UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 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 September 30, 2000

             [ ] Transition report pursuant to section 13 or 15(d) of
                       the Securities Exchange Act of 1934

                        Commission File Number 333-50049

                               DTI HOLDINGS, INC.
             (Exact name of registrant as specified in its charter)


                  Missouri                       43-1828147
          (State of Incorporation)   (I.R.S. Employer Identification No.)

                          8112 Maryland Ave, 4th Floor
                            St. Louis, Missouri 63105
                    (Address of principal executive offices)

                                 (314) 880-1000
                         (Registrant's telephone number)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.

                          Yes  [X]              No  [_]


No non-affiliates of the registrant own common stock of the registrant.


<PAGE>


                               DTI HOLDINGS, INC.

                                    FORM 10-Q

                               September 30, 2000

                                TABLE OF CONTENTS

                                                                            Page

PART I   FINANCIAL INFORMATION

Item 1.  Financial Statements

         Condensed Consolidated Balance Sheets at June 30, 2000 and
           September 30, 2000 (Unaudited)                                     1

         Condensed Consolidated Statements of Operations for the Three
           Months Ended September 30, 1999 and 2000 (Unaudited)               2

         Condensed Consolidated Statements of Cash Flows for the Three
         Months Ended September 30, 1999 and 2000 (Unaudited)                 3

         Notes to Condensed Consolidated Financial Statements (Unaudited)     4

Item 2.  Management's Discussion and Analysis of Financial Condition and
          Results of Operations                                               7

Item 3.  Quantitative and Qualitative Disclosures about Market Risk          12


PART II  OTHER INFORMATION

Item 6.  Exhibits and Reports on Form 8-K                                    13

Signatures
Exhibit Index

<PAGE>


Part I:   FINANCIAL INFORMATION
Item 1.  Financial Statements

<TABLE>
                       DTI HOLDINGS, INC. AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                   (Unaudited)

<CAPTION>
                                                                  June 30,            September 30,
                                                                   2000                   2000
                                                               -------------         ---------------
<S>                                                            <C>                   <C>
Assets
Current assets:
  Cash and cash equivalents.................................   $  32,841,453          $  30,261,793
  Trade accounts receivable, net............................         451,467                406,723
  Other receivables.........................................      13,271,495                     --
  Prepaid and other current assets..........................         752,518              1,497,226
                                                               -------------          -------------
       Total current assets.................................      47,316,933             32,165,742
Property and equipment, net.................................     317,103,473            336,203,174
Deferred financing costs, net...............................       7,042,054              6,550,693
Prepaid fiber usage rights..................................       2,929,639                367,712
Other assets................................................         429,903                479,831
                                                               -------------          -------------
       Total................................................   $ 374,822,002          $ 375,767,152
                                                               =============          =============

Liabilities and stockholders' equity (deficit)
Current liabilities:
  Accounts payable..........................................   $  10,248,286          $  18,783,524
  Vendor financing..........................................       6,566,250              6,837,630
  Taxes payable.............................................       2,490,589              2,700,932
  Other accrued liabilities.................................         859,207              2,802,106
                                                               -------------          -------------
       Total current liabilities............................      20,164,332             31,124,192
Senior discount notes, net of unamortized underwriter's          356,712,668            367,823,738
   discount of $6,183,209 and $5,723,009
Deferred revenues...........................................      41,917,427             40,461,310
Vendor financing                                                   3,843,158              3,139,534
Other long-term liabilities.................................       1,600,024                     --
                                                               -------------          -------------
       Total liabilities....................................     424,237,609            442,548,774
                                                               -------------          -------------
Commitments and contingencies
Stockholders' equity (deficit):
  Preferred stock, $.01 par value, 20,000 shares
     authorized, no shares issued and outstanding...........              --                     --
  Convertible series A preferred stock, $.01 par value,
    (aggregate liquidation preference of $45,000,000)
    30,000 shares authorized, issued and outstanding........             300                    300
  Common stock, $.01 par value, 100,000,000 shares
     authorized, 30,000,000 shares issued and
     outstanding............................................         300,000                300,000
  Additional paid-in capital................................      44,213,063             44,213,063
  Common stock warrants.....................................      10,421,336             10,421,336
  Unearned compensation-restricted stock
  Unearned compensation.....................................         (36,370)               (27,280)
  Loan to stockholder.......................................      (1,539,582)            (1,566,352)
  Accumulated deficit.......................................    (102,774,354)          (120,122,689)
                                                               --------------         --------------
           Total stockholders' equity (deficit).............     (49,415,607)           (66,781,622)
                                                               --------------         --------------
Total.......................................................   $ 374,822,002          $ 375,767,152
                                                               =============          =============
</TABLE>

            See notes to condensed consolidated financial statements.

