SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                            ------------------------
                                    FORM 10-K

                   [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR
                  15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

   FOR THE FISCAL YEAR ENDED:                      COMMISSION FILE NUMBER:
       JANUARY 31, 1998                                    0-3713
                            ------------------------

                         NATIONAL COMPUTER SYSTEMS, INC.
             (Exact name of registrant as specified in its charter)


           MINNESOTA                                    41-0850527
  (State or other jurisdiction of           (I.R.S. Employer Identification No.)
    incorporation or organization)
      11000 PRAIRIE LAKES DRIVE
       EDEN PRAIRIE, MINNESOTA                             55344
(Address of principal executive offices)                 (Zip Code)

        Registrant's telephone number, including area code: 612/829-3000
                            ------------------------
           Securities registered pursuant to Section 12(g) of the Act:

                      Common Shares--par value $.03 a share
                                (Title of Class)

            Rights to Purchase Series A Participating Preferred Stock
                                (Title of Class)
                            ------------------------
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 such  shorter  periods  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 ____

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation S-K is not contained herein and will not be contained, to the best
of  registrant's  knowledge,  in  definitive  proxy  or  information  statements
incorporated  by  reference in Part III of this Form 10-K or any  amendments  to
this Form 10-K. _X_

State the aggregate market value of the voting shares held by  non-affiliates of
the registrant as of April 17, 1998.
                Common Shares, $.03 par value -- $ 644,923,000

Indicate the number of shares outstanding of each of the registrant's classes of
common stock, as of April 17, 1998.
                Common Shares, $.03 par value - 31,044,252 shares

<PAGE>

                       DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Annual  Report to  Stockholders  for the year ended  January 31,
1998 are incorporated by reference into Parts I, II and IV.

Portions  of  the  definitive   proxy   statement  for  the  Annual  Meeting  of
Stockholders to be held on May 21, 1998 are  incorporated by reference into Part
III.

<PAGE>

                                     PART I

ITEM 1.  BUSINESS

     National  Computer  Systems,  Inc.  ("NCS"  or the  "Company")  is a global
information  services  company,  which provides quality  services,  software and
systems for the collection, management and interpretation of data.

    The Company's services include data capture and processing,  analysis,  data
management, reporting, network services, software services, hardware maintenance
and other professional services to meet customer needs.

    The  Company's   application  software  products  are  focused  on  specific
applications within targeted markets, particularly K-12 education, where NCS has
a substantial presence.

     NCS systems are used to: capture and aggregate  data;  create a database or
datastream;  process the data using proprietary software; and analyze, interpret
and report results.  Data collection systems include optical mark read and image
scanning hardware, other data collection technologies,  proprietary software and
pre-printed  forms.  The Company  utilizes  its own  products,  as well as other
technologies,  to provide data collection services to those customers who prefer
not to purchase systems for internal use.

     NCS markets its data  collection,  management  and  reporting  services and
systems within two broad markets: Education and Data Management.


EDUCATION

    NCS develops and markets data collection  services and systems which provide
optical  scanning,  image-based  or  electronic  data  collection  and  computer
processing  services for the high  accuracy,  large volume,  complex  processing
needs of major test  publishers,  state  education  agencies,  universities  and
colleges,  and local school districts.  NCS also develops and markets enterprise
application  software  for the  administration  and  management  of  curriculum,
student  instruction,  and  financial  data  at the  classroom,  school,  school
district and state levels. In addition to its services for training,  consulting
and  project  management  NCS,  more  recently,  has offered  network  services,
including  design,  hardware and  software  procurement,  Internet  utilization,
maintenance  and support,  network  administration  and outsourcing for its K-12
customers.

     By using the Company's optical scanning and image-based  systems and forms,
individual  school  districts can perform in-house  student  assessment  testing
applications,  including  teacher created or  administration  developed norm- or
criterion-referenced  tests;  administrative  applications  such as  attendance,
scheduling, grade reporting and registration;  library and inventory management;
and financial management and payroll.

    The Company's  information  processing services are also provided in support
of federal student financial aid programs for post-secondary education.

