<PAGE>

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                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C.  20549




                                    FORM 10-Q


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

                    FOR THE QUARTER ENDED SEPTEMBER 30, 1996

                         COMMISSION FILE NUMBER 1-13286
                                 ______________



                         DUFF & PHELPS CREDIT RATING CO.
             (Exact name of Registrant as specified in its Charter)




               ILLINOIS                                36-3569514
     (State of Incorporation)                       (I.R.S. Employer
                                                   Identification No.)


55 EAST MONROE STREET, CHICAGO, ILLINOIS 60603         (312)368-3100
  (Address of principal executive offices)   (Registrant's telephone number)




  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.
                                                       --     --


  On October 31, 1996, the registrant had 5,276,873 shares of common stock
  outstanding.



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<PAGE>


                DUFF & PHELPS CREDIT RATING CO. AND SUBSIDIARIES

                        Quarter Ended September 30, 1996

                                      Index



PART I. - FINANCIAL INFORMATION

ITEM 1.   CONSOLIDATED FINANCIAL STATEMENTS


          Consolidated Condensed Statements of Income -                    1
                 Three Months Ended September 30, 1996 and
                 Three Months Ended September 30, 1995

          Consolidated Condensed Statements of Income -                    2
                 Nine Months Ended September 30, 1996 and
                 Nine Months Ended September 30, 1995

          Consolidated Balance Sheets -                                    3
                 September 30, 1996 and December 31, 1995

          Consolidated Statements of Cash Flows -                          4
                 Nine Months Ended September 30, 1996 and
                 Nine Months Ended September 30, 1995

          Notes to the Consolidated Financial Statements                   5-7

ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF                          8-9
          RESULTS OF OPERATIONS AND FINANCIAL CONDITION

<PAGE>

PART I. - FINANCIAL INFORMATION

ITEM 1.   CONSOLIDATED FINANCIAL STATEMENTS



                DUFF & PHELPS CREDIT RATING CO. AND SUBSIDIARIES

                   CONSOLIDATED CONDENSED STATEMENTS OF INCOME
                      (In Thousands, Except Per Share Data)
                                      (Unaudited)
<TABLE>
<CAPTION>

                                                              Three Months        Three Months
                                                                  Ended               Ended
                                                              September 30,       September 30,
                                                                   1996                1995
                                                              -------------       -------------
<S>                                                           <C>                 <C>
REVENUES (NOTE 1)                                                   $12,184             $10,172

EXPENSES
 Employment expense                                                   5,020               4,220
 Other operating expenses                                             2,609               1,834
 Name usage fees--paid to former parent (Note 2)                        500                 500
 Depreciation and amortization (Note 1)                                 505                 467
                                                              -------------       -------------
Total expenses                                                        8,634               7,021

OPERATING INCOME                                                      3,550               3,151

 Other income                                                           125                  24
 Interest expense (Note 3)                                               89                 157
                                                              -------------       -------------

EARNINGS BEFORE INCOME TAXES                                          3,586               3,018

 Income taxes                                                         1,524               1,300
                                                              -------------       -------------

NET EARNINGS                                                         $2,062              $1,718
                                                              -------------       -------------
                                                              -------------       -------------


 Weighted average shares outstanding (Note 1)                         5,822               5,960

EARNINGS PER SHARE (NOTE 1)                                           $0.35               $0.29

</TABLE>


                                       -1-

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

<PAGE>

                DUFF & PHELPS CREDIT RATING CO. AND SUBSIDIARIES

                   CONSOLIDATED CONDENSED STATEMENTS OF INCOME
                      (In Thousands, Except Per Share Data)
                                   (Unaudited)
<TABLE>
<CAPTION>

                                                               Nine Months         Nine Months
                                                                  Ended               Ended
                                                              September 30,       September 30,
                                                                  1996                1995
                                                              -------------       -------------
<S>                                                           <C>                 <C>
REVENUES (NOTE 1)                                                   $37,412             $32,139

EXPENSES
 Employment expense                                                  15,473              12,627
 Other operating expenses                                             7,796               7,132
 Name usage fees--paid to former parent (Note 2)                      1,500               1,500
 Depreciation and amortization (Note 1)                               1,513               1,308
                                                              -------------       -------------
Total expenses                                                       26,282              22,567

OPERATING INCOME                                                     11,130               9,572

 Other income                                                           222                 123
 Interest expense (Note 3)                                              316                 566
                                                              -------------       -------------

EARNINGS BEFORE INCOME TAXES                                         11,036               9,129

 Income taxes                                                         4,699               3,930
                                                              -------------       -------------