                                       1
<PAGE>

<TABLE>

                       DTI HOLDINGS, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)

<CAPTION>
                                                            For the Three Months Ended
                                                                   September 30,
                                                             1999                   2000
                                                         -------------         -------------
<S>                                                      <C>                    <C>

  REVENUES:
  Telecommunications services:
    Carrier's carrier services.........................  $   1,909,520          $  2,740,119
    End-user services..................................         49,930               138,371
                                                         -------------          ------------
       Total revenues..................................      1,959,450             2,878,490
                                                         -------------          ------------

  OPERATING EXPENSES:
    Telecommunications services........................      2,794,928             3,767,880
    Write-off of prepaid fiber usage rights............            --              1,976,000
    Selling, general and administrative................      1,235,845             1,267,326
    Depreciation and amortization......................      3,081,808             4,005,369
                                                         -------------          ------------
       Total operating expenses........................      7,112,581            11,016,575
                                                         -------------          ------------

  LOSS FROM OPERATIONS.................................     (5,153,131)           (8,138,085)

  OTHER INCOME (EXPENSE):
    Interest income....................................      1,376,500               525,912
    Interest expense...................................     (8,532,692)           (9,736,162)
                                                          ------------          -------------

  NET LOSS.............................................   $(12,309,323)         $(17,348,335)
                                                          ============          =============
</TABLE>

            See notes to condensed consolidated financial statements.

                                       2

<PAGE>

<TABLE>

                       DTI HOLDINGS, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)
<CAPTION>
                                                                 Three Months Ended
                                                                    September 30,
                                                              1999                   2000
                                                          --------------------  --------------
<S>                                                       <C>                    <C>
Cash flows provided by operating activities:
  Net loss.............................................   $(12,309,323)          $(17,348,335)
  Adjustments to reconcile net loss to cash provided
     by operating activities:                                3,081,808              4,005,369
       Depreciation and amortization...................
       Accretion of senior discount notes..............      8,003,644              8,927,246
       Amortization of deferred financing costs........        431,385                491,361
       Amortization of unearned compensation...........          9,090                  9,090
       Other noncash items.............................         88,392                179,517
       Changes in assets and liabilities:
          Trade accounts receivable....................         21,281                 44,744
          Other assets.................................         67,965             15,038,786
          Accounts payable.............................      4,708,321              8,535,238
          Other liabilities............................       (330,795)               342,875
          Taxes payable................................       (455,297)               210,343
          Deferred revenues............................        513,487             (1,456,117)
                                                          -------------          -------------
Net cash flows provided by operating activities........      3,829,958             18,980,117
                                                          -------------          ------------

Cash flows from investing activities:
  Increase in network and equipment....................    (41,541,272)           (20,921,246)
                                                          -------------           ------------
Net cash used in investing activities..................    (41,541,272)           (20,921,246)
                                                          -------------           ------------

Cash flows from financing activities:
  Repayment of vendor financing........................             --               (638,531)
                                                          ------------            ------------
Cash flows used in financing activities................             --               (638,531)
                                                          ------------            ------------

Net decrease in cash and cash equivalents..............    (37,711,314)            (2,579,660)
Cash and cash equivalents, beginning of period.........    132,175,829             32,841,453
                                                          ------------           ------------
Cash and cash equivalents, end of period...............   $ 94,464,515           $ 30,261,793
                                                          ============           ============

Noncash investing and financing activities:
  Interest capitalized to fixed assets.................  $   1,798,085           $  2,183,824
                                                         =============           ============
  Fixed assets acquired through vendor financing.......  $   1,358,427           $         --
                                                         =============           ============
</TABLE>

            See notes to condensed consolidated financial statements.