DATA MANAGEMENT

    NCS develops,  markets and manages complex data  collection,  processing and
reporting  services and products  targeted for certain key  applications  in the
data management market. These applications include sales/marketing applications,
such as sales/order entry,  billing,  quality measurement,  product warranty and
customer  satisfaction  surveys and customer  data  collection;  payroll;  human
resource applications, including applicant tracking, organizational development,
employee  attitude  surveys,   benefits  enrollment  and  employee   evaluation;
telephone  equal  access  balloting;  and  general  data  collection,  analysis,
management and reporting.

    NCS provides  scanners and forms for  customers to do their own  paper-based
data collection. The Company also provides solutions to more complex information
management needs through services and products that include  comprehensive  data
collection technologies,  software development,  telecommunications  support and
information dissemination systems. All of these processing,  data management and
reporting services are available from NCS in support of customers that prefer to
outsource these services. In addition,  NCS offers network design,  hardware and
software  acquisition,  implementation,  maintenance  and  support,  and network
administration.


BUSINESS SEGMENT AND OTHER INFORMATION

    NCS  operates  in a  single  business  segment.  See  Note  10 of  Notes  to
Consolidated  Financial  Statements for business  segment data,  which financial
statements are included in the Annual Report to Stockholders for the fiscal year
ended January 31, 1998, and incorporated herein by reference.

    The Company's  headquarters  are located at 11000 Prairie Lakes Drive,  Eden
Prairie, Minnesota 55344, telephone 612/829-3000.


PRIMARY PRODUCT AND SERVICE OFFERINGS

Assessment and Testing Services

     NCS is the largest  commercial  processor of student  assessment  tests for
grades K-12 in the United  States.  NCS markets test  scoring  services to major
test publishers,  state education agencies, the federal government, local school
districts and commercial customers.  For these customers,  NCS service offerings
include  program  design,  item  development,   program   management,   software
development,   printing,  packaging,   distribution  and  collection  logistics,
scoring,  editing,  analysis  and  final  reporting.  Scoring  services  include
selected response scoring and professional scoring of constructed response items
such as essays. Both optical mark reading (OMR) and image scanning  technologies
are utilized in the scoring process.

    The  acquisition  of Virtual  University  Enterprises in fiscal 1997 added a
secure Internet-based  electronic testing delivery capability,  thereby allowing
NCS to participate in the professional certification market, as well as offer an
electronic testing option to traditional statewide grade K-12 testing programs.

    The Company also publishes and  distributes  test  instruments  and provides
scoring services to industrial and clinical psychologists,  psychiatrists, human
resource   professionals  and  educators.   These  tests  and  services  include
personality assessment and psychological diagnostic testing, career development,
guidance  counseling and human  resource  organizational  assessments.  With the
acquisition  of the London  House  business  from The  McGraw-Hill  Companies in
fiscal 1997,  the Company's  test and scoring  services have expanded to include
assessments for personnel selection, skill assessment and workforce development.


Enterprise Software for Schools

    A principal  strategy of the Company in servicing the education  marketplace
is to concentrate  on enterprise  software for school  administration.  Software
products include student administrative  software to assist educators in student
management,  including  such  applications  as  academic  reporting,  attendance
gathering and scheduling.  The Company's instructional and curriculum management
software  products  manage   information  about  student   achievement   against
educational  objectives.   In  conjunction  with  the  instructional  management
software, NCS offers a Model Curriculum and Assessment Database (MCAD) to assist
schools in establishing stated curriculum objectives with specific test items to
measure progress against those objectives.

    NCS software products also include financial management software for schools
and  school  districts,  which  includes  accounting  and  financial  reporting,
payroll, human resources,  inventory and many other financial and administrative
functions.  The Company offers  teacher-training  software specifically aimed at
improving assessment of writing and composition skills.

    NCS offers services  associated with its enterprise  software to assist with
the design and  implementation of these  installations.  Services offered by NCS
include professional consulting;  project management;  network planning,  design
and implementation;  systems installation and integration;  training;  help desk
and ongoing support. The Company also offers outsourcing services to install its
software and third-party  computing and network  hardware and operate the system
on a day-to-day basis for the school district.


Data Management Services

    NCS provides a  comprehensive  package of services and products that include
systems analysis and design; software development; comprehensive data collection
technologies,  including  paper  based  and  electronic;  telecommunication  and
telephone call center support;  information  management and  dissemination;  and
network support,  including Internet connectivity;  and training. These services
and products can be delivered on-site or outsourced off-site to NCS.

