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

                                    Form 10-Q

 (Mark One)

X        QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2000
                                                                  OR

o        TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934

For the transition period from                                         to

                         Commission File Number 0-27412

                                COTELLIGENT, INC.
             (Exact name of registrant as specified in its charter)


                 Delaware                          94-3173918
(State of other jurisdiction of                  (I.R.S. Employer
 incorporation or organization)                 Identification No.)

101 California Street, Suite 2050
    San Francisco, California                          94111
(Address of principal executive offices)             (Zip Code)

                                 (415) 439-6400
              (Registrant's telephone number, including area code)



(Former name, former address and former fiscal year, if changed since last
 report)

     Indicate by check mark  whether the  registrant:  (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days.

Yes      X              No



At November 10, 2000 there were 15,303,402 shares of common stock outstanding.

<PAGE>


                                COTELLIGENT, INC.


                                      INDEX

                         Part I - Financial Information

<TABLE>
<CAPTION>

Item 1. Financial Statements                                                       Page
<S>                                                                             <C>
Cotelligent, Inc.
         Consolidated Balance Sheets at September 30, 2000 (Unaudited)
            and March 31, 2000                                                      3
         Consolidated Statements of Operations for the Three & Six Months Ended
            September 30, 2000 and 1999 (Unaudited)                                 4
         Consolidated Statements of Cash Flows for the Six Months Ended
            September 30, 2000 and 1999 (Unaudited)                                 5
         Notes to Consolidated Financial Statements (Unaudited)                     6

Item 2. Management's Discussion and Analysis of Financial Condition and Results
            of Operations                                                          10

Item 3. Quantitative and Qualitative Disclosures About Market Risk                 13


                           Part II - Other Information


Item 6. Exhibits and Reports on Form 8-K                                           14

Signatures                                                                         15
</TABLE>
                                       2

<PAGE>
                         PART I - FINANCIAL INFORMATION


Item 1.  Financial Statements

                                COTELLIGENT, INC.
                           CONSOLIDATED BALANCE SHEETS
                        (In thousands, except share data)

<TABLE>
<CAPTION>

                                                                        September 30,            March 31,
                                                                             2000                  2000
                                                                       -----------------     ------------------
                                                                         (Unaudited)
                             ASSETS
<S>                                                                    <C>                   <C>
Current assets:
   Cash and cash equivalents..................................          $        26,420       $          4,794
   Accounts receivable, including unbilled accounts of $5,337
      and $5,716 and net of allowance for doubtful accounts...
      of $1,652 and $1,880,respectively.......................                   21,431                 23,435
   Deferred income taxes......................................                       -                     564
   Current portion of notes receivable from officers and......
   related party..............................................                      494                    505
   Prepaid expenses and other.................................                    1,731                  2,289
   Net assets of discontinued operations......................                       -                  84,721
                                                                       -----------------     ------------------
     Total current assets.....................................                   50,076                116,308
Property and equipment, net...................................                    8,083                  5,697
Goodwill, net of accumulated amortization of $1,899 and.......
        $1,913, respectively..................................                   24,514                 35,236
Investments...................................................                   20,779                    253
Notes receivable from officers................................                      706                  1,119
Other assets..................................................                      669                    797
                                                                       -----------------    -------------------
     Total assets.............................................          $       104,827           $    159,410
                                                                       =================     ==================

              LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
   Short-term debt and current maturities of long-term debt...          $            35       $         48,958
   Accounts payable...........................................                    1,315                  2,055
   Accrued compensation and related payroll liabilities.......                    6,493                  6,312
   Income taxes payable.......................................                      831                  1,957
    Amounts due sellers of acquired business..................                       -                   8,386
    Deferred income taxes.....................................                      175                     -
   Other accrued liabilities..................................                    9,959                  5,710
                                                                       -----------------     ------------------
     Total current liabilities................................                   18,808                 73,378
Long-term debt................................................                       51                     52
                                                                       -----------------     ------------------
     Total liabilities........................................                   18,859                 73,430
                                                                       -----------------     ------------------

Stockholders' equity:
  Preferred Stock, $0.01 par value; 500,000 shares authorized,
    no shares issued or outstanding...........................                       -                      -
  Common Stock, $0.01 par value; 100,000,000 shares...........
    authorized, 15,303,402 and 15,065,400 shares issued.......
    and outstanding, respectively.............................                      153                    151
  Additional paid-in capital..................................                   87,439                 85,442
    Notes receivable from stockholders........................                   (6,333)                (6,149)
  Retained earnings...........................................                    4,709                  6,536
                                                                       -----------------       -----------------
    Total stockholders' equity................................                   85,968                 85,980
                                                                      ------------------      ------------------
                                                                       $        104,827        $       159,410
     Total liabilities and stockholders' equity...............         =================     ===================

</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.