                                       3
<PAGE>


DTI Holdings, inc. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
--------------------------------------------------------------------------------

1.    PRESENTATION

         The accompanying  unaudited condensed consolidated financial statements
have been prepared in accordance with generally accepted  accounting  principles
for interim  financial  information  and with the  instructions to Form 10-Q and
Article 10-01 of  Regulation  S-X.  Accordingly,  they do not include all of the
information and notes required by generally accepted  accounting  principles for
complete financial statements.

         In the opinion of the management of DTI Holdings, Inc. and subsidiaries
(the  "Company"  or "DTI") the  accompanying  unaudited  condensed  consolidated
financial  statements  contain all adjustments  (consisting of normal  recurring
adjustments)  considered  necessary to present  fairly the  Company's  financial
information  for the  interim  periods  presented  and  have  been  prepared  in
accordance with generally accepted accounting principles. The interim results of
operations  are not  necessarily  indicative of results that may be expected for
any other interim period or for the full year.

         The financial statements should be read in conjunction with the audited
consolidated  financial statements and notes thereto for the year ended June 30,
2000  included in the  Company's  Form 10-K for the same  period  filed with the
Securities and Exchange  Commission.  Accordingly,  note disclosures which would
substantially duplicate the disclosures in the audited financial statements have
been omitted.  Additionally,  certain prior year balances have been reclassified
to conform with fiscal 2001 presentation.

2.    GOING CONCERN

         The  accompanying   consolidated  financial  statements  and  financial
information has been prepared assuming that the Company will continue as a going
concern.  The Company  incurred losses from operations of $22 and $8 million and
net losses of $57 and $17 million during the fiscal year ended June 30, 2000 and
the three month period ended September 30, 2000,  respectively.  The Company has
not yet been  successful  in  obtaining  additional  financing  to  sustain  its
operations and may have insufficient  liquidity to meet its needs for continuing
operations  and meeting its  obligations.  As of September 30, 2000, DTI had $30
million of cash and cash  equivalents.  Such  amounts  are  expected  to provide
sufficient  liquidity  to meet DTI's  operating  and capital  requirements  into
approximately  January  2001.  In its most  recent  Form 10K filing for the year
ended June 30, 2000,  the Company  disclosed  that its cash on hand coupled with
anticipated  collections  of  additional  amounts  due  it  under  existing  IRU
agreements  upon delivery of specific route  segments,  were expected to provide
sufficient   liquidity  to  meet  DTI's  operating  and  capital  needs  through
approximately  March,  2001.  The  principal  factor  that has given rise to the
accelerated  date  of  January,   2001  referred  to  above  is  further  delays
encountered in delivery of specific route segments under the above mentioned IRU
agreements.  Consequently,  there is  substantial  doubt about DTI's  ability to
continue as a going concern.  The Company's  continuation  as a going concern is
dependent  upon its  ability to (a)  generate  sufficient  cash flow to meet its
obligations  on a  timely  basis,  (b)  obtain  additional  financing  as may be
required, and (c) ultimately sustain profitability.  Management's recent actions
and plans in regard to these matters are as follows:

     1.   The Company is in the process of completing specific route segments to
          deliver to counter  parties under existing IRU agreements  that should
          result in the collection of amounts under those agreements.

                                       4
<PAGE>


     2.   The  Company is  attempting  to  increase  sales of monthly  bandwidth
          capacity  to  reduce  the  amount  of  cash  flow   required  to  fund
          operations.

     3.   The Company is selectively evaluating opportunities to sell additional
          dark fiber and empty conduits to supplement its liquidity position.

     4.   The  Company  is  exploring  vendor  financing  options as a source of
          funding for its  electronics  purchases  in order to light  additional
          network capacity.

     5.   The  Company is  exploring  its  options  with  respect  to  obtaining
          additional  equity  infusions as well as the possibility of additional
          debt financing.  Under its Indenture  provisions,  the Company has the
          ability  to  borrow  up to $100  million  on a  senior  secured  basis
          provided  that  the  Company's   Board  of  Directors   approves  such
          financing.

     6.   The Company is considering delaying,  modifying or abandoning plans to
          build or acquire certain  portions of its network in order to conserve
          cash until such time as  additional  cash is  generated to support its
          business plan.


         There can be no assurance,  however, that DTI will be successful in any
of the above  mentioned  actions or plans in a timely basis or on terms that are
acceptable  to  it  and  within  the  restrictions  of  its  existing  financing
arrangements, or at all.