    The U.S.  Department of Education has  outsourced to NCS the  processing and
eligibility of the free federal  application  for student aid in  post-secondary
education, and is the Company's single largest customer. NCS also manages, under
contract,  the wide area network over which this  information  is distributed to
and from member colleges, universities and other post-secondary institutions.


Scanning Products

    NCS  manufactures  OMR scanners that can read data from  specially  designed
forms  printed by the  Company  with  specifically  formulated  inks.  Computing
capability  is built  into  most  scanners.  Scanners  usually  incorporate,  or
interface  directly with,  software  developed by the Company.  Optical scanning
equipment is most effective for  applications  where highest  accuracy,  precise
response definition and cost effective data capture is required.

    The Company's lines of OMR hardware include  scanners  marketed as OpScan(R)
products.  These lines of scanners  provide a wide range of capabilities to meet
the needs of customers.  The OMR scanning  systems  utilize a  proprietary  mark
discrimination  system to  distinguish  valid marks,  thus providing a very high
degree of accuracy in  processing  responses.  To enhance the  usefulness of the
OpScan line,  the Company  offers  optional  features,  such as bar code reading
capability,  a  transport  printer  to print  alphanumeric  messages  on scanned
documents, optional read formats and upgraded computer capability options.

    NCS markets image-based data collection systems which represent an extension
of the Company's optical mark reading  technology.  These are marketed as NCS(R)
products and contain NCS proprietary character recognition technology as well as
integrated third-party technologies. When attached to a workstation computer and
using sophisticated software,  these scanners allow customers to efficiently and
accurately  collect  and  interpret a wide range of  information  from a printed
form, including machine- and hand-printed data.

    NCS offers a number of standard  software programs for use with NCS systems.
Processing and  application  software is an important  component of its scanning
products and services.  The Company also offers  non-proprietary data collection
products and technology to address specific customer data collection needs.


Scannable Forms

    The Company  designs,  manufactures  and sells  scannable  forms,  including
multiple-page booklets. A variety of custom forms are produced that are tailored
to meet  specific  customer  needs.  In addition,  standardized  forms are used,
especially with  microcomputer-based  scanners, in such applications as testing,
attendance,  scheduling  and  student  evaluation  in the  education  market  or
customer surveys or market research in the commercial setting.

    The Company believes that the use of a properly designed and printed form is
an essential  element in assuring that a scanning  system performs with greatest
accuracy  and  optimum  capability.   In  order  to  assure  a  high  degree  of
consistency,  reliability and accuracy,  NCS has emphasized the use of its forms
with its equipment. The Company prints its forms to exacting specifications.


MARKETING

    NCS  markets  its  data  collection  hardware  and  software  and  its  data
collection and computer  processing  services  directly through sales employees,
business  partners and original  equipment  manufacturers  and resellers located
throughout the United States.  Outside the United States, the Company's systems,
products  and  services  are  sold  through  sales  employees,  distributors  or
independent  sales  agents.  The Company's  published  test products and related
test-scoring   services  are  marketed  principally  in  North  America  through
telemarketing,  direct mail,  professional  journal advertising and professional
trade  convention  attendance and elsewhere  through  distributors.  Each of the
Company's  sales  organizations  are  supported by marketing  and sales  support
personnel.


SOFTWARE SUPPORT, TECHNICAL SUPPORT AND MAINTENANCE

    Software support is provided on a contractual  basis to customers  licensing
application  software  systems  from the  Company.  NCS assists  customers  with
installation,  training,  hardware  or  software  upgrades  and  development  of
specific customer application software on a fee for service basis.

    The Company offers technical  support and hardware  maintenance to customers
purchasing or leasing its equipment either on a contractual basis or through its
national  network of  customer  service and support  engineers.  NCS  emphasizes
prompt,  reliable  service  and  close  customer  relationships.  Technical  and
maintenance  support may include labor, parts,  operational  training and, where
applicable, programming of the equipment and design of forms.

    The Company supports its large scale,  complex data management projects with
information  processing  expertise in areas such as needs  assessment,  software
development, data collection technologies, data base management, secure Internet
applications,  networking,   telecommunications,   help  desk  services,  system
acquisition and implementation and ongoing training and support.


