UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                               WASHINGTON DC 20549

                                    FORM 10-Q

 [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934
     For the quarterly period ended December 31, 1998

                                       OR

[   ]TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
     OF THE SECURITIES EXCHANGE ACT OF 1934
     FOR THE TRANSITION PERIOD OF FROM__________________TO________________

Commission file number 0-21077

                        INTERLINK COMPUTER SCIENCES, INC.
             (Exact name of registrant as specified in its charter)


               Delaware                                94-2990567
       (State of incorporation)            (IRS Employer Identification Number)

                             47370 Fremont Boulevard
                           Fremont, California  94538
                                 (510) 657-9800

          (Address and telephone number of principal executive offices)

                                _________________

 Indicate by check mark whether 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, and (2) has been subject to such filing requirements
                              for the past 90 days.

                              YES  X           NO__


    8,287,914 shares of the registrant's Common stock, $0.001 par value, were
                                   outstanding
                             as of February 1, 1999.
<PAGE>

<TABLE>

                        INTERLINK COMPUTER SCIENCES, INC.
                                AND SUBSIDIARIES

                                    CONTENTS
<CAPTION>
                                                                            Page
                         PART I:  FINANCIAL INFORMATION
<S>                                                                         <C>
Item 1.   Financial Statements
          Condensed Consolidated Balance Sheets:
            December 31, 1998 and June 30, 1998                              4
          Condensed Consolidated Statements of Operations:
            Three and six months ended December 31, 1998 and 1997            5
          Condensed Consolidated Statements of Cash Flows:
            Six months ended December 31, 1998 and 1997                      6
          Notes to Condensed Consolidated Financial Statements               7

Item 2.   Management's Discussion and Analysis of Financial
          Condition and Results of Operations                                12


                           PART II:  OTHER INFORMATION

Item 1 Legal Proceedings                                                     30
Item 4 Submission of Matters to a Vote of Security Holders                   30
Item 6 Exhibits and Reports on Form 8-K                                      30

Signatures                                                                   31
</TABLE>
                                        
<PAGE>
                         PART I:  FINANCIAL INFORMATION
                                        
<PAGE>
<TABLE>
               INTERLINK COMPUTER SCIENCES, INC. AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                 (in thousands)
<CAPTION>
                                          December 31,      June 30,
                                          1998              1998
                                          -----------       -----------
<S>                                       (unaudited)
ASSETS:
                                          <C>               <C>

Cash and cash equivalents                 $    19,224       $    18,189
Accounts receivable, net                        7,591             8,876
Inventories                                       387               380
Current deferred tax asset                      4,782             7,497
Other current assets                            1,748               492
                                          -----------       -----------
Total current assets                           33,732            35,434
Property and equipment, net                     2,095             2,392
Long-term deferred tax asset                    3,615             3,615
Purchased software products & other non-
current assets                                  1,400             1,341
                                          -----------       -----------
Total assets                              $    40,842       $    42,782
                                          ===========       ===========
LIABILITIES AND STOCKHOLDERS' EQUITY:
CURRENT LIABILITIES:
Accounts payable                          $       782       $       793
Current portion of long-term debt                 530             1,031
Accrued compensation                            1,582             1,879
Accrued income taxes                            1,278             1,328
Other accrued liabilities                       3,775             3,544
Deferred maintenance and product revenue        6,451             6,828
                                          -----------       -----------
Total current liabilities                      14,398            15,403
Long-term debt, less current portion              114               132
Deferred maintenance revenue                    1,566             1,421
Other liabilities                               1,555             1,692
Liabilities retained in connection with
sale of HARBOR                                      -             1,109
                                          -----------       -----------
Total liabilities                              17,633            19,757
                                          -----------       -----------
Commitments and contingencies (Note 5)
Common stock                                        8                 8
Additional paid-in capital                     52,776            52,505
Accumulated other comprehensive deficit          (492)             (525)
Accumulated deficit                           (29,083)          (28,963)
                                          -----------       -----------
Total stockholders' equity                     23,209            23,025
                                          -----------       -----------
Total liabilities and
 stockholders' equity                     $    40,842       $    42,782
                                          ===========       ===========

<FN>
     See accompanying notes to condensed consolidated financial statements.
</FN>
</TABLE>
                                        
<PAGE>

<TABLE>
               INTERLINK COMPUTER SCIENCES, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                    (in thousands, except per share amounts)
<CAPTION>

                          Three months ended      Six months ended
                             December 31,           December 31,

                            1998     1997       1998      1997
                            -------  --------   --------  -------
                               (unaudited)        (unaudited)
                            <C>      <C>        <C>       <C>
<S>
Revenues:
Product                     $ 3,416  $  3,388   $ 7,939   $ 6,221
Maintenance and consulting    3,832     3,360     7,563     6,842
                            -------  --------   -------   -------
Total revenues                7,248     6,748    15,502    13,063
                            -------  --------   -------   -------
Cost of revenues:
Product                         256       472       464       864
Maintenance and consulting    1,172     1,052     2,095     2,269
                            -------  --------   -------   -------
Total cost of revenues        1,428     1,524     2,559     3,133
                            -------  --------   -------   -------
Gross profit                  5,820     5,224    12,943     9,930
                            -------  --------   -------   -------

Operating expenses:
Product development           2,869     3,233     5,601     5,551
Sales and marketing           3,520     3,020     7,213     5,798
General and
administrative                1,260     1,933     2,360     3,257
Purchased research and
development and product
amortization                     17       117        34     3,863
Loss (recovery) on sale
of HARBOR                    (2,773)    2,171    (3,044)    2,171
NetLOCK Restructuring
Charge                        1,234         -     1,234         -
                            -------  --------   -------   -------
Total operating expenses      6,127    10,474    13,398    20,640
                            -------  --------   -------   -------

Operating loss                 (307)   (5,250)     (455)  (10,710)

Interest and other
income, net                     153       255       289       520
                            -------  --------   -------   -------
Loss before provision
for income taxes               (154)   (4,995)     (166)  (10,190)

Benefit from income
taxes                            43     4,546        47     6,000
                            -------  --------   -------   -------
Net Loss                     $ (111)   $ (449)   $ (119)  $(4,190)
                            =======  ========   =======   =======

Net loss per share
Basic                        $(0.01)   $ (.06)   $(0.01)  $ (0.55)

Diluted                      $(0.01)   $ (.06)   $(0.01)  $ (0.55)

Shares used in per share
calculation
Basic                         8,247     7,615     8,212     7,586
Diluted                       8,247     7,615     8,212     7,586

<FN>
     See accompanying notes to condensed consolidated financial statements.
</FN>
</TABLE>
                                        
<PAGE>

<TABLE>

               INTERLINK COMPUTER SCIENCES, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (in thousands)
<CAPTION>
                                             Six months ended
                                               December 31,
<S>                                          1998       1997
                                             -------    -------
                                               (unaudited)
                                             <C>        <C>
Cash flows from operating activities:
Net loss                                     $  (119)   $(4,190)
Adjustments to reconcile net loss to net
cash provided by (used in) operating
activities:
Purchased research and development and
other                                              -      3,599
NetLOCK restructuring charge                   1,234          -
Loss (recovery) on sale of HARBOR product
line                                          (2,062)     2,171
Depreciation and amortization                    705      1,092
Provision for excess and obsolete inventory       34        122
Provision for doubtful accounts                   56         43
Exchange loss (gain)                            (106)        50
Deferred income taxes                          2,715     (6,161)
Changes in operating assets and
liabilities:
Accounts receivable                            1,229      2,319
Inventories                                      (41)       (70)
Other assets                                      30       (368)
Accounts payable                                 (11)       107
Accrued liabilities                             (612)    (1,878)
Deferred maintenance and product revenue        (232)      (551)
Other liabilities                               (234)      (115)
                                             -------    -------
Net cash provided by (used in) operating
activities                                     2,586     (3,830)
                                             -------    -------
Cash flows from investing activities:
Acquisition of NetLOCK network security
technology                                         -     (1,175)
Acquisition of property and equipment         (1,021)    (2,007)
Capitalization of software development
costs                                           (315)         -
                                             -------    -------
Net cash used in investing activities         (1,336)    (3,182)
                                             -------    -------
Cash flows from financing activities:
Payments on capital lease obligations            (18)       (32)
Payments on notes payable and other             (501)      (147)
Proceeds from issuance of common stock, net      271        313
                                             -------    -------
Net cash provided by (used in) financing
activities                                      (248)       134
                                             -------    -------
Net increase (decrease) in cash and cash
equivalents                                    1,002     (6,878)
Effect of exchange rate changes on cash           33       (113)
                                             -------    -------
Cash and cash equivalents, beginning of
period                                        18,189     28,106
                                             -------    -------
Cash and cash equivalents, end of period     $19,224    $21,115
                                             =======    =======

