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, 1997
                                       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 0-25372

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


           Delaware                                            94-3173918
(State or 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)

                                       N/A

                (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  12,  1997 there were  10,815,621  shares of common  stock
outstanding.

<PAGE>



                             COTELLIGENT GROUP, INC.


                                      INDEX

                         Part I - Financial Information

<TABLE>
<CAPTION>

         Item 1. Financial Statements                                                            PAGE

<S>                                                                                              <C>
         Cotelligent Group, Inc.
                  Balance  Sheet  at  March  31,  1997 and  September  30,  1997
                  (Unaudited)                                                                      3 
                  Statement of  Operations  for the Three and Six
                  Months Ended  September 30, 1996 and 1997 (Unaudited)                            4
                  Statement of Cash Flows for the Six Months Ended September 30,
                          1996 and 1997  (Unaudited)                                               5

         Item 2. Management's Discussion and Analysis of
                      Financial Condition and Results of Operations                                8


                           Part II - Other Information

                  Signatures                                                                       13

</TABLE>

<PAGE>




                             COTELLIGENT GROUP, INC.

                           CONSOLIDATED BALANCE SHEET
                      (In Thousands, Except Share Amounts)
<TABLE>
<CAPTION>

                                                                        March 31,         September 30,
                             ASSETS                                        1997               1997
                                                                      ---------------    ----------------
                                                                                           (Unaudited)
<S>                                                                   <C>                 <C>
Current assets:
   Cash and cash equivalents..................................         $     2,244         $     1,764
                                                                               
   Accounts receivable including unbilled accounts of
     $$5,535 and $9,834 net..................................               29,153              39,788
   Notes receivable..........................................                   75                  79
   Prepaid expenses and other current assets..................               1,280               1,916
                                                                      ---------------    ----------------
     Total current assets.....................................              32,752              43,547
Property and equipment, net...................................               4,899               5,626
Deferred income taxes.........................................                  61                  61
Goodwill, net of accumulated amortization of $38 and $99                     2,649               6,997
Other assets..................................................                 336                 151
                                                                      ===============    ================
     Total assets.............................................         $    40,697         $    56,382
                                                                      ===============    ================

              LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
   Short-term debt............................................         $     4,087         $     8,477
   Accounts payable...........................................               2,149               2,455
   Accrued compensation and related payroll liabilities.......               8,667              14,224
   Income taxes payable.......................................                 260                 563
   Deferred income taxes......................................                 768                 984
   Other accrued liabilities..................................               2,050               3,095
                                                                      ---------------    ----------------
     Total current liabilities................................              17,981              29,798
Long-term debt................................................                 163                 100
Other long-term liabilities...................................                 289                 250
                                                                      ---------------    ----------------
     Total liabilities........................................              18,433              30,148
                                                                      ---------------    ----------------
Commitments and contingencies.....................................
Stockholders' equity:
   Common Stock, $0.01 par value; 100,000,000 shares
     authorized 9,730,786 and 9,789,740 shares
     outstanding, respectively................................                  97                  98
   Additional paid-in capital.................................              18,765              19,001
   Retained earnings..........................................               3,402               7,135
                                                                      ---------------    ----------------
     Total stockholders' equity...............................              22,264              26,234
                                                                      ---------------    ----------------
     Total liabilities and stockholders' equity...............         $    40,697       $      56,382
                                                                      ===============    ================

</TABLE>




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




<PAGE>


                             COTELLIGENT GROUP, INC.
                      CONSOLIDATED STATEMENT OF OPERATIONS
                 (In Thousands Except Share and Per Share Data)
                                   (Unaudited)
<TABLE>
<CAPTION>


                                                             Three Months Ended              Six Months Ended
                                                               September 30,                   September 30,
                                                           1996             1997            1996             1997
                                                        ------------     ------------    ------------     ------------

<S>                                                     <C>              <C>             <C>              <C>      
     Revenues.........................................   $   35,127       $  49,775       $   67,091       $  96,108
     Cost of services.................................       24,481          35,128           47,426          67,840
                                                          ------------    ------------    ------------     ------------
          Gross profit ...............................       10,646          14,647           19,665          28,268
     Non-recurring transaction costs..................          543               -              788               -
     Selling, general and administrative expenses             8,216          11,374           15,480          21,979
                                                        ------------     ------------    ------------     ------------
          Operating income...........................         1,887           3,273            3,397          6,289
                                                        
