<PAGE>

-----------------------------------------------------------------------------
                                       
                      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 JUNE 30, 1997
                                       
                        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 July 31, 1997, the registrant had 4,899,623 
                    shares of common stock outstanding.
                                       
                                       
                                       

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<PAGE>

               DUFF & PHELPS CREDIT RATING CO. AND SUBSIDIARIES
                                       
                          Quarter Ended June 30, 1997
                                       
                                     Index



PART I. - FINANCIAL INFORMATION

ITEM 1.   CONSOLIDATED FINANCIAL STATEMENTS


          Consolidated Condensed Statements of Income                 1
               Three Months Ended June 30, 1997 and
               Three Months Ended June 30, 1996

          Consolidated Condensed Statements of Income                 2
               Six Months ended June 30, 1997 and
               Six Months ended June 30, 1996

          Consolidated Balance Sheets                                 3
               June 30, 1997 and December 31, 1996

          Consolidated Statements of Cash Flows                       4
               Six Months Ended June 30, 1997 and
               Six Months Ended June 30, 1996

          Notes to the Consolidated Financial Statements              5-7

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

PART II. - OTHER INFORMATION

ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS         10

ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K                            10


<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          Three
                                                          Months         Months
                                                           Ended          Ended
                                                          June 30,      June 30,
                                                            1997          1996
                                                          -------       --------
<S>                                                       <C>           <C>
REVENUES (NOTE 1)                                         $16,894        $12,989

EXPENSES
   Employment expenses                                      6,749          5,292
   Other operating expenses                                 4,728          2,807
   Name usage fees--paid to former parent (Note 2)            500            500
   Depreciation and amortization (Note 1)                     538            505
                                                          -------       --------
 Total expenses                                            12,515          9,104

OPERATING INCOME                                            4,379          3,885

  Other income                                                 48             60
  Interest expense (Note 3)                                    98            103
                                                          -------       --------

EARNINGS BEFORE INCOME TAXES                                4,329          3,842

  Income taxes                                              1,827          1,639
                                                          -------       --------
NET EARNINGS                                               $2,502         $2,203
                                                          -------       --------
                                                          -------       --------

 Weighted average shares outstanding (Note 1)               5,597          5,976

EARNINGS PER SHARE (NOTE 1)                                 $0.45          $0.37


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

                                      -1-

<PAGE>


                   DUFF & PHELPS CREDIT RATING CO. AND SUBSIDIARIES

                     CONSOLIDATED CONDENSED STATEMENTS OF INCOME
                        (In Thousands, Except Per Share Data)
                                       (Unaudited)

                                                           Six             Six
                                                          Months         Months
                                                           Ended          Ended
                                                          June 30,      June 30,
                                                            1997          1996
                                                          -------       --------
REVENUES (NOTE 1)                                         $31,290        $25,227

EXPENSES
   Employment expenses                                     12,873         10,453
   Other operating expenses                                 7,670          5,185
   Name usage fees--paid to former parent (Note 2)          1,000          1,000
   Depreciation and amortization (Note 1)                   1,075          1,008
                                                          -------       --------
 Total expenses                                            22,618         17,646

OPERATING INCOME                                            8,672          7,581

  Other income                                                226             97
  Interest expense (Note 3)                                   217            228
                                                          -------       --------
EARNINGS BEFORE INCOME TAXES                                8,681          7,450

  Income taxes                                              3,663          3,175
                                                          -------       --------
NET EARNINGS                                               $5,018         $4,275
                                                          -------       --------
                                                          -------       --------
 Weighted average shares outstanding (Note 1)               5,629          5,997

EARNINGS PER SHARE (NOTE 1)                                 $0.89          $0.71


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

                                       -2-

<PAGE>

                   DUFF & PHELPS CREDIT RATING CO. AND SUBSIDIARIES

                              CONSOLIDATED BALANCE SHEETS
                                     (In Thousands)

