<PAGE>
 
                      SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 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 September 30, 1997
              
                ---------------------------------------------------

                                       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 number 0-27204

                             TECHFORCE CORPORATION
--------------------------------------------------------------------------------
             (Exact Name of Registrant as Specified in Its Charter)


        GEORGIA                                       58-2082077 
--------------------------------------------------------------------------------
(State of Incorporation)                  (I.R.S. Employer Identification No.)


15950 Bay Vista Drive, Clearwater, Florida                            34620
--------------------------------------------------------------------------------
(Address of Principal Executive Offices)                           (Zip Code) 
                                                    
                                                    

Registrant's Telephone Number, Including Area Code (813) 532-3600
                                                   -----------------------------


________________________________________________________________________________
Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report

     Indicated by check X 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 November 10, 1997, there were 8,111,904 shares of the issuer's
                           common stock outstanding.
<PAGE>
 
                              TECHFORCE CORPORATION

                                   FORM 10-Q

                        QUARTER ENDED SEPTEMBER 30, 1997

                                     INDEX
                                     -----
<TABLE> 
<CAPTION> 

PART I.     FINANCIAL INFORMATION                                      PAGE NO.
-------     ---------------------                                      --------
<S>         <C>                                                        <C> 
Item 1      Financial Statements.......................................    1

            . Consolidated Balance Sheet...............................    1

            . Consolidated Statements of Income........................    2

            . Consolidated Statements of Cash Flows....................    3
 
            . Notes to Consolidated Financial Statements...............    4

Item 2.      Management's Discussion and Analysis of Financial 
             Condition and Results of Operations.......................    6

Item 3.      Quantitative and Qualitative Disclosures 
             About Market Risks.....................................      11
 
<CAPTION> 

PART II.    OTHER INFORMATION
--------    -----------------
<S>         <C>                                              <C>
 
Item 1      Legal Proceedings...........................................  12
                                                         
Item 2      Changes in Securities.......................................  12
                                                         
Item 3      Defaults Upon Senior Securities.............................  12
                                                         
Item 4      Submission of Matters to a Vote of Shareholder..............  12
                                                         
Item 5      Other Information...........................................  12
                                                         
Item 6      Exhibits and Reports on Form 8-K............................  12

SIGNATURES
----------

Signatures............................................................... 13

EXHIBIT INDEX
-------------
</TABLE> 
<PAGE>

                    TECHFORCE CORPORATION AND SUBSIDIARIES
                          CONSOLIDATED BALANCE SHEET
                              September 30, 1997
                                (In thousands)

<TABLE> 
<CAPTION> 


                       ASSETS                                                          September 30, 1997    December 31, 1996
                                                                                      --------------------  ------------------- 
                                                                                            (Unaudited)
<S>                                                                                   <C>                   <C> 
CURRENT ASSETS
       Cash and cash equivalents                                                              $  2,619                 $  3,943
       Investments                                                                               4,134                    2,299
       Accounts receivable, net of Allowance for Doubtful Accounts                              12,009                   12,687
         of $313 and $845 at Sept 30, 1997 and Dec 31, 1996, respectively
       Inventories                                                                               3,480                    4,446
       Net Investment in Sales Type Leases (current portion)                                     2,886                    2,438
       Prepaid expenses/Other Assets                                                             1,016                      741
                                                                                      -----------------     --------------------
             Total current assets                                                               26,144                   26,554
                                                                                      -----------------     --------------------

PROPERTY, PLANT AND EQUIPMENT
       Leasehold improvements                                                                      630                      582
       Office furniture and fixtures                                                             6,778                    4,885
       Replacement parts                                                                        16,222                   11,542
       Equipment held for rental                                                                   733                    1,038
                                                                                      -----------------     --------------------
                                                                                                24,363                   18,047
       Less accumulated depreciation                                                            (9,603)                  (6,736)
                                                                                      -----------------     --------------------
             Total property, plant and equipment, net                                           14,760                   11,311
                                                                                      -----------------     --------------------

NET INVESTMENT IN SALES TYPE LEASES                                                             10,961                    8,545
                                                                                      -----------------     --------------------
       Less current portion

ORGANIZATION COSTS AND OTHER ASSETS                                                                166                       73
                                                                                      -----------------     --------------------

             Total assets                                                                     $ 52,031                 $ 46,483
                                                                                      =================     ====================

                      LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES

       Accounts payable                                                                       $  4,290                 $  2,583
       Accrued expenses                                                                          2,701                    3,259
       Accrued contract labor                                                                      408                      600
       Current maturities of obligations under capital leases,
             long-term debt and non-recourse notes payable                                       3,108                    2,644
       Deferred revenue                                                                          3,368                    2,722
                                                                                      -----------------     --------------------
                                                                                                13,875                   11,808
                                                                                      -----------------     --------------------

