SECURITIES AND EXCHANGE COMMISSION
                           WASHINGTON, D.C. 20549

                                FORM 10-K

(Mark One)

[X]	Annual Report Pursuant To Section 13 Or 15(d) Of The Securities Exchange Act
    Of 1934  
    For the fiscal year ended July 27, 1996   

                                  OR

[ ] 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 1-7636

                          DATAPOINT CORPORATION

            (Exact name of registrant as specified in its charter) 

        Delaware                                     74-1605174
(State or other jurisdiction of         (I.R.S. Employer Identification No.)
incorporation or organization) 

                  4 rue d'Aguesseau 75008, Paris, France
            8410 Datapoint Drive, San Antonio, Texas 78229-8500
           (Address of principal executive offices and zip code)

                           (33-1) 40 07 37 37
                             (210) 593-7000
            (Registrant's telephone number, including area code)


          SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:

  Title of each class               Name of each exchange on which registered

Common Stock, $.25 par value	                New York Stock Exchange
$1.00 Exchangeable Preferred Stock,  
      $1.00 par value                       	New York Stock Exchange
8-7/8% Convertible Subordinated 
      Debentures Due 2006 	                  New York Stock Exchange

 	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  .

  Indicate by a check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to 
the best of registrant's knowledge, in definitive proxy or information 
statements incorporated by reference in Part III of this Form 10-K or any 
amendment to this Form 10-K.  Yes   No  X  .
 
	 As of October 18, 1996, 13,931,640 shares of Datapoint Corporation Common 
Stock were outstanding (excluding 7,059,577 shares held in Treasury), and the 
aggregate market value (based upon the last reported sale price of the Common 
Stock on the New York Stock Exchange -- Composite Tape on October 18, 1996) of
the shares of Common Stock held by non-affiliates was approximately $14.9 
million.  (For purposes of calculating the preceding amount only, all directors 
and executive officers of the registrant are assumed to be affiliates.)

<PAGE>

PART I

ITEM 1.  Business.

General

Datapoint Corporation, including its subsidiaries (hereinafter "Datapoint" or 
"the Company"), is principally engaged in the development, acquisition, 
marketing, servicing, and to a lesser degree, manufacture of computer and 
communication products -- both hardware and software -- for integrated 
computer, telecommunication and video conferencing network systems.  The Company
is also actively engaged in the business of licensing its video conferencing 
technology and its dual protocol local area network ("LAN) technology.

Datapoint was reincorporated in Delaware in 1976 as the successor corporation to
a Texas corporation originally incorporated in 1968 as Computer Terminal 
Corporation and which changed its name to Datapoint Corporation in 1972.  Its 
principal executive offices are located at 4 rue d'Aguesseau 75008, Paris, 
France (telephone number - (33-1) 40 07 37 37 and at 8410 Datapoint Drive, San 
Antonio, Texas 78229-8500 (telephone number - (210)-593-7000). 

Throughout the 1970's, the Company developed, distributed and serviced 
minicomputers, and later computer networks and telecommunications products.  
During that period sales and service revenue was predominately derived from the
U.S. market, supplemented by international sales through a network of 
independent distributors.

In 1981, the Company purchased most of its major international distributors, 
which have been subsequently operated as subsidiaries.  In 1985, the Company 
separately incorporated its U.S. hardware service business as an independent 
company and distributed its shares to shareholders.

Throughout the 1980's and the early 1990's, the Company's business was 
characterized by a significant decline in total revenue, recurring significant 
losses, and a reduction of the domestic workforce.  This was primarily due to 
(1) a mass entry of competitors in the networking marketplace compounded by 
(2) a marketplace demand for "Open Systems" products and standard interfaces, 
both of which had a negative impact on the traditional networking and data 
processing components of the Datapoint business.  The marketplace was forced 
into a sameness of design that lead to highly competitive pricing being the only
significant product differentiator.  These adverse effects were, in turn, 
worsened by the increasing availability of low-cost, off-the-shelf software 
applications packages written in a number of industry-standard programming 
languages.  Since 1994, the Company has been able to maintain a consistent and
slightly increasing revenue level while at the same time restructuring its 
operations (mostly through significant workforce reductions worldwide) to reduce
its cost base to support such revenue levels. 

During fiscal year 1996, the Company pursued and is continuing to pursue actions
to provide cash infusions, including the sale of selected assets and operations
of the Company, and to improve its financial position.  In this regard, on 
May 28, 1996, the Company entered into an agreement with Kalamazoo Computer 
Group, plc, a public limited company organized under the laws of England 
("Kalamazoo"), providing for the sale by Datapoint to Kalamazoo of Datapoint's 
European based Automotive Dealer Management Systems business ("EADS") for a 
purchase price of $33.0 million.  From the sales proceeds, the Company realized
approximately $29.4 million net of transaction related expenses and adjustments
(see note 17 to the Consolidated Financial Statements for a more detailed 
description of this transaction).  The Company has retained Patricof & Co. 
Capital Corp. in connection with the potential disposition of its Telephony 
business, as well as other asset and equity sale transactions and proposals.

During the first quarter of 1996, the Company signed a letter of intent to 
become a joint venture partner in spinning off the Company's Multimedia 
Information Network Exchange ("MINX") video conferencing patents and operations
into separate entities.  While such discussions were terminated in the second
quarter of 1996, the Company is continuing its efforts to enter into discussions
with a suitable partner to exploit the development and marketing of its MINX
video networking technology.

In addition, on July 24, 1996, the Company announced that its Board of Directors
has determined to offer for exchange ("the Exchange Offer") for each share of 
its $1.00 Exchangeable Preferred Stock ($1.00 par value) 3.25 shares of its 
Common Stock ($.25 par value) and to submit a proposal to stockholders under 
which each share of its $1.00 Exchangeable Preferred Stock would be converted 
into 3.25 shares of Common Stock. The Company had previously announced on April
16, 1996, that it intended to submit to its stockholders a proposal to effect 
the conversion of the $1.00 Exchangeable Preferred Stock into 2.75 shares of its
Common Stock.  The affirmative vote of two-thirds of the outstanding shares of 
the $1.00 Exchangeable Preferred Stock and a majority vote of the outstanding 
shares of the Common Stock will be required to adopt the proposal which the 
Company expects to submit at its Annual Meeting of Stockholders expected to be 
held on December 10, 1996.  On January 16, 1996, the Company announced that it 
was in arrears on its $1.00 preferred stock in an aggregate amount equal to six 
full quarterly dividends.  As a result, each holder of $1.00 preferred stock 
currently has the right to exchange each such share (inclusive of all accrued 
and unpaid dividends) into two shares of the Company's common stock.

<PAGE>

The Company has recently been successful in asserting its United States video
conferencing patents resulting in payments for licenses.  On June 6, 1996, the
Company entered into an agreement with NEC America, Inc. for the licensing of 
Datapoint's video conferencing patents.  On April 10, 1996, the Company 
announced that it had commenced suit in the U.S. District Court for the Eastern 
District of New York to recover damages against two companies for infringement 
of Datapoint's patent covering multi-speed network processing (U.S. Patent No. 
5,008,879).  This patent covers certain ARCNET and Fast Ethernet products 
recently introduced by various suppliers to the local area network industry and
dominates certain types of dual-speed LAN Adaptor Products recently introduced 
by various industry leaders.  Currently, the Company is pursuing litigation in 
this respect against six defendants (Datapoint Corporation v. Compression Labs,
Inc., No. 3:93-CV-2522-D (N.D. Tex.); Datapoint Corporation v. PictureTel 
Corporation, No. 3:93-CV-2381-D (N.D. Tex.) (for which a trial has been set in 
February 1997); Datapoint Corporation v. VideoLan Corp., No. 96-2861-AET 
(D.N.J.); Datapoint v. Teleos Communications, Inc., No. 95-4455-AET (D.N.J.); 
Datapoint Corporation v. Standard Micro-Systems, Inc. and Intel Corporation, 
No. CV-96-1685 JBW (E.D.N.Y.)(the "-1685 action")) and has negotiated three 
settlements, two for an aggregate of $1.0 million and one for an undisclosed
amount.  On August 1, 1996, the Company commenced an additional suit against 
Intel and Standard Micro-Systems for infringement of a closely-related patent,
U.S. No. 5,077,732. (Datapoint Corp. v. Standard Micro-Systems Corp. and Intel 
Corp., individually, and as representatives of the class of all manufacturers, 
vendors and users of Fast Ethernet-compliant, dual protocol local area network 
products, Civil Action No. CV-96-3819 (JBW) (E.D.N.Y.)(the "-3819 action")).  
The Company has moved to certify the -1685 action as a defendant class action 
with respect to all manufacturers, vendors, and users of dual protocol, Fast 
Ethernet-compliant local area network products.  On June 28, 1996, the Court 
denied that motion, without prejudice to renew at a later date.  The Company 
intends, in the future, to renew its motion to certify the -1685 action, and to
seek similar "defendant class action" status for the -3819 action.  If 
successful in its certification efforts, the defendant classes in the -1685 and
-3819 actions would include approximately one-hundred potential infringers of 
the multi-speed network processing and related patents.

In John Frassanito and David A. Monroe v. Datapoint Corp., Civil Action 
No. H-95-812 (S.D. Tex.) plaintiffs alleged that the Company usurped various 
patentable inventions and trade secrets in connection with the development of 
its MINX systems.  They also asserted a cause of action for patent 
infringement, and a cause of action requiring Datapoint to assign certain 
MINX-related patents and other intellectual property.  On August 16, 1996, the 
Court dismissed with prejudice plaintiffs' claims of patent infringement against
Datapoint and dismissed without prejudice plaintiff's pendent state law claims 
and Datapoint's state law counter-claims for lack of subject matter 
jurisdiction.

These actions represent the first step in the Company's industry-wide program 
to license and enforce its multi-speed networking patents and video 
conferencing patents through negotiations and/or litigation.  The Company 
believes that these patents provide broad coverage in video conferencing and 
multi-speed networking technology and present the opportunity for further 
royalty bearing licenses.  Such royalty bearing licenses and enforcement of its
patents will be a primary strategy of the Company's business going forward to 
create long-term value for its stockholders.

Products

The Company provides a complete line of products that meet data processing, 
video communications, and telecommunications requirements.  The network-based 
products include video communications, data sharing applications, 
platform-independent local area networking, wide area networking, relational 
database systems, and telecommunications integration.

In 1994, the Company announced its third generation of MINX video 
communications products which provide the capacity for large video networks, 
data conferencing features, and aggressive pricing.  A complete range of 
products is available from a fully interactive, broadcast-quality, full-motion
video network which can accommodate over 700 local workstations to a single 
video station for a remote office.  All of the video products are interoperable
and provide functionality and picture quality that is unparalleled in the 
industry.  Concurrently, the Company strengthened its direct Sales, Support, and
Engineering efforts to respond to the growing desktop video communications 
market.  On May 14, 1996, the Company, working with a Florida-based systems 
integrator for the corrections industry, announced the completion of the 
installation of the first large scale video visitation system in the U.S. at the
Brevard County Detention Center in Florida resulting in $204,520 in revenue for
the Company.

In 1994, consistent with the Company's patent licensing business, the Company 
began patent infringement suits against several defendants related to the 
Company's video conferencing patents and dual protocol local area network 
patents.  The Company's patent enforcement policy includes the identification 
of video conferencing patents and dual protocol local area network products and
applications which infringe the related patents and the execution of licensing 
agreements through a) normal commercial negotiations or b) pursuant to 
settlements of litigation brought against the patent infringers.  The Company 
has been successful in asserting its U.S. video conferencing patents resulting
in payments for licenses.  On June 16, 1996, the Company entered into an 
agreement with NEC America, Inc. for the licensing of Datapoint's video 
conferencing patents.  The Company is also taking steps through an industry-
wide program to license and enforce its multi-speed networking patents through 
negotiations and/or litigation.  Currently, three patent infringement suits are
pending with respect to Datapoint's patents on its dual protocal local area 
networking technology.  These patents cover certain ARCNET and Fast Ethernet 
products recently introduced by various suppliers to the local area network 
industry and dominates certain types of dual-speed LAN Adaptor Products 
recently introduced by various industry leaders.  Such royalty bearing licenses
and enforcement of its patents will be a primary strategy of the Company's 
business going forward to create long-term value for its stockholders.

<PAGE>

The Company's Open Systems Networking products are industry-standard.  The file
servers are based upon a scalable architecture using the Intel microprocessor
because of its cost and performance.  The multi-processor functionality is
provided for both the Company's highly sophisticated RMS network operating 
system.  The same systems can be used for Windows N.T. and UNIX operating 
systems.  The Company offers high-performance, Pentium-based file servers.  All
systems support redundant disk, RAID and popular network protocols such as
TCP/IP and Net BIOS.

The Company's networking products focus on linking file servers, workstations,
terminals, printers, and other peripherals (such as modems) to the network.  
High-performance networking software and hardware components comprise the 
product offering and provide the ability to implement high-capacity, highly 
efficient networks composed of client/server and data communications devices.
The networking solutions provide the capability of running MS-DOS, WINDOWS, 
UNIX, and RMS simultaneously along with both ARCNET, ARCNETPLUS, and Ethernet 
adapters.  These capabilities provide customers the flexibility to design
network architecture to meet their specific requirements.

Realizing that personal computers are the desktop workstation of choice, the
Company offers PC-based hardware and software.  The software component is a full
featured, Microsoft Windows compliant terminal emulation package for the RMS
environment which can be run on existing PCs.  An industry-standard UNIX 
terminal is offered for customers who desire a low-cost data station rather 
than a networked PC.

The Company offers a complete set of telecommunications products and services 
to meet the requirements of large call centers, customer service organizations,
and telemarketing firms.  Power dialers to increase call efficiency for outbound
communications applications, interactive voice response systems which allow
customers to interrogate an organization's database with a simple telephone, and
automatic call distribution systems that manage large volumes of incoming calls
comprise the portfolio of telecommunications products.  The Company has an 
agreement with AT&T to market their Definity line of automatic call 
distributors through several of the Company's European subsidiaries.  
Telecommunications solutions are provided with the combined expertise in 
networking, data processing, and telecommunications products.  

The supplier and value-added reseller relationships that the Company continues
to develop, allow its customers worldwide to enhance their productivity with 
sensible, cost-effective computer-based networking, telephony and video
communication solutions. 

Markets

Customers

Datapoint sells generally to business and government customers, including the
U.S. government, financial institutions, insurance companies, educational
institutions, and manufacturers.  During fiscal 1996, no one customer accounted
for 10 percent or more of consolidated revenues.

Domestic

Datapoint markets its products in the United States through independent sales
representatives who, on a commission basis, solicit orders for Datapoint's 
products; through value-added resellers, who purchase Datapoint's products for
resale; original equipment manufacturers, who integrate Datapoint's products
into their overall offerings; and through Datapoint's own end-user sales force.
Independent sales representatives, value-added resellers, and original 
equipment manufacturers generally market Datapoint's products in conjunction 
with application software and other products developed and marketed by such 
firms.

<PAGE>

International

Datapoint's products are marketed to end-users in over forty countries through 
a network of wholly-owned subsidiaries and independent distributors.  Datapoint
distributes its products internationally through wholly-owned sales and service
operations in Belgium, France, Germany, Holland, Italy, New Zealand, Spain, 
Sweden, Switzerland and the United Kingdom and through authorized distributors
worldwide.  During fiscal year 1996, approximately 97 percent of Datapoint's 
international revenue was derived from customers in Western Europe.

Customer Service

During 1995, Datapoint entered into an agreement with Decision Servcom, Inc.
("DSI"), whereby DSI would serve as the non-exclusive authorized service agent 
for Datapoint's proprietary data processing products in the United States.  
Maintenance of equipment outside the United States is provided by Datapoint's 
international subsidiaries and distributors.  The maintenance operations of the
Company's international subsidiaries produced 44 percent of total company
revenues and 52 percent of total company gross profit for the fiscal year ended
July 27, 1996.

In connection with the sale of EADS to Kalamazoo, Datapoint entered into a
subcontract with Kalamazoo to provide computer hardware and hardware 
maintenance service to such EADS network.

Manufacturing, Raw Materials, and Supplies

A significant portion of Datapoint's products are purchased from third parties,
who manufacture products meeting Datapoint's specifications.  The products are 
then resold badged/unbadged within Datapoint configurations upon the completion
of testing and packaging procedures performed at the Company's facilities in 
San Antonio, Texas.

Datapoint seeks, and maintains where practical, multiple sources of supply for 
the products, components, and raw materials which it uses.  However, certain 
products and components are purchased only from single sources, and Datapoint
could experience manufacturing delays if such suppliers should fail to meet 
Datapoint's requirements.  The interruption of any components, whether for 
supply or quality reasons, can become critical to production flows.  The 
Company's general experience has been good in terms of minimizing exposure; 
however, guarantees regarding possible future situations and rectifying actions
that could arise cannot be made.

Research and Product Development

The technology involved in the design and operation of Datapoint's products is
complex and subject to constant change.  Accordingly, Datapoint is committed to
a program of research and development which is oriented toward the development
of new hardware and software products and the improvement and expansion of its
existing products and services.

Datapoint incurred expense of $2.7 million, $4.3 million, and $5.3 million in 
the fiscal years ended July 27, 1996, July 29, 1995, and July 30, 1994, 
respectively, on research and development activity.  Datapoint maintains its 
principal research and development facility in San Antonio, Texas.  

Competition

Datapoint operates in the intensely competitive computer data processing, video
conferencing and telephony industries that are characterized by the frequent 
introduction of new products based upon technological advances.  Datapoint 
competes, domestically and abroad, with a substantial number of companies, many
of which are larger and have greater resources than Datapoint.  Such companies,
considered in the aggregate, compete in the entire line of products 
manufactured and marketed by Datapoint.  These competitors differ somewhat
depending on the market segment, customer and geographic area involved.

Competition in this market is based primarily on the relationship between price
and performance; the ability to offer a variety of products and unique 
functional capabilities; the strength of sales, service and support
organizations; and upgradability, flexibility, and ease of use of products.  
The Company could be adversely affected if its competitors introduced 
technologically superior products or substantial price reductions.

<PAGE>

Backlog 

The backlog of firm orders for the sale or lease of the Company's products
(using then existing end-user purchase prices for products to be leased and 
giving effect to appropriate discounts for products to be sold) as of 
July 27, 1996 and July 29, 1995 was $8.1 million and $14.2 million, 
respectively.  The backlog amounts are not necessarily indicative of the 
Company's future results, since an increasing amount of the Company's revenues 
are derived from orders obtained in the period of shipment.  Furthermore, a 
portion of the Company's backlog may be cancelable at the customer's option, 
under certain conditions, without financial penalty.  All orders included in the
backlog at July 27, 1996 are currently scheduled for delivery during the 
subsequent 12 months.  All orders are subject to the Company's ability to meet 
delivery commitments.  The Company records only firm orders as backlog, and 
generally such orders are cancelable only by the Company.  In the event that a 
new product is released, a customer is allowed to upgrade (i.e., cancel) an 
existing order and place a new order for the new product.  This is done at the 
Company's discretion with no financial penalty to the customer.

Backlog is also not a reliable indicator of future results, as changes in 
product mix (depending on whether the product content contained in backlog has 
a low or high sales margin) and costs may significantly impact reported 
results.  Therefore, the Company believes that the backlog data is not 
meaningful to an understanding of the Company's business or future reported 
results.

Patents and Trademarks

Datapoint owns certain patents, copyrights, trademarks and trade secrets in 
both network and video conferencing technologies, which it considers valuable 
proprietary assets.  The Company does not primarily rely on these rights to 
establish or protect its market position, but does view them as providing the 
Company a technological advantage in certain cases and does intend to fully 
exploit their value.  The Company believes that its video conferencing patents 
and multi-speed network procesing patents are of material importance to its 
business as a whole.