                                       3

<PAGE>

                                COTELLIGENT, INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                        (In thousands, except share data)
                                   (Unaudited)

<TABLE>
<CAPTION>

                                                              Three Months Ended                    Six Months Ended
                                                                  September 30,                       September 30,
                                                       --------------------------------     -----------------------------------
                                                            2000               1999                2000               1999
                                                       --------------     -------------     ----------------     ---------------
<S>                                                    <C>                <C>               <C>                  <C>
Revenues...........................................     $     22,475       $    26,162       $       46,228       $      52,968
Cost of services...................................           14,904            17,217               31,404              34,273
                                                       --------------     -------------     ----------------    ----------------
        Gross profit...............................            7,571             8,945               14,824              18,695
Selling, general and administrative expenses.......           11,440             9,960               23,966              19,840
Depreciation and amortization of goodwill..........              987               816                2,029               1,539
                                                       --------------     -------------     ----------------    ----------------
Operating loss.....................................           (4,856)           (1,831)             (11,171)             (2,684)
Other income (expense):
   Interest expense................................               (8)             (755)              (1,564)             (1,407)
   Interest income.................................              543                 8                  592                 126
   Other...........................................               (7)                6                   42                 (54)
                                                       --------------     -------------     ----------------    ----------------
     Total other income (expense)..................              528              (741)                (930)             (1,335)
                                                       --------------     -------------     ----------------    ----------------
Loss before provision for income taxes............            (4,328)           (2,572)             (12,101)             (4,019)
Benefit for income taxes...........................            1,472               900                4,115               1,407
                                                       --------------     -------------     ----------------    ----------------
Loss from continuing operations....................           (2,856)           (1,672)              (7,986)             (2,612)
                                                       --------------     -------------     ----------------    ----------------
Operating income (loss) from discontinued
   operations, net of income tax (benefit) of
  $142, $940, $1,693 and $(6,966) .................              148             1,751                1,763             (13,643)
Gain on sale of discontinued operations, net
  of income taxes of $4,224........................               -                 -                 4,396                -
                                                       --------------     -------------     ----------------    ----------------
Income (loss) from discontinued operations.........              148             1,751                6,159             (13,643)
                                                       --------------     -------------     ----------------    ----------------
Net income (loss)..................................    $      (2,708)     $         79      $       ( 1,827)    $       (16,255)
                                                       ==============     =============     ================    ================

Earnings (loss) per share:
Basic and diluted -
Loss from continuing operations....................    $       (0.19)     $       (0.12)    $         (0.53)    $         (0.19)
Income (loss) from discontinued operations.........             0.01               0.13                0.41               (1.01)
                                                       ==============     ==============    ================    ================
Net income (loss) .................................    $       (0.18)     $        0.01     $         (0.12)    $         (1.20)
                                                       ==============     ==============    ================    ================
Weighted average shares outstanding
       Basic.......................................       15,235,827         13,565,326          15,180,040          13,513,452
                                                       ==============     ==============    ================    ================
       Diluted.....................................       15,235,827         13,573,264          15,180,040          13,513,452
                                                       ==============     ==============    ================    ================
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.

                                       4

<PAGE>

                                COTELLIGENT, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (In thousands)
                                   (Unaudited)

<TABLE>
<CAPTION>

                                                                                   Six Months Ended September 30,
                                                                                ------------------- -- -------------------
                                                                                    2000                   1999
                                                                                -------------------    -------------------
<S>                                                                          <C>                    <C>
Cash flows from operating activities:
     Net loss........................................................           $        (1,827)       $       (16,255)
     Adjustments to reconcile net loss to net cash
         Provided by (used in ) operating activities:
                Gain on sale of discontinued operations..............                    (4,396)                     -
                Operating (income) loss from discontinued operations.                    (1,763)                13,643
                Equity loss from investments.........................                        11                      -
                Depreciation and amortization of goodwill............                     2,029                  1,275
                Deferred income taxes, net...........................                     2,789                  1,538
                Loss on disposal of property and equipment...........                        17                      7
                Provision for doubtful accounts......................                     1,145                    202
                Changes in current assets and liabilities:
                      Accounts receivable, net.......................                      (247)                (4,391)
                      Prepaid expenses and other current assets......                      (366)                  (497)
                      Accounts payable and accrued expenses..........                    (2,551)                (1,329)
                      Income taxes payable...........................                    (1,126)                (3,473)
                Changes in other assets..............................                       124                   (409)
                                                                                -------------------    -------------------
    Cash used for operating activities...............................                    (6,161)                (9,689)
Cash flows provided by (used for) investing activities:
     Proceeds from sale of property and equipment ...................                        -                       6
     Purchase of businesses, net of cash acquired....................                        -                    (771)
     Investments.....................................................                    (7,377)                     -
     Purchases of property and equipment ............................                    (1,270)                (1,767)
                                                                                -------------------    -------------------
     Cash used for investing activities .............................                    (8,647)                (2,532)
Cash flows provided by (used for) financing activities:
     Borrowing under Credit Agreement................................                     9,111                 19,830
     Payments on Credit Agreement....................................                   (57,890)                     -
     Payments on amounts due sellers of acquired business............                    (8,534)                  (730)
     Borrowing (payments) on capital lease obligations ..............                       (57)                    86
     Repayments (borrowing) on notes receivable from officers .......                       449                 (1,149)
     Net proceeds on issuance of stock ..............................                       344                    723
     Repurchase of common stock......................................                         -                 (2,233)
                                                                                -------------------    -------------------
     Cash provided by (used for) financing activities................                   (56,577)                16,527
Cash flows provided by (used for) discontinued operations:
     Cash provided by (used for) discontinued operations.............                   (19,470)                (5,061)
     Proceeds from sale of IT staff augmentation business............                   112,481                      -
                                                                                -------------------    -------------------
     Cash provided by (used for) discontinued operations.............                    93,011                 (5,061)
                                                                                -------------------    -------------------
Net increase (decrease) in cash......................................                    21,626                   (755)
Cash at beginning of period..........................................                     4,794                    972
                                                                                -------------------    -------------------
Cash at end of period................................................           $        26,420        $           217
                                                                                ===================    ===================
Supplemental disclosures of cash flow information:
     Interest paid...................................................           $         1,914        $         1,432
     Income taxes paid...............................................           $            29        $         2,367
     Net book value of assets contributed to joint venture...........           $        11,311        $             -
     Issuance of warrants in exchange for warrants received..........           $           900        $             -
     Fair value of Common Stock issued to seller of acquired
     business........................................................           $           572        $             -
     Return of Common Stock previously issued to employee for
     note receivable.................................................           $           113        $             -

</TABLE>

The accompanying notes are an integral part of these consolidated financial
 statements.