LONG-TERM DEBT AND OTHER LIABILITIES                                                             1,127                    1,725
                                                                                      -----------------     --------------------
NON-RECOURSE NOTES PAYABLE, net of current maturities                                            6,194                    4,455
                                                                                      -----------------     --------------------

STOCKHOLDERS' EQUITY
       Common stock                                                                                 81                       80
       Additional paid in capital                                                               27,812                   27,698
       Retained earnings                                                                         2,942                      717
                                                                                      -----------------     --------------------
                                                                                                30,835                   28,495
                                                                                      -----------------     --------------------

             Total liabilities and stockholders' equity                                       $ 52,031                 $ 46,483
                                                                                      =================     ====================
</TABLE> 

<PAGE>

                                      P&L

                    TECHFORCE CORPORATION AND SUBSIDIARIES
                       CONSOLIDATED STATEMENTS OF INCOME
                     (In thousands, except per share data)
                                  (Unaudited)

<TABLE> 
<CAPTION> 

                                                                 Three months ended                     Nine months ended
                                                                    September 30                           September 30
                                                         -----------------------------------     ---------------------------------
                                                              1997                1996               1997               1996
                                                         ---------------      --------------     -------------      --------------
<S>                                                      <C>                  <C>                <C>                <C> 
Revenues:
     Services                                                   $ 9,187             $ 8,268          $ 28,008            $ 24,883
     Hardware                                                     5,232               6,624            19,216              20,735
                                                         ---------------      --------------     -------------      --------------
         Total revenues                                          14,419              14,892            47,224              45,618
                                                         ---------------      --------------     -------------      --------------

Direct costs:
     Services                                                     6,700               5,136            19,314              17,175
     Hardware                                                     3,331               4,669            12,745              14,483
                                                         ---------------      --------------     -------------      --------------
         Total direct costs                                      10,031               9,805            32,059              31,658
                                                         ---------------      --------------     -------------      --------------

Gross Margin:
     Services                                                     2,487               3,132             8,694               7,708
     Hardware                                                     1,901               1,955             6,471               6,252
                                                         ---------------      --------------     -------------      --------------
         Total gross margin                                       4,388               5,087            15,165              13,960
                                                         ---------------      --------------     -------------      --------------

Operating costs
     Selling and marketing                                        2,230               2,307             6,952               7,082
     Research and development                                       313                 364               942               1,248
     General and administrative                                   1,341                 999             3,736               3,211
     Non recurring expense from restructuring                         -                   -                 -                 244
                                                         ---------------      --------------     -------------      --------------
                                                                  3,884               3,670            11,630              11,785
                                                         ---------------      --------------     -------------      --------------

Operating income                                                    504               1,417             3,535               2,175

Interest (income) expense, net                                       (8)                 29                49                 256
                                                         ---------------      --------------     -------------      --------------

Income before taxes                                                 512               1,388             3,486               1,919

Provision for income taxes                                         (180)               (524)           (1,261)               (656)
                                                         ---------------      --------------     -------------      --------------

Net income                                                       $  332              $  864           $ 2,225             $ 1,263
                                                         ---------------      --------------     -------------      --------------

Net income per common share                                      $ 0.04              $ 0.10           $  0.27             $  0.15
                                                         ---------------      --------------     -------------      --------------

Weighted average common
     shares outstanding                                       8,472,620           8,338,863         8,375,173           8,338,863
                                                         ---------------      --------------     -------------      --------------
</TABLE> 

                                    Page 1
<PAGE>

                    TECHFORCE CORPORATION AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                (In thousands)

<TABLE> 
<CAPTION> 



                                                                                     Nine Months Ended
                                                                                      September 30
                                                                              ------------------------------
                                                                                 1997              1996
                                                                              ------------     -------------
                                                                              (Unaudited)      (Unaudited)
<S>                                                                           <C>              <C> 
Cash flows from operating activities
              Net income                                                           $2,225            $1,263
              Adjustments to reconcile net income to net cash
                provided by operating activities:
                          Depreciation and amortization                             2,893             2,384
                          Changes in operating assets and liabilities               3,159            (1,115)
                                                                              ------------     -------------
Net cash provided by operating activities                                           8,277             2,461

Cash Flows from investing activities
              Purchase of property and equipment                                   (6,316)           (4,359)
              Investment in sales type leases                                      (2,863)           (5,910)
              (Purchase of) Sale of Investments                                    (1,835)            9,152
              Purchase of Other Assets                                               (120)              (71)
                                                                              ------------     -------------
Net cash used in investing activities                                             (11,134)           (1,188)
                                                                              ------------     -------------