In 1994, the Company began patent infringement suits against several defendants
related to the Company's video conferencing patents.  In 1995, the Company 
received $1.0 million from two defendants and patent infringement suits against
other defendants are currently pending.  Currently, the Company is pursuing 
litigation in this respect against six defendants (Datapoint Corporation v. 
Compression Labs, Inc., No. 3:93-CV-2522-D (N.D. Tex.); Datapoint Corporation
v. PictureTel Corporation, No. 3:93-CV-2381-D (N.D. Tex.) (for which a trial 
has been set in February 1997); Datapoint Corporation v. VideoLan Corp., No. 
96-2861-AET (D.N.J.); Datapoint Corporation v. Teleos Communications, Inc. No. 
95-4455-AET (D.N.J.)).  On June 6, 1996, the Company entered into an agreement 
with NEC America, Inc. for the licensing of Datapoint's video conferencing 
patents.  On April 10, 1996, the Company announced that it had commenced suit 
in the U.S. District Court for the Eastern District of New York to recover 
damages against two companies for infringement of Datapoint's patent covering 
multi-speed network processing (U.S. Patent No. 5,008,879) (Datapoint 
Corporation v. Standard Micro-Systems, Inc. and Intel Corporation, No.
C.V.-96-1685 JBW (E.D.N.Y.)).  This patent covers certain ARCNET and Fast 
Ethernet products recently introduced by various suppliers to the local area 
network industry and dominates certain types of dual-speed LAN Adaptor Products
recently introduced by various industry leaders.  On August 1, 1996, the 
Company commenced an additional suit against Intel and Standard Micro-Systems 
for infringement of a closely-related patent, U.S. No. 5,077,732. (Datapoint 
Corp. v. Standard Micro-Systems Corp. and Intel Corp., individually, and as 
representatives of the class of all manufacturers, vendors and users of Fast 
Ethernet-compliant, dual protocol local area network products, Civil Action
No. CV-96-3819 (JBW) (E.D.N.Y.)).  The Company has moved to certify the -1685
action as a defendant class action with respect to all manufacturers, vendors,
and users of dual protocol, Fast Ethernet-compliant local area network 
products.  On June 28, 1996, the Court denied that motion, without prejudice to
renew at a later date.  The Company intends, in the future, to renew its motion
to certify the -1685 action, and to seek similar "defendant class action" status
for the -3819 action.  If successful in its certification efforts, the defendant
classes in the -1685 and -3819 actions would include approximately one-hundred 
potential infringers of the multi-speed network processing and related patents.

In John Frassanito and David A. Monroe v. Datapoint Corp., Civil Action 
No. H-95-812 (S.D. Tex.) plaintiffs alleged that the Company usurped various 
patentable inventions and trade secrets in connection with the development of 
its MINX systems.  They also asserted a cause of action for patent infringement,
and a cause of action requiring Datapoint to assign certain MINX-related 
patents and other intellectual property.  On August 16, 1996, the Court 
dismissed with prejudice plaintiffs' claims of patent infringement against 
Datapoint and dismissed without prejudice plaintiff's pendent state law claims 
and Datapoint's state law counter-claims for lack of subject matter 
jurisdiction.

These actions represent the first step in the Company's industry-wide program 
to license and enforce its multi-speed networking patents and video 
conferencing patents through negotiations and/or litigation.  Currently the 
Company is pursuing litigation in this respect against six defendants and has 
negotiated three settlements, two for an aggregate of $1.0 million and one for 
an undisclosed amount.  The Company believes that these patents provide broad 
coverage in video conferencing and multi-speed networking technology and 
present the opportunity for further royalty bearing licenses.  Such royalty 
bearing licenses and enforcement of its patents will be a primary strategy of 
the Company's business going forward to create long-term value for its 
stockholders.

<PAGE>

The Company utilizes a number of trademarks, most importantly "DATAPOINT", 
"ARCNET" and "MINX".  The Company registers or otherwise protects those 
trademarks it deems valuable to its business and anticipates no significant 
impairment of its ability to continue to use and protect its important 
trademarks.  Datapoint, the "D" logo, ARC, ARCNET, RMS, MINX, and Resource 
Management System are trademarks of Datapoint Corporation registered in the 
U.S. Patent and Trademark office.  Attached Resource Computer, ARCNETPLUS, and 
DATALAN are trademarks of the Company.  (AT&T is a registered trademark of
American Telephone and Telegraph.  Ethernet is a registered trademark of Xerox 
Corporation.  Intel is a registered trademark of Intel Corporation.  Microsoft 
and MS-DOS are registered trademarks of Microsoft Corporation.  UNIX is a 
registered trademark of UNIX System Laboratories, Inc.)

Employees 

At July 27, 1996, the Company had 705 employees.  The Company considers its
relations with employees to be satisfactory.

Environmental Matters

Compliance with current federal, state, and local regulations relating to the 
protection of the environment has not had, and is not expected to have, a 
material effect upon the capital expenditures, earnings, or competitive 
position of Datapoint.

ITEM 2.  Properties.

Datapoint's principal executive offices are located in Paris, France and the 
Company maintains executive offices in San Antonio, Texas.  Datapoint believes 
that its plants and offices are generally well maintained, in good operating 
condition and are adequately equipped for their present use.  Information 
regarding the principal plants and properties, excluding leases assigned or 
subleased, as of July 27, 1996 is as follows:

	                           	Approximate               
	                        	    Facility         
      Location       	Use 	  Sq. Footage  Owned or Leased Land Area

San Antonio, Texas	  Office	   144,000    Owned; 12 acres (Subject to mortgage)
Gouda, Netherlands	  Office	    52,000    Owned; 1 acre (Subject to mortgage)
Paris, France	       Office	     7,000    Leased; expires June 30, 1999

Additionally, at July 27, 1996, excluding leases assigned or subleased, the 
Company leased sales and service offices having an aggregate of 256,000 square 
feet in metropolitan areas throughout the world, pursuant to lease agreements 
which expire between 1996 and 2009.  The aggregate annual rental of all of 
these sales and service offices is approximately $3.3 million and most of these
leases are subject to rental increases under certain escalation provisions and 
renewals on similar terms.

ITEM 3.  Legal Proceedings.

In December 1994, a lawsuit was brought against the Company involving the 
earlier sale of real estate by the Company.  In April 1996, an adverse jury 
verdict was rendered against the Company and two of its executive officers.  
During the fourth quarter of 1996, a settlement was reached among the 
litigants.  As such, the District Court entered a Judgment Non Obstante 
Veredicto (Judgment Notwithstanding the Verdict) that set aside the jury's 
findings against the Company and its two executive officers and set aside all 
damages.  The $3.3 million settlement, which was reached to avoid the 
considerable expense, including the business disruption of a protracted appeal 
and legal process, had no material impact on the Company's then current cash 
position as it included payment of funds from a non-working capital trust fund 
which were otherwise not available to the Company, issuance of a short term 
note, and shares of the Company's common stock.

The Company is a defendant in various lawsuits generally incidental to its 
business.  The amounts sought by the plaintiffs in such cases are substantial 
and, if all such cases were decided adversely to the Company, the Company's 
aggregate liability might be material.  However, the Company does not expect 
such an aggregate result based upon the limited number of such actions and an 
assessment that most such actions will be successfully defended.  No provision 
has been made in the accompanying financial statements for any possible 
liability with respect to such lawsuits.

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

Not applicable.

<PAGE>

PART II

ITEM 5.  Market for Registrant's Common Equity and Related Stockholder Matters.

Datapoint Corporation common stock is traded on the New York Stock Exchange 
under the symbol "DPT".  As of October 18, 1996, there were approximately 3,128
holders and 13,931,640 outstanding shares of Common Stock.  The prices below 
represent the high and low prices for composite transactions for stock traded
during the applicable period.  The Company has not paid cash dividends to date 
on its common stock and has no present intention to pay cash dividends on its 
common stock in the near future.

       Fiscal
        year  	             	High       	Low
        1996     	Q4       	 1.88       	1.00
	                 Q3         1.88       	1.00
                 	Q2       	 1.50       	1.00
	                 Q1       	 2.38       	1.38


                           		High       	Low
        1995 	    Q4      	  1.88       	1.00
                 	Q3       	 2.00       	1.25
	                 Q2       	 2.34       	1.50
                 	Q1       	 3.88       	1.25

<PAGE>

ITEM 6.  Selected Financial Data.

Selected Financial Data
Five-Year Comparison
(Dollars in thousands, except per share data)
<TABLE>
                                            	        1996 	     1995  	     1994 	        1993 	      1992 	
<S>                                                   <C>        <C>         <C>           <C>         <C>
Operating Results for the Fiscal Year
Total revenue		                                   $179,541	   $174,901	   $172,936 	    $208,344 	 $255,243
Operating income (loss)		                            1,017	    (18,232)    (81,021)       (1,258)     6,655
Income (loss) before extraordinary credit,
  (utilization of tax loss carryforward) and
  effect of change in accounting principle		        19,015	    (28,343)	   (94,765)      (11,859)   (10,409)
Net income (loss)		                                 19,342	    (28,343)    (93,425)      (11,260)    (8,756)
Net income (loss) per common share:
   Before extraordinary credit and effect of change
      in accounting principle		                       1.27 	     (2.29)	     (6.69)        (.97)      (1.62)
    After extraordinary credit and effect of change
      in accounting principle		                       1.30       (2.29)      (6.60)        (.93)	     (1.47)
Net income per common share assuming full dilution:
    Before extraordinary credit and effect of change
      in accounting principle               		        1.11         n/a         n/a          n/a         n/a
    After extraordinary credit		                      1.13         n/a         n/a          n/a         n/a

Financial Position at End of Fiscal Year
Current assets		                                   $69,995	    $67,506     $79,915      $94,169    $121,991
Fixed assets, net		                                 14,625	     18,877      29,088	      27,950      34,533
Total assets		                                      93,818	    101,751     127,434      202,275     248,813
Current liabilities		                               76,965	    100,256      98,202       74,759      90,581
Long-term debt		                                    63,945	     64,923      70,561       71,551	     66,101
Stockholders' equity (deficit)		                   (55,202)	   (74,116)    (50,761)      47,021	     74,835

Other Information
Average common shares outstanding		             13,455,878 	13,194,667 	14,430,574  	14,081,964 	11,093,431
Number of common stockholders of record		            3,142	      3,274       3,378 	      3,710 	     3,877
Preferred shares outstanding		                   1,868,071	  1,846,456	  1,784,456 	  1,784,456 	 1,784,456
Dividends paid or accumulated on preferred stock	   $1,885      $1,815	     $1,784 	     $1,784 	    $7,601
Number of employees		                                  705	        991 	     1,444 	      1,528 	     1,777

No cash dividends on common stock have been declared during the five-year period.
Net income for 1996 includes a gain of $32.2 million resulting from a divestiture.
See notes to Consolidated Financial Statements and Management Discussion and Analysis of Financial Condition 
 and Results of Operations.

</TABLE>
<PAGE>

ITEM 7.  Management's Discussion and Analysis of Financial Condition and 
Results of Operations.

Overview

Throughout 1996, the Company's main objectives to preserve and improve the
Company's cash liquidity and financial position and to allow the Company to meet
its future operating cash flow requirements were as follows: 

1. Product marketing to maintain stabilized revenue levels
2. Continued review and reduction of operating costs; and 
3. One-time cash infusions to meet operating requirements.

During 1996, the Company had total revenue of $179.5 million, an increase of  
$4.6 million from the previous year. The increase was primarily attributable to
higher sales in certain of the Company's European subsidiaries offset by a
declining maintenance revenue base in the European subsidiaries and a favorable
impact of $2.2 million related to the weakening U.S. dollar when compared with
the same period a year ago. In addition, as a result of the full year
realization of the several cost cutting actions undertaken in the prior year, 
operating expenses decreased $12.3 million. The combination of these two
factors resulted in the Company's achieving operating income during 1996 of
$1.0 million.  

During 1996, the Company pursued and is continuing to pursue actions to provide
cash infusions, including the sale of selected assets and operations of the
Company, to meet certain of its obligations and to improve its financial
position. In this regard, on May 28, 1996, the Company entered into an 
agreement with Kalamazoo Computer Group, plc, a public limited company organized
under the laws of England, providing for the sale by Datapoint to Kalamazoo of 
EADS, other than its United Kingdom operations, for a purchase price of $33.0 
million.  After net liabilities transferred to Kalamazoo and other expenses 
related to the sale, the Company's net cash proceeds were approximately $29.4
million.  As part ofthe agreement, the Company will continue to provide computer
hardware and hardware services to the EADS network, at various discounts, 
through a subcontract agreement with Kalamazoo.

Of the approximate $29.4 million net proceeds received from the above sale, the
Company paid $850,000 to satisfy and discharge in full the outstanding senior
secured indebtedness owing to the CIT Group/Credit Finance ("CIT") and paid
Northern Telecom Inc. ("NTI"), one of its two generally secured creditors, $2.2
million representing the two deferred principal payments on secured debt which
were due in December 1994 and December 1995, as well as accrued and unpaid
interest.  In addition, the proceeds from the Kalamazoo transaction enabled the
Company to pay by June 30, 1996 (within the 30-day grace period measured from
June 1, 1996) the $2.9 million interest payment on the 8-7/8% convertible
subordinated Debentures.  On July 1, 1996, Datapoint entered into an agreement
with NTI pursuant to which Datapoint paid $5.05 million to NTI in full
satisfaction of all amounts due and to be due under the note.  Datapoint had 
entered into with NTI to resolve a patent dispute.  The prepayment agreement
relieves the Company of its obligation to make annual $1.0 million payments to
NTI that commenced in December 1993 and of which seven payments remained to be
made, as well as certain contingent payment obligations.  The balance of the 
proceeds from the sale of EADS will be utilized by Datapoint for working 
capital purposes and to pay other obligations of the Company.  This may include,
from time to time, repurchasing in the public market or in privately negotiated
transactions the Debentures or otherwise reducing existing debt owed by the 
Company to its creditor groups.

In addition, on July 24, 1996, the Company announced that its Board of 
Directors determined to offer for exchange for each share of its $1.00 
Exchangeable Preferred Stock ($1.00 par value) 3.25 shares of its Common Stock 
($.25 par value) and to submit a proposal to stockholders under which each share
of its $1.00 Exchangeable Preferred Stock would be converted into 3.25 shares 
of Common Stock. The Company had previously announced on April 16, 1996, that 
it intended to submit to its stockholders a proposal to effect the conversion 
of the $1.00 Exchangeable Preferred Stock into 2.75 shares of its Common Stock.
The affirmative vote of two-thirds of the outstanding shares of the $1.00 
Exchangeable Preferred Stock and a majority vote of the outstanding shares of 
the Common Stock will be required to adopt the proposal which the Company 
expects to submit at its Annual Meeting of Stockholders expected to be held on 
December 10, 1996.  On January 16, 1996, the Company announced that it was in 
arrears on its $1.00 preferred stock in an aggregate amount equal to six full 
quarterly dividends.  As a result, each holder of $1.00 preferred stock 
currently has the right to exchange each such share into two shares of the 
Company's common stock.  
   	
Financial Condition and Liquidity

During 1996, the Company's net cash provided from operations was $1.3 million.
Primarily, this was attributable to reduced inventory and accounts receivable,
offset by the $3.8 million in payments of restructuring costs.

During 1996, net cash provided from investing activities increased $25.8
million.  This increase was largely due to the approximate $29.4 million net 
proceeds received from the sale of EADS to Kalamazoo, offset by fixed asset
purchases, net of dispositions, of $3.4 million.

<PAGE>

Net cash used in financing activities was $11.9 million in 1996, primarily
related to the net paydown of the Company's borrowings including the debt
repayments to CIT and NTI.

As of July 27, 1996, the Company had restricted cash of $0.9 million as 
compared to $2.5 million in the prior year.  The 1996 and 1995 balances were 
restricted primarily to cover various lines of credits, reflected as payables 
to banks. 

Cash used for investment in fixed assets (primarily test equipment, spares and
internally-used equipment) was $3.7 million in 1996, compared to $4.7 million 
in 1995 and $10.8 million in 1994.  There are no material commitments for 
capital expenditures at the present time.  

Accounts payable decreased to $20.3 million in 1996 from $23.3 million in 1995.
Throughout the year, the Company continued to work with its accounts payable
creditors to extend additional credit and credit terms, thus maintaining
functional relationships with such creditors during 1996.  The Company has no 
significant purchase commitments outstanding as of July 27, 1996.

The Company's cash and cash equivalents increased $14.7 million to $23.2
million.  This was primarily due to the cash infusion in 1996 of approximately
$29.4 million resulting from the sale of the Company's EADS business to
Kalamazoo, as described earlier, offset by the payments of a large portion of
the Company's debt.

As of July 27, 1996, the Company has included in payables to banks an amount of
$5.0 million payable to International Factors "De Factorij" B.V., a subsidiary
of ABN-AMRO Bank of the Netherlands.  The loan is secured by the receivables of
the Company's U.K., Dutch and German subsidiaries.

The Company had a secured credit facility with The CIT Group/Credit Finance
("CIT"), which consisted of a term loan and a revolving loan.  From the 
proceeds of the sale of EADS, the Company paid $850,000 to satisfy and 
discharge in full the indebtedness owed to CIT. 

The Company has available lines of credit from foreign banks to its foreign
subsidiaries.  The unused lines of credit at July 27, 1996 totaled $2.7 million
after borrowings of $9.8 million.  

The Company believes its available cash, cash equivalents and funds generated 
by operations will be sufficient to provide its working capital and cash
requirements for fiscal 1997.  In addition, management believes the Company will
be able to discharge its obligations in the long term with cash generated from 
operations and other sources such as sale of selected assets or operations, and
capital transactions.

During 1993, the Company settled a long standing patent-related legal action
brought against it by NTI.  Pursuant to this settlement, during 1994 and 1993,
the Company paid NTI $1.0 million and $7.5 million, respectively.  The Company 
also agreed to a ten-year note payable to NTI which required annual $1.0 
million payments each December.  As of June 24, 1996, the December 1994 and 
December 1995 installments were in arrears.  From the proceeds of the sale of 
EADS, the Company paid NTI $2.2 million representing payment of these deferred 
payments plus accrued and unpaid interest.  On July 1, 1996, the Company entered
into an agreement with NTI pursuant to which Datapoint paid $5.05 million to NTI
in full satisfaction of all amounts due and to be due.  The prepayment 
agreement relieved the Company of its obligation to make the annual $1.0 
million payments as well as certain contingent payment obligations.

As a result of the Company's capital deficiency which existed at the end of 
1994 and throughout 1995 and 1996, the Company determined not to pay the 
October 15, 1994, January 15, 1995, April 15, 1995, July 15, 1995, October 15, 
1995, January 15, 1996, April 15, 1996, July 15, 1996, and the October 15, 1996
preferred dividend payments to stockholders.  Since dividends are at least six 
quarters in arrears, the preferred stockholders have the right to vote as a 
separate class and elect two board members at the next annual meeting of 
shareholders and each preferred share (inclusive of all accrued and unpaid 
dividends) is exchangeable into two shares of common stock at the option of the
holder.  

The Company adopted, effective August 1, 1993, SFAS No. 109, "Accounting for
Income Taxes", which superseded SFAS No. 96 and APB Opinion No. 11.  The 
Company recorded a favorable cumulative accounting change effect of 
approximately $1.3 million in the first quarter of fiscal 1994 (see note 4 to 
Consolidated Financial Statements).

At July 27, 1996, the Company had available federal tax net operating losses
aggregating approximately $165.0 million, expiring in various amounts beginning
in 2001.  In the event that the Company's ability to utilize its net operating
losses to reduce its federal tax liability with respect to current and future
income becomes subject to limitation, the Company may be required to pay, 
sooner than it otherwise might have to, any amounts owing with respect to such
federal tax liability, which would reduce the amount of cash otherwise 
available to the Company (see note 4 to Consolidated Financial Statements).