     Other (income) expense:
          Interest expense.............................          73              68              185            176
          Interest income..............................         (79)             (3)            (208)            (7)
          Other .......................................         (34)             (3)             (56)             1
                                                        ------------     ------------    ------------     ------------
             Total other .............................          (40)             62              (79)           170
                                                        ------------     ------------    ------------     ------------
     Income before provision for income taxes ........        1,927           3,211            3,476           6,119
     Provision for income taxes.......................          615           1,252            1,855           2,386
                                                        ------------     ------------    ------------     ------------
     Net income......................................    $    1,312       $   1,959       $    1,621       $   3,733
                                                        ============     ============    ============     ============

     Earnings per share..............................    $     0.13       $    0.20       $     0.16       $     0.38
                                                        ============     ============    ============     ============

     Weighted average shares outstanding.......            9,936,288        9,895,015       9,917,275       9,860,437
                                                        ============     ============    ============     ============

     Pro forma net income (adjusted
          for income taxes - Note 4).................   $     1,137                       $   2,051
                                                        ============                     ============
                                                       
</TABLE>








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




<PAGE>



                             COTELLIGENT GROUP, INC.
                      CONSOLIDATED STATEMENT OF CASH FLOWS
                                 (In Thousands)
                                   (Unaudited)
<TABLE>
<CAPTION>

                                                                                           Six Months Ended
                                                                                ---------------------------------------
                                                                                  September 30,        September 30,
                                                                                      1996                  1997
                                                                                ------------------    -----------------
     <S>                                                                        <C>                   <C>
        Cash flows from operating activities:
             Net income......................................................    $        1,621        $      3,733
                                                                                                 
             Adjustments  to  reconcile  net  income  to net  cash  
               provided  by operating    activities:    
               Depreciation    and    amortization............................              437                 532
                 Provision for doubtful accounts..............................                -                 346
                Deferred income taxes, net ...................................               27                 216
                Changes in current assets and liabilities:
                      Accounts receivable ....................................           (1,760)            (10,981)
                      Prepaid  expenses and other current assets..............             (394)               (640)
                      Accounts  payable  and accrued  expenses................            1,691               6,908
                      Income taxes payable ...................................             (866)                303
                      Increase (decrease) in other liabilities ...............             (272)                (39)
                Changes in other assets.......................................              (20)                185
                                                                                ------------------    -----------------
                      Net cash provided by operating activities...............              464                 563
                                                                                ------------------    -----------------
        Cash flows  from  investing activities:   
             Purchases of property and equipment ..............................          (1,495)             (1,139)
             Purchase of Company net of cash...................................               -              (4,468)
             Proceeds on sales of assets.......................................             280                   -
             Net  repayments from related parties..............................             100                   -
                                                                                ------------------    -----------------
                  Net cash used in investing activities........................          (1,115)             (5,607)
                                                                                ------------------    -----------------
        Cash flows from financing  activities:    
             Payments  to  related parties.....................................            (244)                  -
             Payments on long-term debt........................................            (195)                (63)
             Net borrowings (repayments) on short-term debt ...................          (2,553)              4,390
             Net proceeds from issuance of Common Stock .......................              46                 237
             Distribution to former Stockholders...............................          (1,044)                  -
                                                                                -----------------     ------------------
                 Net cash provided by (used in) financing activities...........          (3,990)              4,564
                                                                                ------------------    -----------------
             Net increase decrease) in cash and cash equivalents...............          (4,641)               (480)
             Cash and cash equivalents at beginning of period ..................         14,674               2,244
                                                                                ------------------    -----------------
             Cash and cash equivalents at end of period........................  $       10,033        $      1,764
                                                                                ==================    =================
        Supplemental disclosures of cash flow information:
             Interest paid.....................................................  $          180        $        176
             Income taxes paid................................................   $        2,117        $      2,652



</TABLE>







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


<PAGE>


                             COTELLIGENT GROUP, INC.
                          NOTES TO FINANCIAL STATEMENTS
                 (In Thousands, Except Share and Per share Data)
                                   (Unaudited)


Note 1 - Business Organization and Basis of Presentation

         Cotelligent Group, Inc.  ("Cotelligent" or the "Company") was formed in
February  1993  to  acquire,  own and  operate  software  professional  services
businesses  specializing in providing information  technology ("IT") consultants
on a contract basis and consulting and  outsourcing  services to businesses with
complex IT operations.