NET EARNINGS                                                         $6,337              $5,199
                                                              -------------       -------------
                                                              -------------       -------------

 Weighted average shares outstanding (Note 1)                         5,875               6,008

EARNINGS PER SHARE (NOTE 1)                                           $1.08               $0.87

</TABLE>



                                       -2-

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

<PAGE>

                DUFF & PHELPS CREDIT RATING CO. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS
                                 (In Thousands)

<TABLE>
<CAPTION>
                                                              September 30,        December 31,
ASSETS                                                            1996                1995
                                                              -------------        ------------
                                                               (Unaudited)
<S>                                                           <C>                  <C>
CURRENT ASSETS:
 Cash and cash equivalents                                            $  23              $  233
 Accounts receivable, net of allowance for doubtful
  accounts of $195 and $212, respectively                             8,169              10,099
 Other assets                                                           574                 529
                                                              -------------        ------------
  Total current assets                                                8,766              10,861

OFFICE FURNITURE, EQUIPMENT AND LEASEHOLD IMPROVEMENTS,
 net of accumulated depreciation of $2,974 and $2,249,
  respectively (Note 1)                                               4,519               4,013

OTHER ASSETS:
 Intangible assets (Note 1)                                           2,395               2,624
 Goodwill  (Note 1)                                                  23,280              23,840
 Other long-term investments                                          1,046                 621
 Other long-term assets                                                 167                 315
                                                              -------------        ------------

TOTAL ASSETS                                                        $40,173             $42,274
                                                              -------------        ------------
                                                              -------------        ------------

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
 Accrued compensation and employment taxes                         $  3,456            $  4,518
 Accounts payable                                                     1,763               1,697
 Accrued income tax                                                     418               1,362
 Advance service fee billings to clients (Note 1)                       975               1,294
 Other current liabilities                                              751                 384
                                                              -------------        ------------
  Total current liabilities                                           7,363               9,255

LONG -TERM DEBT (Note 3)                                              4,500               6,000

OTHER LONG-TERM LIABILITY (Note 4)                                      850                 950

STOCKHOLDERS' EQUITY:
 Preferred stock, no par value; 3,000 shares authorized,
  zero outstanding                                                        0                   0
 Common stock, no par value; 15,000 shares authorized,
  5,367 and 5,541 shares issued and outstanding, respectively         9,916              14,371
 Retained earnings                                                   17,544              11,698
                                                              -------------        ------------

TOTAL STOCKHOLDERS' EQUITY                                           27,460              26,069
                                                              -------------        ------------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                          $40,173             $42,274
                                                              -------------        ------------
                                                              -------------        ------------

</TABLE>


                                       -3-

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

<PAGE>

                DUFF & PHELPS CREDIT RATING CO. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (In Thousands)
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                              Nine Months         Nine Months
                                                                 Ended               Ended
                                                              September 30,       September 30,
                                                                  1996                1995
                                                              -------------       -------------
<S>                                                           <C>                 <C>
CASH FLOWS FROM OPERATING ACTIVITIES:

  Net earnings                                                     $  6,337            $  5,199
  Decrease in accounts receivable                                     1,930               2,316
  Decrease in accrued compensation and employment taxes              (1,062)             (1,138)
  Decrease in advance service fee billings                             (319)             (1,336)
  Depreciation and amortization                                       1,513               1,308
  Decrease in accrued income taxes payable                             (128)               (756)
  Decrease (Increase) in other assets and liabilities - net             311                (221)
                                                              -------------       -------------
 Cash provided by operating activities                                8,582               5,372
                                                              -------------       -------------

CASH FLOWS FROM INVESTING ACTIVITIES:

  Increase in other long term investments                              (318)                (84)
  Purchase of office furniture, equipment
    and leasehold improvements-net of retirements                    (1,231)               (964)
                                                              -------------       -------------
 Cash used in investing activities                                   (1,549)             (1,048)
                                                              -------------       -------------

CASH FLOWS FROM FINANCING ACTIVITIES:

  Dividends paid to shareholders                                       (492)               (507)
  Issuances of common stock                                             994                 279
  Repurchases of common stock & common stock equivalents             (6,245)             (1,329)
  Net repayments of long-term debt                                   (1,500)             (3,500)
  Long-term lease payments                                                0                  (4)
                                                              -------------       -------------
Cash used in financing activities                                    (7,243)             (5,061)
                                                              -------------       -------------

NET CHANGE IN CASH                                                     (210)               (737)
                                                              -------------       -------------

CASH, BEGINNING OF PERIOD                                               233               1,218
                                                              -------------       -------------

CASH, END OF PERIOD                                                   $  23              $  481
                                                              -------------       -------------
                                                              -------------       -------------

</TABLE>


                                       -4-

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

<PAGE>

DUFF & PHELPS CREDIT RATING CO. & SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


1      SIGNIFICANT ACCOUNTING POLICIES:

GENERAL

       Duff & Phelps Credit Rating Co. (the "Company") is an internationally
recognized credit rating agency which provides ratings and research on
corporate, structured and sovereign financings, as well as insurance claims
paying ability.  The Company has offices in Chicago, New York, London and Hong
Kong and operates through international partners in Latin America, Asia and
Canada.  The Company is also a designated rating agency in Japan.