<PAGE>

In December 1994, a lawsuit was brought against the Company involving the
earlier sale of real estate by the Company.  In April 1996, an adverse jury
verdict was rendered against the Company and two of its executive officers. 
During the fourth quarter of 1996, a settlement was reached among the 
litigants.  As such, the District Court entered a Judgment Non Obstante 
Veredicto (Judgment Notwithstanding the Verdict) that set aside the jury's 
findings against the Company and its two executive officers and set aside all 
damages.  The $3.3 million settlement, which was reached to avoid the 
considerable expense, including the business disruption of a protracted appeal 
and legal process, had no material impact on the Company's then current cash 
position as it included payment of funds from a non-working capital trust fund
which were otherwise not available to the Company, issuance of a short term 
note, and shares of the Company's common stock.

Reorganization/Restructuring Costs
(In thousands)

A rollforward of the restructuring accrual from July 31, 1993 through 
July 27, 1996 is as follows:


                                                        		TOTAL
Restructuring accrual as of July 31, 1993	                $2,565
Fiscal 1994 additions	                                    14,853
Fiscal 1994 payments	                                     (3,430)
Restructuring accrual as of July 30, 1994	                13,988
Fiscal 1995 additions	                                     9,213
Fiscal 1995 asset write-offs	                             (1,895)
Fiscal 1995 payments	                                    (17,138)
Restructuring accrual as of July 29, 1995	                $4,168
Fiscal 1996 additions	                                       263
Fiscal 1996 payments	                                     (3,776)
Restructuring accrual as of July 27, 1996	                $  655

The projected payout of the restructuring accrual balance as of July 27, 1996,
which related almost entirely to unpaid employee termination costs, is as 
follows:

First quarter 1997	                                       $  491
Second quarter 1997	                                          74
Third quarter 1997	                                           43
Fourth quarter 1997	                                          22
Beyond		                                                      25
Restructuring accrual as of July 27, 1996	                $  655

Restructuring charges are not recorded until specific employees are determined
(and notified of termination) by management in accordance with its overall 
restructuring plan.  As such, employee termination payments are generally paid
out over a period of time rather than as one lump sum.  Although a reasonable
estimate of the amount of future termination costs cannot be made at this time,
management expects to incur additional charges for terminations.

<PAGE> 

Results of Operations

The following is a summary of the Company's sources of revenue for each of
fiscal 1996, 1995 and 1994:

(In thousands)     
                          	          1996       1995	      1994 
Sales:
	U.S.	                             $3,185	    $5,728	    $6,453  
	Foreign                   	       95,691	    78,459	    78,300 
                     	             98,876	    84,187	    84,753 

Service and other:
	U.S.                    	            906	     1,393	     1,164 
	Foreign          	                79,759	    89,321	    87,019 
                     	             80,665	    90,714	    88,183 
                   
Total revenue 	                  $179,541	  $174,901  	$172,936 

1996 Compared to 1995

Total revenue increased by 2.7% to $179.5 million in 1996 from $174.9 million 
in 1995.  The increase was primarily attributable to higher sales volume in 
certain of the Company's European subsidiaries offset by a declining 
maintenance revenue base in the European subsidiaries and a favorable impact of
$2.2 million related to the weakening U.S. dollar when compared with the same
period a year ago.

Included in the operating income for 1996 of $1.0 million is a $0.4 million 
inventory provision and $2.7 million bonus accrual of which $2.1 million is 
related to contractual arrangements with three of the Company's executive
officers and based upon the pre-tax profitability of the Company.

Gross profit margins during 1996 were 30.9% compared with 32.9% for 1995. 
Excluding the additional inventory provisions recorded in 1996, the gross
profit margins were 31.2%.  The decrease was primarily due to the impact of a 
high sales volume of a low margin commodity product in a Northern European
subsidiary, a changing product mix toward lower margin, non-company sourced
product and competitive pricing pressures worldwide.  

Operating expenses (research and development plus selling, general &
administrative) during 1996 declined 18.4% or $12.3 million from 1995 to $54.3
million.  The decline was a result of the continued cost-cutting actions taken
over 1996 and 1995 which reduced costs of internal operations offset by an
unfavorable impact of $0.5 million related to the weakening U.S. dollar when
compared with the same period a year ago.  Research and development expenses
decreased from $4.3 million in 1995 to $2.7 million in 1996.  Management 
expects research and development expenditures to remain relatively flat in 
1997.

Non-operating results for 1996 include a gain of $32.2 million from the sale of
the Company's European Automotive Dealer Management Systems business to
Kalamazoo Computer Group, plc. and a $0.7 million in foreign currency exchange
rate gains on certain of the Company's intercompany payables and receivables 
offset by a $3.3 million legal settlement.  Non-operating results for 1995 
include the $1.7 million gain on the sale of vacant land in San Antonio, Texas,
$1.0 million from the favorable settlement of two patent infringement lawsuits,
and $1.5 million in foreign exchange rate losses on the Company's intercompany
payables and receivables.

1995 Compared to 1994

Total revenue increased by 1% to $174.9 million in 1995 from $172.9 million in
1994.  The increase was due to a weaker U.S. dollar, on average, in 1995 as 
compared to the average U.S. dollar strength in 1994 as the Company incurred a 
$14.6 million increase in total revenue attributable solely to currency changes
($6.4 million for sales and $8.1 million for service and other). 

Included in the operating loss for 1995 of $18.2 million were additional 
inventory provisions of $5.0 million and $1.0 million of additional receivable
provisions.  Operating income during 1994 included a fire insurance settlement
gain of $0.9 million related to a fire in the second quarter in a leased 
warehouse facility in the Company's Belgian subsidiary. 

Gross profit margins during 1995 were 32.9% compared with 37.9% for 1994.  
Excluding the additional inventory provisions recorded in 1995, the gross 
profit margins were 35.7%.  Gross profit margins during 1994 were 37.9% 
compared with 41.6% for 1993.  Excluding the impact upon cost of sales of the 
fires noted above, gross profit margins during 1994 were 37.4%.

<PAGE>

Operating expenses (research and development plus selling, general & 
administrative) during 1995 declined 10% or $7.6 million from 1994 to $66.5 
million.  The decline was a result of cost-cutting actions taken over 1995 
which reduced costs of internal operations.  Excluding the impact of the weaker
U.S. dollar in 1995 as compared with 1994, operating expenses declined $10.3 
million year over year.

Interest expense decreased $0.2 million in 1995 from 1994 as the Company 
benefited from both lower rates on borrowings in Europe and decreased borrowing
amounts in the U.S.

Non-operating results for 1995 include a gain of $1.7 million from the sale of
the vacant land in San Antonio, Texas, $1.0 million from the favorable
settlement of two patent infringement lawsuits, and $1.5 million in foreign 
exchange rate losses on the Company's intercompany payables and receivables. 
Non-operating results for 1994 include the $3.2 million write-off of an 
investment in a partially owned company, $0.7 million in foreign currency 
exchange rate losses on certain of the Company's intercompany payables and 
receivables and a $0.5 million fire settlement gain on fixed assets.  

Prior to 1994, the Company's foreign subsidiaries reported their results to the
parent on a one-month lag which allowed more time to compile results but 
produced comparability problems in management accounting.  Due to improved
internal applications, the one-month lag became unnecessary and therefore was 
eliminated subsequent to 1993 and prior to 1994.  As a result, the July 1993 
results of operations for the Company's foreign subsidiaries was recorded to 
the retained deficit.  This action resulted in a charge of $5.5 million being 
recorded against the retained deficit.  The loss incurred in July 1993 resulted
primarily from a low revenue level, which is usual for the first month 
following the end of a fiscal year.

Cautionary Statement Regarding Risks And Uncertainties That May Affect Future 
Results

This Annual Report on Form 10-K contains forward-looking statements about the 
business, financial condition and prospects of the Company.  The actual results
of the Company could differ materially from those indicated by the forward-
looking statements because of various risks and uncertainties including without
limitation changes in product demand, the availability of products, changes in 
competition, economic conditions, new product development, various inventory 
risks due to changed in market conditions, changes in tax and other 
governmental rules and regulations applicable to the Company, and other risks 
indicated in the Company's filings with the Securities and Exchange Commission.
These risks and uncertainties are beyond the ability of the Company to control,
and in many cases, the Company cannot predict the risks and uncertainties that 
could cause its actual results to differ materially from those indicated by the
forward-looking statements.  When used in this Annual Report on Form 10-K, the 
words "believes," "estimates," "plans," "expects," and "anticipates" and 
similar expressions as they relate to the Company or its management are 
intended to identify forward-looking statements. 

<PAGE>

ITEM 8.  Financial Statements and Supplementary Data.

INDEX TO FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA


                                                                       	Page

Report of Ernst & Young LLP Independent Auditors	                        16

Consolidated Financial Statements

	Consolidated Statements of Operations for the fiscal years 1996, 1995 
 and 1994                                                               	17

	Consolidated Balance Sheets as of July 27, 1996 and July 29, 1995	      18

	Consolidated Statements of Cash Flows for the fiscal years 1996, 1995
 and 1994                                                               	19

	Consolidated Statements of Stockholders' Deficit for the fiscal years
 1996, 1995 and 1994                                                    	20

	Notes to Consolidated Financial Statements                             	21

<PAGE>

REPORT OF ERNST & YOUNG LLP
INDEPENDENT AUDITORS

The Board of Directors 
Datapoint Corporation

We have audited the accompanying consolidated balance sheets of Datapoint 
Corporation and subsidiaries (the Company) as of July 27, 1996 and July 29, 
1995 and the related consolidated statements of operations, stockholders' 
deficit and cash flows for each of the three fiscal years in the period ended 
July 27, 1996.  Our audits also included the financial statement schedule 
listed in the index at Item 14(a). These financial statements and schedule are 
the responsibility of the Company's management.  Our responsibility is to 
express an opinion on these financial statements and schedule based on our 
audits.

We conducted our audits in accordance with generally accepted auditing
standards.  Those standards require that we plan and perform the audit to 
obtain reasonable assurance about whether the financial statements are free of 
material misstatement.  An audit includes examining, on a test basis, evidence 
supporting the amounts and disclosures in the financial statements.  An audit 
also includes assessing the accounting principles used and significant 
estimates made by management, as well as evaluating the overall financial 
statement presentation.  We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of the 
Company at July 27, 1996 and July 29, 1995 and the consolidated results of its 
operations and its cash flows for each of the three fiscal years in the period 
ended July 27, 1996 in conformity with generally accepted accounting 
principles.  Also, in our opinion the related financial statement schedule, 
when considered in relation to the basic financial statements taken as a whole,
presents fairly in all material respects the information set forth therein.

As discussed in Note 4 to the consolidated financial statements, the Company 
changed its method of accounting for income taxes in 1994.


                                                		Ernst & Young LLP



Dallas, Texas
October 21, 1996


<PAGE>
<TABLE>
CONSOLIDATED STATEMENTS OF OPERATIONS
Datapoint Corporation and Subsidiaries Fiscal Years 1996, 1995 and 1994
(In thousands, except share and per share data) 
	                                                                 1996 	       1995 	      1994 
<S>                                                            <C>           <C>         <C>      
Revenue:
	Sales                                           	              $98,876	     $84,187 	   $84,753
	Service and other	                                              80,665	      90,714 	    88,183
		Total revenue	                                                179,541	     174,901 	   172,936

Operating costs and expenses:
	Cost of sales	                                                  72,483	      65,234 	    49,912
	Cost of service and other	                                      51,524	      52,163 	    57,459
	Research and development	                                        2,661	       4,303 	     5,268
	Selling, general and administrative	                            51,593	      62,220 	    68,808
	Write-off of investment in foreign operations	                       -	           - 	    57,657
	Reorganization/restructuring costs 	                               263 	      9,213 	    14,853
		Total operating costs and expenses	                           178,524	     193,133 	   253,957

Operating income (loss)                                           1,017	     (18,232)    (81,021)

Non-operating income (expense):
	Interest expense	                                               (8,619)	     (9,332)     (9,097)
	Realized gain on sale of European based Auto Dealer Systems	    32,200	           -           - 
	Other, net	                                                     (1,891)	       (580)     (4,293)
		Income (loss) before income taxes, extraordinary credit
		  and effect of change in accounting principle	                22,707	     (28,144)    (94,411)
Income taxes 	                                                    3,692	         199 	       354
		Income (loss) before  extraordinary credit and effect
		  of change in accounting principle	                           19,015	     (28,343)    (94,765)
 	 
Extraordinary credit-debt extinguishment                            327	           -           - 
		Income (loss) before effect of change in
		  accounting principle	                                        19,342	     (28,343)    (94,765)

Effect of change in accounting principle	                             -	           - 	     1,340
Net income (loss)	                                              $19,342     $(28,343)   $(93,425)
Net income (loss), less preferred stock dividends
	 paid or accumulated 	                                         $17,457     $(30,158) 	 $(95,209)

Net income (loss) per common share:
	 Before extraordinary credit and effect of change in accounting
    principle                                                     $1.27       $(2.29) 	   $(6.69)
	 Extraordinary credit-debt extinguishment	                         .03            -           -
  Effect of change in accounting principle                            -            -         .09
		Net income (loss)	                                              $1.30       $(2.29)     $(6.60) 

Net income per common share assuming full dilution:
	Before extraordinary credit and effect of change in accounting
	  principle                                              	       $1.11	           -           - 	
	Extraordinary credit-debt extinguishment	                          .02 	          - 	         -
		Net income 	                                                    $1.13	           -           - 

Average common shares outstanding:
	 Primary	                                                   13,455,878	  13,194,667  14,430,574 
	 Assuming full dilution	 	                                  17,192,020	         n/a         n/a
See accompanying Notes to Consolidated Financial Statements. 
</TABLE>
<PAGE>

<TABLE>
CONSOLIDATED BALANCE SHEETS
Datapoint Corporation and Subsidiaries July 27, 1996 and July 29, 1995
(In thousands, except share data) 
                                                                              1996            1995                
<S>                                                                             <C>            <C>  
Assets
Current assets:
	Cash and cash equivalents	                                                   $23,184        $8,493 
	Restricted cash and cash equivalents	                                            864	        2,549 
	Accounts receivable, net of allowance for doubtful		
	  accounts of $2,791 and $3,012, respectively	                                38,735	       43,072 
	Inventories	                                                                   3,726	        9,754 
	Prepaid expenses and other current assets	                                     3,486	        3,638 
		Total current assets	                                                        69,995	       67,506 

Fixed assets, net	                                                             14,625	       18,877
Other assets, net	                                                              9,198	       15,368
                                                                         		   $93,818	     $101,751

Liabilities and Stockholders' Deficit

Current liabilities:
	Payables to banks	                                                            $9,831 	     $16,757
	Current maturities of long-term debt and
		long-term debt subject to accelerated maturity	                               3,114	        9,217
	Accounts payable	                                                             20,280	       23,286
	Accrued expenses	                                                             29,256	       34,857
	Deferred revenue	                                                             11,642	       15,291
	Income taxes payable	                                                          2,842	          848
		Total current liabilities	                                                   76,965 	     100,256

Long-term debt, exclusive of current maturities	                               63,945        64,923
Other liabilities	                                                              8,110	       10,688

Commitments and contingencies	      	      

Stockholders' deficit:
	Preferred stock of $1.00 par value.  Shares authorized 10,000,000; shares
	  issued and outstanding 1,868,071 in 1996 and 1,846,456 in 1995
	  (aggregate liquidation preference, including dividends in arrears,
	  $41,061 in 1996 and $38,744 in 1995).                                        1,868	        1,846 
	Common stock of $0.25 par value.  Shares authorized 40,000,000; shares		
	  issued 20,991,217, including treasury shares of
	  7,043,593 in 1996 and 7,866,832 in 1995.	                                    5,248 	       5,248 
	Other capital	                                                               212,655 	     212,630 
	Foreign currency translation adjustment 	                                     11,567	       13,004
	Retained deficit	                                                           (248,226)	    (261,742)
	Treasury stock, at cost 	                                                    (38,314)	     (45,102)
		Total stockholders' deficit	                                                (55,202)	     (74,116)
                                                                        	  	$  93,818      $101,751

See accompanying Notes to Consolidated Financial Statements.
</TABLE>
<PAGE>

<TABLE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
Datapoint Corporation and Subsidiaries Fiscal Years 1996, 1995 and 1994
(In thousands)
                                                                  1996         1995       1994 
<S>                                                              <C>          <C>         <C>          
Cash flows from operating activities:
	Net income (loss)                                               		$19,342   	$(28,343)   $(93,425)
	Adjustments to reconcile net loss to net cash 	
	used in operating activities:
		Losses incurred in lag month eliminated		                              -	          -	     (5,470)
		Effect of change in accounting principle		                             -	          -	     (1,340)
		Depreciation and amortization		                                    6,969	      9,830	     10,729 
		Write-off of investment in foreign operations		                        -	          - 	    57,657
		Write-off of investment in partially-owned company		                   -	          - 	     3,210
		Proceeds from settlement of litigation		                               -	      5,540	          -
		Realized gain on fixed assets fire settlement		                        -	          -	       (534)
		Provision for losses on accounts receivable		                        170	      2,147 	       803
		Provision for fixed asset write-off		                                  -	      1,895	          -
		Realized gain on sale of property		                                    -      (1,709)	         -
		Realized gain on sale of EADS	                                  	(32,200)	         -	          -
		Gain on debt extinguishment	                                        (327)	         -	          -
		Changes in assets and liabilities:	
		Decrease in receivables		                                          1,467	      4,111 	       801
		Decrease in inventory		                                            5,436	      8,885 	     1,007
		Increase (decrease) in accounts payable and accrued expenses		    (6,503)	    (9,700)	    19,747
		Increase in other liabilities and deferred credits		               2,482	        614 	       388 
		  Decrease in deferred taxes - EADS sale	                          1,673           -           -
		  Use of restricted funds held in trust		                          3,018	          -	          -
		Other, net		                                                        (232)	     1,138         139 
		Net cash provided from (used in) operating activities		            1,295	     (5,592) 	   (6,288)
 
Cash flows from investing activities:
	Payments for fixed assets		                                        (3,725)	    (4,660)	   (10,828)
	Proceeds from the sale of EADS		                                   29,450	          -	          -
	Proceeds from disposition of fixed assets		                           278 	     7,948 	     2,426 
	Other, net 		                                                        (217)	       699 	      (648)
		Net cash provided from (used in) investing activities		           25,786	      3,987	     (9,050)

Cash flows from financing activities:
	Payments on borrowings		                                          (44,963)	   (33,149)	   (32,606)
	Proceeds from borrowings		                                         31,383      31,840 	    33,126 
	Payments of dividends on preferred stock		                              -	          -	     (1,784)
	Restricted cash for letters of credit		                             1,685	      1,763 	       147
	Proceeds on sale of common stock		                                      -	      2,536 	        52 
		Net cash provided from (used in) financing activities	        	  (11,895)	     2,990	     (1,065)
 
Effect of foreign currency translation on cash               		       (495)	       867 	       192
Net increase (decrease) in cash and cash equivalents	          	    14,691	      2,252     (16,211)
Cash and cash equivalents at beginning of year		                     8,493	      6,241 	    22,452 
Cash and cash equivalents at end of year		                         $23,184	     $8,493 	    $6,241  
				            
Cash payments for:				            
Interest		                                                          $8,625	     $8,112 	    $8,781 
Income taxes (refunds), net		                                          514	       (152) 	      362 

See accompanying Notes to Consolidated Financial Statements.
</TABLE>

<PAGE>

<TABLE>
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT
Datapoint Corporation and Subsidiaries Fiscal Years 1996, 1995, and 1994
(In thousands)