<FN>
     See accompanying notes to condensed consolidated financial statements.
</FN>
</TABLE>
                                        

<PAGE>

               INTERLINK COMPUTER SCIENCES, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1.   Basis of Presentation:

These unaudited condensed consolidated financial statements included herein have
been prepared by Interlink Computer Sciences, Inc. and its subsidiaries
(collectively, the "Company") in accordance with generally accepted accounting
principles and reflect all adjustments, consisting only of normal recurring
adjustments, which in the opinion of management are necessary to fairly present
the Company's consolidated financial position, results of operations, and cash
flows for the periods presented.  The financial statements include the accounts
of the Company and its wholly owned subsidiaries after all material intercompany
balances and transactions have been eliminated.  The Notes to the Consolidated
Financial Statements contained in the fiscal year 1998 report on Form 10-K
should be read in conjunction with these Condensed Consolidated Financial
Statements.  The consolidated results of operations for the three and six months
ended December 31, 1998 are not necessarily indicative of the results to be
expected for any subsequent period or for the entire fiscal year ending June 30,
1999.  The June 30, 1998 balance sheet was derived from audited financial
statements, but does not include all disclosures required by generally accepted
accounting principles.

For software arrangements entered into after July 1, 1998, the Company
recognizes revenue in accordance with Statement of Position ("SOP") 97-2,
"Software Revenue Recognition" as amended by SOP 98-9.   SOP 97-2 supercedes SOP
91-1 "Software Revenue Recognition" and requires that if an arrangement to
deliver software or a software system does not require significant production,
modification, or customization of software, then revenue should be recognized
when persuasive evidence of an arrangement exists, delivery has occurred, the
vendor's fee is fixed or determinable, and collectibility is probable.
Accordingly, the Company will generally recognize license fee revenue upon
product shipment provided there are no contingencies and collection is probable.

Cost of revenues have been reclassified for the three and six months ended
December 31, 1997, to include the freight and other cost of sales in product
cost of revenues. In prior periods these expenses were included in maintenance
and consulting cost of revenues.

2.   Inventories:

Inventories are stated at the lower of cost (determined on a first-in, first-out
basis) or market.  Inventories are principally comprised of finished goods at
December 31, 1998  and June 30, 1998.

<TABLE>
3.   Comprehensive Income (Loss):

Comprehensive income (loss) as defined by Statements of Financial Accounting
Standards No. 130, Reporting Comprehensive Income, is net income plus direct
adjustments to stockholders' equity.  Comprehensive income (loss) for the three
and six months ended December 31, 1998 and 1997 is as follows: (in thousands)
<CAPTION>

                            Three months ended   Six months ended
                               December 31,        December 31,
                             1998      1997       1998      1997
                             ------    ------     -----     ------
                             <C>       <C>        <C>       <C>
<S>
Comprehensive income
(loss):
Net loss                     $ (111)   $ (449)    $(119)    $(4,190)
Cumulative translation
adjustment                       (7)       87        33          69
                             ------    ------     -----     -------
Total comprehensive income
(loss)                       $ (118)   $ (362)    $ (86)    $(4,121)
                             ======    ======     =====     =======
</TABLE>

4.   Computation of Net Income (Loss) Per Share:

The Company has adopted the provisions of Statement of Financial Accounting
Standards No. 128 ("SFAS 128") effective December 31, 1997.  SFAS 128 requires
the presentation of basic and diluted earnings per share. Basic EPS is computed
by dividing income available to common shareholders by the weighted average
number of common shares outstanding for the period. Diluted EPS is computed by
giving effect to all dilutive potential common shares that were outstanding
during the period.  For the Company, dilutive potential common shares consist of
the incremental common shares issuable upon the exercise of stock options and
warrants for all periods.  In accordance with SFAS 128, all prior period
earnings per share amounts have been restated to reflect this method of
calculation.
<TABLE>

Basic and diluted earnings per share during the three and six month periods
ended December 31, 1998 and 1997 are calculated as follows (in thousands except
for per share amounts):
<CAPTION>
                                        Three months      Six months ended
                                           ended            December 31,
                                        December 31,
                                        1998    1997       1998      1997
                                       -------  -------  -------    -------
                                       <C>      <C>      <C>        <C>
<S>
Basic:
Weighted average shares                  8,247    7,615    8,212      7,586
Shares used in per share calculation     8,247    7,615    8,212      7,586
Net loss                                $ (111)  $ (449)  $ (119)   $(4,190)
                                        ======   ======   ======    =======
Net loss per share                      $(0.01)  $(0.06)  $(0.01)   $ (0.55)
                                        ======   ======   ======    =======
Diluted:
Weighted average shares                  8,247    7,615    8,212      7,586
Common equivalent shares from stock
options and warrants                         -        -        -          -
                                        ------   ------   ------    -------
Shares used in per share
calculation                              8,247    7,615    8,212      7,586
                                        ======   ======   ======    =======
Net loss                                $ (111)  $ (449)  $ (119)   $(4,190)
                                        ======   ======   ======    =======
Net loss per share                      $(0.01)  $(0.06)  $(0.01)   $ (0.55)
                                        ======   ======   ======    =======
</TABLE>

<PAGE>

Options and warrants to purchase the following shares of common stock at the
indicated range of price per share were outstanding during the three and six
month periods ended December 31, 1998 and 1997, but were not included in the
computation of diluted earnings per share because the exercise price of the
options and warrants was greater than the average market price of the common
shares for each period or the inclusion of the options and warrants in the
diluted per share calculation was antidilutive (in thousands except for per
share amounts):

                              Options and warrants          Range of
                                    excluded             exercise prices
                                    --------             ---------------
Three months ended:
  December 31, 1998                  1,916                $0.70-$12.50
  December 31, 1997                  2,089                $0.70-$15.00

Six months ended:
  December 31, 1998                  1,916                $0.70-$12.50
  December 31, 1997                  2,089                $0.70-$15.00

5.	Contingencies:

The  Company  is  involved  in  a  commercial  dispute  with  a  former  Italian
distributor  ("Claimant"), which has alleged that the Company  and  two  of  its
subsidiaries  have  breached and unlawfully terminated  various  distributorship
agreements  for distribution of the Company's TCPaccess and HARBOR  products  in
Italy,  and  which  has  asserted various claims in  two  lawsuits  against  the
Company, its subsidiaries, and several officers of the Company.

In  January  1997, the Claimant initiated a lawsuit in Milan, Italy against  the
Company's  Canadian Subsidiary, New Era Systems Services Ltd. ("New  Era");  the
Company;  the Company's French subsidiary, Interlink France S.A.R.L. ("Interlink
France");  and the Company's current distributor in Italy, an unrelated  Italian
Corporation.   The  litigation is based on the Claimant's  distribution  of  the
Company's  HARBOR  products pursuant to a distributor  agreement  with  New  Era
Systems  Services  Ltd., an affiliated Irish corporation  ("New  Era  Ireland"),
which   pre-dates  the  Company's  acquisition  of  New  Era.  The   distributor
relationship with the Claimant for the distribution of HARBOR products in  Italy
and Spain has terminated.  Pursuant to court documents, Claimant alleges damages
for  breach  of  contract and related tort claims in the amount of 2,500,000,000
Italian Lira (approximately $1,500,000) and requests that the defendants pay all
expenses  resulting from the litigation.  New Era Ireland has  filed  a  lawsuit
against  the  Claimant  in Ireland for recovery of amounts  due  on  outstanding
invoices and a declaration that the distributor relationship has terminated.

