<PAGE>

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                    FORM 10-Q

                                   (Mark one)
     [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
                              EXCHANGE ACT OF 1934

                 For the quarterly period ended January 31, 2001

                                       OR

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

              For the transition period from __________ to ________

                           Commission File No. 0-24015

                            DUNN COMPUTER CORPORATION
                            D/B/A STEELCLOUD COMPANY
             (Exact name of Registrant as specified in its charter)

                                    VIRGINIA
         (State or other jurisdiction of incorporation or organization)

                                   54-1890464
                      (I.R.S. Employer Identification No.)

                     1306 Squire Court, Sterling, VA. 20166
               (Address of principal executive offices) (zip code)

                                 (703) 450-0400
              (Registrant's telephone number, including area code)


              (Former name or former address, if changed since last report)
         Indicate by check mark whether the registrant (1) has filed all reports
         required to be filed by Section 13 or 15(d) of the Securities Exchange
         Act of 1934 during the preceding 12 months (or for such shorter period
         that the Registrant was required to file such reports), and (2) has
         been subject to such filing requirements for the past 90 days. Yes X
         No______.

         As of March 1, 2001 there were 10,056,963 shares of the registrant's
common stock outstanding.

                                                                               1
<PAGE>




                            Dunn Computer Corporation
                            D/B/A SteelCloud Company
                                 Form 10-Q Index
                 For the Quarterly period ended January 31, 2001

<TABLE>
<CAPTION>
   Description                                                                                            Page
<S>                 <C>                                                                                   <C>
Part I.             Financial Information................................................................   3

Item 1.             Financial Statements................................................................
                    Consolidated Balance Sheets as of January 31, 2001 and October 31, 2000.............    3
                    Consolidated Statements of Operations for the three month periods ended January 31,
                    2001 and 2000.......................................................................    4
                    Consolidated Statements of Cash Flows for the three month periods ended January 31,
                    2001 and 2000.......................................................................    5
                    Notes to the Consolidated Financial Statements......................................    6

Item 2.             Management's Discussion and Analysis of Financial Condition and Results of
                    Operations..........................................................................    9

Part II.            Other Information...................................................................   11

Item 1.             Legal Proceedings...................................................................   11

Item 6.             Exhibits and Reports on Form 8-K....................................................   13
</TABLE>





                                                                               2

<PAGE>



PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

DUNN COMPUTER CORPORATION
D/B/A STEELCLOUD COMPANY
CONSOLIDATED BALANCE SHEET

<TABLE>
<CAPTION>
                                                                                      October 31,             January 31,
                                                                                         2000                    2001
                                                                                   ------------------     --------------------
<S>                                                                               <C>                     <C>
                                        ASSETS                                                                (unaudited)
      Current assets

         Cash and cash equivalents                                                          $363,958                 $540,426
         Accounts receivable, net                                                         10,851,270                5,292,051
         Inventory, net                                                                    4,318,936                4,318,939
         Deferred tax asset                                                                1,326,745                  203,859
         Income tax receivable                                                               230,681                1,470,442
         Prepaid expenses and other current assets                                           191,897                  190,214
                                                                                   ------------------     --------------------
      Total current assets                                                                17,283,487               12,015,931

         Property and equipment, net                                                         819,798                  690,903
         Equipment on lease, net                                                           1,443,704                1,354,008
         Goodwill and other intangible assets, net                                         3,164,789                3,066,235
         Investments                                                                         150,000                  150,000
         Other assets                                                                        143,193                  133,952
                                                                                   ------------------     --------------------
      Total assets                                                                       $23,004,971              $17,411,029
                                                                                   ==================     ====================

                         LIABILITIES AND STOCKHOLDERS' EQUITY
      Current liabilities

          Accounts payable                                                                $7,886,342               $3,542,099
          Accrued expenses                                                                 2,753,361                2,236,216
          Accrued litigation costs                                                           343,087                  343,087
          Notes payable, current                                                             431,597                  430,745
          Unearned revenue                                                                   135,690                  239,729
          Line of credit - short-term                                                              -                1,679,500
                                                                                   ------------------     --------------------
      Total current liabilities                                                           11,550,077                8,471,376

         Notes payable, long-term portion                                                    115,290                    7,645
         Line of credit - long-term                                                        2,483,203                        -

