased
leased network  connectivity,  link, and LATA access charges incurred to support
growth in customer connectivity to the SS7 network.

INTEREST  INCOME/INTEREST  EXPENSE.  Interest income increased by $9,149, or 8%,
from  $120,767 for the three  months  ended June 30,  1996,  to $129,916 for the
comparable  1997 period.  This increase  resulted  primarily from an increase in
available cash balances over the two periods resulting from the Merger.

Interest expense  increased  $29,124,  or 8%, from $378,007 for the three months
ended June 30, 1996 to $407,131  for the 1997 period.  The  increase  reflects a
higher aggregate  outstanding debt balance resulting from an additional loan for
a total of  approximately  $2.7 million  obtained from Rural  Telephone  Finance
Cooperative in December, 1996.

                                          12
<PAGE>

EARNINGS

ILLUMINET's  net income  increased  $999,806  from $956,014 for the three months
ended June 30, 1996, to $1,955,820 for the comparable 1997 period. This increase
primarily  reflects an increase in network usage measurement  revenues,  and the
impact of the post-Merger operational  efficiencies that have reduced costs as a
percentage of revenues.

ILLUMINET's net income increased  $791,290 from $1,164,530 to $1,955,820 for the
three months  ended June 30, 1996 and 1997,  respectively,  primarily  resulting
from positive revenue trends and by the completion of the Merger in 1996.

FORWARD LOOKING INFORMATION

ILLUMINET is including the following cautionary statement to make applicable and
take  advantage of the new "safe harbor"  provisions  of the Private  Securities
Litigation  Reform Act of 1995 for any  forward-looking  statement made by or on
behalf of, ILLUMINET.  The factors  identified in this cautionary  statement are
important factors (but not necessarily all of the important  factors) that could
cause  actual  results  to  differ   materially  from  those  expressed  in  any
forward-looking statement made by, or on behalf of, ILLUMINET.

Where any such forward-looking statement includes a statement of the
assumptions  or  basis  underlying  such  forward-looking  statement,  ILLUMINET
cautions that,  while it believes such assumptions or basis to be reasonable and
makes them in good faith,  assumed facts or basis almost always vary from actual
results,  and the differences  between assumed facts or basis and actual results
can be material, depending upon the circumstances. Where, in any forward-looking
statement,  ILLUMINET, or its management,  expresses an expectation or belief as
to future  results,  such  expectation  or belief is expressed in good faith and
believed to have a  reasonable  basis,  but there can be no  assurance  that the
statement of expectation or belief will result or be achieved or accomplished

Taking into account the  foregoing,  the following  are  identified as important
factors  that  could  cause  actual  results  to differ  materially  from  those
expressed in any forward-looking statement made by, or on behalf of, ILLUMINET:

a) Future  operating  results  will be  affected by the costs of  continuing  to
develop and expand  ILLUMINET's  business  which may be higher than  ILLUMINET's
expectations,  and ILLUMINET may be required to raise  additional  capital or to
borrow  funds to  complete  such  activities.  There  can be no  assurance  that
additional  funding  will be  available  if  such  funding  requirements  exceed
existing financing arrangements.

b) ILLUMINET's advanced data base, billing and collection,  and network services
are offered  directly by other  companies or groups of companies,  many of which
are  significantly  larger and better financed than ILLUMINET.  Future operating
results  will be  affected  by  ILLUMINET's  ability  to adjust  to  competitive
pressures impacting ILLUMINET's market acceptance or prices.

c)  Many  of  ILLUMINET's  customers  are  regulated  directly  by  the  Federal
Communications Commission or other state public utility commissions.  Changes in
regulations,   or  in  interpretation  of  existing   regulations,   may  affect
ILLUMINET's current or planned product and service offerings.

                                         13
<PAGE>

d) ILLUMINET's SS7 network traffic  tracking and measurement  software  products
were developed under ILLUMINET's patents in the United States and Canada. Future
operating results are subject to unforeseen events such as the cost, or failure,
to defend the validity of such patents.

LIQUIDITY AND CAPITAL RESOURCES

ILLUMINET  relies on a combination of cash generated from  operations,  debt and
equity  to  fund  service  development  and  expansion  activities.   Currently,
ILLUMINET's operating activities are generating positive cash flows. However, as
ILLUMINET   broadens  its  services  and  products  to  those  requiring  larger
investments   coupled  with  longer  periods  before  subsequent   revenues  are
generated,  ILLUMINET believes there may be increased pressure on cash generated
from operations.  ILLUMINET  anticipates  continued high levels of investment in
the  development  of new services and  products  over the next several  years as
ILLUMINET  processes  increased volumes relating to its network,  data base, and
billing-and-collection services, and broadens its product base to keep pace with
changing markets and customer needs.

ILLUMINET's working capital (current assets minus current liabilities) was
$9,688,341 as of June 30, 1997.  ILLUMINET's  cash and cash equivalent  balances
included   $7,713,000   required  as  working  capital  to  service  ILLUMINET's
clearinghouse  customers.  Such funds are  received  and  disbursed on a monthly
basis. The increase in working capital of $5,383,378 from $4,304,963 at June 30,
1996,  reflects  the  increase  in  cash  balances  from  operating  activities,
increased  accounts  receivable,  and reductions in  liabilities  assumed in the
Merger.  These  positive  changes were offset by increased  payables  related to
ILLUMINET's growing clearinghouse  program, and the increased current portion of
long-term  debt.  ILLUMINET  believes  that its existing  cash  balances,  funds
generated from its operations and borrowings available under its existing credit
agreements will be sufficient to meet existing  capital  expenditure and working
capital needs for the immediate future.