                                       5
<PAGE>

                                COTELLIGENT, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          (Dollar amounts in thousands)
                                   (Unaudited)


Note 1 -  Business  Organization  and Basis of  Presentation  Cotelligent,  Inc.
("Cotelligent" or the "Company"), a Delaware corporation, was formed in February
1993 to acquire, own and operate software consulting businesses  specializing in
providing  information  technology  ("IT")  consultants  on a contract basis and
consulting and  outsourcing  services to businesses  with complex IT operations.
The Company was inactive  until  February 1996 when it acquired  four  companies
simultaneously  and completed its initial public offering.  Since that date, the
Company has acquired 22 IT consulting  businesses.  These  financial  statements
include the accounts of Cotelligent and its subsidiaries.

During the fiscal year ended March 31,  2000,  the Company was  organized in two
practice groups,  Technology Solutions and Professional  Services (also known as
its IT staff  augmentation  business),  and  conducted  operations  from offices
across the United States and from international consultant recruiting offices in
Brazil and the Philippines.  Prior to March 31, 2000, the Company entered into a
plan to divest its IT staff augmentation business. On June 30, 2000, the Company
sold the  majority of its IT staff  augmentation  business  and on July 14, 2000
sold another component of its IT staff augmentation business.  Accordingly,  the
accompanying  consolidated  financial statements and related footnotes have been
prepared to present as  discontinued  operations  the  remaining  portion of the
Company's IT staff  augmentation  business that the Company has determined to be
non-strategic and that it intends to dispose of or shut down.

Note 2 - Summary of Significant Accounting Policies
The  accompanying  interim  financial  statements do not include all disclosures
included in the financial statements in Cotelligent's Annual Report on Form 10-K
for the year ended March 31, 2000 ("Form 10-K"),  and therefore  these financial
statements should be read in conjunction with the financial  statements included
on Form 10-K.

In the opinion of management,  the interim financial statements filed as part of
this Quarterly Report on Form 10-Q reflect all adjustments  necessary for a fair
presentation of the financial position and the results of operations and of cash
flows for the interim periods presented. Certain balances of the prior year have
been reclassified to conform to the current presentation.

Note 3 - Changes in Stockholders' Equity

<TABLE>
<CAPTION>



                                                                                  Notes
                                      Common Stock             Additional      Receivable                         Total
                                 ------------------------       Paid-In           From          Retained       Stockholders'
                                   Shares        Amount         Capital       Stockholders      Earnings         Equity
                                 -----------     --------     -----------    -------------     ----------    --------------
<S>                              <C>             <C>          <C>            <C>               <C>           <C>
Balance at March 31, 2000.....   15,065,400      $    151     $   85,442      $    (6,149)      $  6,536     $      85,980

Issuance of Common Stock......      163,002             2            638             (297)             -               343
Shares issued in connection
with earn-out to sellers of
acquired business.............      100,000             1            571                -              -               572
Cancellation of LSPP Note.....      (25,000)           (1)          (112)             113              -                 -
Investment in warrants
received in connection with
investment in joint venture...            -             -            900                -              -               900
Net income....................            -             -              -                -         (1,827)           (1,827)
                                 -----------     --------     -----------    -------------     ----------    --------------
Balance at September 30, 2000.   15,303,402      $    153     $   87,439      $    (6,333)      $  4,709     $      85,968
                                 ===========     ========     ===========    =============     ==========    ==============

</TABLE>

                                       6

<PAGE>

                                COTELLIGENT, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          (Dollar amounts in thousands)
                                   (Unaudited)


Note 4 - Discontinued Operations
In accordance  with  Accounting  Principles  Board Opinion No. 30, the following
financial  data  reflects  a summary  of  operating  results  for the  Company's
discontinued  operations  for the three and six months ended  September 30, 2000
and 1999.

Summary of Operating Results of Discontinued Operations:

<TABLE>
<CAPTION>


                                                   Three Months Ended                        Six Months Ended
                                            -----------------------------------     ---------------------------------
                                            September 30,       September 30,       September 30,     September 30,
                                                 2000                1999               2000               1999
                                            ----------------    ---------------     --------------    ---------------
<S>                                         <C>                 <C>                 <C>               <C>
Revenues...........................          $       7,688       $      59,461       $     65,056      $     121,221
Cost of services...................                  5,974              44,287             48,217             90,939
                                            ----------------    ---------------     --------------    ---------------
      Gross profit.................                  1,714              15,174             16,839             30,282
Selling, general and administrative                  1,424              11,683             12,526             24,388
expenses...........................
Depreciation and amortization of...
goodwill ..........................                     -                  798                875              1,579
Impairment of goodwill.............                     -                    -                  -             20,000
Restructuring charge...............                     -                    -                  -              4,920
                                            ----------------    ---------------     --------------    ---------------
      Operating income (loss)......                    290               2,693              3,438            (20,605)
Other income (expense).............                     -                   (2)                18                 (4)
                                            ----------------    ---------------     --------------    ---------------
Operating income (loss) before
provision for taxes................                    290               2,691              3,456            (20,609)
Provision (benefit) for income.....
taxes..............................                    142                 940              1,693             (6,966)
                                            ----------------    ---------------     --------------    ---------------
Operating income (loss) from.......
discontinued operations............          $         148       $       1,751      $       1,763     $      (13,643)
                                            ================    ===============     ==============    ===============