      Stockholders' equity
          Preferred stock $.001 par value; 2,000,000 shares authorized, 3,000                      3                        3
                 shares issued and 2,700 outstanding; aggregate liquidation
                 preference of $2,822,630
          Common stock, $.001 par value: 20,000,000 shares authorized, 9,806,962               9,807                   10,057
                 & 10,056,963 shares issued and outstanding at October 31, 2000
                 and January 31, 2001, respectively;
          Additional paid in capital                                                      41,584,844               41,590,478
          Treasury stock, 400,000 shares;                                                 (3,432,500)              (3,432,500)
          Accumulated deficit                                                            (29,305,753)             (29,236,030)
                                                                                   ------------------     --------------------
      Total stockholders' equity                                                           8,856,401                8,932,008
                                                                                   ------------------     --------------------
      Total liabilities and stockholders' equity                                         $23,004,971              $17,411,029
                                                                                   ==================     ====================
</TABLE>


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

                                                                               3
<PAGE>


DUNN COMPUTER CORPORATION
D/B/A STEELCLOUD COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)

<TABLE>
<CAPTION>
                                                                                         Three Months Ended
                                                                                            January 31,
                                                                                   2000                    2001
                                                                           ---------------------    -------------------
<S>                                                                        <C>                      <C>
     Net revenues                                                                    $7,128,063             $7,188,899
     Cost of revenue                                                                  5,646,745              5,440,561
                                                                           ---------------------    -------------------
     Gross profit                                                                     1,481,318              1,748,338

     Selling and marketing                                                              299,810                160,765
     General and administrative                                                       1,519,265              1,283,541
     Amortization of goodwill                                                            87,466                 98,554
                                                                           ---------------------    -------------------
     (Loss) income from operations                                                     (425,223)               205,478

     Interest income                                                                      4,446                 13,635
     Interest expense                                                                  (165,365)              (111,890)
     Other expense                                                                       (3,156)                     -
                                                                           ---------------------    -------------------
     Net (loss) income from operations before income
     taxes and extraordinary item                                                      (589,298)               107,223

     Provision for income taxes                                                               -                      -
                                                                           ---------------------    -------------------
     Net (loss) income before extraordinary gain                                       (589,298)               107,223

     Extraordinary gain - early extinguishment of debt                                  750,000                      -
                                                                           ---------------------    -------------------
     Net income before dividends                                                        160,702                107,223

     Dividends to preferred stockholders                                                      -                 37,500
                                                                           ---------------------    -------------------
     Net income attributable to common stockholders                                    $160,702                $69,723

     Basic and diluted (loss) earnings per share:
       (Loss) earnings before extraordinary gain                                          (0.06)                  0.01
       Extraordinary gain                                                                  0.08                      -
                                                                           ---------------------    -------------------
       Net earnings per share                                                             $0.02                  $0.01
</TABLE>


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

                                                                               4
<PAGE>


DUNN COMPUTER CORPORATION
D/B/A STEELCLOUD COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)

<TABLE>
<CAPTION>
                                                                                   Three Months Ended
                                                                                      January 31,
                                                                                2000                 2001
                                                                         ------------------   ------------------
<S>                                                                      <C>                    <C>
Operating activities
Net income                                                                         $160,702            $107,223
Adjustments to reconcile net income to net cash provided by operating
  activities:
Depreciation and amortization of property and equipment                             728,534             467,500
Amortization of goodwill and other intangibles                                       87,466              98,554
Extraordinary debt extinguishment gain                                             (750,000)                  -
  Changes in operating assets and liabilities:
  Accounts receivable                                                             1,433,119           5,559,219
  Income tax receivable                                                                   -          (1,239,761)
  Inventory                                                                        (253,427)                 (3)
  Prepaid expenses and other assets                                                (130,380)             10,924
  Accounts payable                                                               (1,425,866)         (4,344,243)
  Accrued expenses                                                                2,408,889            (548,761)
  Deferred tax credit                                                               (47,567)          1,122,886
  Unearned revenue and other liabilities                                          1,416,493             104,039
                                                                         ------------------   ------------------
Net cash provided by operating activities                                         3,627,963           1,337,577

Investing activities
Purchase of property and equipment                                                 (247,416)           (248,909)