			                                                               	            Foreign
		                                                       $1.00                 Currency	
	                                               Common	  Preferred 	 Other 	   Translation   Retained     Treasury
		                                              Stock 	  Stock	      Capital 	 Adjustment    Deficit      Stock	 
<S>                                            <C>      <C>         <C>        <C>           <C>          <C>      
Balance at July 31, 1993                       	$5,248   $1,784  	   $212,599 	$ 7,707 	     $(125,581)	  $(54,736)
Losses incurred in lag month eliminated	             - 	      - 	           - 	      - 	        (5,470)	         - 
Net loss	                                            - 	      - 	           - 	      - 	       (93,425)	         - 
Common stock options exercised	                      -        - 	           - 	      - 	          (717)	       935 
Dividends paid on preferred stock	                   - 	      - 	           - 	      - 	        (1,784)	         - 
Foreign currency translation adjustment	             - 	      - 	           - 	  2,845               - 	         - 
Common stock issued to 401(k) Plan	                  -  	     - 	           - 	      - 	             -	          6
Common stock purchased from 401(k) Plan	             - 	      - 	           - 	      - 	             -	       (172)
Balance at July 30, 1994                       	$5,248	  $1,784 	    $212,599 	$10,552 	     $(226,977)	  $(53,967)
Net loss	                                            -	       -	            -	       -         (28,343)	         -
Common stock options exercised	                      -	       -	            -	       -          (1,036)	     1,292
Foreign currency translation adjustment	             -	       -	            -	   2,452               -           -
Regulation S public filing	                          -	       -	            -	       -          (4,029)      5,776
Consulting Compensation	                             -	       -	            -	       	            (445)	       594
Employment separation	                               -	       -	            -	       -            (814)      1,064
Executive Retirement Plan contribution	              -	      62            31        -               -           -
Common stock issued to 401(k) Plan	                  -	       -	            -        -             (98)        139
Balance at July 29, 1995                       	$5,248  	$1,846	     $212,630  $13,004       $(261,742)   $(45,102)
Net income	                                          -	       -	            -	       -          19,342 	        	-
Foreign currency translation adjustment	             -	       -	            -	  (1,437)              -	          -
Lawsuit settlement	                                  -	       -	            -	       -            (133)	       165
Executive Compensation	                              -	       -	            -	       -            (132)	       165
Lawsuit settlement	                                  -	       -	            -	       -            (700)	       825
Employment separation 	                              -	       -	            -	       -          (2,082) 	    2,413
Consulting Compensation 	                            -	       -	            -	       -            (128)	       149
Executive retirement	                                -	       -	            -	       -          (1,031)      1,238
Preferred stock conversion	                          -	     (28)            -        -            (439)	       467
Executive retirement plan contribution 	             -	      50            25	       -	              -	          - 
Common issued to 401(k) plan	                        -        -	            -        -	         (1,181)      1,366
Balance at July 27, 1996	                       $5,248   $1,868      $212,655  $11,567       $(248,226)   $(38,314)

See accompanying Notes to Consolidated Financial Statements.
</TABLE>
<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Datapoint Corporation and Subsidiaries July 27, 1996, July 29, 1995 and
July 30, 1994
(Dollars in thousands, except share data)

1.  Summary of Significant Accounting Policies

Liquidity

The Company believes its available cash, cash equivalents and funds generated 
by operations will be sufficient to provide its working capital and cash 
requirements for fiscal 1997.  In addition, management believes the Company 
will be able to discharge its obligations in the long term with cash generated 
from operations and other sources such as sale of selected assets or 
operations, and capital transactions.

Fiscal Year

The Company utilizes a 52-53 week fiscal year ending on the Saturday following
the last Friday in July.  References to 1996, 1995 and 1994 are for the fiscal 
years ended July 27, 1996, July 29, 1995 and July 30, 1994.

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and
its wholly-owned subsidiaries.  Intercompany accounts and transactions have 
been eliminated upon consolidation.

Prior to 1994, the Company's foreign subsidiaries reported their results to the
parent on a one-month lag which allowed more time to compile results but 
produced comparability problems in management accounting.  Due to improved 
internal applications, the one-month lag became unnecessary and therefore was 
eliminated subsequent to 1993 and prior to 1994.  

Cash and Cash Equivalents

Cash equivalents include short-term, highly-liquid investments with maturities 
of three months or less from date of acquisition and as a result the carrying 
value approximates fair value because of the short maturity of those 
instruments.  At July 27, 1996, the Company had $864 in restricted cash.  The 
amount collateralizes various lines of credit payable to banks which are 
recorded as current liabilities.

Inventories

Inventories are stated at the lower of standard cost (approximates first-in, 
first-out) or market (replacement cost as to raw materials and net realizable 
value as to work in process and finished products).

The Company reviews inventory obsolescence on a quarterly basis.  This review 
consists of a detailed inventory requirements analysis based upon actual 
shipments of each product for the prior twelve months.  A computation is then 
made of future inventory requirements by product based on the historical 
analysis adjusted for future projections including the impact of new product 
introductions.

Fixed Assets

Fixed assets are carried at cost and depreciated for financial purposes using 
straight-line and accelerated methods at rates based on the economic lives of 
the assets, which are generally as follows:

	Buildings and land improvements	                       5-30 years
	Machinery, equipment, furniture and fixtures 	         3-10 years
	Equipment leased to customers	                            4 years
	Field support spares	                                     3 years

Major improvements that add to the productive capacity or extend the life of an
asset are capitalized while repairs and maintenance are charged to expense as 
incurred.

In March 1995, the Financial Accounting Standards Board ("FASB") issued 
Statement No. 121, "Accounting for the Impairment of Long-Lived Assets and for 
Long-Lived Assets to Be Disposed Of", which requires impairment losses to be 
recognized for long-lived assets used in operations when indicators of 
impairment are present and the undiscounted cash flows are not sufficient to 
recover the assets' carrying amount.  The impairment loss is measured by 
comparing the fair value of the asset to its carrying amount.  The Company will
adopt Statement No. 121 in the first quarter of 1997.  However, based on 
presently available estimates, adoption of the new impairment rules is not 
expected to have a material impact on the Company's financial statements.

<PAGE>

Debt

The carrying amounts and the fair values of the Company's debt at 
July 27, 1996 are:

                              			                   Carrying	    Fair
			                                                 Amount   	   Value
	8-7/8% convertible subordinated debentures	        $63,652     	$35,725

The fair value of the Company's 8-7/8% convertible subordinated debentures is 
based on a quoted market price at July 26, 1996.

Translation of Foreign Currencies

Management has determined that all of the Company's foreign subsidiaries 
operate primarily in local currencies.  All assets and liabilities of foreign 
subsidiaries are translated into U.S. dollars using the exchange rate 
prevailing at the balance sheet date, while income and expense accounts are 
translated at average exchange rates during the year.  

Reclassifications

Certain reclassifications to the financial statements for prior years have been
made to conform to the 1996 presentation.

Revenue Recognition

Revenue is recognized in accordance with the following criteria:

	*	Sales revenue is generally recognized at the time of shipment provided that 
   there are no significant vendor and post-contract support obligations and 
   that collections of the resulting receivable are probable.  If such  
   obligations are present in the contract, revenue is not recognized until 
   such time as the contractual obligations are met.
	*	Software revenue is recognized when the program is shipped, or as the 
   monthly license fees accrue, or over the terms of the support agreement.
	*	Service revenue is recognized ratably over a contractual period or as 
   services are provided.
	*	Lease revenue is recognized on the operating method ratably over the term of
   the lease.

Income Taxes

The provision for income taxes is reduced by investment tax credits, which are 
recognized in the year the assets giving rise to the credits are placed in 
service (flow-through method) or when realized for income tax purposes, if 
later.

No tax provision has been made for the undistributed earnings of foreign 
subsidiaries as management expects these earnings to be reinvested indefinitely
or received substantially free of additional tax.

In February 1992, the FASB issued SFAS No. 109, "Accounting for Income Taxes", 
which superseded SFAS No. 96 and APB Opinion No. 11.  The adoption of this new
standard had a favorable cumulative accounting change effect of $1,340 recorded
in the first quarter of fiscal 1994 (see note 4).

Net Income (Loss) per Common Share

Net income (loss) per common share is based on the weighted average number of 
common shares outstanding during each year presented.  The Company's common 
stock equivalents, which include convertible debt, were antidilutive in each 
year presented and therefore, were excluded from the computations. The 1996, 
1995 and 1994 computations include the effect of dividends paid or accumulated 
on preferred stock of $1,885, $1,815, and $1,784, respectively. For 1996, 
convertible preferred stock has been included in the fully diluted calculation.
  
<PAGE>

Use of Estimates

The preparation of financial statements in conformity with generally accepted 
accounting principles requires management to make estimates and assumptions 
that affect the amounts reported in the financial statements and accompanying 
notes.  Actual results could differ from those estimates.

2.  Reorganization/Restructuring Costs

		
                                              	  1996 	   1995  	    1994 

Employee termination costs	                      $251  	$6,842	   $14,853
Lease termination costs	                            -	     296	         -
Asset write-offs	                                  12	   2,075	         -
		                                               $263	  $9,213	   $14,853

The Company's 1996 and 1995 restructuring charges primarily have been driven by
management's efforts to implement cost cutting measures in light of its overall
plan to return to profitability.  In addition, continued competitive pressures 
in the Company's industry and a slowdown of customer orders have influenced the
level of restructuring charges.

The 1994 restructuring charges included $13,360 as a result of the 
implementation of a statutory plan of reorganization for one of its European 
subsidiaries.  Management developed the plan, which was subject to 
administrative approval, as a result of a continued decline in revenues 
resulting from the loss of several significant accounts.  These charges related
principally to severance costs associated with the termination of approximately
140 employees spread throughout sales, service, and administrative positions 
involved in this European subsidiary.  The reorganization plan was approved in 
September 1995.  Of the total restructuring amount, $5,570 was paid by the 
foreign government and is repayable by the Company over two years beginning in 
1996.

Restructuring charges are not recorded until specific employees are determined 
(and notified of termination) by management in accordance with its overall 
restructuring plan. As such, employee termination payments are generally paid 
out over a period of time rather than as one lump sum.  Although a reasonable
estimate of the amount of future termination costs cannot be made at this time,
management expects to incur additional charges for terminations.

3.  Non-operating Income (Expense)
                              	                        1996 	    1995	    1994 
Interest earned 	                                      $421	     $959 	   $313 
Realized gain on fixed assets fire settlement	            -	        - 	    534
Write-off of investment in partially owned company	       -         -	  (3,210)
Foreign currency gains (losses)	                        728	   (1,480)	   (718)
Realized gain on sale of property	                        -	    1,709 	      - 
Litigation settlements 	                             (2,945)    1,000        -
Other  	                                                (95)	  (2,768)	  (1,212)
 	                                                  $(1,891)	   $(580)	 $(4,293)
<PAGE>

4.  Income Taxes

Effective August 1, 1993, the Company adopted SFAS No. 109 "Accounting for 
Income Taxes" prospectively.  SFAS No. 109 requires a change from the deferred 
method of accounting for income taxes to the asset and liability method of 
accounting for income taxes.

As a result of adoption of SFAS No. 109, the Company recorded additional 
deferred income tax assets of $2,075, after a valuation allowance of $66,720, 
and increased deferred income tax liabilities by $735 which, in total resulted 
in a $1,340 credit ($.09 per share) for the cumulative effect of the accounting
change.

                                            	     1996 	      1995 	     1994 
Income (loss) before income taxes, 
  extraordinary credit and effect of 
  change in accounting principle:
	    U.S.   	                                  $  (771)   $(22,305) 	$(11,430) 
	    Outside the U.S.	                          23,478      (5,839) 	 (82,981) 
			                                            $22,707   	$(28,144)	 $(94,411)
Provision for income taxes:
	U.S. federal:
		Current	                                          $6	        $53 	      $73 

	Outside the U.S.:
		Current	                                       2,266	        229 	      (61) 
		Deferred	                                      1,420	        (83) 	     342
			                                              3,686	        146 	      281 
Total provision	                                $3,692	       $199 	     $354 

The differences between the tax provision in the financial statements and the 
tax benefit computed at the U.S. federal statutory rates are:

                                          		      1996 	      1995 	     1994 
Income taxes (tax benefits) at statutory rate	  $7,947     $(9,850)  $(33,043)
Increase in taxes resulting from:
	Benefit of U.S. tax loss not recognized 	         262	      7,791 	    3,298
	Foreign losses and other transactions on which
	  a tax benefit could not be recognized	          573	      1,952 	    9,288 
	Nondeductible amortization and write-off of
	  intangible assets	                                -	          - 	   20,875 
	Effect of foreign tax refunds and U.S. tax
	  associated with dividends paid 	                  6	          53 	      73 
	Effect of federal tax rate less than (greater than)
	  foreign tax rates	                             (539)	        364 	     142 
	Benefit of operating loss carryforwards	       (4,566)	       (127)	    (286)
	Other, net	                                         9	          16 	       7 
Provision for income taxes	                     $3,692  	      $199 	    $354 

The undistributed earnings, indefinitely reinvested in international business, 
of the Company's foreign subsidiaries aggregated approximately $27,500 at 
July 27, 1996.  Determination of the amount of unrecognized deferred tax 
liability on these unremitted earnings is not practicable.

<PAGE>

The primary components of deferred income tax assets and liabilities are as 
follows:

                                          	      1996 	     1995	   
Deferred income tax assets:
	Property, plant and equipment	                $7,794  	  $4,475
	Loss and credit carryforwards	                71,519  	  76,898
	Accrued restructuring costs	                     335	     1,417
	Other	                                         8,956 	    7,138 
	                                              88,604  	  89,928
Less:  valuation allowance	                    86,411  	  86,008
	                                               2,193	     3,920
Deferred income tax liabilities:
	Accrued retirement costs	                     (1,930) 	  (2,457)
	Other	                                        (1,144)	     (925)
	                                              (3,074) 	  (3,382)
Net deferred income tax asset (liability)	      $(881)	     $538 

At July 27, 1996, the net deferred income tax liability of $(881) was presented
in the balance sheet, based on tax jurisdiction, as deferred income tax assets
of $1,642 and deferred income tax liabilities of $2,523.  Realization of the 
Company's deferred tax assets is dependent on generating sufficient taxable 
income in certain taxing jurisdiction prior to the expiration of loss and 
credit carryforwards.  Management believes that more likely than not the 
deferred tax assets will not be realized and has therefore provided a valuation
allowance to reserve for those deferred tax assets not considered realizable.

At July 27, 1996, the Company had tax operating loss carryforwards 
approximating $165,000 and $28,000 for federal and foreign tax purposes, 
respectively, expiring in various amounts beginning in 2001 and 1997, 
respectively.  Federal long-term capital loss carryforwards of $1,500 expire in
various amounts beginning in 1997.  Utilization of the ordinary and capital tax
loss carryforwards is subject to limitation in the event of a more than 50% 
change in ownership of the Company.

The Company had unused investment, research, and alternative minimum tax 
credits for income tax purposes at July 27, 1996 of approximately $3,300 
expiring at various dates through 2001 which may be used to offset future tax 
liabilities of the Company. Utilization of these credits is subject to 
limitation in the event of a more than 50% change in ownership of the Company.

5.  Inventories
                                           				     1996 	     1995 
				
Finished products			                                $731  	  $6,105 
Work in process			                                   389 	    2,613 
Raw materials			                                   2,606 	    1,036 
                 			                              $3,726  	  $9,754 

<PAGE>

6.  Fixed Assets
                                                          	Accumulated
                                               	   Cost	   Depreciation    Net 
July 27, 1996 
Property, plant and equipment:
	Buildings and land improvements  	               $17,093 	   $12,598 	  $4,495
	Machinery, equipment, furniture and fixtures 	    91,553 	    84,946 	   6,607
	Land 	                                             1,414 	         - 	   1,414
			                                               110,060 	    97,544	   12,516
Field support spares	                              14,161 	    12,238 	   1,923
Equipment leased to customers  	                    5,125 	     4,939 	     186
			                                              $129,346   	$114,721 	 $14,625 
July 29, 1995  
Property, plant and equipment:
	Buildings and land improvements               	  $26,008 	   $18,390 	  $7,618
	Machinery, equipment, furniture and fixtures 	    88,744 	    81,967 	   6,777
	Land 	                                             1,479 	         - 	   1,479
			                                               116,231 	   100,357 	  15,874
Field support spares	                              14,926 	    12,147 	   2,779
Equipment leased to customers  	                    5,630 	     5,406 	     224
			                                              $136,787 	  $117,910 	 $18,877
7.  Lease Commitments

The Company leases certain facilities and equipment under various leases.  
Substantially all of the leases are classified as operating leases.  Rental 
expense for operating leases for 1996, 1995 and 1994 was $7,386, $10,922, and
$9,137, respectively.  Most of the leases contain renewal options for various 
periods and require the Company to maintain the property.  Certain leases 
contain provisions for periodic rate adjustments to reflect Consumer Price 
Index changes.

At July 27, 1996, future minimum lease payments for noncancelable leases 
totaled $20,610 and are payable as follows:  1997-$4,869; 1998-$4,302; 
1999-$3,277; 2000-$2,552, 2001-$2,505 and $3,105 thereafter.

8.  Payables to Bank

As of July 27, 1996, the Company had included in payables to banks an amount of
$4,979 payable to International Factors "De Factorij" B.V., a subsidiary of 
ABN-AMRO Bank of the Netherlands.  The loan is secured by the receivables of 
the Company's U.K., Dutch and German subsidiaries.

The Company had a secured credit facility ("Credit Facility") with The CIT 
Group, with a maximum borrowing level of $2,000 (given sufficient collateral 
was available).  The Credit Facility consisted of a term loan and a revolving
loan.  The term loan and the revolving loan were paid off in 1995 and 1996, 
respectively and the entire Credit Facility was terminated upon payment.

The weighted average interest rate for short term borrowings as of the fiscal 
year end was 9.0% , 10.1%, 10.5% for 1996, 1995, and 1994, respectively.

The Company has available lines of credit from foreign banks to its foreign 
subsidiaries.  The unused lines of credit at July 27, 1996 totaled $2.7 million
after borrowings of $9.8 million.  

<PAGE>

9.  Accrued Expenses
                                                 	     1996 	     1995 

Salaries, commissions, bonuses and other benefits	   $9,247	    $9,661 
Taxes other than income taxes	                       11,161 	    8,687 
Reorganization/restructuring costs	                     655 	    4,168 
Payable to foreign government	                            - 	    5,570
Other 	                                               8,193	     6,771 
	                                                   $29,256   	$34,857 

10.  Long-Term Debt
                                                		     1996 	     1995 

8-7/8% convertible subordinated debentures        		$63,652   	$64,394 
6.5% to 9.0% real estate notes			                       530 	      762 
Non interest bearing note-NTI (net of discount
	of $2,354 in 1995)		                                     -	     6,646 
Other obligations 		                                  2,877 	    2,338 
                      		                             67,059  	  74,140 
Less: current maturities of long-term debt and
	long-term debt subject to accelerated maturity	 	    3,114 	    9,217 
      		                                            $63,945   	$64,923 

Interest on the 8-7/8% convertible subordinated debentures is payable 
semiannually on June 1 and December 1. The debentures are subordinated in right
of payments to all senior indebtedness, as defined, and are convertible into 
common stock of the Company at any time prior to the close of business on 
June 1, 2006, unless previously redeemed.  Each one thousand dollar principal 
amount debenture is convertible into 55.231 shares of common stock and, as of 
July 27, 1996, there were 3,515,564 shares reserved for possible issuance.  
The debentures are entitled to a mandatory sinking fund, which commenced 
June 1, 1991, of $5,000 annually.  The Company, at its option, may increase the
sinking fund payment to $10,000 and may also receive credit against mandatory 
sinking fund payments for debentures acquired through means other than the 
sinking fund.  The Company has applied $30,000 in previous debenture 
retirements against the sinking fund requirements for 1991 through 1996.  The
Company also intends to apply previous debenture retirements of $5,606 through
July 27, 1996 against the sinking fund requirements for 1997 through 1998.  The
debentures are also redeemable at the option of the Company, in whole or in 
part, at any time at 100% of the principal amount together with accrued 
interest to the date of redemption.  During fiscal 1996 from the proceeds 
received from the sale of EADS, the Company repurchased debentures with a total
face value of $742, resulting in an extraordinary gain of $327, with no related
income taxes.  Subsequent to July 27, 1996, the Company repurchased debentures
with a face value of $2,048 resulting in extraordinary gains of $822.