In  March  1997  the  Claimant initiated a separate lawsuit in  Alameda  County,
California  against  the  Company, certain prior officers  of  the  Company,  an
officer of Interlink France, and the Company's current Italian distributor.   In
the  complaint, Claimant alleges various tort claims related to the  defendants'
alleged  actions with respect to prior distribution agreements between Claimant,
the  Company,  and Interlink France for distribution of the Company's  TCPaccess
products in Italy.  The claims alleged include fraud, deceit, defamation,  trade
libel,    unfair   competition,   misappropriation,   breach   of   confidential
relationship, and conversion. Claimant demands compensatory damages in excess of
$2,000,000, unspecified punitive damages, interest, attorneys' fees,  and  costs
of  the litigation.  The Company has successfully moved to compel arbitration of
the   claims  in  accordance  with  the  arbitration  clauses  in  the   earlier
distributorship agreements with the Claimant.  The lawsuit was stayed as to  all
parties  by the Alameda County Superior Court pending arbitration of the  claims
against the Company.

On  or about March 9, 1998 the Claimant initiated arbitration proceedings in San
Francisco, California under the International Chamber of Commerce ("ICC")  Rules
of  Arbitration.   The  request for arbitration alleges  claims  for  breach  of
contract,  fraudulent  inducement,  trade  libel,  use  of  trade  secrets   and
confidential information, unfair business practices, interference with customers
and  improper  use  of confidential information and ideas.   The  request  seeks
damages  in  the  amount of $3,000,000, plus punitive damages in an  unspecified
amount,  less an offset for amounts owed to Interlink France, and a constructive
trust.

The  Company  has  denied that it breached any agreement with  the  Claimant  or
engaged  in  any  wrongful or fraudulent conduct as the  Claimant  alleges.   In
addition,  the  Company has counterclaimed against the Claimant  for  breach  of
contract,  claiming damages in an unspecified amount to be determined  according
to proof.

On or about June 12, 1998 the parties agreed to a sole arbitrator.  Discovery is
proceeding.   Arbitration hearings are currently scheduled  to  occur  in  March
1999.

The Company has accrued $350,000 for settlement of any liability that may result
upon
resolution  of  these matters.  No estimate of the ultimate liability  that  may
result upon the
resolution of these matters is presently determinable.  Should the Company be
unsuccessful in defending any of these claims, the Company's business, financial
condition and results of operations could be materially adversely affected.

6.   NetLOCK Restructuring Charge:

The  Company  has recorded a restructuring charge of $1,234,000  in  the  second
quarter  of  fiscal  1999 for the planned exit from the NetLOCK  business.   The
charge includes $381,000 for anticipated employee termination benefits, $575,000
to  reduce property and equipment to estimated sales prices, $116,000  to  write
down  leasehold improvements which will no longer be used, and other write downs
and  reserves for unused prepaid expenses and facility lease costs.   Management
anticipates final shutdown of the NetLOCK business in the March 1999 quarter.

7.   Recovery on Sale of HARBOR Product Line:

In December 1998, the then current owners of the HARBOR business resold the
business to another party,  following restructuring and additional investment.
As a result of the sale in December 1998, the Company received or will receive
payment for the remaining notes receivable and the guaranteed Canadian loan was
repaid by the new buyer.  As a result the Company recognized a recovery of
$2,773,000 in the second quarter of fiscal 1999.




8.  Concentrations of  Revenues:

During  the  three  and  six  months  ended  December  31,  1998,  14%  and  7%,
respectively, of the Company's total revenues were derived from sales to a large
telecommunications company.  During the three and six months ended December  31,
1997,  11%  and 13%, respectively, of the Company's total revenues were  derived
from sales to and through Cisco Systems, Inc. ("Cisco").

9.  Recent Pronouncements:

In June 1997, The Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 131 (SFAS 131),  Disclosures about Segments
of an Enterprise and Related Information.  This statement establishes standards
for disclosure about operating segments in annual financial statements and
selected information in interim financial reports.  It also establishes
standards for related disclosures about products and services, geographic areas
and major customers.  This statement supersedes Statement of Financial
Accounting Standards No. 14, Financial Reporting for Segments of a Business
Enterprise.  The new standard became effective for the Company's fiscal year
1999.  The Company will adopt the requirements of SFAS 131 and provide all
disclosures necessary in the Company's annual report for fiscal year 1999.


<PAGE>

In  June  1998,  the  FASB  issued  SFAS No.  133,  "Accounting  for  Derivative
Instruments and Hedging Activities," which establishes accounting and  reporting
standards  for derivative instruments, and for hedging activities.  It  requires
that an entity recognize all derivatives as either assets or liabilities in  the
statements  of financial position and measure those instruments at  fair  value.
Management  has  not yet evaluated the effects of this change on  its  financial
position and its results of operations.  The Company will adopt SFAS No. 133  as
required for its first quarterly filing of fiscal 2000.


On December 31, 1998 AcSec issued SOP 98-9 "Modification of SOP 97-2 Software
Revenue Recognition". SOP 98-9 amends paragraphs 11 and 12 of SOP 97-2 to
require revenue recognition using the "residual method" under certain
circumstances. This statement will be effective for transactions entered into
for fiscal years beginning after March 15, 1998 and will be adopted by the
Company in fiscal year 2000. Management does not anticipate that the adoption of
this SOP will have a material impact on the Company's financial position or the
results of its operations.
<PAGE>

   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
                                   OPERATIONS

The  following  Management's Discussion and Analysis of Financial Condition  and
Results of Operations contains forward-looking statements that involve risks and
uncertainties.  The Company's actual results could differ materially from  those
discussed  herein.  Factors that could cause or contribute to  such  differences
include,  but are not limited to, those discussed in the section below  entitled
"Risk  Factors That May Affect Future Results," as well as those risks discussed
in this section and elsewhere in this Report.

Overview

The  Company offers a suite of high-performance solutions for enterprise systems
networking.  Interlink provides software and services which enable customers  to
use  their  IBM  and  IBM-compatible MVS mainframes as "enterprise  servers"  in
distributed, heterogeneous client/server network environments. The  Company  was
incorporated  in December 1985 and registered its shares on the Nasdaq  National
Market System on August 15, 1996.

In  January  1997  the  Company  entered into a strategic  alliance  with  Cisco
Systems,  Inc.  ("Cisco")  pursuant to which Cisco and  the  Company  agreed  to
cooperate  to  develop  certain TCP/IP software known as  Cisco  IOS  for  S/390
("IOS/390").  Pursuant to the agreement, Cisco had principal responsibility  for
all  TCP  sales, with Interlink field personnel providing training and  support.
Early experience with this sales structure was unsatisfactory and in August 1997
Cisco  and  Interlink  restated the agreement to allow  the  Company  to  resell
IOS/390 and, once again, independently market and sell TCPaccess.  Either  Cisco
or  the  Company  may terminate the current relationship upon  90  days  written
notice.

In September 1997, the Company acquired the NetLOCK network security technology
from Hughes Electronics Corporation and recorded a charge in its first quarter
of fiscal year 1998 of approximately $3.1 million relating to in-process
software development.  Revenue from the NetLOCK product commenced in January
1998.  Revenue to date from this product line has not been significant.  In
December 1998, the Company announced plans to exit the NetLOCK product line.
The Company is currently in discussions for the sale of the product line but no
offers have been received.  The Company plans to sell or wind up the NetLOCK
business in its fiscal third quarter.  Consistent with its plans announced in
December, the Company has reserved the anticipated shutdown expenses of
$1,234,000 relating primarily to employee termination benefits, impairment of
asset values and certain other non-recoverable costs.

In December 1997, the Company sold its HARBOR product line , and recorded a
charge of $2.2 million, offset by a tax benefit of $3.2 million. The sale of the
HARBOR product line resulted in a charge to earnings because the Company
guaranteed a Canadian loan in the amount of $1.2 million, which was assumed by
the buyers, and because the notes receivable of $1.9 million from the sale could
not be recognized. In September 1998 the Company collected and recognized a
recovery of $271,000.  In December 1998, the then current owners of the HARBOR
business resold the business to another party, following restructuring and
additional investment. As a result of the sale in December 1998, the Company
received or will receive payment for the remaining notes receivable and the
guaranteed Canadian loan was repaid by the new buyer.  As a result the Company
recognized a recovery of $2,773,000 in the second quarter of fiscal 1999.