Cash flows from financing activities
              Borrowings under revolving credit facilities                             --             1,290
              Issuance (repayment) of Capital leases, long-term
                debt, and non-recourse notes payable                                1,418            (1,430)
              Issuances of Common Stock, net                                          115                25
                                                                              ------------     -------------
Net cash provided by (used in) financing activities                                 1,533              (115)
                                                                              ------------     -------------

Net (decrease) increase in cash and cash equivalents                               (1,324)            1,229

Cash and cash equivalents, beginning of period                                      3,943               565
                                                                              ------------     -------------

Cash and cash equivalents, end of period                                           $2,619            $1,794
                                                                              ============     =============
</TABLE> 
<PAGE>

                    TECHFORCE CORPORATION AND SUBSIDIARIES
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                              September 30, 1997
                                  (Unaudited)


1.    NATURE OF BUSINESS

      TechForce Corporation and subsidiaries (collectively, the "Company" and
      formerly TechForce, a Georgia general partnership) are engaged in the
      sale, design, on-site installation and maintenance, and support of
      computer and data communications networking equipment.

2.    BASIS OF FINANCIAL REPORTING

      The condensed consolidated financial statements at September 30, 1997 and
      for the three month and the nine month periods then ended are unaudited
      and reflect all adjustments (consisting only of normal recurring
      adjustments) which are, in the opinion of management, necessary for fair
      presentation of the financial position and operating results for the
      interim period. The condensed consolidated financial statements should be
      read in conjunction with the consolidated financial statements and notes
      thereto, together with management's discussion and analysis of financial
      condition and results of operations, contained in the Company's Annual
      Report to Shareholders incorporated by reference in the Company's Annual
      Report on Form 10-K for the fiscal year ended December 31, 1996.

3.    MAJOR CUSTOMERS

      During the quarters ended September 30, 1997, and September 30, 1996, the
      following customers individually accounted for more than 10% of the
      Company's revenue:

<TABLE> 
<CAPTION> 
                                               Quarter Ended September 30, 1997    Quarter Ended September 30, 1996
                                               --------------------------------    --------------------------------
                                                Amount ($000)       Percentage       Amount ($000)      Percentage
                                               --------------------------------    --------------------------------
      <S>                                          <C>                 <C>              <C>                 <C>  
      Packard Bell Electronics, Inc.               $ 2,886             20%              $ 2,570             17%
      Federal Express                                N/A               N/A              $ 1,811             12%
</TABLE> 
      The loss of revenues from Packard Bell could have a material impact on the
      results of the operations of the Company in the near term.


4.    LEGAL MATTERS

      From time to time, the Company is involved in certain litigation and
      claims arising in the ordinary course of business. In the opinion of
      management, the ultimate resolution of any such matters will not have a
      material adverse effect on the Company's financial position at September
      30, 1997 or results of operations for the nine months then ended.


<PAGE>

5.    Certain amounts included in the 1996 financial statements have been
      reclassified to conform with the 1997 financial statements.



6.    NEW ACCOUNTING PRONOUNCEMENTS

      In February 1997, the Financial Accounting Standards Board issued
      Statement of Financial Accounting Standards No. 128, "Earnings per Share"
      (EPS). SFAS 128 establishes new standards for computing and presenting
      EPS. Specifically, SFAS 128 replaces the presentation of primary EPS with
      a presentation of basic EPS, requires dual presentation of basic and
      diluted EPS on the face of the income statement for all entities with
      complex capital structures, and requires a reconciliation of the numerator
      and denominator of the basic EPS computation to the numerator and
      denominator of the diluted EPS computation. SFAS 128 is effective for
      financial statements issued for periods ending after December 15, 1997;
      earlier application is not permitted. Management has determined that the
      adoption of SFAS 128 will not have a material effect on the accompanying
      financial statements.

      In June 1997, the Financial Accounting Standards Board issued Statement of
      Financial Accounting Standards No. 131, "Disclosures about Segments of an
      Enterprise and Related Information" (SFAS 131). SFAS 131 requires that a
      public business enterprise report financial and descriptive information
      about its reportable operating segments and related information. SFAS 131
      is effective for financial statements relating to periods beginning after
      December 15, 1997. The effects of SFAS 131 on the Company have not been
      considered at this time.

      Other issued but not yet required FASB standards are not currently
      applicable or material to the Company's operations.