During fiscal 1993, the Company settled two long-standing legal patent actions
brought against it by NTI.  The Company agreed to a ten-year note payable to 
NTI which required annual $1,000 payments beginning in December 1993.  The note
was recorded at a discount reflecting an annual rate of interest of 10%.  The 
Company was also contingently obligated to make payments to NTI dependent upon 
the Company's future profitability.  The contingent payments, up to a 
cumulative maximum of $12.5 million, were to have been paid in annual 
installments calculated at 33-1/3% of the Company's pre-tax annual profits, 
excluding extraordinary items, in excess of $10.0 million in each of the 10 
fiscal years beginning with fiscal 1993.  During 1995 and 1994, the Company 
incurred no liability to make such contingent payments as a result of the net 
losses incurred.  On June 25, 1996, the Company paid NTI $2.2 million 
representing the two deferred principal payments on the secured debt which were
due December 1994 and December 1995 and accrued and unpaid interest.  
Additionally, on July 1, 1996, the Company entered into a prepayment agreement
with NTI pursuant to which the Company paid $5.05 million to NTI in full 
satisfaction of all amounts due and to be due under the note.  The prepayment 
agreement fully relieves the Company of its obligation to make annual $1.0 
million payments to NTI that commenced in December 1993 and of which seven 
payments remained to be made, as well as certain contingent payment 
obligations.

Aggregate scheduled maturities of long-term debt are as follows:  1997--$3,114;
1998--$3,853; 1999--$5,092; 2000--$5,000; 2001--$5,000 and $45,000 thereafter.

<PAGE>

11.  Stockholders' Deficit

During 1996 fiscal year, the Company issued 442,488 shares of common stock held
in treasury as a result of employee separations.

Throughout 1996, the Company issued 166,151 shares from common stock held in 
treasury to participants in the U.S. 401(k) retirement and savings plan.

The Company settled two different lawsuits during fiscal 1996 by issuing 20,000
shares and 100,000 shares of common stock held in treasury.

During 1996 fiscal year, the Board of Directors elected to make a corporate 
contribution to the Datapoint Corporation Supplemental Executive Retirement 
Plan of 50,000 shares of the Company's $1.00 preferred stock with a $20.00 per
share liquidation preference.  The contribution was made on behalf of certain 
participants only.

The $1.00 preferred stock has a liquidation preference of $20.00 per share and
cumulative dividends of $1.00 annually.  On January 16, 1996, the Company 
announced that it was in arrears on its $1.00 preferred stock in an aggregate 
amount equal to six full quarterly dividends.  As a result, each holder of 
$1.00 preferred stock has the right to exchange each such share (inclusive of 
all accrued and unpaid dividends) into two shares of the Company's common 
stock.  Under this right of exchange, 28,300 shares of $1.00 preferred stock 
were converted to 56,600 shares of common stock during 1996.  In addition, as a
result of the dividend arrearages the number of directors constituting the 
Board of Directors of the Company will be increased by two and holders of the 
$1.00 preferred stock (not including those who have exchanged $1.00 preferred 
stock for the Company's common stock), voting as a single class, will have the 
opportunity to elect two directors of the Company to fill such newly created 
directorships at the next annual meeting of stockholders.  These rights 
continue until such time as the arrearages have been paid in full.  Dividends of
$3,700 and $1,815 were accumulated and unpaid at July 27, 1996 and July 29, 
1995, respectively.

In addition, on July 24, 1996, the Company announced that its Board of 
Directors determined to offer for exchange for each share of its $1.00 
Exchangeable Preferred Stock ($1.00 par value) 3.25 shares of its Common Stock
($.25 par value) and to submit a proposal to stockholders under which each 
share of its $1.00 Exchangeable Preferred Stock would be converted into 3.25 
shares of Common Stock. The Company had previously announced on April 16, 1996,
that it intended to submit to its stockholders a proposal to effect the 
conversion of the $1.00 Exchangeable Preferred Stock into 2.75 shares of its 
Common Stock. The affirmative vote of two-thirds of the outstanding shares of 
the holders of the $1.00 Exchangeable Preferred Stock and a majority vote of 
the outstanding shares of the Common Stock will be required to adopt the 
proposal which the Company expects to submit at its Annual Meeting of 
Stockholders expected to be held on December 10, 1996.  On January 16, 1996,
the Company announced that it was in arrears on its $1.00 preferred stock in
an aggregate amount to six full quarterly dividends.  As a result, each holder
of $1.00 preferred stock currently has the right to exchange each such share 
into two shares of the Company's common stock.

12.  Stock Option Plans

At July 27, 1996, 2,248,404 shares were reserved for issuance in connection 
with the Company's stock option plans.  Total options outstanding for all plans
total 1,378,171 and are exercisable at an average price of $3.14.

Under the Company's employee stock option plans, officers and other key 
employees may be granted options to purchase common stock and related stock 
appreciation rights.  Under the terms of these plans, options may be granted at
no less than 75% of fair market value and expire no later than ten years from 
the date of grant.  The Board may grant options exercisable in full or in 
installments, and has generally granted options at fair market value 
exercisable in two to four installments beginning one year from the date of 
grant.  As of July 27, 1996 and July 29, 1995, options for 593,387 and 499,285 
shares, respectively, under all employee plans were exercisable and no stock 
appreciation rights had been granted.  Options outstanding as of July 27, 1996 
have an average exercise price of $3.70 and expire during the period September 
1997 through March 2006. 

<PAGE>

	                                      Employee Stock Option Plans	 	  
                                 	Price Range    	   Number of Shares 	 
                     	             of Shares       	Under   	 Available 
                                	Under Option    	 Option    	for Option
Outstanding at July 31, 1993	     $1.38-8.00	    1,195,658	     951,653
Granted	                           2.50-7.25	      276,989	    (276,989)
Exercised	                         1.38-5.62	     (103,274)	          -
Canceled	                          1.38-7.13	      (84,500)	     84,500
Expired	                                   -	            -	      (1,500)
Outstanding at July 30, 1994     	$1.38-8.00    	1,284,873	     757,664
Granted	                           2.69-3.94	      557,000	    (557,000)
Exercised	                         1.38-1.63	     (156,666)	          - 
Canceled	                          1.63-7.38	     (243,215)	    243,215 
Expired	                                   -	            -	     (18,049)
Outstanding at July 29, 1995     	$1.38-8.00    	1,441,992 	    425,830
Granted	                           1.06-1.94 	     413,500 	   (413,500)
Canceled	                          1.38-6.75 	    (667,321)	    667,321 
Expired                                    -             -     (109,418)
Outstanding at July 27, 1996     	$1.06-8.00    	1,188,171 	    570,233

During 1992, the 1985 Director Stock Option Plan was terminated.  As of 
July 27, 1996, there were continuing options for 25,000 shares outstanding from
this plan which expire five years from the date of grant.  The 1985 Plan was 
replaced by the 1991 Director Stock Option Plan.  This plan greatly resembles 
the terminated 1985 Plan and provides for a one-time grant of an option to 
purchase, at fair market value as of the date of the grant, 25,000 shares of 
common stock to each director, and an additional 50,000 shares to the present 
and any newly elected Chairman of the Board.  The 1991 Plan does not grant any 
options to individuals holding options under the 1985 Plan.  The Plan includes
both employee and non-employee directors and options expire five years from the
date of grant.  Total director options outstanding as of July 27, 1996 have an 
average exercise price of $3.12 and expire during the period November 1996 
through December 1998.

                              	          Director Stock Option Plans   		
	                                      Price Range  	 Number of Shares  	
	                                       of Shares    	 Under  	 Available 
                                      	Under Option 	 Option   	for Option
Outstanding at July 31, 1993	            $1.88-3.06	  250,000	  275,000
Granted	                                       6.31	   25,000   (25,000)
Exercised	                                     2.50	  (10,000)        -
Outstanding at July 30, 1994	            $1.88-6.31   265,000	  250,000
Canceled	                                      2.50	  (50,000)   50,000
Outstanding at July 29, 1995	            $1.88-6.31 	 215,000 	 300,000
Expired	                                       1.88	  (25,000)        -
Outstanding at July 27, 1996  	          $2.50-6.31 	 190,000 	 300,000 

The FASB has issued Statement No. 123, "Accounting for Stock-Based 
Compensation", which requires either recognition or disclosure of a charge for 
the value of stock options granted.  The Company will adopt this statement in 
1997 at which time it will elect to continue to apply the provisions of 
Accounting Principles Board Opinion No. 25 and will make the footnote 
disclosures required by Statement No. 123. 

13.  Information Relating to Business Segments and International Operations

Business Segment Information

The Company operates in one industry and is an international computer and 
communications systems marketer, manufacturer and developer.  Additionally, the 
Company provides maintenance services on its products in the United States 
through a non-exclusive agreement with DSI and services its products outside the
United States through its international distributors and subsidiaries.

<PAGE>

International Operations

The Company conducts the majority of its international marketing and service
operations through its subsidiaries and, to a lesser extent, through various 
distributorship arrangements.  For products manufactured domestically, the 
Company's policy is to transfer such products to and between affiliates at 
prices which reflect market conditions.  Financial information on a geographic
basis follows:

                                       	           1996 	    1995 	    1994 
Revenue - unaffiliated customers:
  United States 	- domestic       	               $4,090	   $7,122 	  $7,617 
	               	- export sales                    3,529     3,899     6,174 
  Europe                 	                       170,806	  162,146 	 156,403 
  Other international            	                 1,116	    1,734 	   2,742 
    Total revenue from unaffiliated customers	   179,541	  174,901   172,936 

Revenue - intercompany:
  United States	                                  4,572      6,390 	   20,868 
  Europe	                                           105        427 	      518 
  Other international	                                -          - 	        7 
  Eliminations                   	               (4,677)    (6,817)   (21,393)
    Total consolidated revenue	                $179,541  	$174,901  	$172,936  

Operating income (loss):
  United States	                               $(11,671)  $(25,201)  $ (8,728) 
  Europe	                                        11,832      7,661    (72,517)
  Other international	                              444       (979)      (904) 
  Eliminations            	                         412        287      1,128
    Total operating income (loss)	             $  1,017   $(18,232)  $(81,021) 

Identifiable assets:
  United States	                               $ 16,471	  $ 21,469 	 $ 43,595 
  Europe	                                        82,497	    83,894 	   87,159 
  Other international	                              239	     1,116 	    1,250
   Eliminations	                                 (5,389)	   (4,728)    (4,570)
    Total identifiable assets	                 $ 93,818  	$101,751  	$127,434 

<PAGE>

14.  Retirement Income Plans

Retirement expenses incurred by the Company were as follows:

                                  	     1996 	   1995 	   1994 
U.S.:
  Matching contributions      	      $   55	  $  119 	   $143 

Outside the U.S.:
  Defined benefit plans	              1,279	     510 	    119
  Other plans                        	  970      675 	    600 
                            	         2,249	   1,185 	    719 

                                    	$2,304  	$1,304 	   $862 

U.S. Plans

The Company adopted a 401(k) retirement and savings plan effective January 
1988.  The plan covers all full-time employees who have been employed for at 
least 12 months.  The Company's retirement and savings plan contribution has 
been a 25% matching contribution for employee contributions up to 5% of each 
employee's compensation.   At the Board's discretion, the Company may also 
contribute a profit sharing amount to the plan that is contingent upon the 
performance level of the Company at the net income line.

In addition, the Company maintains a Supplemental Executive Retirement Plan for
certain executive employee selected by the Board of Directors.  The plan 
provides for employee contributions of up to 10% of applicable compensation.  
In addition, at the Boards' discretion, the Company may also make contributions
on an annual, individual basis, allocated on a pro-rata basis according to 
participant's applicable compensation up to a maximum contribution of 15% of 
applicable compensation per employee.  During the fiscal years ended July 29, 
1995 and July 27, 1996, the Company contributed 62,000 and 50,000 shares of its
Preferred Stock, respectively, to the plan for credit to the accounts of 
various executive officers.  Under the terms of the plan benefits accrue to the
various executive officer upon satisfaction of the plan's vesting criteria 
which is based upon length of employment with the Company.

Plans Outside the U.S. 

Most of the Company's foreign subsidiaries provide retirement income plans 
which conform to the practice of the country in which they do business.  The 
types of company-sponsored plans in use are defined benefit and defined 
contribution.

Five of the Company's subsidiaries, including the United Kingdom, utilize 
defined benefit plans with employee benefits generally being based on years of 
service and wages near retirement.  The plans cover all full-time employees who
have been employed for at least 12 months.  Obligations under these plans are 
funded primarily through fixed rate of return investments, primarily insurance 
policies, except for Germany where reserves are established for the 
obligations.

<PAGE>

The Company's United Kingdom and New Zealand subsidiaries have defined 
contribution plans.  The plans cover all full-time salaried employees who have 
been employed for at least 12 months and contributions are based upon a 
percentage of compensation.  Obligations under this plan are funded primarily 
through deposits in pooled investments or insurance policies.


                                   	   1996 	   1995 	   1994 

Defined benefit plans:

 Service cost             	          $  659	  $  998 	  $  773 
 Interest cost               	        2,219	   1,931 	   1,770 
 Actual return on assets       	     (2,508)	   (887)	    (926)
 Net amortization and deferral          909 	 (1,532) 	 (1,498)

Net pension cost                    	$1,279	  $  510 	  $  119
   
The funded plan status at July 27, 1996 and July 29, 1995 was: 

	                                      1996                 1995   	            
                                 	Over-    	Under-   		Over-    	Under-
                         	        funded   	funded  	 	funded   	funded
Actuarial present value of:

 Vested benefits                	$22,533	   $4,083	   $17,141 	  $6,454 
 
Accumulated benefit
  obligations                   	$22,912	   $4,202  	 $17,520 	  $6,503 

 Projected benefit
  obligations                   	$23,861	   $4,909   	$18,197 	  $7,466 

Plan assets at fair value       	$24,476	   $1,181	   $20,303 	  $2,632 
Plan assets in excess of
 (less than) projected
 benefit obligation	                 615	   (3,729)	    2,106 	  (4,834)
   Unrecognized net (gain) loss	   4,676    (1,635)	    3,611 	  (2,755)
   Unrecognized transition
     net loss	                       783	       28        797 	     124 
Prepaid (accrued) pension 
     cost               	         $6,074  	$(5,336)	   $6,514  	$(7,465)

Unrecognized gains and losses are amortized on a straight-line basis over five
years.  

Actuarial assumptions used to determine funded status for 1996 and 1995 varied 
between subsidiaries.  Discount rates used to determine projected benefit 
obligations range from 5.0% to 9.0% in both 1996 and 1995.  Rates of increase 
in future compensation levels range from 3.0% to 3.5% in both 1996 and 1995.  
The long-term rates of return on plan investments range from 5.0% to 10.0% in 
both 1996 and 1995.

<PAGE>

15.  Certain Relationships and Related Transactions

Director Agranoff had provided various tax, legal and real estate consulting 
services prior to serving as Vice President, General Counsel and Corporate 
Secretary for the Company.  During 1994, the Company paid Mr. Agranoff $126 for
those services.  During the fiscal years 1996, 1995 and 1994, Datapoint paid 
legal fees of $485, $51 and $5, respectively, to the law firm of Pryor, 
Cashman, Sherman, & Flynn, to which firm Mr. Agranoff is of counsel, for legal 
services provided by attorneys other than Mr. Agranoff.

Director Thomas worked from August 1994 until May 1, 1995 as a special 
consultant for which he received compensation of $0.5 per day payable in shares
of common stock.  Subsequently, on May 5, 1995, in consideration of the 
additional work and responsibilities he had taken on for the Company as a 
special consultant, the Board of Directors approved a special compensation 
package for Director Thomas.  From May 1, 1995, through July 31, 1995, he was 
paid at the rate of $0.5 per day for his services, plus travel and housing 
expenses, plus additional compensation of a flat $2 per week for expenses.  On 
July 31, 1995, Director Thomas's consulting contract was extended until 
December 31, 1995 and then was to continue on a month-to-month basis to
July 31, 1996.  Upon the resignation of Doris Bencsik as President and Chief 
Operating Officer, Director Thomas was appointed on December 5, 1995 to the 
position of Executive Vice President and Chief Operating Officer.  Director 
Thomas was also entitled under the extended contract to participate in the 
Standard Health Benefit program until he was appointed Executive Vice President
and Chief Operating Officer.  At such time, he converted to the Executive 
Health Benefit program.  During fiscal 1995, the Board also approved a one time
special issuance of 45,000 shares of common stock of the Company to Director 
Thomas in recognition of his service to the Company.  During the term Director 
Thomas acted as a special consultant he did not accrue or receive any regular 
Board or committee fees.  

Director Ruffat had a consulting agreement from January 1994 through June 1995
under which he received a monthly compensation of $10.  For 1996 and 1995 
Director Ruffat was paid $50 and $80, respectively, for consulting services.

During fiscal 1996, the Company paid office rent and secretarial expenses of 
$39 to Canal Capital Corporation.  Chief Executive Officer Edelman and Director
Agranoff are Canal Capital Corporation board members, with Chief Executive 
Officer Edelman serving as Chairman of the Board.

16.  Commitments and Contingencies

The Company is a defendant in various lawsuits generally incidental to its
business.  The amounts sought by the plaintiffs in such cases are substantial 
and, if all such cases were decided adversely to the Company, the Company's 
aggregate liability might be material.  However, the Company does not expect 
such an aggregate result based upon the limited number of such actions and an 
assessment that most such actions will be successfully defended.  No provision 
has been made in the accompanying financial statements for any possible 
liability with respect to such lawsuits.

In addition, in 1994, the Company began patent infringement lawsuits against 
several defendants related to the Company's video conferencing patents and dual
protocol local area networking patents.  In 1995, the Company negotiated two 
settlements for an aggregate of $1.0 million and negotiated one settlement in 
1996 for an undisclosed amount.  Patent infringement suits against other 
defendants are pending.  The aggregate amounts sought in these suits are 
substantial.  However, no provision has been made in the accompanying financial
statements for any possible gains or cash infusions resulting from favorable 
judgments in these suits.

In December 1994, a lawsuit was brought against the Company involving the 
earlier sale of real estate by the Company. In April 1996, an adverse jury 
verdict was rendered against the Company and two of its executive officers.  
During the fourth quarter of 1996, a settlement was reached among the 
litigants.  As such, the District Court entered a Judgment Non Obstante 
Veredicto (Judgment Notwithstanding the Verdict) that set aside the jury's 
findings against the Company and its two executive officers and set aside all 
damages.  The $3.3 million settlement, which was reached to avoid the 
considerable expense, including the business disruption of a protracted appeal 
and legal process, had no material impact on the Company's then current cash 
position as it included payment of funds from a non-working capital trust fund 
which were otherwise not available to the Company, issuance of a short term 
note, and issuance of shares of the Company's common stock.

17.  Divestitures

On May 28, 1996, the Company entered into an agreement with Kalamazoo providing
for the sale by Datapoint to Kalamazoo of Datapoint's EADS business, other than
its United Kingdom operations, for a purchase price of $33.0 million.  