In January 1998, the Company purchased Networkers Engineering Limited and the
customer contracts of a related business, for a combined cost of approximately
$2.9 million, of which approximately $2.6 million was charged to purchased
research and development in the quarter ended March 31, 1998.
<PAGE>

Results of Operations
<TABLE>
The following table sets forth, as a percentage of total revenues, certain
condensed consolidated statement of operations data for the periods indicated:
<CAPTION>
                                      Three months  Six months ended
                                         ended        December 31,
                                      December 31,
                                     1998    1997    1998     1997
                                     -----   -----   -----    ----- 
                                     <C>     <C>     <C>      <C>
<S>
Revenues:
Product                               47.1%   50.2%   51.2%    47.6%
Maintenance and consulting            52.9    49.8    48.8     52.4
                                     ------  -----   -----    -----  
Total revenues                       100.0   100.0   100.0    100.0
                                     ------  -----   -----    -----

Cost of revenues:
Product                                3.5     7.0     3.0      6.6
Maintenance and consulting            16.2    15.6    13.5     17.4
                                     -----   -----   -----    -----
Total cost of revenues                19.7    22.6    16.5     24.0
                                     -----   -----   -----    -----
Gross profit                          80.3    77.4    83.5     76.0
                                     -----   -----   -----    -----

Operating expenses:
Product development                   39.6    47.9    36.1     42.5
Sales and marketing                   48.6    44.8    46.5     44.4
General and administrative            17.4    28.6    15.2     24.9
Purchased research and development
and product amortization               0.2     1.7     0.2     29.6
Loss (recovery) on sale of HARBOR    -38.3    32.2   -19.6     16.6
NetLOCK restructuring charge          17.0       -     8.0        -
                                     -----   -----   -----    -----
Total operating expenses              84.5   155.2    86.4    158.0
                                     -----   -----   -----    -----

Operating loss                        -4.2   -77.8    -2.9    -82.0
Interest and other income, net         2.1     3.8     1.8      4.0
                                     -----   -----   -----    -----
Loss before income taxes              -2.1   -74.0    -1.1    -78.0
                                     -----   -----   -----    -----
Benefit from income taxes              0.6    67.4     0.3     45.0
                                     -----   -----   -----    -----
Net loss                              -1.5%   -6.6%   -0.8%   -32.1%
                                     =====   =====   =====    =====

Cost of sales as a percentage of
the related revenues:
Product                                7.5%   13.9%    5.8%    13.9%
Maintenance and consulting            30.6%   31.3%   27.7%    33.2%
</TABLE>

Revenues:

Total revenues were $7.2 million and $6.7 million for the three months and $15.5
million $13.1 million for the six months ended December 31, 1998 and 1997,
respectively, representing a year over year increase of 7% and 18%,
respectively.  Product revenues were $3.4 million for both the three months
ended December 31, 1998 and 1997.  Product revenues were $7.9 million and $6.2
million for the six months ended December 31, 1998 and 1997, respectively,
representing a year over year increase of 27%.  This increase resulted primarily
from sales of the new e-Control product which contributed $1.7 million in
product revenue for the first half of fiscal 1999.  Maintenance and consulting
revenues were $3.8 million and $3.4 million for the three months and $7.6
million and $6.8 million for the six months ended December 31, 1998 and 1997,
respectively, representing a year over year increase of 12% for both three and
six month periods.

Cost of Revenues:

Product.  Cost of revenues from product sales consists primarily of hardware,
product media, documentation, shipping and packaging costs.  Cost of revenues
for product sales was $256,000 and $472,000, representing 7% and 14% of total
product revenues for the three months ended December 31, 1998 and 1997,
respectively.  Cost of revenues for product sales was $464,000 and $864,000,
representing 6% and 14% of total product revenues for the six months ended
December 31, 1998 and 1997, respectively.  This resulted primarily from
decreases in hardware  and third-party product sales which carry  higher costs
of product revenue.

Maintenance and Consulting.  Cost of revenues from maintenance and consulting
consists primarily of personnel related costs incurred in providing telephone
support, consulting and software updates.  Cost of revenues from maintenance and
consulting was $1.2 million and $1.1 million for the three months ended December
31, 1998 and 1997, representing 31% of total maintenance and consulting
revenues, respectively. Cost of revenues from maintenance and consulting was
$2.1 million and $2.3 million for the six months ended December 31, 1998 and
1997, representing 28% and 33% of total maintenance and consulting revenues,
respectively.
This decrease in maintenance and consulting costs as a percentage of the related
revenue is due to lower support headcount which resulted from the sale of the
HARBOR product line, which had a smaller maintenance revenue base relative to
the Company's other products.

Operating Expenses:

Total operating expenses were $6.1 million and $10.5 million, representing 85%
and 155% of total revenues for the three months ended December 31, 1998 and
1997, respectively. Total operating expenses were $13.4 million and $20.6
million, representing 86% and 158% of total revenues for the six months ended
December 31, 1998 and 1997, respectively.  The decrease in total operating
expenses is primarily due a $2.2 million loss on sale of HARBOR in the quarter
ending December 31, 1997 and a $2.8 million recovery on that sale in the quarter
ending December 31, 1998. See further discussion below.

Product Development.  Product development expenses consist primarily of
personnel related costs. Product development expenses were $2.9 million and $3.2
million, representing 40% and 48% of total revenues for the three months ended
December 31, 1998 and 1997, respectively. The decrease in product development
expenses is due to the reduction of product development related to the sale of
the HARBOR product line.  Product development expenses were $5.6 million for the
six months ended December 31, 1998 and 1997, representing 36% and 43%,
respectively of total revenues.

Sales and Marketing.  Sales and marketing expenses consist primarily of salaries
and commissions for sales and marketing personnel, the fixed costs of worldwide
sales offices, and promotional costs.  The Company sells through its direct
sales force, resellers and distributors.  The direct channel produced 86% and
87% of product revenues for the three months ended December 31, 1998 and 1997,
respectively, and 88% and 89% of product revenues for the six months ended
December 31, 1998 and 1997, respectively.   Sales and marketing expenses were
$3.5 million and $3.0 million, representing 49% and 45% of total revenues for
the three months ending December 31, 1998 and 1997, respectively.   Sales and
marketing expenses were $7.2 million and $5.8 million, representing 47% and 44%
of total revenues for the six months ending December 31, 1998 and 1997,
respectively.  The increase was the result of increased headcount in both sales
and marketing and increased marketing expenses related to the introduction of
the Company's new products.

General and Administrative.  General and administrative expenses include
personnel and other costs of the finance, human resources, legal and
administrative departments of the Company and includes gains and losses on
foreign currency transactions.  General and administrative expenses were $1.3
million and $1.9 million, representing 17% and 29% of total revenues for the
three months ended December 31, 1998 and 1997, respectively. General and
administrative expenses were $2.4 million and $3.3 million, representing 15% and
25% of total revenues for the six months ended December 31, 1998 and 1997,
respectively.
<PAGE>

The decreases were a result of  higher legal costs, recruiting costs, severance
costs and consulting expenses of approximately $500,000  in the three months
ended December 31, 1997.

Purchased Research and Development and Product Amortization.  Purchased research
and development and product amortization was $17,000 and $117,000, representing
less than 1% and 2% of total revenues for the three months ended December 31,
1998 and 1997, respectively.   Purchased research and development and product
amortization was $34,000 and $3.9 million, representing less than 1% and 30% of
total revenues for the six months ended December 31, 1998 and 1997,
respectively.   A charge of $3.1 million was recorded for purchased research and
development related to the NetLOCK acquisition in September 1997.  A write-down
of $550,000 relating to purchased research and development in connection with
the HARBOR acquisition was recorded in September 1997.

Loss (Recovery) on Sale of HARBOR Product Line.   The loss (recovery) on sale of
the HARBOR product line was ($2.8 million) and $2.2 million, representing (38%)
and 32% of total revenues for the three months ended December 31, 1998 and 1997,
respectively.  The loss (recovery) on sale of  the HARBOR product line was ($3.0
million) and $2.2 million, representing (20%) and 17% of total revenues for the
six months ended December 31, 1998 and 1997, respectively.  The loss on the sale
of the HARBOR product line occurred in December 1997 and included the
establishment of a valuation allowance related to certain assets and liabilities
and the guarantee by the Company of a Canadian loan in the amount of $1.2
million, which was assumed by the buyers.  The recovery is a result of a payoff
on the Canadian loan by the buyer and collections on  notes receivable which had
been fully reserved.

NetLOCK Restructuring Charge.   The NetLOCK restructuring charge was $1.2
million for the three and six months ended December 31, 1998.  The restructuring
charge includes employee termination benefits, impairment of asset values and
certain other non-recoverable costs.  See Note 6 to the Notes to Condensed
Consolidated Financial Statements for further discussion.

