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 March 31, 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

                         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 March 31, 1997,  5,278,430 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>








                     USTN HOLDINGS, INC.

              INDEX TO 10-QSB FOR THE QUARTERLY
                 PERIOD ENDED MARCH 31, 1997


                                                                      Page

     PART I:  FINANCIAL INFORMATION

     ITEM 1:  FINANCIAL STATEMENTS

       USTN Holdings, Inc. Consolidated Balance Sheet - March 31, 1997   2

       USTN Holdings, Inc. Consolidated Statements of Operations -
       Three Months ended March 31, 1997 and 1996                        4

       USTN Holdings, Inc. Consolidated Statements of Cash Flows -
       Three Months ended March 31, 1997 and 1996                        5

       Notes to Consolidated Financial Statements - March 31, 1997       6

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

   PART II:  OTHER INFORMATION

   ITEM 1:  LEGAL PROCEEDINGS                                           13

   ITEM 2:  CHANGES IN SECURITIES                                       13

   ITEM 3:  DEFAULTS UPON SENIOR SECURITIES                             13

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

   ITEM 5:  OTHER INFORMATION                                           13

   ITEM 6:  EXHIBITS AND REPORTS ON FORM 8                              13

   SIGNATURES                                                           14



                             1




<PAGE>


                            PART I
                    FINANCIAL INFORMATION



ITEM 1: FINANCIAL STATEMENTS

                     USTN HOLDINGS, INC.

                  Consolidated Balance Sheet

                        March 31, 1997


          ASSETS                                                  1997
          ------                                                  ----
Current assets:
    Cash and cash equivalents                               $ 9,756,514
    Accounts receivable, less allowance
    for doubtful accounts of $410,000                        23,940,445
    Prepaid expenses and other                                  418,168
                                                             ----------
    Total current assets                                     34,115,127
                                                             ----------
Property and equipment:
    Land                                                        911,765
    Building and leasehold improvements                       6,907,436
    Equipment and furniture                                   2,510,631
    Network assets                                           24,385,206
    Capitalized network costs                                 8,188,112
    Computer hardware and software                           16,062,620
                                                             ----------
                                                             58,965,770
    Less:  Accumulated depreciation and amortization         28,067,237
                                                             ----------
    Total property and equipment                             30,898,533
                                                             ----------

  Computer software product costs, less
  accumulated amortization of $802,000                        2,056,508
  Other assets, net of accumulated
  amortization of $89,000                                     2,743,341
                                                             ----------
Total assets                                                $69,813,509
                                                             ==========


 See accompanying notes to consolidated financial statements.

                             2




<PAGE>






                     USTN HOLDINGS, INC.

            Consolidated Balance Sheet, Continued

                        March 31, 1997


LIABILITIES AND SHAREHOLDERS' EQUITY                           1997
---------------------------------                              ----
Current liabilities:
    Trade accounts payable                                $ 2,566,160
    Accrued expenses                                        2,257,922
    Due to customers                                       19,120,756
    Current portion of long-term debt                       2,205,407
                                                           ----------
    Total current liabilities                              26,150,245
                                                           ----------

  Long-term debt, less current portion                     20,486,739
                                                           ----------
    Total non-current liabilities                          20,486,739
                                                           ----------

Shareholders' equity:
    USTN Holdings, Inc. Series A Convertible Preferred
       Stock, par value $.01 per share, authorized 4,416
       shares, issued and outstanding 2,632                       26
    USTN Holdings, Inc. Preferred Stock, par value $.01
       per share, authorized 95,584 shares, none issued
       or outstanding                                              -
    USTN Holdings, Inc. Common Stock, par value $.01 per
       share, authorized 12,000,000 shares, issued and
       outstanding 5,278,430                                   52,784
    Additional paid-in capital                             10,757,347
    Retained earnings                                      12,366,368
                                                           ----------
    Total shareholders' equity                             23,176,525
                                                           ----------
Total liabilities and shareholders' equity                $69,813,509
                                                           ==========



 See accompanying notes to consolidated financial statements.

                             3



<PAGE>






                     USTN HOLDINGS, INC.