As part of the agreement in connection with the sale of the EADS business, the 
Company agreed to continue to sell hardware to Kalamazoo at various discounts
from its normal hardware prices and to continue to provide hardware service 
maintenance to Kalamazoo at a 15% discount from the Company's normal hardware 
service maintenance prices.  While there can be no assurances that the future 
volume levels will remain the same, revenues related to the EADS continuing 
business were $12.6 million and $14.7 million for the years ended July 27, 1996
and July 29, 1995, respectively.  The Company transferred to Kalamazoo all of 
its employees who were dedicated to the EADS business.  The amounts below 
represent the operations of EADS sold to Kalamazoo plus the effect of discounts
on the continuing EADS's business which are included in the accompanying 
statements of operations.  Because the Company's accounting records do not 
completely segregate the EADS business' historical performance, certain 
allocations were required based upon employee effort analyses of EADS and other
appropriate measures.  

                                      					1996 	 	   1995

         Revenues				                    	$17,028    $18,459   
         Costs and expenses                13,914     15,411   
            
<PAGE>

ITEM 9.  Changes in and Disagreements with Accountants on Accounting and 
Financial Disclosure.

	Not Applicable.

PART III

ITEM 10	DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The names, ages, positions and offices with Company of the current directors 
and executive officers of the Company are set forth below.
                                                                   
                                                                      Director/
                  Age as of                                           Officer
Name            July 15, 1996  Position                                Since
A. B. Edelman        56        Director-Chairman of the Board           1985
                               and Chief Executive Officer
B. D. Thomas         45        Executive Vice President and             1992
                               Chief Operating Officer
P. P. Krumb          54        Vice President and Chief Financial       1994
                               Officer
G. N. Agranoff       49        Vice President, General Counsel,         1994  
                               Corporate Secretary and Director           
D. Berger            47        Vice President, Sales and Distribution   1993
J. Berger            53        Vice President, Sales and Marketing      1991
I. J. Garfinkel      59        Director                                 1991
D. R. Kail           61        Director                                 1985
D. M. M. Ruffat      60        Director                                 1993
R. Edmonds           51        Vice President, Technical Services       1996
W. Gevers            59        Vice President, OSN                      1996
J. Perkins           48        Vice President, Development              1996

The principal occupations and business experience of each the current directors
and executive officers of the Company who are not also directors are described
below.

ASHER B. EDELMAN, age 56, joined Datapoint's Board of Directors as its Chairman
in March 1985, and has served in that capacity and as Chairman of its Executive
Committee to the present date, and as Chief Executive Officer since February 
1993.  Mr. Edelman has served as General Partner of Asco Partners, a general 
partner of Edelman Securities Company L.P. (formerly Arbitrage Securities 
Company) since June 1984.  Mr. Edelman is a director, Chairman of the Board and
Chairman of the Executive Committee of Canal Capital Corporation.  The 
principal business address of Mr. Edelman is 85 Av. General Guisan, CH-1009 
Pully, Switzerland. 

BLAKE D. THOMAS, age 45, is currently the Executive Vice President and Chief 
Operating Officer of the Company.  In addition, he has been engaged in the 
business of investing in listed securities for more than five years.  He is 
President of Blake D. Thomas, Inc., a corporation that until 1991 published The
Thomas Report, an investment newspaper that specialized in evaluating stocks 
traded on the New York Stock Exchange, was General Partner of Mainsail Limited 
Partnership from 1990 until its dissolution in December 1992, has been since 
1990 General Partner of Foresail Limited Partnership, which is engaged in the
business of investing in listed securities; and has been since November 1991 
President of Symba, Inc., which until April 1996 was the General Partner of 
Windward Limited Partnership.  Windward was engaged in the business of 
investing in listed securities and was dissolved in April 1996.  He has served 
as a director of Datapoint since 1992.  He has also served since August 1994 
as a special consultant for the Board on Datapoint general management and 
business affairs.  The principal business address of Mr. Thomas is 4 rue 
d'Aguesseau 75008, Paris, France.

<PAGE>

PHILLIP P. KRUMB, age 54, joined the Company as Vice President and Chief 
Financial Officer in September 1994.  Prior to joining the Company he was 
employed by IOMEGA Corporation for 7 years as Senior Vice President Finance and
Chief Financial Officer.  The principal business address of Mr. Krumb is 8410 
Datapoint Drive, San Antonio, Texas 78229-8500.

GERALD N. AGRANOFF, age 49, is currently Vice President, General Counsel and 
Corporate Secretary of Datapoint.  Mr. Agranoff has been a General Partner of 
Edelman Securities Company L.P. (formerly Arbitrage Securities Company) for 
more than five years.  Mr. Agranoff has also been a General Partner of Plaza 
Securities Company since January, 1987, and a Trustee of Management Assistance
Inc. Liquidating Trust since February 1986.  Mr. Agranoff is a director of Bull
Run Corporation, Atlantic Gulf Communities, The American Energy Group, Ltd., 
and Canal Capital Corporation.  Mr. Agranoff also has been the General Counsel 
to Edelman Securities Company  L.P. and  Plaza Securities Company for more than
five years.  The principal business address of Mr. Agranoff is 8410 Datapoint 
Drive, San Antonio, Texas, 78229-8500.

DAVID BERGER, age 47, was promoted to Vice President, Sales and Distribution in
July 1993.  Mr. Berger joined the Company in 1991 as Managing Director of the 
Company's United Kingdom subsidiary.  Prior to joining the Company, Mr. Berger 
was employed from 1988 to 1991 by RS2, a U.K. marketing communications company,
as Group Managing Director.  The principal business address of Mr. Berger is 4
rue d'Aguesseau 75008, Paris, France.

JAN BERGER, age 53, joined the Company as Vice President, Sales and Marketing 
in June 1991.  Prior to joining the Company, Mr. Berger was employed by 
SCANVEST of Norway, Datapoint's largest independent foreign distributor, for 21
years, most recently as Managing Director, and previously as Director of 
Marketing.  The principal business address of Mr. Berger is 4 rue d'Aguesseau 
75008, Paris, France.

IRVING J. GARFINKEL, age 59, has been a General Partner of Asco Partners, a 
general partner of Edelman Securities Company L.P. (formerly Arbitrage 
Securities Company) for more than five years.  Mr. Garfinkel also has been a 
General Partner and controller of Plaza Securities Company for more than the 
past five years.  He has served as a director of Datapoint since 1991, and is 
Chairman of the Audit Committee and serves on the Compensation Committee.
The principal business address of Mr. Garfinkel is 717 Fifth Avenue, 4th Floor,
Suite 407, New York, New York 10022.

DANIEL R. KAIL, age 61, has been Managing Trustee of Management Assistance Inc.
Liquidating Trust since January 1986, and prior thereto had been a director, 
Executive Vice President and Chief Operating Officer since October 1984 of 
Management Assistance Inc., a computer manufacturing and servicing company.  He
also was a director and Executive Vice President of Canal Capital Corporation 
from 1987 until 1991.  He has served as a director of Datapoint since 1985 and 
is Chairman of the of the Independent Committee and the Compensation Committee 
and a member of the Audit Committee.  The principal business address of Mr. 
Kail is 980 Post Road East, Suite 3, Westport, Connecticut 06880-5300.

DIDIER M. M. RUFFAT, age 60, is currently the Vice President of Digital 
Equipment Europe and the Managing Director of Digital Equipment France.  He has
served for 25 years in various capacities with France's BULL computer group, 
most recently as President and Chief Executive Officer of BULL Europe, and 
previously in senior executive positions in sales, marketing and finance.  He 
has served as a director of Datapoint since December 1993 and is a member of 
the Compensation Committee.  The principal business address of Mr. Ruffat is 8 
rue de la Renaissance 92187, Antony Cedex, France.

ROGER EDMONDS, age 51, was promoted to Vice President, Technical Services in 
February 1996.  Mr. Edmonds joined the Company's United Kingdom subsidiary in 
1972 as Project Leader, and has held various management positions within the
Company.  Mr. Edmonds is also currently Technical Director of the U.K. 
subsidiary.  The principal business address of Mr. Edmonds is Datapoint House, 
400 North Circular Road, London NW10 OJG.

WALTER GEVERS, age 59, was promoted to Vice President, OSN in March 1996.  Mr. 
Gevers joined the Company as Managing Director, Datapoint Belgium in January 
1983.  Prior to joining the Company, Mr. Gevers was employed by SAIT 
Electronics, Datapoint's distributor in Belgium, for nineteen years as Sales 
Manager.  The principal business address of Mr. Gevers is rue de la Fusee 100,
1130 Bruxelles, Belgium.

JOHN PERKINS, age 48, was promoted to Vice President, Development in May 1996. 
Mr. Perkins joined the Company as Director, Engineering in 1981.  Prior to 
joining the Company, Mr. Perkins was employed by General Electric Information
Services Company as Market Planner.  The principal business address of Mr. 
Perkins is 8410 Datapoint Drive, San Antonio, Texas 78229-8500.

There are no family relationships between any of the executive officers of the 
Company.

<PAGE>

Datapoint, Mr. Edelman, Mr. Thomas and Mainsail Limited Partnership entered 
into an agreement in settlement of litigation involving an exchange offer for 
Datapoint's now-extinguished $4.94 Exchangeable Preferred Stock whereby, among 
other things, Datapoint agreed to propose (and Mr. Edelman agreed to support) 
Mr. Thomas for election to the Board of Directors of Datapoint at the 1991 and 
1992 annual meetings of stockholders.

Audit, Compensation and Executive Committees

The Company has Audit, Compensation and Executive Committees of the Board of 
Directors.  The Company does not have a Nominating Committee.  The current 
members of the Audit Committee are Irving J. Garfinkel (Chairman) and Daniel R.
Kail.  The current members of the Compensation Committee are Daniel R. Kail 
(Chairman), Didier M. M. Ruffat and Irving J. Garfinkel.  The members of the 
Executive Committee are Asher B. Edelman (Chairman) and Blake D. Thomas.

The Audit Committee annually recommends to the Board of Directors independent 
auditors for the Company and its subsidiaries; meets with the independent 
auditors concerning the audit; evaluates non-audit services and the financial 
statements and accounting developments that may affect the Company; meets with
management concerning matters similar to those discussed with the outside 
auditors; and makes reports and recommendations to the Board of Directors and 
the Company's management and independent auditors from time to time as it deems
appropriate.  The Committee met 4 times during the fiscal year ended 
July 27, 1996.

The Compensation Committee makes salary recommendations regarding senior 
management to the Board of Directors and administers the Company's Bonus and 
Stock Option Plan as described below.  The Committee met 2 times during the 
fiscal year ended July 27, 1996.

Independent Committee

In connection with the Exchange Offer, the Board created the Independent 
Committee, consisting of Director Daniel R. Kail, to consider the terms of the 
consideration to be offered in the Exchange Offer to the Holders of Preferred 
Stock.  The terms of the Exchange Offer were approved by the Board of Directors
upon the recommendation of the Independent Committee.

Meetings of the Board of Directors and Committees

The Board of Directors met 7 times during the fiscal year ended July 27, 1996, 
and during such fiscal year, each director, except Mr. Ruffat, attended at 
least 75% of the aggregate of (a) the total number of meetings of the Board of 
Directors (held during the period of his/her service) and (b) the total number 
of meetings held by all committees of the Board on which he/she served (during 
the period that he/she served).  Mr. Ruffat, based in Paris, attended two Board
meetings and one Compensation Committee meeting.

COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934

Datapoint believes that, during the fiscal year ended July 27, 1996, its 
officers and directors complied with all filing requirements under Section 
16(a) of the Securities and Exchange Act of 1934; except that executive 
officers Messrs. Edmonds, Gevers, and Perkins failed to file Form 3 required by
such Section. 

ITEM 11	EXECUTIVE COMPENSATION

COMPENSATION OF DIRECTORS

Directors who are employees of Datapoint receive no additional compensation for
serving on the Board of Directors or its committees.  Each director who is not
an employee of Datapoint receives fees as follows:  Each non-employee director 
receives an annual fee of $15,000, payable in quarterly installments.  
Executive Committee members receive an additional $5,000 annual fee.  Committee
Chairmen receive an additional $2,000 annual fee.  Board members serving on 
more than one committee receive an additional $1,000 annual fee.  Each 
non-employee director also receives a fee of $750 for each Board meeting 
attended, $500 for each committee meeting attended and $500 for attendance at 
each meeting on Datapoint's business other than a Board of Directors or 
committee meeting.  Each non-employee director is, at Datapoint's expense, 
provided with $50,000 of group term life insurance and $250,000 accidental 
death insurance.  Each non-employee director has the option to purchase, at his
own expense, coverage for himself and his dependents under Datapoint's group 
medical and dental insurance plan.

Datapoint maintains a retirement plan and a retirement medical care plan to 
cover non-employee Board members.  Both plans presently are purely contractual 
rather than funded, and are self-insured except that retirees are required to 
participate in Medicare parts A and B.  The retirement plan provides for a 
maximum annual benefit equal to a director's annual retainer in effect on the 
date of retirement.  A partial benefit will be paid to directors with less than
five years' service, and a full benefit will be paid to directors with five or 
more years of service.  The benefit will be payable for the greater of ten 
years or life, and in the event a retiree should die within ten years of 
retirement, the remaining benefit will be paid to his estate.  The retirement 
medical care plan affords non-employee directors, upon retirement, benefits and
premiums equivalent to COBRA coverage available to certain former employees 
and/or dependents under Datapoint's group medical plan.  Only directors elected
to the Board prior to March 25, 1996 are eligible to participate in the 
retirement plan.

<PAGE>

Director Thomas worked from August 1994 until May 1, 1995 as a special 
consultant for which he received compensation of $500 per day payable in shares
of common stock.  Subsequently, on May 5, 1995, in consideration of the 
additional work and responsibilities he had taken on for the Company as a 
special consultant, the Board of Directors approved a special compensation 
package for Director Thomas.  From May 1, 1995, through July 31, 1995, he was 
paid at the rate of $500 per day for his services, plus travel and housing 
expenses, plus additional compensation of a flat $2,000 per week for expenses.  
On July 31, 1995, Director Thomas's consulting contract was extended until 
December 31, 1995 and then was to continue on a month-to-month basis to 
July 31, 1996.  Upon the resignation of Doris Bencsik as President and Chief 
Operating Officer, Director Thomas was appointed on December 5, 1995 to the 
position of Executive Vice President and Chief Operating Officer.  Director 
Thomas was also entitled under the extended contract to participate in the 
Standard Health Benefit program until he was appointed Executive Vice President
and Chief Operating Officer.  At such time, he converted to the Executive Health
Benefit program.  During fiscal 1995, the Board also approved a one time 
special issuance of 45,000 shares of common stock of the Company to Director 
Thomas in recognition of his service to the Company.  During the term Director
Thomas acted as a special consultant he did not accrue or receive any regular 
Board or committee fees.  

Director Ruffat had a consulting agreement from January 1994 through June 1995 
under which he received a monthly compensation of $10,000.  For 1996 and 1995 
Director Ruffat was paid $50,000 and $80,000, respectively, for consulting 
services.

EXECUTIVE COMPENSATION

Compensation Committee Report

Datapoint's executive compensation program is based on three fundamental 
principles.

Datapoint must offer compensation opportunities sufficient to attract, retain 
and reward talented executives who are sufficiently capable of addressing the 
challenges of a worldwide business in a difficult industry.

Compensation should include a substantial component of pay-for-performance 
sufficiently related to the financial results of the Company and/or the 
executive's performance to financially motivate the executive's efforts to 
increase stockholder value.  This may cause individual compensation amounts to 
change significantly from year to year.

Compensation should provide a direct link between the long-term interests of 
executives and stockholders.  Through the use of stock-based incentives, the 
Compensation Committee focuses the attention of executives on managing the 
Company from the perspective of an owner with an equity stake.

For executive officers, compensation now consists primarily of base salary, a 
short-term performance incentive opportunity in the form of a variable cash 
bonus based on either the financial performance of the Company or of their area
of responsibility, and a long-term incentive opportunity provided by stock 
options.

The committee also obtains ratification by the non-employee members of the 
Board on most aspects of compensation and long-term incentives for executive 
officers.

The remainder of this Report reviews the annual and long-term components of 
Datapoint's executive compensation program, along with the decisions made by 
the committee regarding fiscal year 1996 compensation for both the CEO and the
other named executive officers.

<PAGE>

Total Annual Compensation

Annual cash compensation consists of two components; a fixed base salary and a 
variable annual bonus opportunity.  As an executive's level of responsibility 
increases, a larger portion of total annual pay is based on bonus and less on 
salary.  Mr. Agranoff was the only named executive who received a salary 
increase during the past year, and Mr. Edelman's salary was last increased in 
December 1990.  The Committee sets the base salary of executive officers based 
upon a subjective analysis of competitive salaries of equally qualified 
executives, occasionally confirmed by reference to general salary surveys;  
prior compensation of the individual or of previous holders of the position is 
also considered.  Contractual minimum base salaries are customarily negotiated 
with the executives.

The short-term performance incentive bonus opportunity is established either as
a percentage, unique for each individual, of a numerical corporate performance 
indicia, or as a target percentage of pay which is the amount that can be 
earned based upon assigned objectives being met.  Performance is measured as a 
percent of attainment against these objectives.  When performance exceeds 
objectives, an executive's incentive pay can exceed the target rate, and when 
it falls below, as was the case in fiscal years 1995 and 1994, individual 
incentive pay is reduced accordingly.

Messrs. Edelman's, Krumb's and Thomas's bonuses are based on a contractually 
specified percentage of Datapoint's pre-tax profits, which are defined as net 
pre-tax earnings, excluding the excess over $10 million of the net of any 
extraordinary gains, due to debt repurchase or exchange, against all 
extraordinary losses.  During fiscal year 1995, the Company incurred net losses
and therefore no bonuses were paid in 1995 under these contractual 
arrangements.  For the fiscal year 1996, an aggregate of approximately $2.1 
million is expected to paid under these contractual arrangements.

The remainder of the named executives have been assigned bonus targets as a 
percentage of their base salary upon 100% achievement of individualized goals 
and objectives; a substantial portion of which are related to the financial 
performance of corporate functions relevant to their respective 
responsibilities.

Long Term Incentives

The committee believes that stock options appropriately link executive 
interests to the enhancement of stockholder value and utilizes them as its 
long-term incentive program; no additional long-term incentive programs are 
utilized.  Stock options generally are granted at fair market value as of the 
date of grant, become exercisable over three years, and have a term of ten 
years.  The stock options provide value to the recipients only when the price 
of Datapoint stock increases above the option grant price.

In 1996, the committee granted stock options to executive officers, as well as 
to other executives and selected key employees.  In determining the size of the
grant for Mr. Edelman and other named executive officers, the committee 
assessed the following factors: their potential by position and ability (i) to 
contribute to the creation of long-term stockholder value; (ii) to contribute 
to the successful execution of Datapoint's product line broadening strategy; 
and (iii) to implement Datapoint's cost reduction objectives; (iv) their 
relative levels of responsibility; and (v) the number of options they already 
held.

This report has been provided by the Compensation Committee.

Daniel R. Kail, Chairman
Irving J. Garfinkel
Didier M.M. Ruffat

Supplemental Executive Retirement Plan

In addition, the Company maintains a Supplemental Executive Retirement Plan for
certain executive employees selected by the Board of Directors.  The plan 
provides for employee contributions of up to 10% of applicable compensation.  
In addition, at the Board's discretion, the Company may also make contributions
on an annual, individual basis, allocated on a pro-rata basis according to 
participant's applicable compensation up to a maximum contribution of 15% of 
applicable compensation per employee.  During the fiscal years ended July 29, 
1995 and July 27, 1996, the Company contributed 62,000 and 50,000 shares of its
Preferred Stock, respectively, to the plan for credit to the accounts of 
various executive officers.  Under the terms of the plan, benefits accrue to 
the various executive officers upon satisfaction of the plan's vesting criteria
related which is based upon to length of employment with the Company.