Interest and Other Income, Net.  Net interest and other income was $153,000 and
$255,000 for the three months ended December 31, 1998 and 1997, respectively.
Net interest and other income was $289,000 and $520,000 for the six months ended
December 31, 1998 and 1997, respectively.   The decrease in net interest and
other income was due primarily to less interest earned as a result of lower cash
balances and higher interest expense in the six months ended December 31, 1998
relating to the amortization of a discount for the minimum royalties in
connection with the NetLOCK acquisition.

Benefit from Income Taxes.  The benefit from income taxes was $43,000 and $4.5
million for the three months ended December 31, 1998 and 1997, respectively.
The benefit from income taxes was $47,000 and $6.0 million for the six months
ended December 31, 1998 and 1997, respectively.  Included in the three and six
months ended December 31, 1997 is a tax benefit of $3.2 million relating to the
sale of HARBOR product line.  The effective tax rate was approximately 28% for
the three and six  months ended December 31, 1998 and 1997, respectively.

Liquidity and Capital Resources

Working capital was $19.3 million and $20.0 million at December 31, 1998 and
June 30, 1998, respectively.

For the six months ended December 31, 1998, net cash provided by operating
activities resulted primarily from collection of a tax refund, decrease in
accounts receivable, partially offset by recovery on the sale of the HARBOR
product line and decrease in accrued liabilities.  For the six months ended
December 31, 1997, net cash used in operating activities resulted primarily from
a net loss, decrease in accrued liabilities and deferred maintenance and product
revenue, partially offset by a decrease in accounts receivable, a write-off of
purchased research and development, and sale of HARBOR product line.

For the six months ended December 31, 1998, the Company's investing activities
consisted primarily of purchases of property and equipment and capitalization of
software development costs.  For the six months ended December 31, 1997, the
Company's investing activities consisted primarily of the acquisition of NetLOCK
network security technology and purchases of property and equipment including
$1.1 million purchased in the NetLOCK acquisition.

For the six months ended December 31, 1998, the Company's financing activities
consisted primarily of payments on notes payable and proceeds from the issuance
of common stock.  For the six months ended December 31, 1997, the Company's
financing activities consisted primarily of payments on notes payable and
proceeds from the issuance of common stock.

At December 31, 1998, the Company had $19.2 million in cash and cash
equivalents. The Company had $7.6 million in accounts receivable, net of
allowance for doubtful accounts, and $8.0 million of unearned revenues, the
majority of which are expected to be earned over the 12 month period following
December 31, 1998.

The Company believes that its current cash and cash equivalents balances as well
as its cash flow from operations, if any, will be sufficient to meet its
anticipated working capital and capital expenditure requirements for at least
the next 12 months.
<PAGE>

RISK FACTORS THAT MAY AFFECT FUTURE RESULTS

New Products and Rapid Technological Change

The  markets for the Company's network transport products and system  management
products  are characterized by rapidly changing technologies, evolving  industry
standards,  frequent  new product introductions and rapid  changes  in  customer
requirements. The Company believes that its future success will depend upon  its
ability  to  develop, manufacture and market products which meet  changing  user
needs,  to  continue to enhance its products and to develop and introduce  in  a
timely  manner new products that take advantage of technological advances,  keep
pace   with   emerging   industry  standards,  and  address   the   increasingly
sophisticated  needs of its customers. There can be no assurance whether  TCP/IP
will  continue  to  be  accepted as a communications protocol  on  client/server
networks.  Furthermore,  there can be no assurance  that  the  Company  will  be
successful  in  acquiring, developing or marketing, on a timely  basis,  product
enhancements  or new products (including the IOS/390 product and  the  e-Control
product),  either  independently or with strategic  partners,  that  respond  to
technological change or evolving industry standards, that the Company  will  not
experience  difficulties that could delay or prevent the successful development,
introduction and sale of these products or that any such new products or product
enhancements  will  adequately  meet the requirements  of  the  marketplace  and
achieve  market  acceptance. The Company's failure or  inability  to  adapt  its
products  to  technological  changes  or to  acquire  or  develop  new  products
successfully  would  have a material adverse effect on the  Company's  business,
financial condition and results of operations.

The  introduction or announcement of products by the Company or one or  more  of
its  competitors, including, but not limited to IBM, embodying new technologies,
or  changes in customer requirements or the emergence of new industry  standards
and  practices  could  render  the  Company's  existing  products  obsolete  and
unmarketable. There can be no assurance that the introduction or announcement of
new  product offerings by the Company or one or more of its competitors will not
cause customers to defer purchasing the existing products of the Company or that
the  Company  will successfully manage the transition from older products.  Such
deferment  of purchases or inability to manage the transition of products  could
have  a  material adverse effect on the Company's business, financial  condition
and  results  of  operations. In addition, there can be no  assurance  that  the
Company will successfully identify new product opportunities, develop and  bring
to market in a timely manner such new products, or that products or technologies
developed  by  others  will  not render the Company's products  or  technologies
noncompetitive or obsolete.

Competition

General.  The market in which the Company operates is intensely competitive  and
is  characterized  by extreme price competition and rapid technological  change.
The  competitive  factors  influencing the markets for  the  Company's  products
include   product   performance,  price,  reliability,  features,   scalability,
interoperability across multiple platforms, adherence to industry standards, and
the provision of support and maintenance services.  The Company competes with  a
number  of  companies, principally IBM, that specialize in one or  more  of  the
Company's  product  lines,  and such competitors  may  have  greater  financial,
technical, sales and marketing resources to devote to the development, promotion
and  sale of their products, as well as longer operating histories, greater name
recognition,  and  greater  market acceptance for their  products  and  services
compared  to those of the Company. There can be no assurance that the  Company's
current  competitors  or  any  new market entrants will  not  develop  networked
systems  management  products  or  other  technologies  that  offer  significant
performance,  price  or  other advantages over the Company's  technologies,  the
occurrence  of  which  would have a material adverse  effect  on  the  Company's
business, financial condition and results of operations.

Network Transport Products. The Company sells its IOS/390 and TCPaccess suite of
products  to  customers who have installed mainframes using  the  MVS  operating
system. The Company's main competition for its IOS/390 and TCPaccess products is
IBM. IBM sells TCP/IP and associated products for its MVS mainframe systems that
compete directly with the Company's IOS/390 and TCPaccess product line. IBM  has
continued  to  enhance the functionality and performance of its TCP/IP  product,
which  enhancements may require the Company to update its IOS/390 and  TCPaccess
product  to remain competitive. There can be no assurance that the Company  will
be able to make the improvements in its IOS/390 and TCPaccess products necessary
to  remain  competitive with IBM or that any such improvements by IBM would  not
have a material adverse effect on the Company's business, financial condition or
results  of operations. In addition, IBM includes TCP/IP communications software
in a bundle of software provided to purchasers of their OS/390 operating system.
An  IBM  customer  can request to have the IBM TCP/IP product removed  from  the
software  bundle provided by IBM and thereby reduce the purchase  price  of  the
system  purchased. The reduction in the purchase price related to the  exclusion
of  IBM's  TCP/IP  for MVS product from its software bundle,  in  certain  model
groups, is substantially lower than the price the customer would have to pay  to
purchase  the  Company's corresponding IOS/390 and TCPaccess products.   Because
IBM's  TCP/IP  product  may  be less expensive to purchase  than  the  Company's
corresponding IOS/390 and TCPaccess products there could be substantial  erosion
of  the  Company's margins if the Company reduces the price of its  IOS/390  and
TCPaccess products in order to compete against IBM, which erosion would  have  a
material  adverse  effect  on the Company's business,  financial  condition  and
results of operations.  Principle competition for the Company's X.25 product  is
from  IBM's  specialized  front  end  processors  which  process  X.25  protocol
communications from the network to the mainframe. CICS Programmers Toolkit is  a
specialized  application and has no direct competition as a  product.   However,
the  benefits provided by CPT can also be provided by IBM's CICS Sockets,  which
are part of the OS/390 operating system.

Systems  Management  Products.  The primary competitors  for  e-Control  include
Tivoli  Systems  (an IBM company) with its various framework products  including
NetView, Sterling Software, Inc. with its NetMaster for TCP/IP product,  Applied
Expert Systems and TDSLink.  Many other companies in the computer industry  have
announced  products  and  plans to compete in  the  market  for  management  and
control  of  computer  systems  and networks.  The  Company's  Enterprise  Print
Services  competes  principally with IBM's IP-PrintWay & NetSpool,  as  well  as
Levi, Ray & Shoup, Inc. with their VPS product.