DEVELOPMENT OF PRODUCTS AND SERVICES

    The  Company's   development   efforts  are  directed   toward  new  product
development and enhancements to existing products. During the fiscal years ended
January 31, 1998, 1997 and 1996, the Company spent  approximately  $8.6 million,
$9.9  million  and $8.5  million,  respectively  (including  certain  internally
developed,  capitalized  software  development  costs). The expenditures  relate
principally to software product  development  (primarily focused on applications
software) and scanning software and equipment  development.  See Note 2 to Notes
to  Consolidated  Financial  Statements  for a  description  of  additional  new
products and enhancements to existing  products  acquired through  acquisitions,
which financial statements are included in the Annual Report to Stockholders for
the fiscal year ended January 31, 1998, and incorporated herein by reference.


MANUFACTURING

    The Company  assembles its scanning  equipment from  electronic  components,
metal stampings, molded plastic parts and mechanical sub-assemblies. These parts
are generally available from multiple sources. The Company assembles most of the
scanning systems equipment at its Eagan,  Minnesota facility.  Computer hardware
is purchased from other manufacturers.

    Scannable   forms  are  produced  at  NCS'  printing   plants  in  Columbia,
Pennsylvania;  Owatonna, Minnesota; and Rotherham, South Yorkshire, England. The
ink  and  paper  used  in  forms   production  are  produced  to  the  Company's
specifications  by a limited  number of  suppliers.  Although the Company has no
long-term supply contracts with its paper or ink suppliers,  the Company has had
long-term   relationships   with  such   suppliers   and  believes   that  these
relationships are good.


COMPETITION

    Competition in the data  collection and information  management  industry is
intense.  Numerous  companies offer various  combinations of data collection and
data management services.  Optical scanning and imaging are only two of numerous
data  collection  methods  available and  successfully in use in the marketplace
today.  The  Company  continues  to  focus  on  the  development  of  education,
government and commercial market niches where scanning technology has advantages
over other data entry technologies.

    In addition to the functional competition provided by alternative methods of
data  capture  (including  on-line  terminal  keyboards  and  optical  character
readers),  other  scanning  vendors supply  products that directly  compete with
those of the Company.

    Enterprise  software for the education  market is competitive  with in-house
systems,  national and regional software and service providers,  data processing
service  bureaus,  test  publishers and providers of educational  curriculum and
instruction management products and services.

    The Company's  scannable forms compete with those produced by commercial and
specialized forms printers. Principal competitive factors in the scannable forms
printing industry are product quality, service and price.

    NCS' test  processing,  test  publishing  and computer  processing  services
compete with several test publishers and data processing  service  bureaus.  The
Company's  customer  support  maintenance  organization  competes  with services
provided by manufacturers,  other national service companies and local providers
of maintenance services.


 PATENTS, TRADEMARKS AND LICENSES

    The Company holds certain patents,  registered and  unregistered  trademarks
and copyrights.  The Company also has rights under  licensing  arrangements to a
number of  patents,  trademarks,  copyrights  and  manufacturing  processes  and
materials.  These  licensing  arrangements  are  agreements  with  publishers of
various copyrighted  psychological,  aptitude and achievement tests that license
NCS to distribute  these tests,  to print and sell answer sheets for such tests,
and to score such tests.  Payment of royalties is usually  based upon the volume
of tests  distributed,  answer sheets sold, and tests scored.  NCS believes that
its  business  is not  dependent  upon  any one  individual  patent,  trademark,
copyright or license right or group thereof.

    "OpScan"  and  "NCS"  appearing  herein  are  registered  trademarks  of the
Company.

EMPLOYEES

    As of February 28, 1998, the Company employed  approximately 3,500 full-time
employees. The Company believes that its employee relations are excellent.


EXECUTIVE OFFICERS OF THE REGISTRANT

    The  names,  ages and  positions  of all of the  executive  officers  of the
Company as of  February  28,  1998 are listed  below  along with their  business
experience during the past five years.

NAME                      AGE       POSITION
-------------------     --------    -------------------------------------
Russell A. Gullotti       55        Chairman of the Board,
                                    President and Chief Executive Officer
Robert C. Bowen           56        Senior Vice President
Michael C. Brewer         51        Vice President and General Counsel
Jay V. Clark              56        Vice President
John W. Fenton, Jr.       57        Secretary-Treasurer
Clive M. Hay-Smith        40        Vice President
Robert C. Hickcox         44        Vice President
Gary L. Martini           47        Vice President
Michael A. Morache        47        Vice President
David W. Smith            53        Vice President
Jeffrey W. Taylor         44        Vice President and Chief Financial Officer
Adrienne T. Tietz         51        Vice President

     Mr. Gullotti has been President and Chief Executive  Officer since October,
1994 and  Chairman  of the Board since May,  1995.  Prior to that he held senior
executive  positions in sales and marketing,  services and  administration  with
Digital  Equipment  Corporation  (computer  manufacturing and services) for more
than five years.

