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 (FEE REQUIRED)

                For the quarterly period ended: January 31, 2000

[    ]      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
            SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)


                        Commission file number: 000-20688

                              Datatec Systems, Inc.
             (Exact name of Registrant as specified in its charter)

            Delaware                                    94-2914253
------------------------------                       -------------------
(State or other jurisdiction of                      (I.R.S. Employer
incorporation or organization)                       Identification No.)


23 Madison Road, Fairfield, NJ                           07004-2308
------------------------------                       -------------------
(Address of principal executive                          (Zip Code)
offices)

                                 (973) 808-4000
                        -----------------------------------
               Registrant's telephone number, including area code


Check whether the Registrant  (1) has filed all reports  required to be filed by
Section 12 or 15(d) of the  Securities  Exchange  Act of 1934 during the past 12
months (or for such shorter period that the Registrant was required to file such
reports) and (2) has been subjected to such filing  requirements for the past 90
days. Yes /X/   No / /.

The number of shares of  Registrant's  Common Stock  outstanding  on January 31,
2000 was 31,274,064.


<PAGE>
                              DATATEC SYSTEMS, INC.
                                    FORM 10-Q
                       THREE MONTHS ENDED JANUARY 31, 2000


                                      INDEX




PART I:     FINANCIAL INFORMATION

                                                                            Page

            Item 1:   Consolidated Financial Statements

                      Balance Sheets at April 30, 1999 (audited) and
                      January 31, 2000                                        3

                      Statements of Operations for the three months ended
                      January 31, 1999 and 2000                               4

                      Statements of Operations for the nine months ended
                      January 31, 1999 and 2000                               5

                      Statements of Comprehensive Loss for the
                      nine months ended January 31, 1999 and 2000             6

                      Statements of Cash Flows for the nine months ended
                      January 31, 1999 and 2000                               7

                      Notes to Unaudited Consolidated Financial Statements    8

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


PART II:    OTHER INFORMATION

            Item 4:  Submission of Matters to a Vote of Security Holders     11

            Item 6:  Exhibits and Reports of Form 8-K                        12


                                       2
<PAGE>
                              DATATEC SYSTEMS, INC.
                           CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>

                                                        April 30,     January 31,
                                                         1999            2000
                                                                      (unaudited)
                                                        ---------     -----------

ASSETS

CURRENT ASSETS:

<S>                                                  <C>              <C>
   Cash and cash equivalents                         $    234,000     $     82,000
   Accounts receivable, net                            20,661,000       25,610,000
   Inventory                                            3,252,000        4,790,000
   Prepaid expenses and other current assets            2,970,000          886,000
   Net assets from discontinued operations                447,000                0
                                                     ------------     ------------

               Total current assets                    27,564,000       31,368,000

Property and equipment, net                             5,200,000        4,800,000
Goodwill, net                                           3,539,000        3,211,000
Other assets                                            4,300,000        6,017,000
                                                     ============     ============

               Total assets                          $ 40,603,000     $ 45,396,000
                                                     ============     ============

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:

   Short-term borrowings                             $  8,623,000     $ 11,240,000
   Current portion of long-term debt                    1,783,000          968,000
   Accounts payable                                     9,943,000        9,112,000
   Accrued and other liabilities                        3,866,000        3,378,000
   Due to related parties                               1,052,000        1,052,000
                                                     ------------     ------------

               Total current liabilities               25,267,000       25,750,000
                                                     ------------     ------------

Long-term debt                                            607,000          286,000
                                                     ------------     ------------

Commitments and contingencies

SHAREHOLDERS' EQUITY:

   Preferred stock                                           --               --
   Common stock                                            30,000           32,000
   Additional paid-in capital                          34,317,000       38,312,000
   Accumulated deficit                                (19,275,000)     (18,638,000)
   Accumulated other comprehensive loss                  (343,000)        (346,000)
                                                     ------------     ------------

      Total shareholders' equity                       14,729,000       19,360,000
                                                     ============     ============

      Total liabilities and shareholders' equity     $ 40,603,000     $ 45,396,000
                                                     ============     ============
</TABLE>


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

                                       3
<PAGE>

                              DATATEC SYSTEMS, INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (unaudited)
<TABLE>
<CAPTION>

                                                               For the Three Months Ended
                                                                      January 31,
                                                    -------------------------------------------------
                                                             1999                        2000
                                                     ---------------------       ---------------------