Financing activities
Proceeds from exercise of common stock options                                       15,313                   -
Payments on notes payable                                                           (23,478)           (108,497)
Repayments on line of credit, net                                                (3,040,705)           (803,703)
                                                                         ------------------   ------------------
Net cash used in financing activities                                            (3,048,870)           (912,200)

Net increase in cash and cash equivalents                                           331,677             176,468
Cash and cash equivalents at beginning of period                                    655,450             363,958
                                                                         ------------------   ------------------
Cash and cash equivalents at end of period                                         $987,127            $540,426

Supplemental cash flow information
Interest paid                                                                      $165,365            $111,891
Income taxes paid                                                                        $-                  $-
</TABLE>

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

                                                                               5
<PAGE>



DUNN COMPUTER CORPORATION
D/B/A STEELCLOUD COMPANY
NOTES TO  CONSOLIDATED FINANCIAL STATEMENTS

1.   Basis of Presentation

The consolidated financial statements for the three month periods ended
January 31, 2001 and 2000 are unaudited and include all adjustments which, in
the opinion of management, are necessary to present fairly the results of
operations for the periods then ended. All such adjustments are of a normal and
recurring nature. These consolidated financial statements should be read in
conjunction with the Annual Report on Form 10-K of Dunn Computer Corporation
d/b/a SteelCloud Company (the "Company") which includes consolidated financial
statements and notes thereto for the years ended October 31, 2000 and 1999.

Certain prior year amounts have been reclassified to conform to current year
presentation.

2.   Early Extinguishment of Debt

In conjunction with the purchase of IDP, the Company assumed a credit facility
of $25,000,000 secured by inventory and accounts receivable of IDP.

On November 8, 1999, the Company executed an agreement with the financial
institution to terminate this facility. Under the terms of the agreement, the
Company repaid approximately $3.0 million of the outstanding principal balance
prior to December 31, 1999. In conjunction with the agreement, approximately
$750,000 ($.08 per share) was forgiven by the financial institution and the
remaining principal balance of approximately $832,000 was converted into a
two-year note maturing in January 2002 bearing interest at the prime rate. The
Company has properly reflected the $750,000 as an extraordinary gain for the
three months ended January 31, 2000, which resulted in income of approximately
$.08 per share. The outstanding balance on the note at October 31, 2000 and
January 31, 2001 was approximately $519,000 and $415,000 respectively.

3.   Lease Transaction

In December 1999, the Company assigned payments from one of its operating leases
to a financing company in exchange for the present value of the minimum lease
payments. The Company has recorded this amount as unearned revenue and will
recognize the revenue over the lease term. The lease term expired on September
30, 2000.

4.   Amended Line of Credit

On November 10, 2000, the Company amended its primary line of credit whereby the
maximum availability was reduced from $5 million to $3.5 million while the
interest rate remained unchanged at the prime rate plus 1%. The line of credit
expires on November 30, 2001. The outstanding balance on the line of credit at
October 31, 2000 and January 31, 2001 was approximately $2,483,000 and
$1,680,000, respectively.

                                                                               6
<PAGE>


5.   Private Placement

On March 13, 2000, the Company sold 3,000 shares of its Series A Convertible
Preferred Stock in a private placement, which is exempt from registration
provided by Regulation D Rule 506 promulgated by the Securities and Exchange
Commission under the Securities Act of 1933, as amended. The Company received
net proceeds of approximately $2.7 million, which was used to fund current and
future operations.

In addition, the Company issued warrants to the preferred investor and broker of
the transaction in the amount of 247,525 and 75,000 to purchase shares of the
Company's common stock at $3.64 and $4.57 per share, respectively.

The holders of the preferred shares are entitled to cumulative dividends of 5%
of the liquidation preference of $1,000 per share plus accrued but unpaid
dividends whether or not declared. As of January 31, 2001, 300 shares of
preferred stock plus accrued dividends were converted into common stock. As of
January 31, 2001 there were approximately $123,000 in accrued and unpaid
dividends. Each holder of preferred shares is entitled to voting rights equal to
the number of shares of common stock into which such preferred shares are
convertible.