<PAGE>
<TABLE>

Summary Compensation Table

The following table sets forth certain information regarding all cash compensation paid or accrued
for services rendered by the Company's Chief Executive Officer, four most highly compensated
executive officers for the last three fiscal years, and one individual for whom disclosure
would have been applicable but for the fact that the individual was not serving as an executive
officer at the end of the last completed fiscal year.

                                        Annual Compensation                   Long-Term                                     
Name and                                                        Other         Compensation         All
Principal                   Fiscal                              Annual        Stock Options       Other
Position                    Year     Salary         Bonus       Compensation   Granted (#)     Compensation  
<S>                        <C>     <C>          <C>             <C>            <C>             <C>         
Asher B. Edelman (1)        1996    $299,956     $1,152,918 (2)  $148,752 (3)   40,000         $17,952 (18)  
Chairman of the Board and   1995     275,104 (4)          0       180,781 (3)        0          30,000 (18)
Chief Executive Officer     1994     300,534              0       190,012 (3)        0              0

Blake D. Thomas (5)         1996    $145,166 (8)   $691,751 (2)        $0      100,000              0
Executive Vice President    1995         n/a            n/a           n/a          n/a            n/a    
and Chief Operating Officer 1994         n/a            n/a           n/a          n/a            n/a   

Phillip P. Krumb (6)        1996    $175,000       $230,584 (2)    $9,373 (7)        0              0
Vice President and          1995     141,346 (8)     50,000 (9)    57,094 (10)  50,000              0
Chief Financial Officer     1994         n/a            n/a           n/a          n/a            n/a  

Gerald N. Agranoff (11)     1996    $172,481       $400,000 (12)   $7,200 (13)       0              0          
Vice President, General     1995     125,192 (8)          0         6,000 (13)  50,000              0  
Counsel and Corp. Secretary 1994         n/a            n/a           n/a          n/a            n/a 

Jan Berger (14)             1996    $180,000        $75,000 (12)  $38,662 (3)   20,000        $10,050 (18)     
Vice President, Marketing   1995     180,000              0        38,662 (3)   15,000          7,200 (18)
                            1994     180,000              0        30,190 (3)        0              0

Doris D. Bencsik (15)       1996    $121,731              0        $3,000 (13)       0       $241,694 (17)        
President and Chief         1995     281,166 (4)          0             0            0         61,798 (19)  
Operating Officer           1994     259,615              0             0       75,000         31,798 (16)

</TABLE>

Table Footnotes

(1) Asher B. Edelman was named Chief Executive Officer in February 1993.
(2) Represents bonus based on the Company's net pre-tax earnings.
(3) Represents payments incident to foreign assignment.
(4) Effective in 1995, Mr. Edelman and Mrs. Bencsik agreed to a 10% salary 
    reduction as part of the Company's cost reduction plan.
(5) Blake D. Thomas commenced employment with the Company in December of fiscal
    1996 as Executive Vice President and Chief Operating Officer.
(6) Phillip P. Krumb commenced employment with the Company in September of 
    fiscal 1995 as Vice President and Chief Financial Officer.
(7) Represents auto allowance and company match of employee profit sharing plan.
(8) Amount reflects partial year of employment.
(9) Represents a one-time guaranteed bonus per terms of employment agreement.
(10) Represents relocation, housing and auto allowance.
(11) Gerald N. Agranoff commenced employment with the Company in October of 
     fiscal 1995 as Vice President, General Counsel and Corporate Secretary.
(12) Represents a performance bonus.
(13) Represents auto allowance.
(14) Since July 1996, Mr. Berger has been working as a consultant for Kalamazoo
     Computer Group, plc.
(15) Doris D. Bencsik commenced emoloyment with the Company on a half-time 
     basis as Executive Vice President and Chief Operating Officer in February 
     of fiscal 1993 and converted to a full time status and was promoted to 
     President on November 1, 1993, at a minimum annual salary of $300,000.  On
     December 5, 1995, Mrs. Bencsik resigned from her position of the Company 
     and on May 20, 1996, Mrs. Bencsik resigned from her position as a director
     of the Company.
(16) Represents contractually fixed supplemental early retirement benefit 
     attributable to prior service as an officer from 1982-1987.
(17) Includes $35,444 of contractually fixed supplemental early retirement 
     benefit attributable to prior service as an officer from 1982-1987.  Also,
     includes $206,500 related to a grant of 150,000 shares of common stock by 
     the Company's Board of Directors upon Mrs. Bencsik's resignation.
(18) Represents vested portion of the Company's preferred stock contributions 
     to the Supplemental Executive Retirement Plan on behalf of named employee.
(19) Includes $31,798 of contractually fixed supplemental early retirement 
     benefit attributable to prior service as an officer from 1982-1987.  Also
     includes the vested portion of the Company's preferred stock contributions
     to the Supplemental Executive Retirement Plan on behalf of named employee 
     ($30,000).

<PAGE>

<TABLE>

The following table sets forth certain information regarding all stock option grants
made to the Company's Chief Executive Officer, four most highly compensated executive
officers for the last fiscal year and one individual for whom disclosure would have been
applicable but for the fact that the individual was not serving as an executive officer
at the end of the last completed fiscal year.


Stock Option Grants in Last Fiscal Year (1)

                                Options Granted in Fiscal 1996
                                     % of Total
                                       Options                                           Potential Gain at Assumed
                   Number of          Granted to         Exercise                       Annual Rates of Stock Price
                    Options          Employees in          Price        Expiration    Appreciation for Option Term (3)
       Name        Granted (2)        Fiscal Year        Per Share          Date           5%             10%
<S>                 <C>               <C>                <C>             <C>            <C>           <C>      
Asher B. Edelman     40,000              9.67%            $1.50           08/05/05       $37,734       $ 95,625
Blake D. Thomas     100,000             24.18%             1.06           03/20/06        66,820        169,335  
Phillip P. Krumb          0              0.00%              n/a                n/a           n/a            n/a 
Gerald N. Agranoff        0              0.00%              n/a                n/a           n/a            n/a            
Jan Berger           20,000              4.84%             1.50           08/05/05        18,867         47,812
Doris D. Bencsik          0              0.00%              n/a                n/a           n/a            n/a

Gain for all stockholders at assumed annual rates of stock price appreciation (4):    $9,868,040    $25,007,528

</TABLE>

(1)	No Stock Appreciation Rights (SARs) have ever been granted by Datapoint.
(2)	Each grant becomes exercisable in three equal annual installments commencing
    on the first anniversary date, with the exception of Blake Thomas's options.
    His options are an ISO and do not become exercisable until two years from 
    the anniversary date.
(3)	The dollar amounts under these columns are the result of calculations at the
    5% and 10% rates required by the SEC and, therefore, are not intended to 
    forecast possible future appreciation, if any, of the stock price.
(4)	These amounts represent the increase in the market value of Datapoint's 
    outstanding shares (13.9 million) as of July 27, 1996, that would result 
    from the same stock price assumptions used to show the potential realizable
    value for the named executives.


Aggregated Option Exercises in Last Fiscal Year and
Fiscal Year End Option Values

<TABLE>

The following table sets forth certain information regarding stock options exercised 
by the Company's Chief Executive Officer, four most highly compensated executive officers 
for the last fiscal year and one individual for whom disclosure would have been applicable 
but for the fact that the individual was not serving as an executive officer at the end 
of the last completed fiscal year.


                  Number of                                                   Value of Unexercised
                    Shares                    Number of Unexercised           In-the-Money Options     
                 Acquired on    Value        Options at July 27, 1996          at July 27, 1996       
      Name         Exercise    Realized    Exercisable    Unexercisable   Exercisable  Unexercisable
<S>                   <C>      <C>          <C>             <C>                <C>       <C>       
Asher B. Edelman       0         $0          175,000          40,000           $0         $    0    
Blake D. Thomas        0          0           25,000         100,000            0          6,250
Phillip P. Krumb       0          0           16,667          33,333            0              0
Gerald N.Agranoff      0          0           16,667          33,333            0              0
Jan Berger             0          0           55,000          30,000            0              0
Doris D. Bencsik       0          0           15,000               0            0              0 
</TABLE>


<PAGE>

Performance Graph

Set forth below is a line graph comparing the five-year cumulative total return
for Datapoint common stock with the Dow Jones 65-Composite Average, a broad 
equity market index, and the Dow Jones computer systems index, excluding IBM.

          		Comparison of Five-Year Cumulative Total Return
<TABLE>
 
Year        Datapoint Common Stock         Dow Jones Computer       Dow Jones 65-Computer
                                         Systems Index (w/o IBM)      Composite Average
            Actual YE      Base YE       Actual YE      Base YE     Actual YE     Base YE 
<S>          <C>          <C>            <C>            <C>         <C>           <C>    
FY 1996       1.13          81.82         477.75         223.75      1,746.32      141.08
FY 1995       1.50         109.09         460.48         215.66      1,577.65      127.45      
FY 1994       3.75         272.73         181.90          85.19      1,635.12      132.10  
FY 1993       7.00         509.09         148.27          69.44      1,609.55      130.03
FY 1992       2.38         172.73         214.45         100.44      1,414.24      114.25
FY 1991       1.38         100.00         213.52         100.00      1,237.82      100.00

</TABLE>
The graph assumes $100 invested on July 28, 1991, in Datapoint common stock and
each of the Dow Jones indexes, and that all dividends were reinvested.  During 
the five-year period Datapoint did not pay any dividends on its common stock.

EMPLOYMENT AGREEMENTS 

Effective April 25, 1990, Datapoint entered into a written employment agreement
memorializing an existing understanding concerning the employment of Mr. 
Edelman as Chairman of the Board of Directors and the Executive Committee of 
Datapoint. The agreement, as amended, now provides for a base salary of 
$300,000, an annual bonus opportunity of 5% of the Company's net pre-tax 
earnings (excluding the excess over $10 million of the net of any extraordinary
gains due to debt repurchase or exchange against all extraordinary losses) and 
payment of certain of his expenses, subject to limitations, including expenses 
relating to his presence at Datapoint's European offices.  The amended 
agreement further provides for a lump-sum payment of two years salary and 
benefits plus one year of bonus at plan should Mr. Edelman's employment 
involuntarily terminate other than by death or disability, or for "cause" as 
strictly defined therein.

Effective June 1, 1991, Datapoint entered into an agreement with Mr. Jan Berger
providing for his employment as Vice President, Marketing, at a minimum annual 
base salary of $180,000.  The agreement provides for an annual bonus 
opportunity, certain executive benefits, and lump-sum payment of one year of 
base salary as well as a continuation of benefits for one year should Datapoint
terminate his employment other than for "cause" as strictly defined therein.  
The agreement also provides for expatriate accommodations incident to foreign 
assignment.

Effective October 1, 1994, Datapoint entered into an agreement with Mr. 
Agranoff providing for his employment as Vice President, General Counsel and 
Corporate Secretary.  This agreement, as amended, now provides for a minimum 
annual base salary of $200,000, annual bonus opportunity, certain executive 
benefits, and continuation of base salary payments of up to $100,000, plus any 
performance bonus he may be entitled to, as well as a continuation of benefits
for six months should Datapoint terminate his employment other than for cause.

<PAGE>

Effective December 5, 1995, Datapoint entered into an agreement with Mr. Thomas
providing for his employment as Executive Vice President and Chief Operating 
Officer at a minimum annual base salary of $250,000.  The agreement provides 
for an annual bonus opportunity of 3% of the Company's net pre-tax earnings 
(excluding the excess over $10 million of the net of any extraordinary gains 
due to debt repurchase or exchange against all extraordinary losses), certain 
executive benefits, and continuation of base salary payments of up to $100,000,
plus any performance bonus he may be entitled to, as well as a continuation of 
benefits for six months should Datapoint terminate his employment other than 
for cause.  The agreement also provides for expatriate accommodations 
incident to foreign assignment.

Effective September 19, 1994, Datapoint entered into an agreement with Mr. 
Krumb providing for his employment as Vice President and Chief Financial 
Officer at a minimum annual base salary of $175,000.  The agreement provides 
for an annual bonus opportunity of 1% of the Company's net pre-tax earnings 
(excluding the excess over $10 million of the net of any extraordinary gains 
due to debt repurchase or exchange against all extraordinary losses), certain 
executive benefits, and continuation of base salary payments of up to $100,000,
plus any performance bonus he may be entitled to, as well as a continuation of 
benefits for six months should Datapoint terminate his employment other than 
for cause.  The agreement also provided for certain relocation accommodations 
which were terminated at the end of 1995.

Effective February 4, 1993, Datapoint entered into an agreement with Mrs. 
Bencsik providing for her employment as Executive Vice President and Chief
Operating Officer with a minimum annual base salary of $150,000 for half-time
service until November 1, 1993, and for her employment as President and Chief
Operating Officer with a minimum annual base salary of $300,000 for full-time 
service thereafter.  The agreement provides for an annual bonus opportunity, 
certain executive benefits, and base salary continuation for two (2) years 
should Datapoint terminated her employment prior to September, 1996 other than
for "cause" as strictly defined therein.  On December 5, 1995, Mrs. Bencsik 
resigned from her position as an officer of the Company and on May 20, 1996, 
Mrs. Bencsik resigned from her position as a director of the Company. 

ITEM 12	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth information regarding the beneficial ownership of
the Common Stock and Preferred Stock by each director, by each executive 
officers named in the table, and by the directors and executive officers as a 
group as of October 18, 1996.

                            		Common Stock	         	Preferred Stock
                             	Beneficially  	Percent  	Beneficially	  Percent
Name of Director	              Owned 	(1)  	of Class       Owned    	of Class

Gerald N. Agranoff (O&D)	      245,651(2)(5)	 1.8%			    182,471(3)(5)     9.8%
Asher B. Edelman (O&D)	     	1,634,953(2)(4) 11.7% 	     466,027(3)(4)    24.9%
Irving J. Garfinkel (D)		      237,318(2)(5)  1.7%	       70,471(5)        3.8%
Daniel R. Kail (D)		            25,000(2)	     	o 			     	-0-	   	        	o 
Didier Ruffat (D)		             25,000(2)	      o 	        -0- 	           	o
Blake D. Thomas (O&D)	          51,999(2)      	o	        28,430	         	1.5% 
David Berger (O)		              63,333(2)	     	o 		     112,000(3)        6.0%
Jan Berger (O)		                66,667(2)      	o			       -0-		           	o
Phillip P. Krumb (O)		          33,333(2)      	o		       	-0-		           	o
Roger Edmonds (O) 	 	           12,500(2)      	o		       	-0-		           	o
Walter Gevers (O)		             46,667(2)      	o		       	-0-              o
John Perkins (O)		               3,333(2)      	o		        -0-			           o

Executive Officers and
	Directors of Datapoint as
	a group (12 persons)	       	2,021,118       14.5% 	    	494,457        	26.5%
	o	Indicates less than 1% ownership.

 (1) Information relating to beneficial ownership is based upon ownership 
information furnished by each person using "beneficial ownership" definitions 
set forth in Section 13 of the Securities Exchange Act of 1934, as amended (the
"Exchange Act").  Under those rules, a person is deemed to be a "beneficial 
owner" of a security if that person has or shares "voting power," which 
includes the power to vote or to direct the voting of such security, or 
"investment power," which includes the power to dispose or to direct the 
disposition of such security.  The person is also deemed to be a beneficial 
owner of any security of which that person has a right to acquire beneficial
ownership (such as by exercise of options) within 60 days.  Under such rules, 
more than one person may be deemed to be a beneficial owner of the same 
securities, and a person may be deemed to be a beneficial owner of securities 
as to which he or she may disclaim any beneficial interest.  Except as 
otherwise indicated in other table footnotes, the indicated directors and 
executive officers possessed sole voting and investment power with respect to
all shares of Common Stock and Preferred Stock attributed.

	(2) The tabulation includes shares of Common Stock which may be deemed to be 
beneficially owned by such persons by reason of stock options currently 
exercisable or which may become exercisable within sixty (60) days after that 
date.  The number of shares deemed to be beneficially owned by reason of such 
options is: Mr. Edelman, 188,333; Mr. Agranoff, 33,333; all other directors, 
25,000 each (total 100,000); Mr. David Berger, 63,333;  Mr. Jan Berger, 66,667;
Mr. Krumb, 33,333; Mr. Edmonds, 12,500; Mr. Gevers, 46,667; Mr. Perkins, 3,333;
all officers and directors as a group, 547,499.

	(3)	Gerald N. Agranoff, Asher B. Edelman, and David Berger are Trustees of the
Datapoint Corporation Supplemental Executive Retirement Plan (the "Datapoint 
Plan") and may each be deemed to be beneficial owners of the 112,000 Preferred 
Share owned by the Datapoint Plan by virtue of their shared voting and 
investment powers as Trustees.  In the above tabulation, such shares have been 
included within each party's Preferred Shares listing as well as the listing 
for the directors and executive officers as a group.  Messrs. Agranoff, Edelman,
and Berger each disclaim beneficial ownership of these shares except to the 
extent of pecuniary interests in such shares which each party currently be 
vested; being, Mr. Agranoff, 0 shares, Mr. Edelman, 31,968 shares and Mr. 
Berger, 9,584 shares.

<PAGE>

	(4)	 Mr. Edelman's listed beneficial ownership of 1,634,953 shares of Common 
Stock is explained in detail in this paragraph.  As the controlling general 
partner of each of Plaza Securities Company, A.B. Edelman Limited Partnership 
and Citas Partners (which is the sole general partner of Felicitas Partners, 
L.P.).  Mr. Edelman may be deemed to own beneficially the 212,318, 783,890, and
4,402 shares held, respectively, by each of such entities for purposes of Rule 
13d-3 under the Exchange Act, and these shares are included in the listed 
ownership.  Also included are the 333,779 shares owned by Canal Capital 
Corporation ("Canal"), in which companies Mr. Edelman and various persons and 
entities with which he is affiliated own interests.  By virtue of investment 
management agreements between A.B. Edelman Management Company Inc. and Canal, 
A.B. Edelman Management Company Inc. has the authority to purchase, sell and 
trade in securities on behalf of Canal.  A.B. Edelman Management Company Inc. 
therefore may be deemed to be the beneficial owner of the 333,779 shares owned 
by Canal.  Asher B. Edelman is the sole stockholder of A.B. Edelman Management 
Company Inc. and these shares are included.  A. B. Edelman Management Company, 
Inc. is also the sole general partner of Edelman Value Partners, L.P. which 
currently owns no common stock.  Also included are Mr. Edelman's presently 
exercisable options to purchase 188,333 shares.  Also included are the 86,204 
owned by Mr. Edelman's spouse, Maria Regina M. Edelman, 5,000 shares held by 
Mr. Edelman in a Keough account and the 21,000 shares beneficially owned by Mr.
Edelman's daughters in accounts for which he is the custodian.  As a trustee of
the Canal Capital Corporation Retirement Plan ("Canal Plan"), Mr. Edelman may 
be deemed to own beneficially, and share voting and investment power over the 
27 shares owned by such plan, which are included.  Excluded are 15,835 shares 
beneficially owned by Mr. Edelman's daughters in accounts for which their 
mother, Penelope C. Edelman, is the custodian and the 10,500 shares owned 
directly by Penelope C. Edelman.  Mr. Edelman disclaims beneficial ownership of
these shares.