         On  February  20,  1996,   Cotelligent  acquired  four  companies  (the
"Founding  Companies")  simultaneously  with the initial public  offering of its
Common  Stock (the  "Offering").  These  acquisitions  were  accounted  for on a
historical cost basis.  During fiscal 1997, the Company  acquired six businesses
accounted for under the-pooling-of-interests method (the "Pooled Companies"). In
addition, during fiscal 1997, the Company acquired two businesses and during the
first six months of fiscal 1998 acquired one  business,  accounted for under the
purchase  method  (the  "Purchased  Companies").  The  operating  results of the
Founding and  Purchased  Companies are included  subsequent to their  respective
acquisition dates.



Note 2 - Summary of Significant Accounting Policies

         The  accompanying  interim  financial  statements  do not  include  all
disclosures  included in the  financial  statements  for the fiscal  years ended
March 31, 1995, 1996 and 1997 as included on Cotelligent's Annual Report on Form
10-K for the year ended March 31, 1997 ("Form  10-K"),  and therefore  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,  consisting
only of normal  recurring  accruals,  necessary for a fair  presentation  of the
financial  position  and the  results  of  operations  and of cash flows for the
interim periods presented.

         In February  1997,  the  Financial  Accounting  Standards  Board issued
Statement  of  Financial  Accounting  Standards  (SFAS) No. 128,  "Earnings  per
share".  This  statement  establishes  standards for  comparing  and  presenting
earnings per share ("EPS").  SFAS 128 simplifies the standards for computing EPS
and  makes  the  presentation  comparable  to  international  EPS  standards  by
replacing the  presentation  of primary EPS with a presentation of basic EPS. It
also  requires  dual  presentation  of basic and dilutive EPS on the face of the
income statement. Basic EPS excludes dilution and is computed by dividing income
available to common shareholders by the weighted average number of common shares
outstanding  for the period.  Diluted EPS reflects the  potential  dilution that
could  occur  if  securities  or other  contracts  to issue  common  stock  were
exercised  or  converted  into common  stock.  This  Statement is required to be
adopted by the Company during fiscal 1998.



<PAGE>


                             COTELLIGENT GROUP, INC.
                          NOTES TO FINANCIAL STATEMENTS
                 (In Thousands, Except Share and Per share Data)
                                   (Unaudited)


Note 3 - Changes in Stockholder's Equity
<TABLE>
<CAPTION>


                                                                 Additional                             Total
                                         Common Stock              Paid-In          Retained       Stockholders'
                                   --------------------------
                                     Shares        Amount          Capital          Earnings           Equity
                                   -----------     ----------    ------------     -------------    ----------------
<S>                                <C>            <C>            <C>              <C>              <C>        
Balance at March 31, 1997......      9,730,786      $    97      $  18,765        $   3,402        $    22,264 
Issuance of Common Stock......          27,642            1            194                -                195
Net income ....................              -            -              -            1,774              1,774
                                   -----------     ----------    ------------     -------------    ----------------
Balance at June 30, 1997.........    9,758,428           98         18,959             5,176            24,233
Issuance of Common Stock......          31,312            -             42                 -                42
Net Income........................           -            -              -             1,959             1,959
                                   -----------     ----------    ------------     -------------    ----------------
Balance at September 30, 1997       9,789,740      $     98       $ 19,001         $   7,135        $   26,234
                                   ===========     ==========    ============     =============    ================
</TABLE>