The Series A Convertible Preferred Stock are convertible at the shareholders
option into common stock at the price equal to the lesser of 85% of the average
of the three lowest closing bid prices of the common stock for the 25 days prior
to the conversion date or $3.64. In fiscal year 2000, the Company recorded a
non-cash deemed dividend of $529,411 for the beneficial conversion feature. The
transaction was reported as "Dividend to Preferred Stockholders" on the
Company's 2000 Consolidated Statement of Operations.

6.   Earnings Per Share

Basic earnings per common share are calculated by dividing the net earnings
(loss) available to common shareholders by the weighted average number of common
shares outstanding. Due to their anti-dilutive effects, outstanding shares of
preferred stock, stock options and warrants to purchase shares of common stock
were excluded from the computation of diluted earnings per share for the three
months ended January 31, 2000 and 2001.

                                                                               7
<PAGE>


7.   Contingencies

Professional Services Malpractice Claim

In August of 2000, the Company's former legal counsel filed a claim against the
Company for approximately $343,087 plus accrued interest for legal fees and
costs. In response to the claim, the Company filed a counter claim for
professional malpractice and breach of fiduciary duty in the amount of
$1,568,000. The matter is currently in litigation. An outcome for this matter
cannot be predicted. The Company has accrued amounts for this potential
liability in the financial statements.

Microsoft Licensing Agreement

In November 1998, IDP entered into a Government Integrator Agreement, as
amended, with Microsoft Corporation (Microsoft) for the licensing of certain
Microsoft software. During 1999, Microsoft asserted that IDP owed approximately
$800,000 under this due primarily to amended billing by Microsoft concerning
sales by IDP to the U.S. Air Force in conjunction with the Desktop V contract.
On October 31, 2000, Microsoft filed suit against the Company, and its
subsidiary IDP, for breach of contract. In conjunction with the filing of the
claim, Microsoft further amended the original billings, which resulted in a
claim against the Company of approximately $1.3 million. Subsequent to October
31, 2000, the Company submitted a motion to dismiss the case and filed a
counterclaim of fraud on behalf of IDP in the amount of $500,000. The Company
believes that it has meritorious defenses to the claim and intends to vigorously
defend itself. The Company cannot estimate at this time the amount of the
liability to be incurred, if any. In the event the Company is not successful in
its defense and a judgment is entered on behalf of Microsoft for the full amount
sought, the payment would have a material adverse effect upon the Company's
financial position and results of operations. The Company has accrued for
amounts due Microsoft based on the original billing terms. On February 20, 2001,
the Court ruled in favor of Dunn Computer Corporation d/b/a SteelCloud thereby
dismissing that entity from the claim. The Company will continue to vigorously
defend its subsidiary, IDP, for which it believes to have meritorious defenses.

Trademark Infringement

On October 19, 2000, the Company received a cease and desist letter from
LoudCloud, Inc. alleging that the use of the "SteelCloud" mark and name would
constitute an infringement of LoudCloud's rights to its "LoudCloud" mark and
name and family of "Cloud" marks, that use of "SteelCloud" would dilute the
distinctiveness and fame of the LoudCloud mark and name and, that such acts by
the Company violated federal and state law regarding unfair competition. In
response, the Company filed a declaratory judgment action in the U.S. District
Court for the Eastern District of Virginia, seeking a judicial determination
that its use of the "SteelCloud" mark and name would not violate the proprietary
rights of LoudCloud nor dilute the alleged fame and distinctiveness of the
"LoudCloud" mark and name. In this action, the Company also alleged a new claim
that LoudCloud, Inc. has violated federal law through its misuse of the
trademark provisions under the Lanham Act as amended in 1988. A hearing has been
held on the LoudCloud motion to dismiss and the court has taken the matter under
advisement. On January 10, 2001, the US District Court for the Eastern District
of Virginia dismissed the case. SteelCloud has appealed such decision. The
Company cannot estimate at this time the amount of the liability to be incurred,
if any, but does not believe that this matter will have a material adverse
effect upon the Company's financial position or results of operations.

                                                                               8
<PAGE>



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

Founded in 1987, Dunn Computer Corporation d/b/a SteelCloud Company, based in
Dulles, Virginia, designs, develops and manufactures customized computers,
appliances and network solutions. In addition, the Company provides Information
Technology ("IT") solutions support for those hardware and networking solutions
implemented.