		In addition, Mr. Edelman's listed beneficial ownership of 466,027 shares of 
Preferred Stock is explained in detail in this paragraph.  As the controlling 
general partner of each of Plaza Securities Company, A.B. Edelman Limited 
Partnership and Citas Partners, which is the sole general partner of Felicitas 
Partners, L.P., Mr. Edelman may be deemed to hold beneficially the 70,471, 
51,229 and 581 shares held, respectively, by each of such entities for purposes
of Rule 13d-3 under the Exchange Act, and these shares are included in the 
amount stated in the first sentence of this paragraph.  Mr. Edelman is also the
sole stockholder of A.B. Edelman Management Company, Inc., which is the general
partner of Edelman Value Partners, L.P., owner of 50,300 shares.  Also, 
included are the 8,458 shares owned by Canal, and the 29,002 shares owned 
directly by Mr. Edelman's spouse, Maria Regina M. Edelman.  Also included are 
the 104,400 shares owned by Edelman Value Fund, Ltd., a corporation in which 
Maria Regina M. Edelman is an investor and for which Mr. Edelman serves as 
investment manager.  Mr. Edelman expressly disclaims both the Maria Regina M. 
Edelman and Edelman Value Fund, Ltd. shares.  As a trustee of the Canal Plan 
and the Datapoint Plan, Mr. Edelman may be deemed to own beneficially, and 
share voting and investment power over the 39,586 shares and 112,00 shares, 
respectively, owned by such plans, which are included.  Mr. Edelman disclaims 
ownership except as to shares with which he is vested under each plan.  
Excluded are the 38,330 shares owned by Mr. Edelman's daughters in accounts for
which their mother, Penelope C. Edelman, is the custodian and 20,009 shares 
owned directly by Penelope C. Edelman.  Mr. Edelman disclaims beneficial 
ownership of these excluded shares.

	(5)	 Messrs. Agranoff and Garfinkel are general partners of Plaza Securities 
Company, which owns 212,318 shares of Common Stock and 70,471 shares of 
Preferred Stock.  Each disclaims beneficial ownership of these shares, which 
are included in the beneficial ownership table above.

<PAGE>

ITEM 13	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Mr. Edelman (the Company's current Chairman of the Board and Chief Executive 
Officer), and Messrs. Agranoff and Kail (currently directors), and former 
Company director Dwight D. Sutherland were also directors of Intelogic Trace, 
Inc., ("Intelogic"), a wholly-owned subsidiary of Datapoint and its computer 
hardware maintenance division in the U.S., comprising four of Intelogic's six 
directors, when Intelogic filed a voluntary petition for relief under Chapter 
11 of the Bankruptcy Code in the U.S. Bankruptcy Court, Western District of 
Texas, San Antonio Division, Case No. 94-52172-C-11 on August 5, 1994. 
Intelogic emerged from bankruptcy pursuant to approval of a modified first 
amended plan of reorganization on November 28, 1994.  The above named directors
resigned from Intelogic on December 8, 1994.  On March 16, 1995, Intelogic 
again filed for bankruptcy protection under Chapter 11 of the Bankruptcy Code 
in the U.S. Bankruptcy Court, Western District of Texas, San Antonio Division, 
Case No. 95-50753-LMC-11. During that proceeding, substantially all of 
Intelogic's operating assets were sold to a third party on April 5, 1995.  
Intelogic is effectively no longer in business.

The above named directors received compensation and/or benefits from Intelogic 
prior to their resignations.  Also, these directors and former director may be 
deemed to have beneficially owned approximately 15% of Intelogic's common stock
as of July 30, 1994.  In addition, they had options to purchase shares of 
Intelogic common stock equal in the aggregate to approximately 1% of the amount
then outstanding.  The overlap of directors does not give rise to a reportable
compensation committee interlock.

Since the 1985 spin-off of Intelogic from being Datapoint's U.S. computer 
hardware maintenance division up until April 5, 1995, when substantially all of
its operating assets were sold to a third party, Datapoint engaged in and 
continued to engage in various transactions with Intelogic as an independent 
computer maintenance company.  All such transactions were billed to Intelogic
by Datapoint at its cost.  All other transactions between Datapoint and 
Intelogic were pursuant to a Master Maintenance Agreement entered into at the 
time of the spin-off and related to the ordinary business operations of both 
Datapoint and Intelogic.  For fiscal year 1994, Intelogic paid Datapoint 
approximately $196,000 for equipment and field support spares, royalties, and 
expenses and Datapoint paid Intelogic approximately $3,000 and $28,000 in 1995
and 1994, respectively for services and sales.  Included in accounts receivable
were amounts due from Intelogic of $298,000.

During fiscal year 1991, Datapoint sold its outstanding stock in Datapoint 
Canada, a wholly-owned subsidiary, to Intelogic.  The proceeds consisted of 
$350,000 in cash and 25,000 shares of Intelogic preferred stock, redeemable at 
the option of Intelogic, in escalating amounts, beginning at $62.50 per share 
on or before November 9, 1992, and increasing to $100.00 per share on or before
November 10, 1994, until a mandatory redemption date of November 9, 1995.  The 
preferred stock was to also accrue dividends at an annual rate of $10.00 per 
share, if paid in cash, or at an annual rate of $18.00 per share if paid in 
additional shares of preferred stock.  As an element of the transaction, the 
parties caused Datapoint Canada to repay approximately $1,300,000 in an 
operating capital loans provided to Datapoint Canada as a subsidiary of 
Datapoint.  No gain or loss was recorded on the sale.  As an aspect of 
consideration for the sale, Datapoint received a five-year option to purchase 
substantially all of Intelogic's holdings of Datapoint's common and preferred 
stock.  The option allowed Datapoint to purchase from Intelogic up to 2,700,000
shares of Common Stock for $0.75 a share and up to 85,000 shares of the 
Company's $4.94 Exchangeable Preferred Stock for $1.375 a share.  The $4.94 
Exchangeable Preferred Stock owned by Intelogic was exchanged for 85,000 shares
of $1.00 Preferred Stock and 170,000 shares of Common Stock in the exchange 
offer consummated April, 1992.  Datapoint exercised its option and 
repurchased and retired 85,000 shares of Preferred Stock and 170,000 shares of
Common Stock.

In September 1994, the Company reached an agreement with Intelogic, in 
conjunction with Intelogic's court approved reorganization, to cancel its 
option to purchase at $0.75 per share its common stock held by Intelogic in 
exchange for all of the Company's holdings of Intelogic preferred stock which
had no carrying value.  As a result of the exchange, the Company received from 
Intelogic 2,400,000 shares of Datapoint common stock.

Director Agranoff had provided various tax, legal and real estate consulting 
services prior to serving as Vice President, General Counsel and Corporate 
Secretary for the Company.  During 1994, the Company paid Mr. Agranoff $126,000
for those services.  During the fiscal years 1996, 1995 and 1994, Datapoint 
paid legal fees of $485,000, $51,000 and $5,000 respectively, to the law firm 
of Pryor, Cashman, Sherman, & Flynn, to which firm Mr. Agranoff is of counsel, 
for legal services provided by attorneys other than Mr. Agranoff.

Director Thomas worked from August 1994 until May 1, 1995 as a special 
consultant for which he received compensation of $500 per day payable in shares
of common stock.  Subsequently, on May 5, 1995, in consideration of the 
additional work and responsibilities he had taken on for the Company as a 
special consultant, the Board of Directors approved a special compensation 
package for Director Thomas.  From May 1, 1995, through July 31, 1995, he was 
paid at the rate of $500 per day for his services, plus travel and housing 
expenses, plus additional compensation of a flat $2,000 per week for expenses. 
On July 31, 1995, Director Thomas's consulting contract was extended until 
December 31, 1995 and then was to continue on a month-to-month basis to July 
31, 1996.  Upon the resignation of Doris Bencsik as President and Chief 
Operating Officer, Director Thomas was appointed on December 5, 1995 to the 
position of Executive Vice President and Chief Operating Officer.  Director 
Thomas was also entitled under the extended contract to participate in the 
Standard Health Benefit program until he was appointed Executive Vice President
and Chief Operating Officer.  At such time, he converted to the Executive 
Health Benefit program.  During fiscal 1995, the Board also approved a one time
special issuance of 45,000 shares of common stock of the Company to Director 
Thomas in recognition of his service to the Company.  During the term Director 
Thomas acted as a special consultant, he did not accrue or receive any regular 
Board or committee fees.

Director Ruffat had a consulting agreement from January 1994 through June 1995 
under which he received a monthly compensation of $10,000.  For 1996 and 1995, 
Director Ruffat was paid $50,000 and $80,000, respectively, for consulting 
services.

PART IV

ITEM 14.  Exhibits, Financial Statement Schedules and Reports on Form 8-K.

	(a)1	 Financial Statements

		     The consolidated financial statements listed in the accompanying index to
       the financial statements are filed as part of this report.

	(a)2 	Financial Statement Schedules

     		Schedule II - Valuation and Qualifying Accounts and Reserves

       All other schedules are omitted since they are either not applicable or 
       the required information is shown in the Company's financial statements 
       or notes thereto.  Individual financial statements of the Company are 
       omitted because the Company is primarily an operating company and all 
       subsidiaries included in the Consolidated Financial Statements being 
       filed, in the aggregate, do not have minority equity interest and/or 
       indebtedness to any person other than the Company or its consolidated 
       subsidiaries in amounts which together exceed 5% of the total 
       consolidated assets as shown by the most recent year-end Consolidated 
       Balance Sheet.

	(a)3 	Exhibits
  
     		The exhibits listed on the accompanying index to exhibits are filed as 
       part of this report.

	(b)	  The Company filed a Form 8-K on July 10, 1996 and a Form 8-KA on August
       15, 1996 with regards to its divestiture of EADS.

<PAGE>
                              INDEX TO EXHIBITS

                                                                  		Sequentially
Exhibit		                                                             Numbered 
Number	  Description of Exhibits   	                                   Pages   

(3)(a)	  Certificate of Incorporation of Datapoint Corporation, 
         as amended (filed as Exhibit (3)(a) to the Company's Annual  
         Report on Form 10K for the year ended July 31, 1993, and 
         incorporated herein by reference).

(3)(b)	  Bylaws of Datapoint Corporation, as amended (filed as 
         Exhibit (3)(b) to the Company's Annual Report on Form 10-K
         for the year ended August 1, 1992, and incorporated herein 
         by reference).

(4)(a)	  Debenture holder Notice of Adjustment to Conversion Rate, 
         dated July 11, 1985, under Indenture dated as of June 1, 1981, 
         between Datapoint Corporation and Continental Illinois 
         National Bank and Trust Company of Chicago, as Trustee,
         providing for 8-7/8% Convertible Subordinated Debentures
         Due 2006 (filed as Exhibit (4)(a) to the Company's Annual
         Report on Form 10-K for the year ended July 27, 1985
         and said Indenture filed as Exhibit 4 to the Company's 
         Registration Statement on Form S-16 (No. 2-72395), each 
         incorporated herein by reference).

(4)(b	   Certificate of Designation, Preferences, Rights and 
         Limitations of Series of $1.00 Preferred Stock (filed as
         Exhibit (4)(e) to the Company's Registration Statement on
         Form S-4 dated April 30, 1992 and incorporated herein 
         by reference).

(10)(a)	 1983 Employee Stock Option Plan (filed as Exhibit (4)(a)(4)
         to the Company's Registration Statement on Form S-8 dated
         November 9, 1983 and incorporated herein by reference).

(10)(b)	 1985 Director Stock Option Plan (filed as Exhibit (10)(i) 
         to the Company's Annual Report on Form 10-K for the year
         ended August 1, 1987 and incorporated herein by reference). 	

(10)(c)	 1986 Employee Stock Option Plan (filed as Exhibit (10)(h) 
         to the Company's Annual Report on Form 10-K for the year
         ended August 1, 1987 and incorporated herein by 
         reference).

(10)(d)	 1991 Director Stock Option Plan (filed as Exhibit (10)(b)(2)
         to Amendment No. 1 dated February 6, 1992 to the Company's
         Registration Statement on Form S-4 (Registration 
         No. 33-44097) and incorporated herein by reference).

(10)(e) 	1992 Employee Stock Option Plan (filed as Exhibit (4)(a)(4)
         to the Company's Registration Statement on Form S-8 dated
         January 19, 1993 and incorporated herein by reference).

(10)(f)	 Agreement for Transfer of Assets and Liabilities in Exchange 
         for Stock, dated as of June 28, 1985, between the Company
         and Intelogic Trace, Inc. (filed as Exhibit (10)(a) to the 
         Company's Current Report on Form 8-K dated July 28, 1985 
         and incorporated herein by reference).

(10)(g)	 Master Maintenance Agreement, dated as of June 28, 1985,
         between the Company and Intelogic Trace, Inc. (filed as
         Exhibit (10)(b) to the Company's Current Report on Form 
         8-K dated July 28, 1985 and incorporated herein by reference).

(10)(h)	 Maintenance Agreement regarding open systems products
         between the Company and Intelogic Trace, Inc., (filed as
         Exhibit (10)(g) to the Company's Annual Report on Form 
         10-K for the year ended August 1, 1992, and incorporated
         herein by reference).

<PAGE>
                                                                   Sequentially
Exhibit		                                                            Numbered 
Number	  Description of Exhibits	                                     Pages     

(10)(i)	 Agreement between the Company and Arbitrage Securities
         Company, as amended (filed as Exhibit (10)(f) to the
         Company's Annual Report on Form 10-K for the year ended July 
         29, 1989 and incorporated herein by reference).

(10)(j)	 Indemnity Agreements with Officers and Directors (filed
         as Exhibit (10)(f) to the Company's Annual Report on Form
         10-K for the year ended August 1, 1987 and incorporated
         herein by reference).

(10)(k)	 First Amendment to Indemnification Agreement with certain
         Officers and Directors. (filed as Exhibit (10)(h) to the
         Company's Annual Report on Form 10-K for the year ended 
         July 28, 1990 and incorporated herein by reference).

(10)(l)	 Second Amendment to Employment Agreement with A. B. Edelman
         (said amendment filed as Exhibit (10)(h)(3) to the Company's
         Registration Statement on Form S-4 dated April 30, 1992),
         amending Employment Agreement dated January 9, 1991 (said 
         agreement filed as Exhibit (10)(j) to the Company's Annual 
         Report on Form 10-K for the year ended July 28, 1990), as
         amended by Amendment No. 1 dated December 1, 1990 (said
         amendment filed as Exhibit (10)(i) to the Company's Annual
         Report on Form 10-K for the year ended July 27, 1991), each
         of which are incorporated herein by reference.

(10)(m)	 Employment Agreement with D. Berger (filed as Exhibit (10)(m)
         to the Company's Annual report on Form 10-K for the Year 
         ended July 31, 1993 and incorporated herein by reference). 

(10)(n)	 Employment Agreement with J. Berger (filed as Exhibit (10)(l)
         to the company's Annual Report on Form 10-K for the year
         ended August 1, 1992 and incorporated herein by reference). 

(10)(o)	 Employment Agreement with K. L. Thrower (filed as Exhibit 
         (10)(o) to the company's Annual Report on Form 10-K for the
         year ended August 1, 1992 and incorporated herein by reference).

(10)(p)	 First Amendment to the Grantor Trust Agreement dated June 18, 1991. 
         (filed as exhibit (10)(n) to the Company's Annual Report on Form
         10-K for the year ended July 27, 1991 and incorporated herein 
         by reference).

(10)(q)	 Manufacturing facilities Agreement of Lease between the Company
         and Willis and Cox Associates dated June 21, 1991 (filed as
         Exhibit (10)(q) to the Company's Annual Report on Form 10-K for
         the year ended August 1, 1992 and incorporated herein by reference).

(10)(r)	 Employment Agreement with D. Bencsik (filed as exhibit (10)(r) to 
         the Company's Annual Report on the Form 10-K for the year ended
         July 30, 1994 and incorporated herein by reference).

(10)(s)	 Employment Agreement with G. Agranoff and Amendment No. 1 to
         Employment Agreement (filed as Exhibit (10) (s) to Amendment No. 2
         to the Company's Registration Statement on Form S-4 filed on 
         September 27, 1996 and incorporated herein by reference).

(10)(t)	 Employment Agreement with B. Thomas (filed as Exhibit (10) (t) to
         Amendment No. 2 to the Company's Registration Statement on Form S-4
         filed on September 27, 1996 and incorporated herein by reference).

(10)(u)	 Employment Agreement with P. Krumb (filed as Exhibit (10) (u) to
         Amendment No. 2 to the Company's Registration Statement on Form S-4
         filed on September 27, 1996 and incorporated herein by reference).

(10)(v)	 Settlement Agreement with NTI (filed as Exhibit (10) (v) to
         Amendment No. 2 to the Company's Registration Statement on Form S-4
         filed on September 27, 1996 and incorporated herein by reference).

<PAGE>

                                                                    Sequentially
Exhibit                                                               Numbered  
Number   Description of Exhibits                                        Pages 
(10)(w)	 Umbrella Acquisition Agreement between Kalamazoo and Datapoint
         (filed as Exhibit 2 to the Company's Current Report on Form 
         8-K dated June 25, 1996 and incorporated herein by reference).

(10)(x)	 Form of Agreement for sale of assets of Datapoint Group Vendor
         and Kalamazoo (filed as Exhibit 3 to the Company's Current 
         Report on Form 8-K dated June 25, 1996 and incorporated herein 
         by reference).

(10)(y)	 Agreement for sale of DARTS Software (filed as Exhibit 4 to the
         Company's Current Report on Form 8-K dated June 25, 1996 and
         incorporated herein by reference).

(23)	    Consent of Independent Auditors.

(27)	    Article 5, Financial Data Schedule.

<PAGE>

                              SIGNATURES

	Pursuant to the requirements of Section 13 or 15(d) 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.



                                                	DATAPOINT CORPORATION
	                                                    (Registrant)

                                         BY: 	
	                                                    Asher B. Edelman    
	                                                Chief Executive Officer and 
	                                                  Chairman of The Board
								                                 By Phillip P. Krumb, Attorney In Fact
							

DATED:  October 25, 1996


	Pursuant to the requirements of the Securities Exchange Act of 1934, this 
report has been signed below by the following persons on behalf of the 
Registrant and in the capacities and on the dates indicated.

Signature                         Title                      	          Date


            			    Vice President and Chief Financial Officer 	 October 25, 1996
Phillip P. Krumb 		      (Principal Accounting Officer)


Phillip P. Krumb, pursuant to powers of attorney which are being filed with this
report, has signed below as attorney-in-fact for the following directors of the
Registrant:

                		 Gerald N. Agranoff        	Didier M.M. Ruffat
		                 Irving Garfinkel          	Blake D. Thomas
	                 	Daniel Kail	




                                    		                       		October 25, 1996


Phillip P. Krumb

<PAGE>

                                     Schedule II

                        DATAPOINT CORPORATION AND SUBSIDIARIES
                     Valuation and Qualifying Accounts and Reserves
                                    (In thousands)



                                       				      (a)	       (b)   
		                     Balance 	  Charged     	Charged
		                        at      	  to      	(to) from     Other     	 Balance
		                    Beginning 	Costs and      Other     	Additions	    at End 
	Classification 	      of Year    Expenses     Accounts 	(Deductions)  	of Year



Allowance for doubtful accounts:

 Year ended July 27, 1996 	$3,012	 $  170	     $(102)	     $  (289)      $2,791

 Year ended July 29, 1995	 $2,568  $2,147 	    $ (21)     	$(1,682)      $3,012

	Year ended July 30, 1994	 $2,466  $  807      $(472)	     $  (233)	     $2,568


(a)  Transfers to and from other balance sheet reserve accounts.
(b)  Accounts written-off net of recoveries, other expense accounts and 
     translation adjustments.

<PAGE>

                                     EXHIBIT 23


                           CONSENT OF INDEPENDENT AUDITORS


We consent to the incorporation by reference in the following registration 
statements and related prospectuses of our report dated October 21, 1996, with
respect to the consolidated financial statements and schedules of the Company
included in this Annual Report on Form 10-K for the year ended July 27, 1996: 
Registration Statement No. 2-60374 on Form S-8, Registration Statement No.
2-87765 on Form S-8, Registration Statement No. 33-19328 on Form S-8, 
Registration Statement No. 33-19427 on Form S-8, and Registration Statement No.
33-57102 on Form S-8.


                                                	Ernst & Young  LLP



Dallas, Texas
October 21, 1996


<PAGE>