Note 4 - Unaudited Pro Forma Income Tax Information

         Prior to their  acquisitions in fiscal 1997,  certain  companies were S
corporations  and,  accordingly,  the  financial  statements  did not  reflect a
provision  for income  taxes,  as income  taxes were the  responsibility  of the
individual  stockholders.  Effective  with  these  acquisitions,  the  companies
terminated their respective S corporation  status.  The following  unaudited pro
forma  income tax  information  is  presented in  accordance  with  Statement of
Financial  Accounting  Standards  No.  109  as  if  the  companies  had  been  C
corporations  subject to federal and state income taxes  throughout  the periods
presented.
<TABLE>
<CAPTION>

                                               (In Thousands)
                                                            Three Months Ended          Six Months Ended
                                                            September 30, 1996          September 30, 1996
                                                            ------------------------    ----------------------
<S>                                                          <C>                        <C>    
Income before provision for income taxes..................    $       1,927              $         3,476
Provision for income taxes................................              790                        1,425
                                                            ------------------------    ----------------------
Pro forma net income......................................    $       1,137              $         2,051
                                                            ========================    ======================

</TABLE>


Note 5 - Subsequent Events

         The Company acquired three IT consulting companies on October 31, 1997.
These acquisitions will be accounted for as poolings-of-interests. Additionally,
the Company  acquired  one IT consulting company on November 6, 1997,  which 
will be accounted for as a purchase.


<PAGE>




                                     ITEM 2

            Management's Discussion and Analysis of Financial 
                    Condition and Results of Operations

Overview

         Cotelligent  was formed in February  1993 to  acquire,  own and operate
software   professional   services  businesses   specializing  in  providing  IT
consultants  on a contract  basis and  consulting  and  outsourcing  services to
businesses  with  complex IT  operations.  On  February  20,  1996,  Cotelligent
acquired four  companies  (the  "Founding  Companies")  simultaneously  with the
initial  public  offering of its Common Stock ( the  "Offering").  Prior to this
date Cotelligent was a non-operating entity.

         During fiscal 1997, the Company  acquired six businesses  accounted for
under  the-pooling-of-interests  method (the "Pooled  Companies").  In addition,
during fiscal 1997, the Company  acquired three  businesses and during the first
six  months  of fiscal  1998  acquired  one  business,  accounted  for under the
purchase  method  (the  "Purchased  Companies").  The  operating  results of the
Founding and  Purchased  Companies are included  subsequent to their  respective
acquisition dates.

         The Company derives substantially all of its revenues from professional
service  activities.  The majority of these  activities are provided under "time
and  expense"  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  professional  and such rates are a function of the
professional's skills,  experience and the type of work performed. 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
service activities 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 or
if there are high levels of unutilized  time (work  activities not chargeable to
clients or unrelated  to client  services)  of  full-time  service  professional
employees.   Operating   income  (gross   profit  less   selling,   general  and
administrative  expenses) can be adversely impacted by increased  administrative
staff  compensation,  expenses  related to growing and  expanding  the Company's
business,  which may be  incurred  before  revenues  or  economics  of scale are
generated from such investment.

     As part of its  strategic  plan,  the  Company  intends  to  acquire  other
software professional  services businesses.  Should the Company be successful in
acquiring such  businesses,  the period in which such acquisition is consummated
could be  adversely  impacted by costs  associated  with such  acquisitions.  In
addition, financial periods subsequent to the completion of an acquisition could
be adversely  impacted by costs and activities  associated with the assimilation
and integration of the acquired company.

     As a professional  services  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. The Company generally experiences a reduction
in gross profit in the first calendar quarter due to employment related taxes.


<PAGE>


                    HISTORICAL COMBINED RESULTS OF OPERATIONS

                 Three Months Ended September 30, 1997 Compared to 
                      Three Months Ended September 30, 1996

Revenues

         Revenues  increased  $14.6  million,  or 42%,  to $49.8  million in the
second quarter of fiscal 1998 from $35.1 million in the second quarter of fiscal
1997. The increase was primarily  attributable to a 32% increase in total client
service  hours  provided  to 801,000  hours in the  second  quarter of 1998 from
609,000 hours in the second  quarter of 1997, and a 7.9% increase in the average
hourly  billing rate to $61.10 in the second  quarter of 1998 from $56.61 in the
second quarter of 1997.  The increase in hourly billing rate reflects  increased
demand for  professional  staff and  consultants  with higher skill levels and a
more favorable economic climate.  The increases discussed above were in addition
to an increase in  placement  fee  revenues  generated to $544,000 in the second
quarter of 1998 from $403,000 in the second quarter of 1997.