<PAGE>
 
PART I.    FINANCIAL INFORMATION (continued)
------     ---------------------            

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

Overview

     The Company provides network support services focusing on mission critical
technologies such as LAN/WAN internetworking, data networking, mainframe channel
networking and workstation support.  The Company's support solutions include
network monitoring services, 7X24 diagnostic and technical support from the
Technology Support Center in Clearwater, Florida, on-site maintenance, remote
and on-site equipment software installation and network design on complex multi-
vendor enterprise networks.  The Company's maintenance contracts with customers
range from one to five years.  The Company also sells and leases various data
network hardware supplied by other manufacturers, as well as its own channel
extension hardware.  Field service operations are conducted through a
combination of the Company's field support personnel and a network of authorized
service providers that are certified by the Company to provide local on-site
repair or parts replacement services under the direction of the Company's
Technical Support Center.

     Revenues from service and maintenance contracts are either recognized
ratably over the contract period or on a per call basis, as is the case under
the Company's workstation support agreements.  Revenues from product sales are
recognized at the time of shipment.  When appropriate, revenues from leasing are
accounted for as sales-type leases where the present value of all payments are
recorded currently as revenues and the related costs of the equipment less the
present value of any appropriate unguaranteed residual value are recorded as
cost of sales.  The associated interest income is recognized over the term of
the lease. Revenues derived from sales-type leases for the three months ended
September 30, 1997 and September 30, 1996, respectively were  $0.7 million and
$2.4 million.  Interest income on sales-type leases totaled $0.1 million and
$0.2 million for the three month periods ended September 30, 1997 and September
30, 1996, respectively.

     Management anticipates that revenues from its proprietary channel extension
products and services will gradually decrease over the next few years at a rate
of approximately 10% to 20% per year primarily as a result of a trend toward
open-systems environments.  Management does not believe that this gradual
decline in such revenues will have a material adverse effect on the Company's
results of operations and financial condition.

     Revenues from Packard Bell represented 20% of total Company revenues for
the three months ended September 30, 1997 as compared to 17% for the three
months ended September 30, 1996.  The call volume level for the three months
ended September 30, 1997 may not be indicative of future call volumes due to
changes made by Packard Bell in its end user product warranty.

     Packard Bell is invoiced monthly and payment is due 30 days after the
invoice date. The Company typically receives payment from Packard Bell
approximately 60 days after the billing date. In light of the substantial amount
of the Company's total revenues that are attributable to Packard Bell, failure
to receive payment in accordance with past practice under the Packard Bell
contract could have a material adverse effect on the Company's cash flow.

     Revenues from FedEx decreased during the three and nine months ended
September 30, 1997 as compared to the same periods in 1996 due to lower repair
volumes resulting from the introduction of upgraded technology by FedEx which
experiences a lower failure rate than the replaced technology.  The Company had
previously experienced above-average margins from the repair of the units which
FedEx replaced.  Consequently, margins from the remaining repair business from
FedEx decreased significantly as a result of the decreased volume of higher
margin repair services.  During the three months ended September 30, 1997 the
Company discontinued its repair business for FedEx.  Revenues and operating
losses from this repair business for the three months ended September 30, 1997
were $144,000 and $(138,000), respectively, as compared to revenues and
operating income for the three 
<PAGE>
 
months ended September 30, 1996 of $1.2 million and $596,000 respectively. As of
November 12, 1997 the Company continues to provide temporary labor to FedEx
pursuant to a contract which terminated during the three months ended September
30, 1997. Although the Company has submitted a bid to FedEx to continue to
provide these services, there can be no assurance that FedEx will renew its
contract with the Company. Revenues from this contract were $0.4 million and
$0.6 million for the three months ended September 30, 1997 and 1996,
respectively and $1.2 million and $1.5 million for the nine months ended
September 30, 1997 and 1996, respectively. Operating margins from this contract
are below the Company's average margins. Management does not believe that the
decline or discontinuation of revenues from this contract would have a material
adverse effect on the Company's results of operations and financial condition.

     Continued growth of the Company's customer base and its services can be
expected to continue to place a significant strain on its administrative,
operational and financial resources.  The Company's future performance and
profitability will depend in part on its ability to continue to increase the
number and productivity of its channels to market,  to successfully implement
enhancements to its business management systems and to adapt those systems as
necessary to respond to changes in its business.  Furthermore, although the
Company has experienced rapid growth in total revenues and has previously been
profitable, its limited operating history makes the prediction of future
operating results difficult.  There can be no assurance that the Company's
revenue growth will continue in the future or that profitable operating results
can be sustained.

     In February 1997, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 128, "Earnings per Share" (SFAS 128).
SFAS 128 establishes new standards for computing and presenting EPS.
Specifically, SFAS 128 replaces the presentation of primary EPS with a
presentation of basic EPS, requires dual presentation of basic and diluted EPS
on the face of the income statement for all entities with complex capital
structures, and requires a reconciliation of the numerator and denominator of
the basic EPS computation to the numerator and denominator of the diluted EPS
computation.  SFAS 128 is effective for financial statements issued for periods
ending after December 15, 1997; earlier application is not permitted.
Management has determined that the adoption of SFAS 128 will not have a material
effect on the accompanying financial statements.