Other  Factors.  The Company's ability to compete successfully depends  on  many
factors,  including  the  Company's success  in  developing  new  products  that
implement  new  technologies, performance, price, product quality,  reliability,
and  the  success  of  competitors' products, general economic  conditions,  and
protection  of  Interlink  products  by effective  utilization  of  intellectual
property  laws.  In  particular,  competitive pressures  from  existing  or  new
competitors who offer lower prices or other incentives or introduce new products
could  result  in  price reductions which would adversely affect  the  Company's
profitability. There can be no assurance that the Company's current or other new
competitors  will  not  develop  enhancements  to,  or  future  generations  of,
competitive products that offer superior price or performance features, that the
Company  will be able to compete successfully in the future, or that the Company
will  not  be  required  to  incur substantial additional  investment  costs  in
connection  with its engineering, research, development, marketing and  customer
service  efforts  in order to meet any competitive threat.  The Company  expects
competition  to  intensify, and increased competitive pressure could  cause  the
Company to lower prices for its products, or result in reduced profit margins or
loss  of market share, any of which could have a material adverse effect on  the
Company's business, financial condition and results of operations.

Dependence on Current Products

During  the three months ended December 31, 1998 and 1997, sales of the  network
transport  products, excluding maintenance and consulting revenues and  hardware
sales,  accounted for approximately 34% and 30%, respectively, of the  Company's
total   revenues.  The  Company's  operating  results  have  historically   been
significantly dependent upon sales of the network transport products. A  portion
of  the maintenance revenues are from customers of the Company's DECnet product.
The  Company  no  longer  actively markets the DECnet product,  and  maintenance
revenues  from  DECnet customers have declined each year since the  fiscal  year
ended June 30, 1993, and are expected to continue to decline.

Reliance on IBM and Emergence of the Mainframe as an Enterprise Server

The  Company's current software products are designed for use with IBM and  IBM-
compatible  mainframe  computers. Specifically, these software  products  target
users  of  the  MVS  operating system, the Customer Information  Control  System
communications subsystem and the IMS and DB2 database management systems.  As  a
result, future sales of the Company's existing products and associated recurring
maintenance  revenues are dependent upon continued use of mainframes  and  their
related systems software. In addition, because the Company's products operate in
conjunction  with  IBM  systems software, changes to IBM  systems  software  may
require the Company to adapt its products to these changes, and any inability to
do  so,  or  delays  in  doing so, may adversely affect the Company's  business,
financial  condition  and  results  of  operations.  Currently,  TCP/IP  is  the
communications  protocol  for  the  Internet  and  is  being  adopted  by   some
organizations as the communications  protocol for their client/server local area
networks  and  wide area  networks. This adoption has allowed IBM MVS mainframe
computers to act  as enterprise servers on such networks. The use of mainframes
as enterprise servers is relatively new and still emerging. The Company's future
financial performance will  depend  in  large part on the acceptance and growth
in  the  market   forcentralized  network  management.  Adoption  of another
communications  protocol on   client/server  networks  could make  TCP/IP
communication not viable, which would  undermine  the  demand for the Company's
products, and  have  a  material adverse  effect  on the Company's business,
financial condition and  results  of operations.

Dependence on Key Personnel

The  Company is highly dependent on the continued service of, and on its ability
to  attract  and  retain, qualified technical, sales, marketing  and  managerial
personnel.   The  competition for qualified personnel in the  software  industry
(including engineers skilled in MVS operating systems) is intense, and the  loss
of  any such persons, as well as the failure to recruit additional key personnel
in  a  timely  manner,  could have a material adverse effect  on  the  Company's
business,  financial  condition  and results of  operations.  There  can  be  no
assurance  that the Company will be able to continue to attract and  retain  the
qualified  personnel necessary for the development of its business. The  Company
has  employment agreements with certain executive officers, but such  agreements
do  not  ensure  their  continued  service  to  the  Company  or  prevent  their
competition with the Company following a termination of employment. The  Company
does not maintain key man life insurance on the lives of its key employees.

Customer  Acceptance  and  Scalability of  New  Products;  History  of  Acquired
Technologies

The Company has acquired a significant portion of the technology associated with
its  e-Control   product.  There can be no assurance that the  Company  will  be
successful  in  integrating  the operations and personnel  associated  with  its
recent  acquisition of  Networkers Engineering, Ltd.  There can be no  assurance
that  the  Company will be successful in deriving significant future sales  from
the  products  developed from this technology, or establishing  and  maintaining
uniform  standards, controls, procedures and policies.  To the extent  that  the
Company is unable to accomplish the foregoing, the Company's business, financial
condition and results of operations may be materially adversely affected.

There  can  be  no  assurance  that the Company will  have  the  opportunity  to
successfully  acquire or develop new technologies in the  future  or  that  such
technology,  if  acquired, can be successfully integrated and commercialized  by
the Company.  An inability to acquire, develop or commercialize new technologies
would  have  a  material  adverse  effect on the Company's  business,  financial
condition  and  results of operations. The Company may also seek to  acquire  or
invest  in  businesses,  products or technologies  that  expand,  complement  or
otherwise relate to the Company's current business or product line. There can be
no  assurance  that  such acquisitions will be successfully or  cost-effectively
integrated  into  the  Company's  current  operations,  or  that  the   acquired
technologies  will  provide the necessary complement to  the  Company's  current
products. If the Company consummates additional acquisitions in the future  that
must be accounted for under the purchase method of accounting, such acquisitions
would likely increase the Company's amortization expenses. In addition, any such
acquisitions would be subject to the risks of integration mentioned  above.  The
Company  does  not currently have any understandings, commitments or  agreements
with  respect  to any potential acquisition nor is it currently engaged  in  any
discussions or negotiations with respect to any such transaction.

Product Errors; Product Liability

Software products as complex as those offered and being developed by the Company
often  contain  undetected errors or failures when first introduced  or  as  new
versions  are  released.  Testing  of  the Company's  products  is  particularly
challenging  because it is difficult to simulate the wide variety  of  computing
environments  in  which  the  Company's  customers  may  deploy  its   products.
Accordingly, there can be no assurance that, despite testing by the Company  and
by  current and potential customers, errors will not be found after commencement
of  commercial shipments, resulting in lost revenues, loss of or delay in market
acceptance  and  negative publicity about the Company and its products,  any  of
which  could have a material adverse effect on the Company's business, financial
condition and results of operations.

The  Company's  license agreements with customers typically  contain  provisions
designed to limit the Company's exposure to potential product liability  claims.
The  limitation of liability provisions contained in such license agreements may
not  be  effective  under the laws of some jurisdictions,  particularly  if  the
Company  in the future relies on "shrink wrap" licenses that are not  signed  by
licensees. The Company's products are generally used to manage data critical  to
organizations, and as a result, the sale and support of products by the  Company
may  entail  the risk of product liability claims. A successful liability  claim
brought  against  the  Company  could have a  material  adverse  effect  on  the
Company's business, financial condition and results of operations.

Dependence on Strategic Relationships

Alliance  with  Cisco.   In January 1997 the Company entered  into  a  strategic
alliance  with Cisco pursuant to which Cisco and the Company agreed to cooperate
to  develop  the IOS/390 product, which has been available since May  13,  1997.
The  Company restructured this agreement with Cisco in August 1997.   Cisco  has
not  guaranteed  the Company any minimum sales revenues in connection  with  its
sales  of  the IOS/390 product, and there can be no assurance that  the  Company
will  continue to receive any revenues therefrom. The Company markets and  sells
its   software  products  and  services  primarily  through  its  direct   sales
organization  and  to  a  lesser  extent, through  international  resellers  and
distributors  to  domestic  and  international  customers,  including   original
equipment manufacturers.

The  alliance with Cisco is subject to all the risks inherent in such  strategic
relationships  including  the failure of the parties to  meet  their  respective
obligations  under  the terms of the alliance, the risk of  loss  of  rights  to
important intellectual property either jointly developed in connection with  the
alliance  or  otherwise, and the risk of a dispute over key  provisions  of  the
alliance.  There can be no assurance that the parties will meet their objectives
under  the terms of the alliance. The failure of either the Company or Cisco  to
meet  their  obligations under the terms of the alliance would have  a  material
adverse  effect on the Company's business, financial condition, and  results  of
operations.  In  addition,  either  Cisco  or  the  Company  may  terminate  the
relationship upon 90 days written notice.