3.    NETWORK AND EQUIPMENT

Network and equipment consists of the following as of:

                                               June 30, 2000  September 30, 2000
                                              -------------   ------------------
      Land...................................  $     756,945    $   1,447,409
      Fiber optic cable plant................    154,775,867      166,790,403
      Fiber usage rights.....................    128,667,295      136,771,418
      Fiber optic terminal equipment.........     42,596,743       44,151,315
      Network buildings......................      8,696,531        9,399,855
      Furniture, office equipment and other..      2,846,165        2,884,218
      Leasehold improvements.................        605,407          601,406
                                               -------------    -------------
                                                 338,944,953      362,046,024
      Less-- accumulated depreciation........     21,841,480       25,842,850
                                               -------------    -------------
      Network and equipment, net               $ 317,103,473    $ 336,203,174
                                               =============    =============

4.    WRITE-OFF OF PREPAID FIBER USEAGE RIGHTS

         The Company  decided in November  2000 to abandon its  two-fiber  lease
from Las  Vegas to  Dallas  and St.  Louis to  Chicago  as the  Company  has now
developed   alternative   solutions  for  these  routes.  The  effects  of  this
transaction were recorded as of September 30, 2000.


                                       5
<PAGE>

5.    COMMITMENTS AND CONTINGENCIES

         From  time to time  the  Company  is named as a  defendant  in  routine
lawsuits  incidental  to its  business.  The Company  believes that none of such
current  proceedings,  individually  or in the  aggregate,  will have a material
adverse  effect on the Company's  financial  position,  results of operations or
cash flows.  During  fiscal 2001,  the Company has made and may continue to make
material commitments related to the expansion of its network.



6.    RECENT EVENTS

         On September  27, 2000,  Kansas City Power & Light  confirmed  that its
subsidiary  KLT Telecom  Inc.  intended to make a tender offer for the Notes and
Warrants of DTI. KLT Telecom also agreed in September,  on a conditional  basis,
to acquire an  additional  31 percent of the fully  diluted  common stock in DTI
Holdings,  which would increase  KLT's fully diluted  ownership to 78 percent of
the Company.  The stock acquisition was contingent upon KLT Telecom's successful
purchase of at least 90 percent of the outstanding Notes and Warrants.

         On October 23, 2000,  Kansas City Power & Light Company  announced that
KLT  Telecom  had placed on hold the  anticipated  tender  offer for the 10-year
Senior  Discount  Notes and  related  Warrants  of DTI  Holdings,  Inc.  and the
acquisition of additional shares referred to above due to the unfavorable credit
market for telecommunication companies.

                                       6
<PAGE>


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


Results of Operations


REVENUE

         Total  revenue  for the quarter  ended  September  30,  2000  increased
$919,000  (47%) from  comparable  fiscal 2000  period.  This growth is primarily
attributable to increased revenue from carrier's carrier services.  Revenue from
carrier's  carrier  services  was up 43%  principally  from  increased  sales of
transport business on our in-service routes.

OPERATING EXPENSES

         Total operating expenses were up $3.9 million in the first three months
of fiscal 2001 over the same  period in fiscal  2000.  For the first  quarter of
fiscal 2001 compared to 2000, telecommunication services expenses increased $1.0
million.  This increase primarily reflects the growth of personnel costs related
to the growth of the operational infrastructure,  costs related to accepted dark
fiber  segments and property  taxes.  Additionally,  the Company  abandoned  its
short-term  two-fiber lease from Las Vegas to Dallas and St. Louis to Chicago as
the Company has now  developed  alternative  solutions  for these  routes.  As a
result of this decision, the Company recorded a write-off of prepaid fiber usage
rights of $2.0 million.

         Selling, general and administrative expenses for the three months ended
September  30, 2000  increased  $31,000  compared to the same  periods in fiscal
2000. The increase is due mainly to an increase in professional service costs.

         Depreciation and  amortization  grew $1.0 million for the quarter ended
September  30,  2000 in  comparison  to the same  period in  fiscal  2000 due to
increasing  amounts of our fiber optic  network  being  placed  into  service in
fiscal 2000 and 2001.  Depreciation  and  amortization  will continue to grow as
additional  network  routes are placed into  service and as we move forward with
our investment in capital assets in order to increase network capacity.