<S>                                                        <C>                         <C>
Revenues                                                   $   19,377,000              $   21,363,000

Cost of revenues                                               13,456,000                  13,699,000
                                                     ---------------------       ---------------------

Gross profit                                                    5,921,000                   7,664,000

Selling, general and administrative expenses                    7,017,000                   8,258,000
                                                     ---------------------       ---------------------

Operating loss                                                 (1,096,000)                   (594,000)

Interest expense                                                  483,000                     437,000
                                                     ---------------------       ---------------------
 Loss before provision (benefit) for income
  taxes                                                        (1,579,000)                 (1,031,000)

Provision (benefit) for income taxes                                   --                          --
                                                     ---------------------       ---------------------

 Net loss                                                 $    (1,579,000)             $  (1,031,000)
                                                     =====================       =====================

 Loss per share (Note 3):


 Basic and diluted                                        $          (.05)             $         (.03)
                                                     =====================       =====================


 WEIGHTED AVERAGE COMMON SHARES - BASIC                        29,642,000                  31,467,000
                                                     =====================       =====================
  WEIGHTED AVERAGE COMMON AND COMMON EQUIVALENT
    SHARES  - DILUTED                                          29,642,000                  31,467,000
                                                     =====================       =====================
</TABLE>

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

                                       4

<PAGE>
                              DATATEC SYSTEMS, INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (unaudited)
<TABLE>
<CAPTION>

                                                               For the Nine Months Ended
                                                                      January 31,
                                                    -------------------------------------------------
                                                             1999                        2000
                                                     ---------------------       ---------------------

<S>                                                        <C>                         <C>
Revenues                                                   $   70,098,000              $   72,422,000

Cost of revenues                                               46,146,000                  45,259,000
                                                     ---------------------       ---------------------

Gross profit                                                   23,952,000                  27,163,000

Selling, general and administrative expenses                   23,064,000                  25,179,000
                                                     ---------------------       ---------------------

Operating income                                                  888,000                   1,984,000

Interest expense                                                1,448,000                   1,347,000
                                                     ---------------------       ---------------------
 Income(loss) before provision (benefit) for
  income taxes                                                   (560,000)                    637,000

Provision (benefit) for income taxes                                   --                          --
                                                     ---------------------       ---------------------

 Net income(loss)                                          $     (560,000)             $      637,000
                                                     =====================       =====================

 Income(loss) per share (Note 3):


Basic and diluted                                          $         (.02)             $          .02
                                                     =====================       =====================


 WEIGHTED AVERAGE COMMON SHARES - BASIC                        29,285,000                  31,129,000
                                                     =====================       =====================
  WEIGHTED AVERAGE COMMON AND COMMON EQUIVALENT
    SHARES  - DILUTED                                          29,285,000                  31,614,000
                                                     =====================       =====================
</TABLE>

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

                                       5
<PAGE>
                              DATATEC SYSTEMS, INC.
             CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
                                   (unaudited)
<TABLE>
<CAPTION>

                                                                                  For the Nine Months Ended
                                                                                         January 31,
                                                                        ----------------------------------------------------
                                                                             1999                           2000
                                                                        --------------------      --------------------------

<S>                                                                       <C>                               <C>
       Net income(loss)                                                   $       (560,000)                 $       637,000

       Other comprehensive income(loss)-                                             2,000                           (3,000)
          Foreign currency translation adjustment
                                                                        --------------------      --------------------------

       Comprehensive income(loss)                                         $       (558,000)                 $       634,000
                                                                        ====================      ==========================
</TABLE>


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

                                       6
<PAGE>
                              DATATEC SYSTEMS, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (unaudited)
<TABLE>
<CAPTION>
                                                                                       For the Nine Months Ended
                                                                                               January 31,
                                                                                       -------------------------
                                                                                         1999              2000
                                                                                       -------------------------
  CASH FLOWS FROM OPERATING ACTIVITIES:

<S>                                                                                 <C>             <C>
  Net income(loss)                                                                  $  (560,000)    $   637,000

    Adjustments to reconcile net income to net cash used in
    operating activities --

       Depreciation and amortization                                                  2,387,000       2,518,000

       Changes in operating assets and liabilities:

           Decrease(increase) in accounts receivable                                  2,194,000      (4,949,000)

           Increase in inventory                                                       (153,000)     (1,538,000)

           Increase in prepaid expenses and other assets                             (1,723,000)       (179,000)