</TABLE>

On June 30, 2000,  the Company  sold the  majority of its IT staff  augmentation
business  for  $111,495  in cash paid at closing and the  assumption  of certain
liabilities totaling approximately $10,000. In addition,  $5,000 will be held in
escrow  for one year to cover  potential  contingent  claims by the  buyer.  The
Company may also be entitled to a  contingent  payment of up to $5,000  based on
the  operating  results of the sold business for the three months ended June 30,
2000.  Both  contingent  payments  are  subject to further  review and  analysis
between the Company and the buyer. The Company agreed to provide  administrative
information  systems  support to the acquirer for up to one-year  following  the
close of the sale.  In addition,  Cotelligent  is still the lessee under certain
leases of property.

On July 14,  2000,  the Company  sold its IT staff  augmentation  operations  in
Orlando for a cash payment of $650 and the assumption of  approximately  $385 of
certain  liabilities.  The Company has written  down the value of the net assets
related to this sale, including goodwill,  to zero during the quarter ended June
30, 2000.

On October 31, 2000,  the Company  sold its Global  Resources  International  IT
staff  augmentation  operations for a $4,500 secured  promissory  note,  bearing
interest at 9.5% per annum,  payable over 5 years.  The Company has written down
the value of the net assets related to this sale,  including  goodwill,  to zero
during the quarter ended June 30, 2000.

The Company  anticipates that it will dispose of the remaining  component of its
IT staff  augmentation  business in  discontinued  operations at a loss prior to
March 31, 2001. Consequently,  the Company has written down the value of the net
assets,  including goodwill, of these discontinued businesses to zero during the
quarter ended June 30, 2000.

The net gain on the  disposal  of these IT  staff  augmentation  businesses  was
$4,400 for the quarter  ended June 30, 2000 and the six months  ended  September
30, 2000.

                                       7

<PAGE>

                                COTELLIGENT, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          (Dollar amounts in thousands)
                                   (Unaudited)


Note 5 - Earnings (loss) Per Share
Earnings (loss) per share were as follows:
<TABLE>
<CAPTION>


                                                                 For the Three Months Ended September 30, 2000
                                                             -------------------------------------------------------
                                                                                                       Per Share
                                                               Income (loss)           Shares             Amount
                                                             ------------------     --------------     -------------
   <S>                                                       <C>                    <C>                <C>
   Basic and diluted earnings (loss) per share-
   Loss from continuing operations........................    $         (2,856)         15,235,827      $     (0.19)
   Income from discontinued operations....................                 148          15,235,827             0.01
                                                             ------------------                        -------------
   Net loss available to common stockholders .............    $         (2,708)         15,235,827      $     (0.18)



                                                                 For the Three Months Ended September 30, 1999
                                                             -------------------------------------------------------
                                                                                                       Per Share
                                                               Income (loss)           Shares             Amount
                                                             ------------------     --------------     -------------
   Basic earnings (loss) per share-
   Loss from continuing operations........................    $        (1,672)         13,565,326       $    (0.12)
   Income from discontinued operations....................              1,751          13,565,326             0.13
                                                             ------------------                        -------------
   Net income available to common stockholders ...........    $            79          13,565,326       $     0.01



   Diulted earnings (loss) per share-
   Loss from continuing operations........................   $         (1,672)         13,573,264       $    (0.12)
   Income from discontinued operations....................              1,751          13,573,264,            0.13
                                                             ------------------                        -------------
   Net income available to common stockholders............   $             79          13,573,264       $     0.01



                                                                  For the Six Months Ended September 30, 2000
                                                             -------------------------------------------------------
                                                                                                       Per Share
                                                               Income (loss)           Shares             Amount
                                                             ------------------     --------------     -------------
   Basic and diluted earnings (loss) per share-
   Loss from continuing operations........................   $         (7,986)         15,180,040       $     (0.53)
   Income from discontinued operations....................              6,159          15,180,040              0.41
                                                             ------------------                        -------------
   Net loss available to common stockholders .............   $         (1,827)         15,180,040       $     (0.12)



                                                                  For the Six Months Ended September 30, 1999
                                                             -------------------------------------------------------
                                                                                                       Per Share
                                                               Income (loss)           Shares             Amount
                                                             ------------------     --------------     -------------
   Basic and diluted earnings (loss) per share-
   Loss from continuing operations........................   $         (2,612)         13,513,452      $     (0.19)
   Loss from discontinued operations......................            (13,643)         13,513,452            (1.01)
                                                             ------------------                        -------------
   Net loss available to common stockholders .............   $        (16,255)         13,513,452      $     (1.20)



</TABLE>


Note 6 - Property and Equipment
In  connection  with the  disposal  of the  majority of the  Company's  IT staff
augmentation business,  certain technology fixed assets were included in the net
assets of  discontinued  operations  at March 31, 2000.  Subsequent to March 31,
2000, the Company determined that a portion of these assets will be retained for
use in  continuing  operations  and has  reclassified  $3,107 into  property and
equipment.

                                       8
<PAGE>

                                COTELLIGENT, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          (Dollar amounts in thousands)
                                   (Unaudited)


Note 7 - Credit Agreement
On June 30, 2000,  the Company used a portion of the cash proceeds from the sale
of the majority of its IT staff augmentation business to pay off all obligations
under  its  Amended  and  Restated  Senior  Secured  Credit  Agreement  ("Credit
Agreement"), dated March 12, 1999, with BankBoston N.A. and certain other banks.
Upon  settlement  of all  obligations  under the  Credit  Agreement,  the Credit
Agreement was terminated.