OTHER INCOME (EXPENSE)

         Net other income  (expense)  for the first quarter  increased  from net
expense of $7.2  million  in fiscal  2000 to a net  expense  of $9.2  million in
fiscal  2001.  This  change  is due to the  continued  accretion  of the  Senior
Discount  Notes issued in February  1998,  which results in  increasing  noncash
interest expense, offset in part by interest income earned on the portion of the
proceeds from the Senior Discount Notes invested in short-term  investment-grade
securities.  As the average cash balances have decreased as we have  implemented
our business  strategy so has the related  interest  income  generated  from our
short-term investment-grade securities.

INCOME TAXES

         No income tax benefit or provision  was  recorded  for the  three-month
periods  ended  September  30,  2000 or 2001.  A  valuation  allowance  is being
provided to reserve  for  significant  deferred  tax assets  generated  from net
operating loss  carryforwards and the nondeductible  interest expense related to
our Senior Discount  Notes,  issued in February 1998, that may not be realizable
due to  uncertainties  surrounding  income tax law changes and future  operating
income levels.

                                       7
<PAGE>

LIQUIDITY AND CAPITAL RESOURCES

         We have  funded our  capital  expenditures,  working  capital  and debt
requirements  and operating losses through a combination of advance payments for
future  telecommunications  services received from certain major customers, debt
and equity financing and external borrowings.

         At  September  30,  2000,  we had a  working  capital  surplus  of $1.0
million,  which  represents a decrease of $26.2 million  compared to the working
capital  surplus of $27.2  million at June 30, 2000.  This decrease is primarily
attributable to the continued build-out of our network.

         The net cash  provided by operating  activities  for the periods  ended
September   30,  1999  and  2000  totaled   $3.8  million  and  $19.0   million,
respectively.  During  fiscal 2001,  net cash  provided by operating  activities
resulted  principally  from  collection  of an  IRU-related  receivable of $13.3
million recorded as an other receivable at June 30, 2000.

         Our  investing  activities  used cash of $41.5  million  for the period
ended  September 30, 1999 and $20.9  million for the period ended  September 30,
2000.  During both periods 100% of the investing  activities were in network and
equipment.

         Cash used in financing activities was $0 for the period ended September
30, 1999 and $.6 million for the period ended  September 30, 2000.  Amounts paid
in fiscal 2001 were due under our vendor financing agreement.

The accompanying consolidated financial statements and financial information has
been prepared  assuming that the Company will continue as a going  concern.  The
Company  incurred losses from operations of $22 and $8 million and net losses of
$57 and $17  million  during the fiscal  year ended June 30,  2000 and the three
month period ended  September  30, 2000,  respectively.  The Company has not yet
been successful in obtaining  additional financing to sustain its operations and
may have insufficient  liquidity to meet its needs for continuing operations and
meeting its  obligations.  As of September 30, 2000, DTI had $30 million of cash
and cash equivalents.  Such amounts are expected to provide sufficient liquidity
to meet DTI's  operating and capital  requirements  into  approximately  January
2001.  In its most recent Form 10K filing for the year ended June 30, 2000,  the
Company disclosed that its cash on hand coupled with anticipated  collections of
additional  amounts  due it under  existing  IRU  agreements  upon  delivery  of
specific route segments,  were expected to provide sufficient  liquidity to meet
DTI's  operating  and capital  needs  through  approximately  March,  2001.  The
principal  factor that has given rise to the accelerated  date of January,  2001
referred to above is further  delays  encountered  in delivery of specific route
segments  under the  above  mentioned  IRU  agreements.  Consequently,  there is
substantial  doubt about  DTI's  ability to  continue  as a going  concern.  The
Company's  continuation  as a going concern is dependent upon its ability to (a)
generate  sufficient  cash flow to meet its  obligations on a timely basis,  (b)
obtain  additional  financing as may be  required,  and (c)  ultimately  sustain
profitability.  Management's recent actions and plans in regard to these matters
are as follows:

          1.   The  Company  is in the  process  of  completing  specific  route
               segments  to  deliver  to  counter  parties  under  existing  IRU
               agreements  that should result in the collection of amounts under
               those agreements.