The following discussion should be read in conjunction with the consolidated
financial statements. Certain statements contained herein may constitute
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. Because such statements include risks and
uncertainties, actual results may differ materially from those expressed or
implied by such forward-looking statements. Factors that could cause actual
results to differ materially include, but are not limited to, risks associated
with the integration of businesses following an acquisition, competitors with
broader product lines and greater resources, emergence into new markets, the
termination of any of the Company's significant contracts, the Company's
inability to maintain working capital requirements to fund future operations or
the Company's inability to attract and retain highly qualified management,
technical and sales personnel.

RESULTS OF OPERATIONS

For the three months ended January 31, 2001 compared to the three months ended
January 31, 2000

Net revenues for the three months ended January 31, 2001 were $7,188,899 as
compared to $7,128,063 for the three months ended January 31, 2000, an increase
of approximately 1%. Although revenue remained constant, the Company has
continued to develop new markets and diversify its product mix in order to
promote future revenue growth. For the three month period ended January 31,
2001, the Company derived its revenue from both commercial and Government
contracts.

Gross margin, as a percentage of sales, increased to 24.3% for the three months
ended January 31, 2001 from 20.8% for the three months ended January 31, 2000.
This increase in profit margin, while revenue remained constant as compared to
prior year, represents the change in the Company's product lines and product
mix, which yield higher gross margins.

For the three months ended January 31, selling and marketing expenses decreased
to $160,765 in fiscal 2001 from $299,810 in fiscal 2000, a decrease of
approximately 46%. The decrease is attributable to the elimination of expensive
marketing programs as well as the utilization of cooperative marketing
arrangements with certain vendors which reduced the overall marketing costs.

General and administrative expenses decreased to $1,283,541 for the three months
ended January 31, 2001 from $1,519,265 for the three months ended January 31,
2000. The decrease resulted primarily from the Company's efforts to manage
general and administrative expenses relative to its net revenue and gross
margin.

Interest expense, net of interest income, decreased to $98,255 for the three
months ended January 31, 2001 from $160,919 for the three months ended January
31, 2000. This decrease is the result of the Company's reduction in its
outstanding debt during fiscal 2001.

The Company reported net income before extraordinary items and dividends of
$107,223 for the three months ended January 31, 2001, as compared to a net loss
before extraordinary items and dividends of $589,298 for the same period in the
prior year. This increase is the result of the Company's efforts to manage costs
relative to its net revenue as well as its efforts to increase profit margins
for their products and services sold. In addition, the Company recorded an
extraordinary gain for the quarter ended January 31, 2000 due to the early
extinguishment of the

                                                                               9
<PAGE>

Company's loan with Deutsche Financial Services, which resulted in net income of
$160,702 for the period then ended.

LIQUIDITY AND CAPITAL RESOURCES

For the three months ended January 31, 2001, the Company generated approximately
$1,338,000 in cash flow from its operating activities. The Company generated net
income before preferred dividends of $107,223 and collected approximately
$5,559,000 in receivables. The cash generated was used to purchase goods and
services of approximately $4,344,000 net of payments and to reduce accrued
expenses by approximately $549,000.

Funds used for investing activities consisted of the purchase of property,
equipment and leased assets of $248,909. Net cash used for financing activities
consisted of net repayments on the line of credit of $803,703 and payments on
notes payable of $108,497.

In November 2000, the Company amended its existing line of credit from $5
million to $3.5 million, with an expiration date of November 30, 2001, bearing
interest at the prime rate plus 1%. As of January 31, 2001, the Company had an
outstanding balance on the line of credit of approximately $1.7 million and
available borrowing capacity of $1.8 million.

In fiscal 2000, the Company executed an agreement terminating the borrowing
arrangement with Deutsche Financial Services (DFS) whereby $3.0 million was
repaid to DFS prior to December 31, 1999. The remaining outstanding balance of
approximately $832,000 was converted to a 24-month note accruing interest at the
prime rate and $750,000 was forgiven by DFS. The Company recorded the $750,000
as an extraordinary gain on the early extinguishment of debt.

As of January 31, 2001, the Company had working capital of approximately $3.5
million. The Company believes the bank facility, together with cash on hand,
projected cash generated from operations, and income tax refunds due will
provide sufficient financial resources to finance the current operations of the
Company through fiscal 2001.