            Consolidated Statements of Operations

          Three Months Ended March 31, 1997 and 1996


                                                1997         1996
                                                ----         ----

Revenues                                   $11,571,891   $5,966,911
                                           ----------     ---------
Expenses:
    Operating                                2,924,993    2,313,073
    Selling, general and administrative      2,342,458    1,553,695
    Depreciation and amortization            1,532,565    1,106,566
    Network operating                        3,161,221    1,000,047
    Corporate realignment                            -      350,067
                                            ----------    ---------
                          Total expenses     9,961,237    6,323,448
                                            ----------    ---------
Operating income (loss)                      1,610,654     (356,537)

Interest income                                131,021       89,090
Interest expense                              (353,699)    (180,070)
                                            ----------    ---------
Income (loss) before income taxes            1,387,976     (447,517)

Income tax provision                            27,760           -
                                            ----------    ---------
Net income (loss)                          $ 1,360,216   $ (447,517)
                                            ==========    =========
Weighted average common shares               5,277,226    4,215,300
                                            ==========   ==========
Primary earnings (loss) per share           $     0.26   $    (0.11)
                                            ==========   ==========
Fully diluted earnings (loss) per share     $     0.23   $    (0.11)
                                            ==========   ==========



 See accompanying notes to consolidated financial statements.

                             4



<PAGE>






                               USTN HOLDINGS, INC.

                      Consolidated Statements of Cash Flows

                    Three Months Ended March 31, 1997 and 1996


                                                          1997         1996
                                                          ----         ----

Cash flows from operating activities:

    Cash received from customers                       $40,747,257  $34,105,567
    Interest received                                      133,650       86,965
    Cash paid to customers, suppliers and employees    (40,065,359) (31,317,836)
    Income taxes paid                                     (111,921)           -
    Income tax refund                                            -      173,795
    Interest paid                                         (448,831)    (152,370)
                                                         ----------   ----------
    Net cash provided by operating activities               254,796   2,896,121
                                                         ----------   ----------

Cash flows from investing activities:

    Cash acquired in acquisition of Independent
    Telecommunications Network, Inc               .              -      613,086
    Capital expenditures                                (2,565,711)    (793,816)
                                                         ----------   ----------
    Net cash used by investing activities               (2,565,711)    (180,730)
                                                         ----------   ----------
Cash flows from financing activities:

    Principal payments on notes payable                   (447,078)    (257,747)
                                                         ----------   ----------

Net increase(decrease)in cash and cash equivalents      (2,757,993)   2,457,644

Cash and cash equivalents at:

    Beginning of year                                   12,514,507    6,992,206
                                                        ----------    ----------
    End of period                                      $ 9,756,514  $ 9,449,850
                                                        ==========   ===========

 See accompanying notes to consolidated financial statements.

                             5



<PAGE>

                         USTN HOLDINGS, INC.

               Notes to Consolidated Financial Statements

                        March 31, 1997 (unaudited)


(1)  BASIS OF PRESENTATION

The  consolidated   financial  statements  of  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 USTN 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 quarters ended March 31, 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 would have
been as follows:

                                                 Three months ended March 31,
                                                 ----------------------------
                                                    1997             1996
                                                    ----             ----
       Revenues                                 $11,571,891       $9,694,448
                                                 ==========        =========
       Net income (loss)                        $ 1,360,216       $ (742,513)
                                                 ==========        =========
       Income (loss) per common share           $      0.26       $    (0.14)
                                                 ==========        =========

(4)  SUBSEQUENT EVENT

On April 30, 1997, USTN Holdings, Inc. stockholders approved the change in
name of USTN Holdings, Inc. to Illuminet Holdings, Inc.






                             7



<PAGE>






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

BASIS OF PRESENTATION

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

Three Months Ended March 31, 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                     $ 1,761,297   $ 2,095,550
Data base services                                    2,028,629     1,675,311
Network usage measurement                               784,409             -
Other services                                           70,916       251,261
                                                     ----------    ----------
                                                      4,645,251     4,022,122
                                                     ----------    ----------
Services acquired by Merger:
---------------------------
  Intelligent network services                        5,725,206     5,127,175
  Wireless services                                   1,201,434       545,151
                                                     ----------    ----------
                                                      6,926,640     5,672,326
                                                     ----------    ----------
Pro forma revenue                                    11,571,891     9,694,448
Financial statement reporting adjustment
  for operations prior to the Merger                          -   ( 3,727,537)
                                                     ----------    ----------
Revenues per statements of operations               $11,571,891   $ 5,966,911
                                                     ==========    ==========