     In June 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 131, "Disclosures about Segments of an
Enterprise and Related Information" (SFAS 131).  SFAS 131 requires that a public
business enterprise report financial and descriptive information about its
reportable operating segments and related information.  SFAS 131 is effective
for financial statements relating to periods beginning after December 15, 1997.
The effects of SFAS 131 on the Company have not been considered at this time.

     Other issued but not yet required FASB standards are not currently
applicable or material to the Company's operations.


THREE MONTHS ENDED SEPTEMBER 30, 1997 COMPARED TO THREE MONTHS ENDED 
SEPTEMBER 30, 1996

     Total revenues.  Total revenues decreased  3.5% from $14.9 million for the
three months ended September 30, 1996 to $14.4 million for the three months
ended September 30, 1997 due to decreased revenues from hardware sales and
leasing activity  and decreased  repair service revenues from FedEx partially
offset by increased enterprise network support and workstation support revenues.

     Service  revenues.  Revenues from services increased 11.1% from $8.3
million (55.5% of total revenues) for the three months ended September 30, 1996
to $9.2 million (63.7% of total revenues) for the three months ended September
30, 1997.  This increase was attributable to increased service revenues
associated with the Company's enterprise network support services and increased
workstation support revenues partially offset by a decrease in revenue from
services provided to FedEx. Revenues from enterprise network support services
increased by 20.7% while revenues from workstation support increased by 50.2%
and revenues from FedEx decreased by 70.7% for the three months ended September
30, 1997 as compared to revenues from these services for the three months ended
September 30, 1996. Revenues from FedEx decreased due to lower repair volumes
resulting from the introduction of upgraded

<PAGE>
 
technology by FedEx which experiences a lower failure rate than the replaced
technology. The Company had previously experienced above-average margins from
the repair of the units which FedEx replaced. Consequently, margins from the
remaining repair business from FedEx decreased significantly as a result of the
decreased volume of higher margin repair services. During the three months ended
September 30, 1997 the Company discontinued its repair business for FedEx.
Revenues and operating losses from this repair business for the three months
ended September 30, 1997 were $0.1 million and ($0.1) million, respectively, as
compared to revenues and operating income for the three months ended September
30, 1996 of $1.2 million and $0.6 million respectively. For the three months
ended September 30, 1997 as compared to the same period in 1996, the Company
experienced a decrease in revenues from its proprietary channel extension
support business in line with its previously stated expectations.

     Hardware  revenues. Revenues from hardware products decreased 21.0% from
$6.6 million (44.5% of total revenue) for the three months ended September 30,
1996 to $5.2 million (36.3% of total revenues) for the three months ended
September 30, 1997 due to a decrease in the volume of lease activity. Hardware
revenues included revenues from leasing activities of $2.4 million and $0.7
million for the three months ended September 30, 1996 and 1997, respectively.

     Cost of Service. Cost of service increased 30.5% from $5.1 million (62.1%
of service revenues) for the three months ended September 30, 1996 to $6.7
million (72.9% of service revenues) for the three months ended September 30,
1997.  This overall cost of service increase was unfavorably affected by the
reduction in and discontinuation of FedEx repair business volumes and increased
cost related to enterprise service delivery.

     Cost of Hardware. Cost of hardware decreased 28.7% from $4.7 million (70.5%
of hardware revenues) for the three months ended September 30, 1996 to $3.3
million (63.7% of hardware revenue) for the three months ended September 30,
1997.  This decrease was caused primarily by lower hardware revenues combined
with improved hardware margins during the three months ended September 30, 1997.

     Gross Margin. Overall gross margin decreased 13.7% from  $5.1 million
(34.2% of total revenues) for the three months ended  September 30, 1996 to
$4.4 million (30.4% of total revenues) for the three months ended September 30,
1997.  Gross margin on services decreased 20.6% from $3.1 million for the three
months ended September 30, 1996 to $2.5 million for the three months ended
September 30, 1997, while decreasing as a percent of service revenues from 37.9%
to 27.1% respectively, due primarily to the decrease in FedEx repair business
discussed above. Gross margin on hardware revenues decreased 2.8% from $2.0
million for the three months ended September 30, 1996 to $1.9 million for the
three months ended September 30, 1997. This decrease was caused primarily by
decreased hardware revenues partially offset by improved margins from sales of
hardware during the three months ended September 30, 1997. Hardware margins as a
percentage of hardware revenues increased from 29.5% for the three months ended
September 30, 1996 to 36.3% for the three months ended September 30, 1997
primarily as a result of these factors. The Company has experienced competitive
pressure on resale hardware margins and anticipates continued pressure due to
price competition.