       On October 31, 1994, the spin-off of the Company from its former parent
company, Phoenix Duff & Phelps Corporation, formerly Duff & Phelps Corporation
("D&P"), was finalized.  The Company's shares, held by D&P, were distributed
October 31, 1994, to D&P shareholders as a tax-free distribution.  D&P
shareholders received one of the Company's shares for every three shares held of
D&P.  The distribution resulted in the Company operating as a free standing
entity whose common stock is publicly traded on the New York Stock Exchange
under the ticker symbol "DCR."

BASIS OF PRESENTATION

       The accompanying consolidated financial statements include those assets,
liabilities, revenues and expenses directly attributable to the Company's
operations.  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.  Though actual results could differ from those estimates,
the Company believes that the disclosures are adequate to make the information
presented not misleading.  It is suggested that these consolidated financial
statements be read in conjunction with the consolidated financial statements and
notes thereto as of December 31, 1995.

PRINCIPLES OF CONSOLIDATION

       During July 1994, the Company organized a new U.S. subsidiary, Duff &
Phelps Credit Rating Co. of Europe, with an office located in London, England.
In July 1996, the Company organized a new U.S. subsidiary, Duff & Phelps Credit
Rating Co. of Asia, with an office in Hong Kong.  The consolidated financial
statements include the accounts of the Company and its wholly owned
subsidiaries, Duff & Phelps Credit Rating Co. of Europe and Duff & Phelps Credit
Rating Co. of Asia.  All significant intercompany balances have been eliminated.

DIVIDENDS AND EARNINGS PER SHARE

       Earnings per share were computed using the weighted average number of
shares of common stock and common stock equivalents outstanding.  Common stock
equivalents are based on outstanding stock options under a stock option plan.

REVENUE RECOGNITION

       Rating revenues are typically recognized when services rendered for
credit ratings are complete, generally when billed.  Revenues are dependent, in
large part, on levels of debt issuance.  The Company's fee schedule depends on
the type and amount of securities rated and the complexity of securities issued.
Research revenues are billed in advance and amortized over the subscription
period.

                                       -5-
<PAGE>

GOODWILL AND INTANGIBLE ASSETS

       In 1987, an acquisition of the former parent resulted in goodwill and
intangible assets allocated to the Company of approximately $5.0 million and
$6.0 million, respectively.  In 1989, another acquisition of the former parent
resulted in a "push-down" of goodwill to the Company of approximately $24.0
million.

       Goodwill and intangible assets are shown net of accumulated amortization.
Goodwill is amortized over its estimated remaining life of approximately 32
years, and intangible assets are amortized over remaining lives of 4 through 13
years. 

       The Company periodically evaluates whether significant events have
occurred which may require a revision of the estimated useful life of goodwill
and intangible assets or an impairment of the recoverability of remaining
balances.  The Company uses an estimate of future net income over the remaining
useful life of goodwill and intangible assets to measure recoverability.

DEPRECIATION AND AMORTIZATION

       Office furniture and equipment are stated at cost less accumulated
depreciation and are depreciated on a straight-line basis over the estimated
remaining lives of the assets, which, on a composite basis, is 5 years.
Leasehold improvements are amortized over the remaining lives of the related
leases, which, on a composite basis, is 12 years.

2      RELATED PARTIES:

SERVICE FEES PAID TO D&P

       Support agreements in effect between the Company and D&P include a name
use fee of $2 million per year and actual charges for other administrative
services which are included in the Company's financial results for the periods
presented.  Effective September 30, 2000, the name use fee reduces to
$10 thousand per year.

SERVICE FEES PAID TO THE COMPANY

       The Company and D&P are parties to service and support agreements under
which the Company provides D&P with fixed income research services for an annual
fee of $0.9 million and other administrative services for a fee which represents
actual expenses incurred by the Company on behalf of D&P.  Both are included in
the Company's financial results for the periods presented.  The fixed income
research agreement expires on September 30, 2000.