Note 8 - Income  Taxes
The effective tax rate varies from the U.S.  Federal  statutory tax rate for the
three  and  nine  months  ended  September  30,  2000,  principally  due  to the
following:
<TABLE>
<CAPTION>
                                                                           Continuing                Discontinued
                                                                           Operations                  Operations
                                                                     ----------------------   -----------------------
<S>                                                                  <C>                      <C>
U.S. Federal Statutory Tax Rate....................                                  34.0%                     34.0%
Consolidated state rate ...........................                                   3.0                       3.0
Meals and entertainment ...........................                                  (1.2)                      0.4
Amortization of non-deductible goodwill ...........                                  (1.8)                        -
Write-off of non-deductible goodwill...............                                     -                      11.7
                                                                     ----------------------    ----------------------
Effective tax rate.................................                                  34.0%                     49.1%
                                                                     ======================    ======================

</TABLE>

Note 9 - Change in Fiscal Year End
On July 19,  2000,  the Company  changed its fiscal year end to December 31 from
March 31. The Company will report the nine-month  period beginning April 1, 2000
and ending December 31, 2000 as a transition  period. The first new twelve-month
fiscal year will begin January 1, 2001.

Note 10 - Investments
During the quarter  September 30, 2000, the Company made certain  investments as
follows:

On July 18, 2000, the Company paid $2,000 to acquire a 35% ownership interest in
White Horse Interactive,  an integrated media agency. The Company is entitled to
appoint two of the five directors to the Board of White Horse  Interactive.  The
Company uses the equity method of accounting for this investment.

On August 8, 2000, the Company executed its definitive  joint venture  agreement
with bSmart.to Technologies,  Inc. The Company contributed:  (1) cash of $5,000,
of  which  $2,500  was  paid  directly  to the  joint  venture  and  $2,500  was
distributed   to  the   developer   of   certain   technology,   and   (2)   its
Philadelphia-based  IT  solutions  staff and ASP data center  and,  accordingly,
reclassified  $1,200 of working  capital and property  and  equipment as well as
$10,073 of goodwill,  in exchange for a 50%  interest in the joint  venture.  In
addition,  the Company incurred  approximately  $1,500 in transaction costs that
have been  capitalized  as a part of its  investment in the joint  venture.  The
Company will have  representation on the Board of Directors of the joint venture
equal to that of its joint venture  partner.  The Company uses the equity method
of accounting for this investment.

In  connection   with  the  investment  in  the  joint  venture  with  bSmart.to
Technologies, Inc., the Company issued and received from bSmart.to Technologies,
Inc.  warrants  for the  purchase  of common  shares.  Accordingly,  the Company
recognized an investment of $900 for the warrants received,  and a corresponding
amount in additional paid-in capital.

Note 11 - Subsequent Event
On October 31, 2000,  the Company  sold its Global  Resources  International  IT
staff  augmentation  operations for a $4,500 secured  promissory  note,  bearing
interest at 9.5% per annum, payable over 5 years.


                                       9
<PAGE>
Item 2.  Management's Discussion and Analysis of Financial Condition and Results
of Operations

Except for  statements of  historical  fact  contained  herein,  any  statements
contained in this report may be deemed to be  forward-looking  statements within
the  meaning of Section  27A of the  Securities  Act of 1933,  as  amended,  and
Section 21E of the  Securities  Exchange Act of 1934,  as amended.  For example,
words such as "may," "will,"  "should,"  "estimates,"  "predicts,"  "potential,"
"continue," "strategy," "believes," "anticipates," "plans," "expects," "intends"
and similar expressions are intended to identify forward-looking statements. All
such forward-looking statements are based upon current expectations that involve
risks and uncertainties.  Cotelligent's actual results and the timing of certain
events  may   differ   significantly   from  the   results   discussed   in  the
forward-looking  statements.  Factors that might cause or  contribute  to such a
discrepancy  include,  but are not  limited  to,  those  discussed  under  "Risk
Factors" in  Cotelligent's  Annual Report on Form 10-K for the fiscal year ended
March 31, 2000,  other filings made with the Securities and Exchange  Commission
and  Cotelligent's  press  release  announcing  earnings  for the quarter  ended
September  30,2000  issued  November  8,  2000.  The  following  discussion  is
qualified in its entirety by, and should be read in  conjunction  with, the more
detailed information set forth in our financial statements and the notes thereto
included elsewhere in this filing. All  forward-looking  statements  included in
this report are based upon  information  available to Cotelligent as of the date
thereof,   and  Cotelligent   assumes  no  obligation  to  update  any  of  such
forward-looking statements.
                                    OVERVIEW

Cotelligent  was  formed  in  February  1993  to  acquire,  own and  operate  IT
consulting  services   businesses.   During  the  year  ended  March  31,  2000,
Cotelligent  acquired one company on August 12, 1999,  which was  accounted  for
under the purchase method. The results of this acquisition have been included in
the Company's results from its acquisition date.