           (Increase) decrease in net assets from discontinued operations              (292,000)        447,000

           Increase (decrease) in accounts payable, accrued and other liabilities       237,000      (1,319,000)
                                                                                    -----------     -----------

       Net cash provided by(used in) operating activities                             2,090,000      (4,383,000)
                                                                                    -----------     -----------

CASH FLOWS FROM INVESTING ACTIVITIES:

       Purchases of property and equipment                                             (881,000)     (1,244,000)
                                                                                    -----------     -----------

       Net cash used in investing activities                                           (881,000)     (1,244,000)
                                                                                    -----------     -----------

CASH FLOWS FROM FINANCING ACTIVITIES:

        Net (decrease)increase in short-term borrowings                              (3,238,000)      2,617,000

        Net payments of indebtedness                                                   (821,000)     (1,136,000)

        Net proceeds from common stock/warrant issuances                              2,654,000       3,997,000

                                                                                     ----------     -----------
              Net cash (used in)provided by financing activities                     (1,405,000)      5,478,000
                                                                                     ----------     -----------

              Net effect of foreign currency translation on cash                          2,000          (3,000)
                                                                                    -----------     -----------

              Net decrease in cash                                                     (194,000)       (152,000)

Cash at beginning of period                                                             317,000         234,000
                                                                                    ===========     ===========

Cash at end of period                                                               $   123,000     $    82,000
                                                                                    ===========     ===========
</TABLE>

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


                                       7
<PAGE>
                              DATATEC SYSTEMS, INC.
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

(1)      Business

         Datatec Systems, Inc. and its subsidiaries (the "Company" or "Datatec")
are in the  business  of  providing  rapid and  accurate  technology  deployment
services and licensing software tools to support  enterprises in the delivery of
complex IT solutions.

(2)      Basis of Presentation

         The  consolidated  financial  statements  include  the  accounts of the
Company and its  subsidiaries.  All intercompany  accounts and transactions have
been eliminated.

         The accompanying  unaudited consolidated financial statements have been
prepared in conformity with generally accepted accounting  principles consistent
with those  applied  in, and should be read in  conjunction  with,  the  audited
financial  statements for the year ended April 30, 1999.  The interim  financial
information is unaudited,  but reflects all normal  recurring  adjustments  that
are, in the opinion of management, necessary for a fair statement of results for
the interim periods  presented.  The results for the three and nine months ended
January 31, 2000 are not necessarily  indicative of the results expected for the
full fiscal year.

(3)      Earnings per share:

         Basic  earnings  per share is  calculated  using the  weighted  average
number of shares  outstanding  for the three and nine months  ended  January 31,
1999 and 2000.  Diluted  earnings  per share is  calculated  using the  weighted
average number of shares  outstanding  plus the incremental  shares from assumed
conversions of options,  debt and preferred  stock for the three and nine months
ended  January 31, 1999 and 2000.  Outstanding  options and  warrants  have been
excluded for the three  months ended  January 31, 1999 and 2000 and for the nine
months ended January 31, 1999 as their  inclusion  would have been  antidilutive
for these periods.

(4)      Supplemental Disclosure of Cash Flows

         Cash paid during the nine months ended January 31:

                                           1999                   2000
                                        ----------            ----------
                 Interest Paid          $1,221,000            $1,132,000



                                       8
<PAGE>
(5)      eDeploy.com

         The following table breaks out the revenue and expenses attributable to
the Company's subsidiary eDeploy.com for the nine months ended January 31, 2000.
All revenues and expenses not directly  attributed to eDeploy.com  are reflected
as Datatec.



                             eDeploy            Datatec          Consolidated
                             -------            -------          ------------

Revenues                     $1,029,000     $71,393,000          $72,422,000

Operating income(loss)      ($1,063,000)     $ 3,047,000         $ 1,984,000

Net income(loss)            ($1,954,000)     $  2,591,000        $   637,000



                                       9
<PAGE>

                              DATATEC SYSTEMS, INC.
                         PART I - FINANCIAL INFORMATION


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

Results of Operations - For the Three and Nine Months Ended January 31, 2000

            Revenues.  Revenues for the three and nine months ended  January 31,
2000 were  $21,363,000 and  $72,422,000  compared to $19,377,000 and $70,098,000
for the three and nine months ended January 31, 1999, respectively, representing
an  increase  of 10.2%  and 3.3% for the three  and nine  months,  respectively.
Included in revenues for the three and nine months  ended  January 31, 2000 were
eDeploy.com revenues of $490,000 and $1,029,000, respectively.