          2.   The Company is attempting to increase sales of monthly  bandwidth
               capacity  to reduce  the  amount of cash  flow  required  to fund
               operations.


                                       8
<PAGE>

          3.   The  Company  is  selectively  evaluating  opportunities  to sell
               additional  dark  fiber  and empty  conduits  to  supplement  its
               liquidity position.

          4.   The Company is exploring vendor financing  options as a source of
               funding  for  its   electronics   purchases  in  order  to  light
               additional network capacity.

          5.   The Company is  exploring  its options  with respect to obtaining
               additional  equity  infusions  as  well  as  the  possibility  of
               additional debt financing.  Under its Indenture  provisions,  the
               Company has the ability to borrow up to $100  million on a senior
               secured  basis  provided  that the  Company's  Board of Directors
               approves such financing.

           6.   The Company is  considering  delaying,  modifying  or abandoning
               plans to build or  acquire  certain  portions  of our  network in
               order to  conserve  cash  until such time as  additional  cash is
               generated to support its business plan.


         There can be no assurance,  however, that DTI will be successful in any
of the above  mentioned  actions or plans in a timely basis or on terms that are
acceptable  to  us  and  within  the  restrictions  of  our  existing  financing
arrangements, or at all.

         To achieve our business  plan,  we will need  significant  financing to
fund our capital expenditure, working capital, debt service requirements and our
anticipated  future  operating  losses.   Our  estimated  capital   requirements
primarily include the estimated cost of (i) constructing the remaining  portions
of the  planned DTI  network  routes,  (ii)  purchasing,  for cash,  fiber optic
facilities  pursuant to long-term  IRUs for planned  routes that we will neither
construct nor acquire through swaps with other  telecommunication  carriers, and
(iii) additional  network  expansion  activities,  including the construction of
additional  local loops in  secondary  and  tertiary  cities as network  traffic
volume  increases.  We estimate  that total  capital  expenditures  necessary to
complete our network will  approximate  $650  million,  of which we had expended
$351 million as of September  30, 2000.  During the balance of fiscal year 2001,
we anticipate our capital expenditure  priorities will be focused principally on
completing our nationwide backbone and lighting rings in our network in areas in
which  we  believe  there is  strong  carrier  interest.  Our  existing  capital
commitments consist  principally of construction  commitments of $13 million for
network segments under construction and payments required under existing IRU and
short-term lease agreements,  totaling $9 million,  which are payable within the
next twelve months as related contract completion criteria are met. In addition,
we have a commitment at September 30, 2000 for eight telecommunications switches
totaling $15 million which is cancelable upon the payment of a cancellation  fee
of $42,000 for each of the remaining  unpurchased  switches. We also may require
additional  capital in the future to fund operating  deficits and net losses and
for  potential  strategic  alliances,  joint  ventures and  acquisitions.  These
activities  could  require  significant  additional  capital not included in the
foregoing estimated capital requirements.

         We have  entered  into  various  agreements  with state  Department  of
Transportation's  (DOTs) that require us to construct our network  facilities in
order to obtain  rights-of-way.  Our  agreement  with the Kansas  Department  of
Transportation  requires  us to build  approximately  750  miles of fiber  optic
network  along  an  interstate  highway  system  by  September  2000,  of  which
approximately  600 miles have been  completed as of September  30, 2000.  We may
lose our  rights  under  this  agreement  if we are  declared  in  breach of the
agreement  and do not cure  such  breach  as  required  under  the  terms of the
agreement.

                                       9
<PAGE>

         In  November  1999,  we entered  into an IRU  agreement  with  Adelphia
Business  Solutions for over 4000 route miles on our network initially valued at
between  $27 to $42  million  to DTI  depending  on the  number of  options  for
additional routes of fiber strands  exercised by the parties.  Adelphia paid $10
million in advance cash  payments  under the terms of the  Agreement.  In August
2000,  Adelphia cancelled five routes or portions thereof,  which will result in
approximately  $3.8  million  in  reduced  future  cash  collections  under  the
Agreement,  plus  the  repayment  to  Adelphia  of  approximately  $1.6  million
previously  paid to DTI by  Adelphia,  which was repaid in  September  2000.  In
addition to providing for certain  rights to cancel  delivery of route  segments
not  delivered to them by agreed upon dates,  the  Agreement  also  provides for
monthly  financial  penalties for late deliveries.  As of September 2000, DTI is
late with  respect to delivery of all routes,  and accrued  penalties  under the
Agreement totaled approximately $3.5 million.  These penalties will result in an
offset to future cash receipts by DTI upon delivery of the remaining  routes. If
Adelphia were to cancel all remaining  route segments under the Agreement;  then
we would no  longer  receive  the  remaining  approximate  $20  million,  net of
penalties, due under the Agreement and would be required to return the remaining
$8 million received upon execution of the Agreement plus interest. Additionally,
we would receive none of the  maintenance  and other monthly and annual payments
due under the terms of the Agreement.