                                                         June 30,      December 31,
ASSETS                                                     1997           1996
                                                        -----------      --------
                                                        (Unaudited)
CURRENT ASSETS:
  Cash and cash equivalents                                $  554          $  0
  Accounts receivable, net of allowance for doubtful
     accounts of $228 and $212, respectively               10,898         10,298
  Other assets                                                542            642
                                                        -----------      --------
     Total current assets                                  11,994         10,940

OFFICE FURNITURE, EQUIPMENT AND LEASEHOLD IMPROVEMENTS,
     net of accumulated depreciation of $3,590 and 
      $3,042, respectively (Note 1)                         4,599          4,540

OTHER ASSETS:
  Intangible assets (Note 1)                                2,169          2,319
  Goodwill  (Note 1)                                       22,720         23,094
  Other long-term investments                               1,136          1,019
  Other long-term assets                                       65            214
                                                        -----------      --------
TOTAL ASSETS                                              $42,683        $42,126
                                                        -----------      --------
                                                        -----------      --------
LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
  Accrued compensation and employment taxes              $  3,991       $  5,756
  Accounts payable                                          4,191          3,193
  Accrued income tax                                           74            576
  Advance service fee billings to clients (Note 1)          1,751          1,314
  Other current liabilities                                    17             15
                                                        -----------      --------
     Total current liabilities                             10,024         10,854

 LONG -TERM DEBT (Note 3)                                   9,500          5,500

OTHER LONG-TERM LIABILITY (Note 4)                            717            717

STOCKHOLDERS' EQUITY:
  Preferred stock, no par value: 3,000 shares authorized,
    zero outstanding                                            0              0
  Common stock, no par value; 15,000 shares authorized,
    4,926 and 5,541 shares issued and 
    outstanding, respectively                                   0          5,030
  Retained earnings                                        22,442         20,025
                                                        -----------      --------
TOTAL STOCKHOLDERS' EQUITY                                 22,442         25,055
                                                        -----------      --------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                $42,683        $42,126
                                                        -----------      --------
                                                        -----------      --------

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

                                      -3-

<PAGE>

                   DUFF & PHELPS CREDIT RATING CO. AND SUBSIDIARIES

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

                                                       Six Months     Six Months
                                                          Ended          Ended
                                                         June 30,       June 30,
                                                           1997           1996
                                                         --------      ---------
CASH FLOWS FROM OPERATING ACTIVITIES:

     Net earnings                                        $  5,018      $   4,275
     Decrease (increase) in accounts receivable              (600)         2,793
     Decrease in accrued compensation and 
      employment taxes                                     (1,765)        (1,757)
     Increase (decrease) in advance service 
      fee billings                                            437           (259)
     Depreciation and amortization                          1,075          1,007
     Decrease in income taxes payable                        (519)          (525)
     Decrease in other assets and liabilities - net         1,130            128
                                                         --------      ---------
Cash provided by operating activities                       4,776          5,662
                                                         --------      ---------

CASH FLOWS FROM INVESTING ACTIVITIES:

     Decrease (increase) in other long-term investments         9           (174)
     Purchase of office furniture, equipment
         and leasehold improvements-net of retirements       (608)          (890)
                                                         --------      ---------
Cash used in investing activities                            (599)        (1,064)
                                                         --------      ---------
CASH FLOWS FROM FINANCING ACTIVITIES:

     Deferred financing                                       (11)             0
     Dividends paid to shareholders                          (307)          (330)
     Issuances of common stock                                664            373
     Repurchase of common stock                            (7,969)        (3,241)
     Increase of long-term debt                            10,500          1,500
     Decrease of long-term debt                            (6,500)        (3,000)
                                                         --------      ---------
Cash used in financing activities                          (3,623)        (4,698)
                                                         --------      ---------
NET CHANGE IN CASH                                            554           (100)
                                                         --------      ---------
CASH, BEGINNING OF PERIOD                                       0            233
                                                         --------      ---------
CASH, END OF PERIOD                                        $  554        $   133
                                                         --------      ---------
                                                         --------      ---------
</TABLE>
             The accompanying notes to the consolidated financial statements
                        are an integral part of these statements.