The Company derives substantially all of its revenues from IT consulting service
activities.  The  majority  of these  activities  are  provided  under  time and
materials billing arrangements,  and revenues are recorded as work is performed.
Revenues are directly related to the total number of hours billed to clients and
the associated  hourly billing rates.  Hourly billing rates are  established for
each service  provided and are a function of the type of work  performed and the
related  skill  level of the  consultant.  The  Company's  principal  costs  are
professional  compensation  directly  related to the performance of services and
related expenses.  Gross profits (revenues after  professional  compensation and
related  expenses)  are  primarily  a function  of hours  billed to clients  per
professional employee or consultant,  hourly billing rates of those employees or
consultants  and employee or consultant  compensation  relative to those billing
rates.  Gross profits can be adversely  impacted if services  provided cannot be
billed, if the Company is not effective in managing its service  activities,  if
fixed-fee  engagements  (which  historically  have not constituted a significant
portion of total revenues) are not properly priced, if consultant cost increases
exceed bill rate increases or if there are high levels of un-utilized time (work
activities  not  chargeable  to  clients or  unrelated  to client  services)  of
full-time  salaried  service  professional  employees.  Operating  income (gross
profit less  selling,  general and  administrative  expenses)  can be  adversely
impacted by increased selling, general and administrative staff compensation and
expenses related to growing and expanding the Company's  business,  which may be
incurred  before  revenues  or  economies  of  scale  are  generated  from  such
investments.  Historically,  a majority of the Company's revenues were generated
from  IT  staff   augmentation   activities.   Following  the   disposition   of
substantially  all of its IT staff  augmentation  business,  the majority of the
Company's  revenues will be generated by technology  solutions  activities which
require a higher level of selling, general and administrative  infrastructure to
generate revenues.

As a service  organization,  the Company  responds to service  demands  from its
clients.  Accordingly,  the  Company  has  limited  control  over the timing and
circumstances under which its services are provided.  Therefore, the Company can
experience  volatility  in its  operating  results from quarter to quarter.  The
operating results for any quarter are not necessarily  indicative of the results
for any future period.

                                       10
<PAGE>

                  CONSOLIDATED RESULTS OF CONTINUING OPERATIONS


Three Months Ended September 30, 2000 Compared to Three Months Ended
September 30, 1999

Revenues
Revenues decreased $3.7 million,  or 14.1%, to $22.5 million in the three months
ended  September 30, 2000 from $26.2 million in the three months ended September
30,  1999.  The  decrease  was due to a  general  reduction  in  demand  for the
Company's  services  coupled  with  the  discontinuation  of  revenues  from the
Philadelphia-based  operation  effective with its  contribution to the bSmart.to
joint  venture on August 8, 2000,  offset by an 18.1%  increase  in the  average
billing rate.  Gross Profit Gross profit  decreased $1.4 million,  or 15.4%,  to
$7.6 million in the three months ended  September  30, 2000 from $8.9 million in
the three months  ended  September  30, 1999.  The decrease was due to a general
reduction in demand for the Company's services coupled with the  discontinuation
of revenues and cost of services from the Philadelphia-based operation effective
with its  contribution to the bSmart.to  joint venture on August 8, 2000.  Gross
profit as a percentage of revenues decreased to 33.7% from 34.2%,  primarily due
to a drop in utilization of salaried employees,  offset by the 18.1% increase in
the average billing rate.

Selling, General and Administrative Expenses
Selling,  general and administrative  expenses increased $1.5 million, or 14.9%,
to $11.4 million in the three months ended September 30, 2000 from $10.0 million
in the three months ended  September 30, 1999. The increase was primarily due to
increases in employee  wages and benefits  incurred in the  Company's  effort to
move  towards  a  centralized  business  model  which  required  a  more  robust
infrastructure.  This  cost  structure  was put in place  prior to  management's
decision to divest the majority of its IT staff augmentation business.  Selling,
general and  administrative  expenses as a percent of revenues were 50.9% in the
three  months  ended  September  30, 2000  compared to 38.1% in the three months
ended September 30, 1999,  reflective of the increases  described above.  During
the three months ended  September  30,  2000,  the Company  began the process of
streamlining  its operations  commensurate  with its revenue base. By the end of
the quarter,  the Company had made a thorough  review of its cost  structure and
implemented several cost-saving programs,  including reducing staff, eliminating
excess  office space and  consolidating  accounting  centers with a view towards
reducing excess overhead. While cognizant of the need for cost containment,  the
Company continues to invest in revenue generating programs.

Depreciation and Amortization of Goodwill
Depreciation and amortization of goodwill  increased $0.2 million,  or 21.0%, to
$1.0 million in the three months ended  September  30, 2000 from $0.8 million in
the three months ended September 30, 1999. The increase was primarily due to the
spending  on  new   state-of-the-art   technology   equipment  and  the  related
depreciation.

Other Income (Expense)
Other income  (expense)  primarily  consists of net interest  income  (expense).
Interest  income was $0.5 million for the three months ended  September 30, 2000
compared to interest  expense of $0.8 for the three months ended  September  30,
1999.  This increase  resulted  from  interest  income earned during the quarter
ended  September  30, 2000 on the cash proceeds from the sale of the majority of
the IT staff  augmentation  business on June 30, 2000,  which cas remained after
the pay off of all obligations due under the Company's  Credit  Agreement and an
earn-out agreement.

Benefit for Income Taxes
The Company  recorded an income tax benefit of $1.5  million for its  continuing
operations in the three months ended  September 30, 2000,  compared to a benefit
of $0.9 million for the three months ended September 30, 1999,  reflecting a net
effective rate of 34.0% for both periods.

Income (Loss) from Discontinued Operations
Discontinued  operations is comprised of operations associated with the majority
of the Company's IT staff  augmentation  business.  The income from discontinued
operations  of $0.1  million  for the three  months  ended  September  30,  2000
compares to income of $1.8  million for the three  months  ended  September  30,
1999. The decrease in income from  discontinued  operations is the result of the
sale of the majority of the discontinued operations on June 30, 2000.