The Company is currently investing, and plans to continue to invest, significant
resources  to  develop additional strategic relationships, and such  investments
could  adversely  affect the Company's operating margins. The  Company  believes
that  its success in penetrating markets for its products depends in large  part
on  its  ability  to  maintain  these  relationships,  to  cultivate  additional
relationships  and  to  cultivate  alternative  relationships  if   distribution
channels  change.  There  can  be  no assurance  that  any  distributor,  system
integrator or strategic partner will not discontinue its relationship  with  the
Company, form competing arrangements with the Company's competitors, or  disrupt
the Company's other strategic relationships.

Dependence on Distributors

The  Company's sales are primarily made through the Company's direct sales force
and  the  Company's distributors in some international markets. The  Company  is
currently  investing, and plans to continue to invest, significant resources  to
develop new strategic marketing relationships, which investments could adversely
affect  the Company's operating margins.  The Company believes that its  success
in  penetrating markets for its products depends in large part on its ability to
maintain  its  existing marketing and distribution relationships,  to  cultivate
additional   relationships  and  to  cultivate  alternative   relationships   if
distribution  channels change.  There can be no assurance that any  distributor,
systems  integrator or strategic partner will not discontinue  its  relationship
with the Company, form competing arrangements with the Company's competitors, or
dispute the Company's other strategic relationships.

The  loss  of,  or  a  significant reduction in  revenues  from,  the  Company's
international  distributors  through which the  Company  sells  certain  of  its
products  could  have  a  material adverse effect  on  the  Company's  business,
financial  condition  and  results of operations. In addition,  if  one  of  the
Company's  distributors declares bankruptcy, becomes insolvent, or  is  declared
bankrupt  before  the  distributor remits to the Company the  payments  for  the
Company's products, the Company may not be able to obtain the revenues to  which
it  would be entitled for sales made by such distributor prior to the bankruptcy
or  insolvency  proceeding.  In addition, the Company's  distributors  generally
offer other products and these distributors may give higher priority to sales of
such other products.

The  Company is involved in a commercial dispute and litigation  with  a  former
distributor.  Should  the  distributor prevail  on  its  claims,  the  Company's
<PAGE>

business, financial  condition  and  results of operations could be  materially
adversely affected. See "Legal Proceedings."

Reliance on and Risks Associated with International Sales

During  the  three  months  ended December 31,  1998  and  1997,  42%  and  40%,
respectively,  of  the  Company's total revenues  were  derived  from  sales  to
international  customers.  During the six months ended  December  31,  1998  and
1997,   37% and 36%, respectively, of the Company's total revenues were  derived
from  sales  to international customers The Company's international  sales  have
been primarily to European markets, and sales are generally denominated in local
currencies.  The  Company expects that international revenue  will  continue  to
represent  a  significant portion of its total revenue.  Sales to  international
customers   are  subject  to  additional  risks  including  longer   receivables
collection  periods,  greater  difficulty  in  accounts  receivable  collection,
failure of distributors to report sales of the Company's products, political and
economic  instability,  nationalization,   trade  restrictions,  the  impact  of
possible  recessionary  environments in economies  outside  the  United  States,
reduced  protection for intellectual property rights in some countries, currency
fluctuations and tariff regulations and requirements for export licenses.  There
can  be  no  assurance that foreign intellectual property laws  will  adequately
protect  the  Company's  intellectual property rights.  In  addition,  effective
copyright  and trade secret protection may be unavailable or limited in  certain
foreign  countries.  Substantially all of the Company's distribution  and  other
agreements  with  international distributors require  any  dispute  between  the
Company  and  any  distributor  to  be  settled  by  arbitration.  Under   these
agreements, the party bringing the action, suit or claim is required to  conduct
the  arbitration in the domicile of the defendant. The result is  that,  if  the
Company  has a cause of action against a party, it may not be feasible  for  the
Company  to pursue such action, as arbitration in a foreign country could  prove
to  be excessively costly and have a less certain outcome depending on the  laws
and  customs  in the foreign country. These international factors could  have  a
material   adverse  effect  on  future  sales  of  the  Company's  products   to
international  end  users and, consequently, the Company's  business,  financial
condition and results of operations.

Most  of  the Company's international sales are denominated in local currencies.
The Company has attempted to reduce the risk of currency fluctuations by hedging
in  certain circumstances. The Company may be disadvantaged with respect to  its
competitors  operating  in foreign countries by foreign currency  exchange  rate
fluctuations that make the Company's products more expensive relative  to  those
of  local  competitors.  The  Company may  attempt  to  reduce  these  risks  by
continuing  to hedge in certain limited transactions in the future. Accordingly,
changes  in  the  exchange rates or exchange controls may adversely  affect  the
Company's  results of operations. There can be no assurance that  the  Company's
current  or any future currency exchange strategy will be successful in avoiding
exchange related losses or that any of the factors listed above will not have  a
material  adverse  effect  on  the  Company's future  international  sales  and,
consequently,  on  the Company's business, financial condition  and  results  of
operations.

Fluctuations in Operating Results; Absence of Backlog; Seasonality

The  Company's  operating results have historically been  subject  to  quarterly
fluctuations  due  to a variety of factors. The Company has typically  sold  its
products   through  a  trial  process  to  allow  customers  to   evaluate   the
effectiveness  of the Company's products before determining whether  to  proceed
with  broader deployment of such products. The Company's sales cycle,  from  the
date  the  sales  agent  first contacts a prospective customer  to  the  date  a
customer ultimately purchases the Company's product, has typically been three to
nine  months.   There  can  be  no assurance that customers  will  purchase  the
Company's  products after a trial period or that the Company's sales cycle  will
not  lengthen,  exposing  it  to  the possibility  of  shortfalls  in  quarterly
revenues,  which could have a material adverse effect on the Company's business,
financial  condition  or results of operations and cause results  to  vary  from
period  to period. The Company's operating results may also be affected  by  the
seasonality on fluctuations of Cisco sales, if any, of the IOS/390 product.  The
Company's operating results will also be affected by general economic and  other
conditions  affecting  the timing of customer orders and capital  spending,  and
order cancellations or rescheduling.

The  Company operates with very little backlog and most of its product  revenues
in  each  quarter result from orders closed in that quarter, with a  substantial
majority of those orders being completed at the end of that quarter. The Company
establishes its expenditure levels for sales, marketing, product development and
other  operating expenses based in large part on its expectations as  to  future
revenues,  and  revenue levels below expectations could  cause  expenses  to  be
disproportionately  high. If revenues fall below expectations  in  a  particular
quarter,  operating results and net income are likely to be materially adversely
affected.  Any  inability of the Company to adjust spending  to  compensate  for
failure  to  meet  sales  forecasts or to collect accounts  receivable,  or  any
unexpected increase in product returns or other costs, could magnify the adverse
impact of such events on the Company's operating results.

The  Company's business has historically experienced and is expected to continue
to  experience significant seasonality. The Company has had higher sales of  its
software  products in the quarters ending in March and June and weaker sales  in
the  quarters ending in September and December. The decrease in product revenues
in  the  quarters  ending  in  September is due to  the  international  customer
seasonal  buying patterns.  Due to the foregoing factors, quarterly revenue  and
operating  results are likely to vary significantly in the future and period-to-
period  comparisons of its results of operations are not necessarily  meaningful
and should not be relied upon as indications of future performance. Further, the
Company's  results have been and it is likely that in some future  quarters  the
Company's revenue or operating results will be below the expectations of  public
market  analysts and investors. In such event, the price of the Company's Common
Stock would likely be materially adversely affected.

Dependence  Upon  Proprietary  Technology;   Risk  of  Third-Party   Claims   of
Infringement

The  Company's  success and ability to compete is dependent  in  part  upon  its
proprietary  information.  The  Company relies primarily  on  a  combination  of
copyright and trademark laws, trade secrets, software security measures, license
agreements  and  nondisclosure agreements to protect its proprietary  technology
and  software products. There can be no assurance, however, that such protection
will  be  adequate to deter misappropriation, deter third parties  from  copying
aspects  of,  or otherwise obtaining and using, the Company's software  products
and  technology without authorization, or that the rights secured  thereby  will
provide competitive advantages to the Company.