ILLUMINET's  expenditures for property and equipment were $3,417,692 for the six
months  ended June 30,  1997.  Expenditures  for  property  and  equipment  were
primarily for network equipment.

At June 30, 1997,  ILLUMINET had a secured line of credit expiring August, 2001,
with RTFC that permits  ILLUMINET to borrow up to $7,300,000,  not to exceed 80%
of accounts  receivable.  There were no borrowings against the line of credit at
June 30, 1997. Additionally at June 30, 1997, ILLUMINET had $5,188,007 of unused
loan facilities  established or committed with RTFC,  maturing in the years 2000
and 2001.

                                        14
<PAGE>
                                PART II
                           OTHER INFORMATION

ITEM 1:       LEGAL PROCEEDINGS
                  None

ITEM 2:       CHANGES IN SECURITIES
                  None

ITEM 3:       DEFAULTS UPON SENIOR SECURITIES
                  Not applicable

ITEM 4:      SUBMISSION  OF  MATTERS TO A VOTE OF  SECURITY-HOLDERS  At the
                Annual Meeting of Stockholders of USTN Holdings, Inc. ("USTN"),
                held on April 30, 1997, the following  numbers of votes were 
                cast for the matters indicated:

1.  Proposal to amend USTN's Certificate of Incorporation to change the name 
    of USTN to Illuminet Holdings, Inc.:
                                          Broker
    For             Against   Abstain     Non-Vote
    ---------       -------   -------     --------
    3,961,371          0       72,053     1,472,563

2.  Election of two Class I Directors of USTN to a three-year  term  expiring 
    at the 2000 Annual Meeting:
                                                             Broker
    Nominee                  For       Against   Abstain     Non-Vote
    --------------------     ---       -------   -------     --------
    Kenneth L. Lein        4,023,124       724     9,576    1,472,563
    G.I. Ross              4,023,848         0     9,576    1,472,563

    The following individuals continued as USTN directors after the Annual
    Meeting:

    Richard A. Lumpkin
    Gregory J. Wilkinson
    Theodore D. Berns
    Eugene L. Cole
    Aubrey E. Judy
    James S. Quarforth
    James W. Strand

ITEM 5:     OTHER INFORMATION
              None

ITEM 6:     EXHIBITS AND REPORTS ON FORM 8-K
             (a)  EXHIBITS REQUIRED TO BE FILED BY ITEM 601
                  OF REGULATION S-B
                  Exhibit 11 - Computation of Earnings Per Share
                  Exhibit 27 - Financial Data Schedule

             (b)  REPORTS ON FORM 8-K
                  No  reports on Form 8-K were  filed  during  the three  months
                  ended June 30, 1997.

                                        15
<PAGE>

                                   SIGNATURES

In accordance with  requirements of the Exchange Act, the Registrant caused this
report to be signed on its behalf by the undersigned, thereunto duly authorized.

                                        ILLUMINET HOLDINGS, INC.



Date:  August 8, 1997                   By:  /s/ Daniel E. Weiss
                                             ---------------------------
                                             Daniel E. Weiss, Vice President -
                                             Finance and Treasurer
                                             (Principal Accounting Officer)

                                        16


<PAGE>

                                                                     EXHIBIT 11
                           ILLUMINET HOLDINGS, INC.

Computation of Earnings Per Share
<TABLE>
<CAPTION>

                                                   Three Months Ended                   Six Months Ended
                                                         June 30,                             June 30,
                                                  1997               1996                1997           1996
                                             -----------------------------          -------------------------
<S>                                          <C>                 <C>                 <C>             <C>
Primary:

Average common shares
outstanding                                  5,270,694           5,161,152           5,273,942       4,688,226
                                             =========           =========           =========       =========

Net income                                  $1,955,820           $ 956,014          $3,316,036      $  508,497
                                             =========            ========           =========       =========

Per share amount                            $     0.37           $    0.19          $     0.63      $     0.11
                                             =========            ========           =========       =========

Fully diluted:

Primary average common
    shares outstanding                       5,270,694           5,161,152           5,273,942       4,688,226
Assumed conversion of
    ILLUMINET 7.5%
    Debentures                                 907,923             946,853             911,393               -
Assumed conversion of
    ILLUMINET Series A
    Preferred Stock                            224,036              22,770             224,175               -
                                             ---------           ---------           ---------       ---------
                                             6,402,653           6,130,775           6,409,509       4,688,226
                                             =========           =========           =========       =========

Net income                                  $1,955,820           $ 956,014          $3,316,036      $  508,497
Add ILLUMINET 7.5%
    Debenture interest,
    net of federal
    income tax effect                          129,598              68,177             260,473               -
                                             ---------           ---------           ---------       ---------
Totals                                      $2,085,418          $1,024,191          $3,576,509      $  508,497
                                             =========           =========           =========       =========

Per share amount                            $     0.33          $     0.17          $     0.56      $     0.11
                                             =========           =========           =========       =========
</TABLE>