     Selling and Marketing Expenses. Selling and marketing expenses decreased
3.3% from $2.3 million (15.5% of total revenues) for the three months ended
September 30, 1996 to $2.2 million (15.5% of total revenues) for the three
months ended September 30, 1997.  This decrease is in line with decreased total
revenues and was favorably affected by selling cost improvements initiated by
the Company for 1997.

     Research and Development Expenses. Research and development expenses
decreased 14.0% from $0.4 million (2.4% of total revenues) for the three months
ended September 30, 1996 to $0.3 million (2.2% of total revenues) for the three
months ended September 30, 1997 primarily due to internal business systems
support expenses now being reported together with general and administrative
expenses.

     General and Administrative Expenses. General and administrative expenses
increased 34.2% from $1.0 million for the three months ended September 30, 1996
to $1.3 million for the three months ended September 30, 1997.  This increase
included internal business systems support expenses reported together with
general and administrative expenses for the 1997 period.
<PAGE>
 
     Operating Income. Operating income decreased 64.4% from $1.4 million 
(9.5% of total revenues) for the three months ended September 30, 1996 to $0.5
million (3.5% of total revenues) for the three months ended September 30, 1997
as a result of the factors listed above.

     Interest (Income) Expense, Net. Net interest expense totaled $29,000 for
the three months ended September 30, 1996, resulting from interest on the
company's line of credit.  Net interest income totaled $8,000 for the three
months ended September 30, 1997, due to an increased average investment balance
and no outstanding balance on the line of credit.

     Income Taxes.  The Company's effective income tax rate was 35.2% for the
three months ended September 30, 1997, as compared to a 37.8% effective income
tax rate for the three months ended September 30, 1996.  The lower rate for 1997
was principally the result of higher non-taxable interest income and a prior
year income tax refund.

NINE MONTHS ENDED SEPTEMBER 30, 1997 COMPARED TO NINE MONTHS ENDED SEPTEMBER 30,
1996

     Total revenues.  Total revenues increased 3.5% from $45.6 million for the
nine months ended September 30, 1996 to $47.2 million for the nine months ended
September 30, 1997 due to increased revenues from enterprise network support and
workstation support revenues partially offset by a decrease in hardware revenues
and service revenues from FedEx.

     Service  revenues.  Revenues from services increased 12.6% from $24.9
million (54.5% of total revenues) for the nine months ended September 30, 1996
to $28.0 million (59.3% of total revenues) for the nine months ended September
30, 1997.  This increase was attributable to increased service revenues
associated with the Company's enterprise network support services and increased
workstation  support revenues offset by a decrease in revenue from services
provided to FedEx. Revenues from enterprise network support services partially
increased by 24.5% while revenues from FedEx decreased by 44.3% and revenues
from workstation support increased by 28.2% for the nine months ended September
30, 1997 as compared to revenues from these services for the nine months ended
September 30, 1996. Revenues from FedEx decreased due to lower repair volumes
resulting from the introduction of upgraded technology by FedEx which
experiences a lower failure rate than the old replaced technology. The Company
had previously experienced above-average margins from the repair of the units
which FedEx replaced. Consequently, margins from the remaining repair business
from FedEx decreased significantly as a result of the decreased volume of higher
margin repair services. During the third quarter the Company discontinued its
repair business for FedEx. Revenues and operating income from this repair
business for the nine months ended September 30, 1997 were $1.6 million and $0.1
million, respectively, as compared to revenues and operating income for the nine
months ended September 30, 1996 of $3.5 million and $1.7 million, respectively.
For the nine months ended September 30, 1997 as compared to the same period in
1996, the Company experienced a decrease in revenues from its proprietary
channel extension support business in line with its previously stated
expectations.

     Hardware  revenues. Revenues from hardware decreased 7.3% from $20.7
million for the nine months ended September 30, 1996 (45.5% of total revenue) to
$19.2 million for the nine months ended September 30, 1997 (40.7% of total
revenues).  Hardware revenues included revenues from leasing activities of $9.6
million and $5.1 million for the nine months ended September 30, 1996 and
September 30, 1997, respectively.

     Cost of Service. Cost of service increased 12.5% from $17.2 million (69.0%
of service revenues) for the nine months ended September 30, 1996 to $19.3
million (69.0% of service revenues) for the nine months ended September 30,
1997 due to increased service revenues.

     Cost of Hardware. Cost of hardware decreased 12.0% from $14.5 million
(69.8% of hardware revenues) for the nine months ended September 30, 1996 to
$12.7 million (66.3% of hardware revenue) for the nine months ended September
30, 1997.  This decrease was caused primarily by lower hardware revenues and
lower than average costs 
<PAGE>
 
associated with the sales of used equipment which yielded higher margins during
the nine months ended September 30, 1997.