There  can  be  no assurance that others will not independently develop  similar
products or duplicate the Company's products. There can be no assurance that the
steps  taken  by the Company to protect its proprietary technology will  prevent
misappropriation  of  such  technology, and such protections  may  not  preclude
competitors from developing products with functionality or features  similar  to
or  superior  to the Company's products. A substantial amount of  the  Company's
sales  are in international markets, and the laws of other countries may  afford
the Company little or no effective protection of its intellectual property.

While the Company believes that its products and trademarks do not infringe upon
the  proprietary  rights of third parties, there can be no  assurance  that  the
Company will not receive future communications from third parties asserting that
the  Company's products infringe, or may infringe, on the proprietary rights  of
third  parties.  The  Company was denied a trademark registration  of  the  name
"Interlink" based on the use of similar names by other companies in the computer
industry.  The  Company  expects  that  software  product  developers  will   be
increasingly  subject  to  infringement claims as the  number  of  products  and
competitors  in the Company's industry segments grow and the functionalities  of
products  in  different  industry segments overlap. Any  such  claims,  with  or
without  merit,  could  be  time  consuming, result  in  costly  litigation  and
diversion  of technical and management personnel, cause product shipment  delays
or  require  the  Company  to develop non-infringing technology  or  enter  into
royalty  or  licensing agreements, any of which could have  a  material  adverse
effect on the Company's business, financial condition and results of operations.
Moreover,  an  adverse outcome in litigation or similar adversarial  proceedings
could  subject the Company to significant liabilities to third parties,  require
expenditure  of  significant  resources to  develop  non-infringing  technology,
require  disputed rights to be licensed from others or require  the  Company  to
cease  the  marketing  or use of certain products, any of  which  could  have  a
material  adverse  effect  on the Company's business,  financial  condition  and
results of operations.

Possible Volatility of Share Price

There  can  be no assurance that the market price of the Company's Common  Stock
will  not  decline.  The trading prices of the Company's  Common  Stock  may  be
subject  to  wide  fluctuations in response to a number  of  factors,  including
variations  in  operating results, alliances, changes in earnings  estimates  by
securities  analysts, announcements of extraordinary events such as  litigation,
alliances,  or acquisitions, announcements of technological innovations  or  new
products  or new contracts by the Company or its competitors, announcements  and
reports  about  the  declining  number  of mainframe  computers  shipped,  press
releases or reports
<PAGE>

of  IBM or other competitors introducing competitive or substitute products,  as
well  as  general  economic, political and market conditions. In  addition,  the
stock  market  has  from time-to-time experienced significant price  and  volume
fluctuations  that have particularly affected the market prices for  the  common
stocks  of  technology  companies and that have  often  been  unrelated  to  the
operating  performance of particular companies. These broad market  fluctuations
may also adversely affect the market price of the Company's Common Stock. In the
past,  following  periods  of  volatility in the market  price  of  a  company's
securities, securities class action litigation has occurred against the  issuing
company.  There can be no assurance that such litigation will not occur  in  the
future  with respect to the Company. Such litigation could result in substantial
costs and a diversion of management's attention and resources, which would  have
a  material  adverse effect on the Company's business, financial  condition  and
results  of operations. Any adverse determination in such litigation could  also
subject the Company to significant liabilities.





Year 2000 Issues

In  the  computer  industry many systems were not designed to handle  any  dates
beyond  the year 1999, and such computer hardware and software will need  to  be
modified  prior to the year 2000 in order to remain functional. The  Company  is
concerned that many enterprises will be devoting a substantial portion of  their
information systems spending to resolving this upcoming year 2000 problem.  This
may  result in spending being diverted over the next two years. The Company  has
completed  its  assessment and testing of its product lines and has  established
that  the  current  versions of its products are all year 2000  compliant.   The
Company is in the process of completing the assessment and testing of year  2000
compliance  for  its  internal  information and  non-IT  systems.   The  Company
anticipates  that addressing the year 2000 problem for its internal  information
and  non-IT  systems and current and future products will not  have  a  material
impact  on  its  operations or financial results and  expects  to  complete  its
assessment  by  the end of fiscal 1999. However, there can be no assurance  that
these  costs  will  not be greater than anticipated, or that corrective  actions
undertaken will be completed before any year 2000 problems could occur. The year
2000  issue  could lower demand for the Company's products while increasing  the
Company's  costs. These combining factors, while not quantified,  could  have  a
material  adverse impact on the Company's financial results.  The  Company  uses
certain  products  from  and  has  certain  key  relationships  with  suppliers,
including  Cisco.  If these suppliers fail to adequately address the  year  2000
issue  for  the  products  this  could have a material  adverse  impact  on  the
Company's operations and financial results.  The Company is still assessing  the
effect  the  year 2000 issue will have and, at this time, cannot  determine  the
impact it will have, if any.

Issues Related to the European Monetary Conversion

The  Company  is aware of the issues associated with the changes in Europe  with
the  European  economic  and monetary union (the "EMU").   One  of  the  changes
resulting  from this union  required EMU member states to irrevocably fix  their
respective currencies to a new currency, the Euro, on January 1, 1999.  On  that
day,  the  Euro   became  a  functional legal currency within  these  countries.
During the next three years, business in the EMU member states will be conducted
in both the 25 existing national currencies, such as the Franc or Deutsche Mark,
and the Euro.  As a result, companies operating in or conducting business in EMU
member  states  will  need  to ensure that their financial  and  other  software
systems  are  capable  of  processing transactions and properly  handling  these
currencies, including the Euro.  The Company is still assessing the  impact  the
EMU  formation will have on both its internal systems and the products it sells.
The  Company  will take appropriate corrective actions based on the  results  of
such  assessment.   The  Company  has not yet determined  the  cost  related  to
addressing  this  issue and there can be no assurance that this  issue  and  its
related  costs  will  not  have a materially adverse  affect  on  the  company's
business, operating results and financial condition.
<PAGE>

                   PART II:                 OTHER INFORMATION
<PAGE>

ITEM 1.     Legal Proceedings

            Incorporated by reference from the Notes to Condensed Consolidated
            Financial Statements- Note 5. Contingencies,  provided in Part I
            hereto.

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

            (i)  On November 5, 1998, the Company held an Annual Meeting
                 of stockholders (the "Annual Meeting").  At the Annual
                 Meeting Augustus J. Berkeley, Thomas H. Bredt,
                 Ronald W. Braniff, Andrew I. Fillat, and Ralph B. Godfrey
                 were reelected to the Company's Board of Directors.
                 Director              Votes for Votes withheld
                 Augustus Berkeley     5,785,143    296,454
                 Ronald W. Braniff     5,783,168    298,429
                 Thomas H. Bredt       5,862,700    218,897
                 Andrew J. Fillat      5,785,265    296,332
                 Ralph B. Godfrey      5,859,933    221,664

            (ii) Approval of an        Votes for  Votes against  Votes Abstained
                 amendment to the      4,817,382    1,062,568        14,051
                 1992 stock option
                 plan

            (iii)Approval of an        Votes for  Votes against  Votes Abstained
                 amendment to the      5,237,716     822,797         21,084
                 1996 employee stock
                 purchase plan

            (iv) Appointment of the    Votes for  Votes against  Votes Abstained
                 selection of          6,042,503     20,715          18,379
                 PricewaterhouseCoopers,
                 LLP as independent
                 accountants for the
                 1999 fiscal year

            The foregoing matters are described in more detail in the
            Registrants' definitive proxy statement dated September 24, 1998.


ITEM 6.     Exhibits and Reports on Form 8-K

            (a) Exhibit 27         Financial Data Schedule
                                   (EDGAR version only)

            (b  Reports on         The Company filed a current report
                Form 8-K           on Form 8-K on December 21, 1998.
<PAGE>
SIGNATURES

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

Date:  February 9, 1999           INTERLINK COMPUTER SCIENCES INC.
                                  AND SUBSIDIARIES
                                  (Registrant)



                                  By: /s/  James A. Barth
                                      -------------------------------------
                                      James A. Barth
                                      Chief Financial Officer and Secretary

                                  By: /s/ Augustus J. Berkeley
                                      -------------------------------------
                                      Augustus J. Berkeley
                                      President and Chief Executive Officer