3      LONG-TERM DEBT AND SUPPLEMENTAL CASH FLOWS INFORMATION:

       Long-term debt obligations were $4.5 and $6.0 million, bearing interest
of 6.6 and 6.9 percent, for the periods ended September 30, 1996 and December
31, 1995, respectively.  The Company's long-term debt obligations were the
result of a "push-down" of debt from the Company's former parent, D&P.  Cash
interest and fees paid were $.1 million for three months ended September 30,
1996 and $.3 million for nine months ended September 30, 1996.

       Dividends paid were $.2 million for three months and $.5 million for nine
months ended September 30, 1996.  Repurchases of 148,781 shares and share
equivalents amounted to $3.0 million for the three months and 348,397 shares and
share equivalents amounted to $6.2 million for the months ended September 30,
1996.

       Income taxes paid were $1.1 million during the third quarter of 1996 and
$4.8 million in the nine months of 1996.

                                       -6-

<PAGE>

4      LITIGATION MATTERS:

       During 1993, several legal actions were filed against the Company in
federal court by holders of secured promissory notes ("Notes") of Towers
Financial Corporation ("Towers") and holders of bonds ("Bonds") issued by
subsidiaries of Towers in five structured financing transactions.  Towers
collapsed in 1993 amid allegations of massive fraud and is in bankruptcy.  The
Company had rated the Bonds but had not rated the Notes.  It is alleged that
$245 million of Notes were sold that are worthless and that $200 million of
Bonds were sold that have lost much or all of their value.  Directors and
officers of Towers, lawyers, accountants, broker-dealers and the indenture
trustee for the Bonds were also named as defendants in one or more of the
actions.  The plaintiffs in the actions contend that the Company and the other
defendants are liable for losses the plaintiffs have suffered and for punitive
damages.  The holders of the Bonds also seek recovery from the Company of treble
damages under the Racketeer Influenced and Corrupt Organizations Act.  It is
asserted that the Company,  in its ratings and its monitoring of the
transactions after ratings were issued, was either fraudulent or negligent in
failing to discover the alleged fraud of Towers and its officers or in taking
other action that allegedly induced purchases of the Bonds and the Notes.  The
Company denies these assertions.  The Company's ratings were based upon (and
assumed the accuracy of) the information provided to it by Towers and its
officers.  The Company has taken the position that it cannot be expected to
detect fraud or discover variances from the structure of a rated security when
the information provided to it demonstrates compliance with that structure.  In
1996, the legal actions filed by the holders of the Notes were dismissed by the
federal courts.  One holder of Notes claiming to represent holders of
approximately $17 million of Notes filed a class action against the Company in
Illinois state court alleging  the state law claims previously asserted in
federal court.

       In October 1994, putative class actions were filed in the U.S. District
Court for the Northern District of Georgia and in Georgia and New York State
Courts on behalf of all persons (the "Plaintiffs") who purchased or renewed life
insurance policies, annuities or guaranteed investment contracts (collectively
the "Contracts") from or issued by Confederation Life Insurance Company or its
subsidiaries ("Confederation") during the period from May 27, 1993, through
August 12, 1994.  The Company, which had rated the claims paying ability of
Confederation, was named a defendant in the action along with two other rating
agencies, A.M. Best and Standard & Poor's, Confederation's independent auditor,
Ernst & Young, and certain officers and/or directors of Confederation.
Confederation has ceased operations and is in liquidation allegedly because of a
decline in the amount of its assets, a large percentage of which were real
estate investments.  The complaint in the action alleges that the Company and
the other rating agencies knew or should have known of Confederation's
deteriorating financial condition and that by issuing and maintaining their
ratings they misrepresented Confederation's financial strength and the value of
the Contracts, thereby inducing the Plaintiffs to purchase or renew Contracts.
It is alleged that the Company and the other defendants' conduct constituted a
violation of Section 10(b) of the Exchange Act, common law fraud and negligent
misrepresentation.  The complaint seeks compensatory damages in an unspecified
amount, punitive damages, costs, attorneys' fees and interest.

       Management intends to vigorously defend these above actions, and at this
time, cannot make an assessment with regard to the above litigation's effect on
the Company's financial position or results of operations.  The Company is
involved in other litigation, which in the opinion of management, would not have
a material adverse effect on the Company's financial position or results of
operations.

5      SUBSEQUENT EVENTS:

       On November 7, 1996, the Company declared a quarterly dividend of $.03
per share payable December 6, 1996, to shareholders of record on November 22,
1996.