     Gross Margin. Overall gross margin increased 8.6% from $14.0 million (30.6%
of total revenues) for the nine months ended September 30, 1996 to $15.2 million
(32.1% of total revenues) for the nine months ended September 30, 1997. Gross
margin on services increased 12.8% from $7.7 million for the nine months ended
September 30, 1996 to $8.7 million for the nine months ended September 30, 1997,
while remaining constant as a percent of service revenue at 31.0%. Gross margin
on hardware revenues increased 3.5% from $6.3 million for the nine months ended
September 30, 1996 to $6.5 million for the nine months ended September 30, 1997.
This increase was caused primarily by increased revenues and margins from sales
of used equipment. Hardware margins as a percentage of hardware revenues
increased from 30.2% for the nine months ended September 30, 1996 to 33.7% for
the nine months ended September 30, 1997 primarily as a result of these factors.
The Company has experienced competitive pressure on new resale hardware margins
and anticipates continued pressure due to price competition.

     Selling and Marketing Expenses. Selling and marketing expenses decreased
1.8% from $7.1 million (15.5% of total revenues) for the nine months ended
September 30, 1996 to $7.0 million (14.7% of total revenues) for the nine months
ended September 30, 1997.  This decrease reflects selling cost improvements
initiated by the Company for 1997.

     Research and Development Expenses. Research and development expenses
decreased 24.5% from $1.3 million (2.7% of total revenues) for the nine months
ended September 30, 1996 to $1.0 million (2.0% of total revenues) for the nine
months ended September 30, 1997 primarily due to internal business systems
support expenses now being reported together with general and administrative
expenses.

     General and Administrative Expenses. General and administrative expenses
increased 16.4% from $3.2 million (7.0% of total revenues) for the nine months
ended September 30, 1996 to $3.7 million (7.9% of total revenues) for the nine
months ended September 30, 1997.  This increase included business systems
support expenses reported together with general and administrative expenses for
the 1997 period.

     Non recurring expenses.  Non recurring restructuring expenses were $0.2
million for the nine months ended September 30, 1996.  The Company incurred no
such expenses for the nine months ended September 30, 1997.

     Operating Income. Operating income increased 62.5% from $2.2 million (4.8%
of total revenues) for the nine months ended September 30, 1996 to $3.5 million
(7.5% of total revenues) for the nine months ended September 30, 1997 as a
result of the factors listed above.

     Interest (Income) Expense, Net. Net interest expense decreased  from
$256,000 for the nine months ended September 30, 1996 to $49,000, for the nine
months ended September 30, 1997, due primarily to lower interest expense on the
Company's reduced use of its line of credit combined with increased interest
income on higher average investments.

     Income Taxes.  The Company's effective income tax rate was 36.2% for the
nine months ended September 30, 1997, as compared to  34.2% in the same period
of the prior fiscal year.  The lower 1996 rate was principally the result of
higher non-taxable interest income as a percentage of pre-tax income.

Liquidity and Capital Resources

     The Company's operating activities provided cash of $2.5 million and $8.3
million for the nine months ended September 30, 1996 and 1997, respectively.
Cash provided by operating activities for the 1996 period was primarily due to
net income before depreciation and amortization, decreases in accounts
receivable and increases in deferred revenue offset by increases in inventory
and other current assets.  Cash provided by operating activities for the 1997
period was primarily due to income before depreciation and amortization,
increases in accounts payable and deferred revenue and reductions in accounts
receivable and inventory.
<PAGE>
 
     The Company's investing activities used  cash of $1.2 million and $11.1
million for the nine months ended September 30, 1996 and 1997, respectively.
Cash used by the Company's investing activities for the 1996 period related to
the sale of investments, offset by the purchase of property and equipment as
well as increases in investment of sales-type leases.  Cash used in the
Company's investing activities for the 1997 period resulted from the purchase of
investments, property, and equipment, as well as increases in investment of
sales-type leases.

     Financing activities used cash of $0.1 million for the nine months ended
September 30, 1996 for the repayment of long term debt partially offset by cash
provided by net new short term revolving credit facility borrowings. Financing
activities provided cash of $1.5 million for the nine months ended September 30,
1997, primarily due to the issuance of non-recourse notes payable for discounted
leases, and the issuance of common stock under the Employee Stock Purchase Plan.