From time to time, the Company may pursue strategic acquisitions or mergers,
which may require significant additional capital, and additional capital may be
required to satisfy unusual or infrequent expenses. In such event, the Company
may seek additional financing of debt and/or equity.

                                                                              10
<PAGE>


PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

Professional Services Malpractice Claim

In August of 2000, the Company's former legal counsel filed a claim against the
Company for approximately $343,087 plus accrued interest for legal fees and
costs. In response to the claim, the Company filed a counter claim for
professional malpractice and breach of fiduciary duty in the amount of
$1,568,000. The matter is currently in litigation. An outcome for this matter
cannot be predicted. The Company has accrued amounts for this potential
liability in the financial statements.

Microsoft Licensing Agreement

In November 1998, IDP entered into a Government Integrator Agreement, as
amended, with Microsoft Corporation (Microsoft) for the licensing of certain
Microsoft software. During 1999, Microsoft asserted that IDP owed approximately
$800,000 under this due primarily to amended billing by Microsoft concerning
sales by IDP to the U.S. Air Force in conjunction with the Desktop V contract.
On October 31, 2000, Microsoft filed suit against the Company for breach of
contract. In conjunction with the filing of the claim, Microsoft further amended
the original billings, which resulted in a claim against the Company of
approximately $1.3 million. Subsequent to October 31, 2000, the Company
submitted a motion to dismiss the case and filed a counterclaim of fraud on
behalf of IDP in the amount of $500,000. The Company believes that it has
meritorious defenses to the claim and intends to vigorously defend itself. The
Company cannot estimate at this time the amount of the liability to be incurred,
if any. In the event the Company is not successful in its defense and a judgment
is entered on behalf of Microsoft for the full amount sought, the payment would
have a material adverse effect upon the Company's financial position and results
of operations. The Company has accrued for amounts due Microsoft based on the
original billing terms. On February 20, 2001, the Court ruled in favor of Dunn
Computer Corporation d/b/a SteelCloud thereby dismissing that entity from the
claim. The Company will continue to vigorously defend its subsidiary, IDP, for
which it believes to have meritorious defenses.

                                                                              11
<PAGE>


Trademark Infringement

On October 19, 2000, the Company received a cease and desist letter from
LoudCloud, Inc. alleging that the use of the "SteelCloud" mark and name would
constitute an infringement of LoudCloud's rights to its "LoudCloud" mark and
name and family of "Cloud" marks, that use of "SteelCloud" would dilute the
distinctiveness and fame of the LoudCloud mark and name and, that such acts by
the Company violated federal and state law regarding unfair competition. In
response, the Company filed a declaratory judgment action in the U.S. District
Court for the Eastern District of Virginia, seeking a judicial determination
that its use of the "SteelCloud" mark and name would not violate the proprietary
rights of LoudCloud nor dilute the alleged fame and distinctiveness of the
"LoudCloud" mark and name. In this action, the Company also alleged a new claim
that LoudCloud, Inc. has violated federal law through its misuse of the
trademark provisions under the Lanham Act as amended in 1988. A hearing has been
held on the LoudCloud motion to dismiss and the court has taken the matter under
advisement. On January 10, 2001, the US District Court for the Eastern District
of Virginia dismissed the case. The Company has appealed such decision. The
Company cannot estimate at this time the amount of the liability to be incurred,
if any, but does not believe that this matter will have a material adverse
effect upon the Company's financial position or results of operations.

There are routine legal claims pending against the Company, that occur in the
ordinary course of business but in the opinion of management, liabilities, if
any, arising from such claims will not have a material adverse effect on the
financial condition and results of operation of the Company.

Other than the above, we are not a party in any other material legal
proceedings.
                                                                              12

<PAGE>


ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a)  Exhibits

Exhibit 11.1: Statement of computation of earnings per share.
Exhibit 27: Financial Data Schedule.

(b) Reports on Form 8-K

none

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.

                                            Dunn Computer Corporation
                                            D/B/A SteelCloud Company
                                            (Registrant)

Date:    March 19, 2001             By:  /s/ Thomas P. Dunne
                                       ---------------------------------------
                                       Thomas P. Dunne
                                       Chief Executive Officer and President


Date:    March 19, 2001             By:  /s/ Kevin M. Murphy
                                       ---------------------------------------
                                       Kevin M. Murphy
                                       Vice President, Finance



                                                                              13