                                       11
<PAGE>



Six Months Ended September 30, 2000 Compared to Six Months Ended
September 30, 1999

Revenues
Revenues  decreased $6.7 million,  or 12.7%,  to $46.2 million in the six months
ended  September 30, 2000 from $53.0  million in the six months ended  September
30,  1999.  The  decrease  was due to a  general  reduction  in  demand  for the
Company's  services  coupled  with  the  discontinuation  of  revenues  from its
Philadelphia-based  operation  effective with its  contribution to the bSmart.to
joint  venture  on August 8, 2000,  offset by a 13.9%  increase  in the  average
billing rate.

Gross Profit
Gross profit  decreased  $3.9  million,  or 20.7%,  to $14.8  million in the six
months  ended  September  30,  2000 from $18.7  million in the six months  ended
September  30, 1999.  The decrease was due to a general  reduction in demand for
the Company's services coupled with the  discontinuation of revenues and cost of
services from its  Philadelphia-based  operation effective with its contribution
to the bSmart.to  joint venture on August 8, 2000.  Gross profit as a percentage
of revenues decreased to 32.1% from 35.3%, primarily due to lower utilization of
salaried employees offset by increases in the average billing rate.

Selling, General and Administrative Expenses
Selling,  general and administrative  expenses increased $4.1 million, or 20.8%,
to $24.0  million in the six months ended  September 30, 2000 from $19.8 million
in the six months ended  September  30, 1999.  The increase was primarily due to
increases in employee  wages and benefits  incurred in the  Company's  effort to
move  towards  a  centralized  business  model  which  required  a  more  robust
infrastructure.  This  cost  structure  was put in place  prior to  management's
decision to divest the majority of its IT staff augmentation business.  Selling,
general and  administrative  expenses as a percent of revenues were 51.8% in the
six months ended  September  30, 2000  compared to 37.5% in the six months ended
September 30, 1999. Although the Company was in the process of divesting part of
its operations during the six months ended September 30, 2000, selling,  general
and administrative expenses did not decrease as the Company continued to provide
the  infrastructure  and support for the divested  operations.  During the three
months ended  September 30, 2000, the Company began the process of  streamlining
its  operations  commensurate  with its revenue base. By the end of the quarter,
the Company had made a thorough  review of its cost  structure  and  implemented
several  cost-saving  programs,  including  reducing staff,  eliminating  excess
office space and consolidating  accounting  centers with a view towards reducing
excess overhead.  While cognizant of the need for cost containment,  the Company
continues to invest in revenue generating programs.

Depreciation and Amortization of Goodwill
Depreciation and amortization of goodwill  increased $0.5 million,  or 31.8%, to
$2.0 million in the six months ended September 30, 2000 from $1.5 million in the
six months ended  September  30, 1999.  The  increase was  primarily  due to the
spending  on  new   state-of-the-art   technology   equipment  and  the  related
depreciation.

Other Income (Expense)
Other income (expense) primarily consists of net interest income (expense).  Net
interest  expense of $0.9  million for the six months ended  September  30, 2000
compared  to net  interest  expense of $1.3  million  for the six  months  ended
September  30, 1999.  The  decrease in net interest  expense was due to interest
income earned  during the quarter ended  September 30, 2000 on the cash proceeds
from the sale of the majority of the IT staff augmentation  business on June 30,
2000 that remained after the pay off of all  obligations due under the Company's
Credit Agreement and an earn-out agreement.

Benefit for Income Taxes
The Company  recorded an income tax benefit of $4.1  million for its  continuing
operations in the six months ended September 30, 2000,  compared to a benefit of
$1.4  million for the six months  ended  September  30,  1999,  reflecting a net
effective rate of 34.0% for both periods.

Income (Loss) from Discontinued Operations
Discontinued  operations is comprised of operations associated with the majority
of the Company's IT staff  augmentation  business.  The income from discontinued
operations  of $1.8  million  for the six months  ended  September  30, 2000 was
comprised  of $3.5  million of  operating  income for these  operations  (net of
income tax expense of $1.7  million) and net gain of $4.4 million (net of income
taxes of $4.2  million)  related to the sale of a majority  of the  discontinued
operations and the write-down of the remaining discontinued  operations to their
net realizable value.  This compares to a loss from  discontinued  operations of
$13.6  million for the six months ended  September  30,  1999,  largely due to a
restructuring  charge of $4.9 million and a goodwill  impairment charge of $20.0
million taken prior to year-end.

                                       12

<PAGE>

                         LIQUIDITY AND CAPITAL RESOURCES


The  Company  has  financed  its  growth  principally  through  cash  flows from
operations,  periodic  borrowing under its credit  facilities and the use of the
net proceeds from its public offerings.

On June 30, 2000,  the Company  sold the  majority of its IT staff  augmentation
business  for  $111.5  million  in cash paid at closing  and the  assumption  of
certain liabilities  totaling  approximately  $10.0 million.  In addition,  $5.0
million will be held in escrow for one year to cover potential contingent claims
by the buyer. The Company may also be entitled to a contingent  payment of up to
$5.0 million based on the  operating  results of the sold business for the three
months  ended June 30,  2000.  Both  contingent  payments are subject to further
review and analysis  between the Company and the buyer.  On June 30,  2000,  the
Company  used a  portion  of the  cash  proceeds  from  the  sale to pay off all
obligations under the Credit Agreement and to pay existing earn-out  obligations
to sellers of an acquired business. Upon settlement of all obligations under the
Credit Agreement, the Credit Agreement was terminated.

During the quarter ended  September 30, 2000, the Company  received $1.0 in cash
from the sale of its IT staff  augmentation  business in Orlando and the sale of
real property previously used by one of its IT staff augmentation locations.