     The Company's cash requirements have been financed with cash flow from
operations and borrowings under its revolving credit facility with First Union
National Bank of Florida (the "Bank") since October 1996.  The credit facility
with the Bank provides for borrowings of up to $15.0 million based on the value
and aging of the Company's eligible accounts and lease receivables.  Borrowings
under the line of credit bear interest at the Bank's quoted variable base rate,
which has ranged from 7.13% to 7.19% during the three months ended September 30,
1997,  and was 7.16% as of September 30, 1997.  As of September 30, 1997, the
Company had no outstanding balance under the line of credit and approximately
$7.8 million was available for borrowing thereunder based upon the Company's
qualifying accounts receivables.  The Company intends to use its borrowing
capacity under the line of credit on a limited basis primarily for working
capital requirements.  The credit facility expires in September 1998.  Although
there can be no assurances that the Bank will do so, the Company believes that
the Bank will agree to renew the facility.

     The Company believes that leasing provides a key competitive advantage in
the sale of long term support agreements.  In addition, the Company views
leasing as a source of low cost future replacement spares inventories which can
be deployed to reduce future capital commitments for enterprise network support
contracts. As of September 30, 1997, the Company's investment in capital leases
included $8.7 million of leases which had been discounted via non-recourse notes
payable to banks. An additional $7.2 million represented undiscounted leases, a
portion of which the Company expects to discount in the near future. This
leasing activity places demands on the Company's working capital based on the
timing and availability of discounting activities with financial institutions.

     The Company intends to relocate its joint corporate headquarters and
operations facility to a new location in the first quarter of 1998. In
conjunction with this move, the company has committed to a 60 month premise
lease in Clearwater, Florida, and anticipates total capital expenditures for
tenant improvements, furniture, and equipment of approximately $1.0 million. The
Company does not currently have any other material commitments for capital
expenditures.

     Management believes that cash from operations and borrowings available
under its revolving credit facility together with current cash balances will be
sufficient to finance its working capital needs and capital expenditure
requirements for at least the next 12 months.  Although no assurance can be
given, management believes that cash from operations together with available
sources of financing, including additional bank debt, will be sufficient to fund
the company's capital requirements for the foreseeable future beyond such 12
month period.  

     The above "Management's Discussion and Analysis of Financial Condition and
Results of Operations" contains forward-looking statements that involve risks
and uncertainties.  The Company's actual results could differ materially from
those anticipated in these forward-looking statements as a result of certain
factors.  Among such risks and uncertainties are as those relating to the
competitive nature of the TechForce's marketplace and its ability to expand its
customer base and grow revenues in line with previous experience, dependence
upon certain key personnel, the Company's ability to manage its growth, and the
risk of economic and market factors affecting TechForce or its customers.

Item 3.     Quantitative and Qualitative Disclosures About Market Risks.
<PAGE>
 
     Not Applicable.
<PAGE>
 
PART II    OTHER INFORMATION
-------    -----------------

Item 1.    Legal Proceedings
           Not Applicable.

Item 2.    Changes in Securities
           Not Applicable.

Item 3.    Defaults Upon Senior Securities
           Not Applicable.

Item 4.    Submission of Matters to a Vote of Shareholders
           Not Applicable.

Item 5.    Other Information
           Not Applicable.

Item 6.    Exhibits and Reports on Form 8-K

           (a)   Exhibit No.    Description
                 -----------    -----------
 
                  10.1          Transfer of Federal Express Services Agreement,
                                dated as of September 26, 1997, by and between
                                TechForce Corporation and ATS Telephone & Data
                                Systems, Inc.
                          
                  10.2          Premise Lease, dated March 12, 1997, with
                                addendum dated September 30, 1997, by and
                                between TechForce Corporation and Pinellas Bay
                                Vista Partners, Ltd.
                          
                  11.1          TechForce Corporation and Subsidiaries
                                Computation of Earnings Per Share of Common
                                Stock.
                          
                  27            Summary Financial Data


           (b)    No reports on Form 8-K were filed during the period.
<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.


                                    TECHFORCE CORPORATION



     Date:  November 13, 1997       /s/ Jerrel W. Kee
                                    ------------------------
                                    Jerrel W. Kee
                                    Chief Financial Officer
                                    (principal financial and accounting officer)
<PAGE>
 
                                 EXHIBIT INDEX
                                 -------------
 
EXHIBIT NO.
-----------
 
10.1                         Transfer of Federal Express Services Agreement,
                             dated as of September 26, 1997, by and between
                             TechForce Corporation and ATS Telephone & Data
                             Systems, Inc.
 
10.2                         Premise Lease, dated March 12, 1997, with addendum
                             dated September 30, 1997, by and between TechForce
                             Corporation and Pinellas Bay Vista Partners, Ltd.
 
11.1                         TechForce Corporation and Subsidiaries Computation
                             of Earnings Per Share of Common Stock.

27                           Summary Financial Data