       In addition to the 348,397 shares and share equivalents repurchased in
the nine months of 1996, the Company also repurchased 91,562 shares in October
1996, resulting in total shares and share equivalents repurchased in 1996 of
439,959.


                                       -7-

<PAGE>

ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
          OF OPERATIONS AND FINANCIAL CONDITION

RESULTS OF OPERATIONS

               THREE MONTHS ENDED SEPTEMBER 30, 1996 COMPARED WITH
                      THREE MONTHS ENDED SEPTEMBER 30, 1995

       Revenues for the three months ended September 30, 1996, were $12.2
million, an increase of approximately 20 percent, or $2 million over the $10.2
million recorded in the corresponding period in 1995.  Rating revenues accounted
for $2.2 million of the increase and were offset by a decline in other revenues
of $.2 million.

       The substantial growth in third quarter revenues and earnings was the
result of strong performance by both the corporate and structured finance rating
businesses, which posted 11 percent and 56 percent revenue increases,
respectively.  The increase in structured finance rating revenues was led by the
commercial real estate rating group.  During 1995, commercial real estate rating
revenues lagged during the first three quarters and were highly concentrated in
the fourth quarter.  During 1996, commercial real estate rating revenues have
been more evenly distributed over the first three quarters of the year.

       For the quarter ending September 30, 1996, operating expenses were up 23
percent due to higher compensation expense and higher travel expense both
reflecting the increase in business and partially due to the opening of the Hong
Kong office.

       Net earnings for the third quarter of 1996 increased 21 percent to $2.1
million, while earnings per share were $0.35 compared with $0.29 in 1995.


               NINE MONTHS ENDED SEPTEMBER 30, 1996 COMPARED WITH
                      NINE MONTHS ENDED SEPTEMBER 30, 1995

       Revenues for the nine months ended September 30, 1996, were $37.4
million, an increase of 16 percent or $5.3 million over the $32.1 million
recorded in the corresponding period in 1995.  Rating revenues accounted for
$5.9 million of the increase and were offset by a decline in other revenues of
$.6 million.

       Rating revenues were favorably impacted by an 11 percent increase in
corporate rating revenues and a 41 percent increase in structured finance rating
revenues for the same reasons as described above.

       Operating income for the nine months ended September 30, 1996, was $11.1
million, an increase of 16 percent or $1.5 million over the $9.6 million
recorded in the first nine months of 1995.  This increase is a result of the
revenue increase discussed above, offset by an increase in operating expenses of
$3.7 million or approximately 16 percent.  Expense increases were primarily
related to higher compensation and higher travel expenses.

       Net earnings for the nine months of 1996 increased to $6.3 million from
$5.2 million, while earnings per share were $1.08 over last year's $0.87.

                                       -8-

<PAGE>

LIQUIDITY AND CAPITAL RESOURCES

       Capital expenditures totaled $1.2 million for the nine months of 1996 and
are anticipated to be approximately $1.5 million for the year ended 1996 and are
primarily for leasehold improvements to accommodate the increase in staff and
offices, computer equipment office fixtures, and the purchase of communications
equipment.

       Dividends paid totaled $0.5 million in the nine months of 1996; share and
share equivalent repurchases of 348,397 during the nine months of 1996 amounted
to $6.2 million.

       The Company's long-term debt obligations were the result of a "push down"
of debt from the Company's former parent.  The Company has in place a $10
million, four-year revolving credit agreement.  As of September 30, 1996, $4.5
million was outstanding under the facility at a floating rate of approximately
6.6 percent.  Commitment fees are accrued on the unused facility at a rate of
 .38 percent and are paid quarterly.  The credit agreement contains certain
financial covenants which the Company is currently in compliance with.

       The Company believes that funds provided by operations and amounts
available under its credit agreement will provide adequate liquidity for the
foreseeable future.

                              -9-

<PAGE>

SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

This quarterly report contains forward looking statements that are subject to
risks and uncertainties, including but not limited to the following:  the
Company's performance is highly dependent on corporate debt issuances and
structured finance transactions, which may decrease for a variety of reasons
including changes in interest rates and adverse economic conditions; the
Company's performance is affected by the demand for and the market acceptance of
the Company's services; and the Company's performance may be impacted by changes
in the performance of the financial markets and general economic conditions.
Accordingly, actual results may differ materially from those set forth in the
forward looking statements.  Attention is also directed to other risk factors
set forth in documents filed by the Company with the Securities and Exchange
Commission.

<PAGE>

                                    SIGNATURE

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




                         Duff & Phelps Credit Rating Co.




November 7, 1996
                         Marie C. Becker
                         --------------------------------
                         Marie C. Becker, Chief Accounting Officer/Controller