Gross Profit

         Gross profit  increased  $4.0 million,  or 38%, to $14.6 million in the
second  quarter  of 1998 from  $10.6  million  in the  second  quarter  of 1997,
primarily due an increase in hours of service provided to clients.  Gross margin
as a percentage  of revenues  decreased  to 29.4% in the second  quarter of 1998
from  30.3% in the  second  quarter of 1997,  principally  due to a lower  gross
margin inherent in the Purchased Companies.

Non - Recurring Transaction Costs

         Non-recurring  transaction costs include  expenditures  associated with
the acquisition of the Pooled Companies.

Selling, General and Administrative Expenses

         Selling, general and administrative expenses increased $3.2 million, or
38%,  to $11.4  million in the second  quarter of 1998 from $8.2  million in the
second  quarter of 1997.  The increase in absolute  dollars was primarily due to
increased  compensation  to existing staff,  staff added to support  anticipated
growth,   additional  occupancy  costs  and  an  increased  level  of  corporate
activities.   Selling,  general  and  administrative  expenses  decreased  as  a
percentage of revenues from 23.4% in the second  quarter of 1997 to 22.9% in the
second quarter of 1998.

Interest Expense, Net

         Interest  expense,  net of  interest  income was  $65,000 in the second
quarter of 1998.  Interest  income  net of  interest  expense  was $5,000 in the
second quarter of 1997, due to the cash provided from the Offering.

Provision for Income Taxes

         The Company's provision for income taxes was $1.3 million in the second
quarter of 1998,  which  reflects a  provision  on  pre-tax  income of 39%.  The
Company's  provision  for income taxes was $0.6  million for the second  quarter
1997 at a rate of 32% due to  recognition of the benefit  associated  with a net
operating loss carryforward.


<PAGE>




                    HISTORICAL COMBINED RESULTS OF OPERATIONS

                 Six Months Ended September 30, 1997 Compared to 
                      Six Months Ended September 30, 1996

Revenues

         Revenues increased $29.0 million, or 43%, to $96.1 million in the first
half of 1998 from  $67.1  million in the first half of 1997.  The  increase  was
primarily  attributable to a 34% increase in total client service hours provided
to 1,565,000  hours in the first half of 1998 from 1,170,000  hours in the first
half of 1997,  and a 7.4% increase in the average  hourly billing rate to $60.38
in the first half of 1998 from $56.21 in the first half of 1997. The increase in
hourly  billing  rate  reflects  increased  demand  for  professional  staff and
consultants with higher skill levels and a more favorable economic climate.  The
increases  discussed  above were in addition to an  increase  in  placement  fee
revenues  generated  to $990,000 in the first half of 1998 from  $810,000 in the
first half 1997.

Gross Profit

         Gross profit  increased  $8.6 million,  or 44%, to $28.3 million in the
first half of 1998 from $19.7  million in the first half of 1997,  primarily due
an  increase  in hours  of  service  provided  to  clients.  Gross  margin  as a
percentage  of revenues  increased to 29.4% in the first half of 1998 from 29.3%
in the first  half of 1997,  principally  due to a greater  increase  in billing
rates compared to the increase in the cost of services rate.


Non - Recurring Transaction Costs

         Non-recurring  transaction costs include  expenditures  associated with
the acquisition of the Pooled Companies.

Selling, General and Administrative Expenses

         Selling, general and administrative expenses increased $6.5 million, or
42.0%,  to $22.0  million in the first  half of 1998 from  $15.5  million in the
first half of 1997.  The  increase in  absolute  dollars  was  primarily  due to
increased  compensation  to existing staff,  staff added to support  anticipated
growth,   additional  occupancy  costs  and  an  increased  level  of  corporate
activities.   Selling,  general  and  administrative  expenses  decreased  as  a
percentage  of  revenues  from  23.0% in the first  half of 1997 to 22.9% in the
first half of 1998.