            Gross  Profit.  Gross  profits for the three and nine  months  ended
January 31, 2000 were  $7,664,000  and  $27,163,000  compared to $5,921,000  and
$23,952,000 for the three and nine months ended January 31, 1999,  respectively.
Gross  profits as a  percentage  of net sales were 35.9% and 37.5% for the three
and nine months ended January 31, 2000 compared to 30.6% and 34.2% for the three
and nine months ended January 31, 1999, respectively.  The improved gross profit
margin is the result of  initiatives  that  began in the 3rd and 4th  quarter of
fiscal year ended April 30, 1999.  These  initiatives  were focused on improving
project  management  information to allow for improved  decision  making.  These
initiatives also included additional personnel in the role of project management
and sales engineering.

            Selling, general and administrative  expenses.  Selling, general and
administrative  expenses  for the three and nine months  ended  January 31, 2000
were  $8,258,000  and  $25,179,000,  respectively,  compared to  $7,017,000  and
$23,064,000, respectively, for the three and nine months ended January 31, 1999,
respectively.  As a percentage  of sales,  selling,  general and  administrative
expenses  were 38.7% and 34.8% for the three and nine months  ended  January 31,
2000,  compared to 36.2% and 32.9% for the three and nine months  ended  January
31, 1999.  The  increase in selling,  general and  administrative  expenses as a
percentage  of sales is the  result of the  Company's  continued  investment  in
supporting  its  ability to supply  nationwide  deployment  capabilities  to its
clients.  Included in selling, general and administrative expenses for the three
and nine months ended January 31, 2000 were eDeploy.com expenses of $718,000 and
$2,092,000, respectively.

            Interest  expense.  Interest  expense  for the three and nine months
ended  January 31, 2000 was  $437,000  and  $1,347,000  compared to $483,000 and
$1,448,000,  respectively, for the three and nine months ended January 31, 1999,
respectively.

Financial Position

            During  the  nine  months  ended  January  31,  2000,  cash  used in
operations was $4,382,000,  reflecting  growth in the Company's  receivables and
continued  investment in the  development of  eDeploy(TM),  compared to the nine
months ended  January 31, 1999,  during which cash  provided by  operations  was
$2,090,000.

            Cash used for investing  activities  during the first nine months of
the fiscal year ending April 30, 2000 was $1,244,000 compared to $881,000 during
the first nine months of the fiscal year ended April 30, 1999.


                                       10
<PAGE>

            Cash provided by financing  activities  during the nine months ended
January 31, 2000 was $5,477,000 compared to cash used in financing activities of
$1,405,000  in the  year-ago  period.  Included in the  current  period were net
proceeds of $3,997,000 from the issuance of common stock related to the exercise
of stock  options and  warrants as well as purchases  under the  employee  stock
purchase plan.

            The Company's  working capital improved from $2,297,000 at April 30,
1999 to $5,618,000 at January 31, 2000.

            At  January  31,  2000,  total  debt  was  $12,494,000  compared  to
$11,013,000 at April 30, 1999.

            Shareholders'  equity  increased  $4,631,000  during the nine months
ended  January 31,  2000,  principally  reflecting  net income of  $637,000  and
proceeds  from the  issuance of common  stock  related to the  exercise of stock
options and warrants as well as purchases under the employee stock purchase plan
of $3,997,000.





                                       11
<PAGE>
                              DATATEC SYSTEMS, INC.
                                    FORM 10-Q
                           PART II - OTHER INFORMATION

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

            None




                                       12
<PAGE>
                              DATATEC SYSTEMS, INC.
                                    FORM 10-Q
                     PART II - OTHER INFORMATION - CONTINUED


Item 6:     Exhibits and Reports on Form 8-K

     (a)    Exhibit 27 - Financial Data Schedule

     (b)    Reports on Form 8-K

                   None




                                       13
<PAGE>
                                   SIGNATURES


In accordance with the requirements of the Securities  Exchange Act of 1934, the
Registrant  caused  this  report to be signed on its behalf by the  undersigned,
thereunto duly authorized.

                                                DATATEC SYSTEMS, INC.
                                                    Registrant



Date:       March 15, 2000                      By:/S/ James M. Caci
                                                   -----------------------------
                                                James M. Caci
                                                Chief Financial Officer and Duly
                                                Authorized Officer



                                       14