                                      -4-

<PAGE>

                 DUFF & PHELPS CREDIT RATING CO. AND SUBSIDIARIES

             NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)


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 directly or through international partners in North 
and South America, Europe, Asia and Africa.  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 preparation of financial statements in conformity with generally 
accepted accounting principles requires management to make estimates and 
assumptions.  These estimates affect the reported amounts of assets, 
liabilities and disclosure of contingent assets and liabilities at the date 
of the financial statements.  In addition, they affect the reported amounts 
of revenues and expenses during the period.  Actual results could differ from 
those estimates.

     The accompanying consolidated financial statements have been prepared in 
accordance with generally accepted accounting principles and include those 
assets, liabilities, revenues and expenses directly attributable to the 
Company's operations in the periods presented.

PRINCIPLES OF CONSOLIDATION   

     During July 1994, the Company organized a U.S. subsidiary, Duff & Phelps 
Credit Rating Co. of Europe, with an office located in London, England.  In 
July 1996, the Company organized a 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.

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 non-qualified 
stock option plan.

                                     -5-

<PAGE>

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.

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 31 years, and intangible assets are amortized over remaining 
lives of 3 through 12 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 undiscounted cash 
flows over the remaining useful life of goodwill and intangible assets to 
measure recoverability as required by Statement of Financial Accounting 
Standards ("SFAS") No. 121, "Accounting for the Impairment of Long-Lived 
Assets and for Long-Lived Assets to be Disposed of."  

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 five years.  
Leasehold improvements are amortized over the remaining lives of the related 
leases, which, on a composite basis, is 11 years.

NEW ACCOUNTING PRONOUNCEMENTS

     Recently the Financial Accounting Standards Board issued Statement of 
Financial Accounting Standards No. 128 ("SFAS 128") which changes the 
disclosure of earnings per share ("EPS") data.  SFAS 128 replaces the 
presentation of "primary" EPS with "basic" EPS.  Under SFAS 128 
"diluted" EPS, the dilutive effect of outstanding share options is computed 
similarly to "fully diluted" EPS.  Under SFAS 128 the dilutive effect of 
outstanding shares is computed using the "average share price" for the 
period rather than the "greater of the average share price or end of period 
share price."  By these standards the pro forma basic EPS for the six months 
ended June 30, 1997 would be $.98 per share for 5,099,984 average shares 
outstanding; and for the six months ended June 30, 1996 would be $.78 per 
share for 5,508,412 average shares outstanding.  The difference between these 
weighted average share figures and those presented on the consolidated 
condensed statements of income is due to the dilutive effect of outstanding 
stock options.

2    RELATED PARTIES:

SERVICE FEES PAID TO D&P

     A name use fee agreement in effect between the Company and D&P requiring 
payment of $2 million per year is 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.

                                      -6-

<PAGE>

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 administrative services for a fee that 
represents actual expenses incurred by the Company on behalf of D&P.  For the 
years presented, the fixed-income research fees are included in revenue, and 
the administrative support fees offset other operating expenses. The fixed 
income research agreement expires on September 30, 2000.

3    LONG-TERM DEBT AND SUPPLEMENTAL CASH FLOWS INFORMATION:

     Long-term debt obligations were $9.5 million and $5.5 million, bearing 
interest of 6.2 percent and 6.3 percent, for the periods ended June 30, 1997 
and December 31, 1996, respectively.  Cash interest and fees paid were $.1 
million for three months ended June 30, 1997 and $.2 million for the six 
months ended June 30, 1997.

     Dividends paid totaled $0.2 million, and repurchases of 160,900 shares 
amounted to $4.8 million during the second quarter of 1997.

     Income taxes paid were $2.4 million during the second quarter of 1997 
and $4.2 million in the first half of 1997.

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 sought recovery from the 
Company of treble damages under the Racketeer Influenced and Corrupt 
Organizations Act ("RICO").  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 and 
the RICO claim of the holders of the Bonds was dismissed. 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.

     Management intends to vigorously defend these actions, and at this time, 
cannot make an assessment with regard to such 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.