Billing-and-collection  services  revenues  for 1997  decreased  primarily  as a
result of a $326,943,  or 19%, decrease in clearinghouse  product line revenues.
This  decrease  reflects a fourth  quarter 1996 price  decrease  offset by a 22%
increase  in messages  processed  from 14.4  million in 1996 to 17.5  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") product line revenues  partially offset by a reduction in Line
Information  Data Base ("LIDB") product line revenues.  CNAM revenues  increased
$291,737,  or 394%, in 1997, reflecting growing market acceptance of the service
introduced  in 1995.  CNAM queries  increased  162% from 20.3 million in 1996 to
53.2  million  in  1997.  LIDB  revenues  decreased  $62,937,  or 5%,  in  1997,
reflecting a 13% decrease in queries processed from 39.2 million in 1996 to 34.2
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 $190,299
for the 1996 period.

Intelligent  network services revenues for 1997 increased  primarily as a result
of a $628,139, or 62%, increase in trunk signaling and related service revenues,
reflecting  new customer  growth.  Network  connectivity  product line  revenues
increased $135,840, or 7%, from growth in chargeable customer links.  Offsetting
the revenue  growth in these product lines,  LIDB switch and transport  revenues
decreased  $225,876,  or 22%,  in 1997 due to lower  query  volumes  and reduced
prices brought on by competition.

Wireless  services  revenue  increased  primarily  due to a  $596,151,  or 113%,
increase  in 1997 in  cellular  switch  and  transport  revenues.  The  increase
reflects  customer growth and increased  utilization of the network with message
volumes  increasing 123% from 184.6 million for the 1996 period to 411.4 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                                            $2,924,993    $2,668,872
Selling, general and administrative                   2,342,458     2,449,906
Depreciation and amortization                         1,532,565     1,555,515
Network operating                                     3,161,221     2,773,786
Corporate realignment                                         -       700,875
                                                      ---------    ----------
Pro forma expenses                                    9,961,237    10,148,954
Financial statement reporting adjustment
  for operations prior to the Merger                          -    (3,825,506)
                                                      ---------    ----------
Expenses per statements of operations                $9,961,237   $ 6,323,448
                                                      =========    ==========

ILLUMINET's  primary costs are network operating  expenses followed by personnel
costs,  depreciation  and  amortization  of hardware,  software  and  facilities
assets, and software maintenance expenses.



                              9

<PAGE>


Operating expenses increased $256,121, or 10%, 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  $107,448,  or 4%, 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.
Such equipment has been installed to expand network capacity.

Network operating expenses increased $387,435, or 14%, 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 $41,931, or 47%,
from  $89,090 for the three  months  ended March 31,  1996,  to $131,021 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  $24,526,  or 23%,  from
$106,495 for the 1996 period to $131,021 for the 1997 period.

Interest expense increased $173,629,  or 96%, from $180,070 for the three months
ended March 31, 1996 to $353,699  for the 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 decreased $40,803, or 10%, from $394,502
for the 1996 period to $353,699 for the comparable 1997 period.

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  $1,807,733 from a net loss of $(447,517) for
the three  months  ended March 31,  1996,  to net income of  $1,360,216  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,  and the  impact of the post-


                             10

<PAGE>

Merger operational efficiencies that have reduced costs as a percentage of 
revenues.

On a pro forma basis,  ILLUMINET's  net income  increased  $2,102,729 from a net
loss of $(742,513) to net income of $1,360,216  for the three months ended March
31, 1996 and 1997,  respectively,  primarily  resulting  from  positive  revenue
trends and by 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.

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.

d) ILLUMINET's SS7 network traffic  tracking and measurement  software  products
were developed under ILLUMINET's patents in the United States and Canada. Future


                               11

<PAGE>




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
$7,964,882 as of March 31, 1997.  ILLUMINET's cash and cash equivalent  balances
included   $6,803,000   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 $3,801,615  from $4,163,267 at March
31, 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  $2,565,711  for the
three months ended March 31, 1997.  Expenditures for property and equipment were
primarily for network equipment.

At March 31, 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
March 31, 1997.  Additionally  at March 31, 1997,  ILLUMINET  had  $5,188,007 of
unused loan facilities established or committed with RTFC, maturing in the years
2000 and 2001.





                             12


<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
           None

        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
            March 31, 1997.





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<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.

                               USTN HOLDINGS, INC.



Date:  May 12, 1997            By:  /s/ Daniel E. Weiss
                                   -------------------------------------
                               Daniel E. Weiss, Vice President - Finance
                                  and Treasurer
                               (Principal Accounting Officer)






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