Cash used for  operating  activities  was $6.2  million for the six months ended
September 30, 2000.  Historically,  the Company's  primary  sources of liquidity
have been the collection of accounts  receivable and borrowings under the Credit
Agreement. Total receivables were 88 days of quarterly revenues at September 30,
2000.

With the termination of its borrowing  arrangements  under the Credit Agreement,
the Company's  primary  sources of liquidity  going forward will be the existing
cash  balances,  and any cash  resulting from the sales of the components of the
remaining  discontinued  IT staff  augmentation  business to be disposed of. The
Company  believes  that the  remaining  cash  from the  consummated  divestiture
transactions, additional proceeds from the potential sale(s) of the remainder of
its  discontinued  IT staff  augmentation  business and any funds generated from
operations  will  provide  adequate  cash to fund its  anticipated  cash working
capital needs at least through the next twelve months.

Item 3.  Quantitative and Qualitative Disclosures About Market Risk

Cotelligent  has invested its excess cash in highly liquid money market accounts
and  does  not  use  derivative  financial  instruments,   derivative  commodity
instruments   or  other  market  risk   sensitive   instruments,   positions  or
transactions.  Accordingly,  the Company  believes that it is not subject to any
material risks arising from changes in interest rates, foreign currency exchange
rates,  commodity  prices,  equity  prices or other  market  changes that affect
market risk sensitive instruments.  Cotelligent's policy is to invest its excess
cash in a  manner  that  provides  Cotelligent  with  the  appropriate  level of
liquidity  to enable the  Company  to meet its  current  obligations,  primarily
accounts payable, capital expenditures and payroll, recognizing that the Company
does not currently have outside bank funding available.

                                       13
<PAGE>

                           PART II - OTHER INFORMATION


Item 6.   Exhibits and Reports on Form 8-K

(a)       Exhibits

          The following  exhibits were filed during the quarter ended  September
          30, 2000.

          BSmart.to LLC Amended and Restated Operating  Agreement,  dated August
          8, 2000, between bSmart.to Technologies, Inc. and CGZ Mobile Ventures,
          Inc.  (Exhibit  10.1 of the Form 8-K  filed  with the  Securities  and
          Exchange  Commission  on August 23,  2000) is hereby  incorporated  by
          reference.

          Letter  Agreement,  dated as of August 8, 2000,  between  Cotelligent,
          Inc.  and eMeris  Limited  (Exhibit  99 of the Form 8-K filed with the
          Securities  and  Exchange  Commission  on August  23,  2000) is hereby
          incorporated by reference.

          Press  Release,   dated  July  19,  2000,   regarding  the  change  of
          Cotelligent,  Inc.'s  fiscal year end from March 31 to December 31 and
          other company information (Exhibit 99.1 of the Form 8-K fileD with the
          Securities  and  Exchange  Commission  on July  21,  2000)  is  hereby
          incorporated by reference.

          Employment Agreement,  dated July 10, 2000, between Cotelligent,  Inc.
          and Jeffrey B. Van Horn  (Exhibit  10.1 of the Form 8-K filed with the
          Securities  and  Exchange  Commission  on July  18,  2000)  is  hereby
          incorporated by reference.*

          Press Release, dated July 10, 2000, announcing the promotion of Daniel
          E.  Jackson  to  the   President  and  Chief   Operating   Officer  of
          Cotelligent, Inc. and Cotelligent, Inc.'s employment of Jeffrey B. Van
          Horn  (Exhibit  99 of the  Form 8-K  filed  with  the  Securities  and
          Exchange  Commission  on July 18,  2000)  is  hereby  incorporated  by
          reference.

(b)       Reports  on Form 8-K

          The following  reports on Form 8-K were filed during the quarter ended
          September 30, 2000.

          Cotelligent,  Inc. filed with the Securities and Exchange  Commission,
          on July 17, 2000,  Form 8-K regarding the  divestiture of the majority
          of its IT staff augmentation business to COMSYS Information Technology
          Services,   Inc.  and  the   divestiture   of  its  Orlando  IT  Staff
          Augmentation  business  together with  unaudited  pro forma  financial
          statements for the year ended March 31, 2000.

          Cotelligent,  Inc. filed with the Securities and Exchange  Commission,
          on July 18,  2000,  Form 8-K  regarding  the  promotion  of  Daniel E.
          Jackson to the position of President and Chief  Operating  Officer and
          its  employment  of Jeffrey B. Van Horn as Executive  Vice  President,
          Chief Financial Officer and Treasurer.

          Cotelligent,  Inc. filed with the Securities and Exchange  Commission,
          on July 27,  2000,  Form 8-K  regarding  the  change of the  Company's
          fiscal year end from March 31 to December 31.

          Cotelligent, Inc. filed with the Securities and Exchange Commission, a
          Form 8-K regarding  the  bSmart.to LLC Amended and Restated  Operating
          Agreement,  dated August 8, 2000 between bSmart.to Technologies,  Inc.
          and CGZ  Mobile  Ventures,  Inc.  and the  finders  fee paid to eMeris
          Limited related to such transaction.

          *Management  contracts and compensatory plans or arrangements required
          to be filed as exhibits to this Form 10-Q.

                                       14
<PAGE>

                                   SIGNATURES



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


                                                 COTELLIGENT, INC.




Date: November 13, 2000                    /s/ Jeffrey B. Van Horn
                                           -------------------------
                                           Jeffrey B. Van Horn
                                           Executive Vice President,
                                           Chief Financial Officer and Treasurer

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