                                         -7-

<PAGE>

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

RESULTS OF OPERATIONS

                THREE MONTHS ENDED JUNE 30, 1997 COMPARED WITH
                       THREE MONTHS ENDED JUNE 30, 1996

     Revenues for the three months ended June 30, 1997, were $16.9 million, 
an increase of approximately 30 percent, or $3.9 million over the $13.0 
million recorded in the corresponding period in 1996.

     The growth in revenues and earnings was the result of strong performance 
by both the corporate and structured finance rating businesses, which posted 
14 percent and 66 percent revenue increases, respectively.  Each major 
segment of the Company's corporate rating business achieved higher revenues 
due to the addition of new clients and continuing moderate level of financing 
activity. The structured finance revenue increase was primarily contributed 
by the on-going strong performance of the real estate and asset-backed 
sectors.  The Company's international business, which is incorporated in the 
corporate and structured revenue comparisons above, also exhibited strong 
double-digit revenue growth.

     For the quarter ending June 30, 1997, operating expenses were up 37 
percent primarily reflecting  higher compensation expenses and travel 
expenses reflecting the increase in business and higher expenses and legal 
fees incurred in the connection with the litigation matters discussed in 
Note 4.

     Net earnings for the second quarter of 1997 increased 14 percent to $2.5 
million, while earnings per share increased 22 percent to $0.45 compared with 
$0.37 in 1996.

                 SIX MONTHS ENDED JUNE 30, 1997 COMPARED WITH
                        SIX MONTHS ENDED JUNE 30, 1996
                                       
     Revenues for the six months ended June 30, 1997, were $31.3 million, an 
increase of 24 percent, or $6.1 million over the $25.2 million recorded in 
the corresponding period in 1996.  Rating revenues accounted for $6.5 million 
of the increase and were offset by a decline in other revenues of $.4 million.

     Rating revenues were favorably impacted by a 14 percent increase in 
corporate rating revenues and a 50 percent increase in structured finance 
rating revenues for the same reasons as described above.

     Operating income for the six months ended June 30, 1997, was $8.7 
million, an increase of 14 percent, or $1.1 million over the $7.6 million 
recorded in the first half of 1996.  This increase is a result of the revenue 
increase discussed above, offset by an increase in operating expenses of $5 
million or approximately 28 percent.  Expense increases were primarily 
related to higher compensation and travel expenses reflecting the increase in 
business and higher expenses and legal fees incurred in connection with the 
litigation matters discussed in Note 4.

     Net earnings for the first half of 1997 increased to $5 million from 
$4.3 million, while earnings per share were $0.89 compared to last year's 
$0.71.

                                       -8-

<PAGE>

LIQUIDITY AND CAPITAL RESOURCES

     Capital expenditures totaled $0.6 million for the first half of 1997 and 
are anticipated to be approximately $1.8 million for the 1997 fiscal year, 
primarily for leasehold improvements, office fixtures and computer equipment 
to accommodate the increase in staff.

     Dividends paid totaled $0.3 million in the first half of 1997, and 
repurchases of 281,250 shares during the first half of 1997 amounted to $8 
million.

     The Company has in place a $20 million, revolving credit agreement. As 
of June 30, 1997, $9.5 million was outstanding under the facility at a 
floating rate of approximately 6.2 percent.  Commitment fees are accrued on 
the unused facility at an annual rate of .25 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.









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

This 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  any number 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.

                                        -9-

<PAGE>

PART II.  OTHER INFORMATION

ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     (a)  On May 13, 1997 an annual meeting of stockholders was held.

     (b)  Each of the five nominees for director were elected by a majority 
of shareholders' votes to serve until the next annual meeting of stockholders 
and until their successors are duly elected and qualified.  The directors 
elected were Paul J. McCarthy, Philip T. Maffei, Milton L. Meigs, Jonathan 
Ingham and Donald J. Herdrich.

ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K

          Exhibit No.    Description
             27          Financial Data Schedule


                                      -10-

<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.



                         /s/ Marie C. Becker
                         ------------------------------------
                         Marie C. Becker, Vice President and
                           Chief Accounting Officer/Controller

August 11, 1997