         We have a swap  agreement with a counter party under which both DTI and
the counter party have not delivered their  respective  routes by the contracted
due date. The counter party to the agreement has initiated the delivery  process
for their two routes but we have started the delivery  process related to one of
our two routes.  Once the counter party has  delivered  their routes and we have
accepted  them we will be required to begin making  annual cash payments to them
of approximately $1.4 million,  plus quarterly building and maintenance fees, in
advance of their making payments to us for our routes.  Additionally,  we may be
required to accrue  penalties for late delivery of $100,000 per route per month.
If the counter  party were to exercise  their  rights to cancel  delivery of our
routes we would not receive approximately $26 million in lease payments over the
term of the  agreement  plus  quarterly  maintenance,  building  space and other
quarterly and annual payments due under the terms of the agreement.

         In  another  swap  agreement,  if we do not  settle  an  obligation  by
providing the counter party with  additional  DTI fiber by December 31, 2000, we
will be required to pay an additional $7 million in cash to the counter party.

         An  agreement  dating  back  to  October  1994,  between  AmerenUE  and
ourselves  requires us to construct a fiber optic network linking  AmerenUE's 86
sites throughout the states of Missouri and Illinois in return for cash payments
to DTI and the use of various rights-of-way  including downtown St. Louis. As of
September 30, 2000, we had completed approximately 70% of the sites required for
AmerenUE and expect to complete all such construction by the end of fiscal 2001.
AmerenUE has given us notice that they intend to set off against amounts payable
to us up to $90,000 per month, which as of September, 2000 totaled approximately
$1.5 million (in addition to $400,000 previously set off against other payments)
as damages and penalties under our contract with them due to our failure to meet
certain  construction  deadlines,  and  AmerenUE has reserved its rights to seek
other remedies under the contract which could potentially include reclamation of
the  rights-of-way  granted to DTI. We are behind  schedule with respect to such
contract as a result of AmerenUE not obtaining on behalf of the Company  certain
rights-of-way  required for completion of certain  network  facilities,  and the
limitation  of our  financial  and human  resources,  particularly  prior to the
Senior Discount Notes Offering.  We have obtained  alternative  rights-of-way to
accelerate the completion of such  construction.  Upon completion and turn-up of

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<PAGE>

services,  AmerenUE is contractually  required to pay us a remaining lump sum of
approximately  $4.1  million,  less the  above  mentioned  penalties,  for their
telecommunications services over our network.

         On February 23, 1998,  we completed the issuance and sale of the Senior
Discount Notes, from which we received proceeds,  net of underwriting  discounts
and expenses,  totaling  approximately $265 million.  We are using and have used
the net proceeds (i) to fund additional  capital  expenditures  required for the
completion of the our network,  (ii) to expand our  management,  operations  and
sales and marketing  infrastructure and (iii) for additional working capital and
other  general  corporate  purposes.  We  may  incur  significant  and  possibly
increasing operating losses and expect to generate negative net cash flows after
capital expenditures during at least the next two years as we continue to invest
substantial   funds  to  complete   our  network  and  develop  and  expand  our
telecommunications services and customer base. Accordingly, if we cannot achieve
operating profitability or positive cash flows from operating activities, we may
not be able to  service  the  Senior  Discount  Notes or to meet our other  debt
service or working  capital  requirements,  which would have a material  adverse
effect on us.