Interest Expense, Net

         Interest expense, net of interest income was $169,000 in the first half
of 1998.  Interest income net of interest  expense was $23,000 in the first half
of 1997, due to the cash provided from the Offering.

Provision for Income Taxes

         The Company's  provision for income taxes was $2.4 million in the first
half of 1998, which reflects a provision on pre-tax income of 39%. The Company's
provision for income taxes was $1.9 million for the first half 1997 at a rate of
53% due to the  recognition of deferred  income taxes on the conversion from the
cash to accrual method by certain of the Pooled Companies.


<PAGE>


                         LIQUIDITY AND CAPITAL RESOURCES

         The Company has financed its growth principally through cash flows from
operations,  periodic  borrowings under its credit facilities and cash generated
from the Offering.

         The  Company's  primary  source of liquidity is the  collection  of its
accounts receivable.  Accounts receivable have grown as the Company's operations
have grown.  Receivables  increased to 62 days of revenue at September  30, 1997
from 59 days of revenue at March 31,  1997.  Should the  Company  not be able to
bill and  collect  for its  services on a timely  basis,  the Company  could use
utilize  existing  cash on hand or draw  upon  available  credit  facilities  to
finance its operations.

         Cash flow  provided by  operating  activities  was $563,000 for the six
months ended  September 30, 1997.  During this period the Company  utilized this
cash plus a portion of existing  cash  balances to acquire $1.1 million of fixed
assets and  purchase a company for $4.5  million.  The  average  balance of such
borrowings  outstanding was approximately  $3.5 million and  approximately  $2.8
million during the six months of 1998 and 1997, respectively.

         At September  30,  1997,  the Company had $1.8 million in cash and cash
equivalents  as compared to $2.2  million at March 31, 1997.  At  September  30,
1997,  the  Company  had $8.5  million  outstanding  borrowings  under  its bank
revolving credit  facilities.  The Company's  entered into a new credit facility
(the  "Facility"),  which  provides  $40.0  million for the Company,  secured by
accounts  receivable  and other  assets of the Company.  Indebtedness  under the
Facility bears interest at a base rate or LIBOR plus an applicable  margin.  The
Facility includes financial covenants with respect to maximum leverage,  minimum
profitability  and debt service  ratio.  Long-term  obligations,  consisting  of
capital lease obligations and equipment loans, totaled $100,000 at September 30,
1997 compared to $163,000 at March 31, 1997.





<PAGE>


                           PART II - OTHER INFORMATION

Item 1.    Legal Proceedings.

           The Company is, from time to time, a party to  litigation  arising in
           the normal  course of its  business.  The  Company  is not  presently
           subject to any material litigation.

Item 2.  Changes in Securities.

           None.

Item 3.  Defaults Upon Senior Securities.

           None.

Item 4.  Submission of Matters to a Vote of Security Holders.

      (A.) The Company held its annual meeting of stockholders on 
           September 9, 1997

       The following is a brief description of each matter voted upon at 
       the annual meeting:

      1. Elections of three directors to serve for a three-year term expiring at
the annual meeting in 2000.

                               For              Against          Abstain
      Anthony M. Frank      7,070,622           210,003             0
      James R. Lavelle      6,850,150           430,475             0
      Susan E. Trice        7,220,734            59,891             0

      2.  Elections of one director to serve for a two-year term expiring at the
annual meeting in 1999.
                               For               Against          Abstain
      Christy L. Cooper     7,116,554            164,071             0

      3.  Approve  the  appointment  of Price  Waterhouse  LLP as the  Company's
independent certified public accountants.

            For              7,145,689
            Against             10,966
            Abstain            123,970

          (D.)  N/A


Item 5.  Other Information.

           None.


Item 6   Exhibits and Reports on Form 8-K.

           (A.)    Exhibits.

      (B.)  Reports on Form 8K


                    The  following  report  on Form  8-K was  filed  during  the
quarter ended September 30, 1997:

                    Cotelligent Group, Inc. files the Company's Shareholder 
Rights Program - September 24, 1997




<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 GROUP, INC




November 14, 1997                      By : /s/  Curtis J. Parker
                                            ----------------------
                                            Curtis J. Parker
                                            Vice President and Chief 
                                                  Accounting Officer

<PAGE>