         Subject to the  Indenture  provisions  that limit  restrictions  on the
ability of any of our  Restricted  Subsidiaries  to pay dividends and make other
payments  to  us,  future  debt  instruments  of  Digital  Teleport  may  impose
significant  restrictions  that may affect,  among other things,  the ability of
Digital Teleport to pay dividends or make loans, advances or other distributions
to us.  The  ability  of  Digital  Teleport  to pay  dividends  and  make  other
distributions also will be subject to, among other things, applicable state laws
and regulations. Although the Senior Discount Notes do not require cash interest
payments  until  September 1, 2003, at such time the Senior  Discount Notes will
require annual cash interest  payments of $63 million.  In addition,  the Senior
Discount  Notes mature on March 1, 2008.  We currently  expect that the earnings
and cash flow,  if any, of Digital  Teleport  will be retained  and used by such
subsidiary in its operations,  including servicing its own debt obligations.  We
do not anticipate that we will receive any material  distributions  from Digital
Teleport  prior to September 1, 2003.  Even if we determine to pay a dividend on
or make a  distribution  in respect of the  capital  stock of Digital  Teleport,
there can be no assurance that Digital  Teleport will generate  sufficient  cash
flow to pay such a dividend or  distribute  such funds to us or that  applicable
state law and contractual  restrictions,  including negative covenants contained
in any future debt instruments of Digital  Teleport,  will permit such dividends
or  distributions.  The  failure  of  Digital  Teleport  to pay  or to  generate
sufficient  earnings or cash flow to distribute  any cash  dividends or make any
loans,  advances or other payments of funds to us would have a material  adverse
effect on our  ability to meet our  obligations  on the Senior  Discount  Notes.
Further, there can be no assurance that we will have available,  or will be able
to acquire from alternative sources of financing, funds sufficient to repurchase
the Senior Discount Notes in the event of a Change of Control.

FORWARD LOOKING STATEMENTS

         Certain statements throughout  Management's  Discussion and Analysis of
Financial  Condition and Results of Operations  and elsewhere in this  quarterly
report  are  "forward  looking  statements"  within the  meaning of the  Private
Securities  Litigation  Reform Act of 1995 and involve known and unknown  risks,
uncertainties  and other  factors  that may cause  actual  events or  results to
differ  materially  from  those  expressed  or implied  by the  forward  looking
statements.  The most important factors that could prevent us from achieving our
stated goals include,  but are not limited to, (a) failure to obtain substantial
amounts of additional financing at reasonable costs and on acceptable terms, (b)
failure to effectively and efficiently  manage the expansion and construction of
our network,  (c) failure to enter into  additional  indefeasible  rights to use
and/or wholesale network capacity agreements, (d) failure to obtain and maintain

                                       11
<PAGE>

sufficient  rights-of-way,  (e) intense  competition and pricing decreases,  (f)
potential for rapid and significant changes in telecommunications technology and
their  effect  on our  business,  and  (g)  adverse  changes  in the  regulatory
environment.


Item 3.  Quantitative and Qualitative Disclosures About Market Risk.

Not applicable.













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<PAGE>

                           PART II - OTHER INFORMATION


Item 6.  Exhibits and Reports on Form 8-K:

(a)       Exhibits


3.1       Restated  Articles of  Incorporation  of the Registrant  (incorporated
          herein by  reference to Exhibit 3.1 to the  Registrant's  Registration
          Statement on Form S-4 (File No. 333-50049)).

3.2       Restated Bylaws of the Registrant (incorporated herein by reference to
          Exhibit 3.2 to the S-4).

27        Financial Data Schedule

(b)       Reports on Form 8-K

(1)       Form 8-K  dated  September  27,  2000  was  filed  pursuant  to Item 1
          (Changes in Control of Registrant) and Item 7.



                                       13
<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:  November 13, 1999                 /S/ Gary W. Douglass
       -----------------                 ---------------------------------------
                                         Gary W. Douglass, Senior Vice President
                                         Finance and Administration and Chief
                                         Financial Officer (Principal  Financial
                                         and Accounting Officer)



<PAGE>


Exhibits Index:

3.1       Restated  Articles of  Incorporation  of the Registrant  (incorporated
          herein by  reference to Exhibit 3.1 to the  Registrant's  Registration
          Statement on Form S-4 (File No. 333-50049)).

3.2       Restated Bylaws of the Registrant (incorporated herein by reference to
          Exhibit 3.2 to the S-4).

27        Financial Data Schedule