     Mr. Bowen has been a Senior Vice President of NCS for more than five years.

     Mr. Brewer has been Vice  President  and General  Counsel of NCS since May,
1995. Prior to that he was General Counsel of NCS from May, 1992 until May, 1995
and Associate General Counsel of NCS from May, 1990 until May, 1992.

     Mr. Clark has been a Vice President of NCS for more than five years.

     Mr. Fenton has been Secretary-Treasurer of NCS for more than five years.

     Mr. Hay-Smith has been a Vice President of NCS since December,  1993. Prior
to that he was a sales and  distribution  executive  with Control Data  Systems,
Inc. (computer systems integrator) from March, 1989 to August, 1993.

     Mr. Hickcox has been a Vice President of NCS since February, 1997. Prior to
that he was  Director,  Methods and Tools of NCS from April,  1995 to  February,
1997 and  prior to that,  Manager,  Tools and  Systems  with  Digital  Equipment
Corporation (computer manufacturing and services) for more than five years.

     Mr. Martini has been a Vice President of NCS since August,  1997.  Prior to
that  he was  owner  and  President  of  Martini  &  Associates  (organizational
development  consulting)  for more than five  years and was  Senior  Consultant,
Organization  Development  with  Medtronic,  Inc.  (manufacturer  of implantable
cardiac devices) from April, 1991 to June 1993.

     Mr. Morache has been a Vice President of NCS since May, 1996. Prior to that
he was a Vice President of Unisys Corporation  (information  management company)
from  September,  1995 to May,  1996 and prior to that, a Senior Vice  President
with ALLTEL  Information  Services,  Inc.  (information  processing  management,
outsourcing services and application software) for more than five years.

     Mr. Smith has been a Vice President of NCS for more than five years.

     Mr. Taylor has been Vice President and Chief  Financial  Officer since May,
1994 and prior to that Vice  President and Corporate  Controller of NCS for more
than five years.

     Ms. Tietz has been a Vice President of NCS for more than five years.

     Officers  are  elected  annually  by the Board of  Directors.  There are no
family relationships among these officers,  nor any arrangement or understanding
between  any  officer  and any other  person  pursuant  to which the officer was
selected.


PRIVATE SECURITIES LITIGATION REFORM ACT

     In connection with the "safe harbor"  provisions of the Private  Securities
Litigation  Reform  Act of 1995,  the  Company is hereby  filing,  as Exhibit 99
hereto, cautionary statements identifying important factors that could cause the
Company's  actual results to differ  materially  from those projected in forward
looking statements of the Company made by, or on behalf of, the Company.


ITEM 2.  PROPERTIES

The Company's principal facilities are as follows:

                                 SQUARE
   LOCATION                     FOOTAGE     GENERAL PURPOSE
---------------               ----------    -------------------------------

Mesa, AZ (1) (2)                 40,000     Education software and services
                                             general offices, sales and
                                             marketing, product
                                             development and support

Cedar Rapids, IA                205,000     Data processing services and
                                             warehouse

Iowa City, IA                               Assessment and test processing
 Building 1 (1)                 168,000      and data processing services,
 Building 2 (1)                 112,000      general offices and operations

Lawrence, KS                     90,000     Data processing services,
                                             general offices and operations

Eagan, MN (1)                   109,000     Scanner hardware development
                                             and manufacturing; NCS
                                             services general offices,
                                             sales and marketing;
                                             customer support services
                                             general offices and
                                             operations; and
                                             international operations
                                             general offices, sales and
                                             marketing

Eden Prairie, MN                 45,000     Executive general offices

Edina, MN (1)                   101,000     Data collection systems and
                                             services general offices,
                                             data processing services,
                                             sales and marketing; and
                                             scanner software
                                             development



Minnetonka, MN  (1)              54,000     Test publishing and scoring
                                             general offices and
                                             operations

Owatonna, MN (1)                128,000     Documents design and
                                             production


Columbia, PA (1)                121,000     Documents design and
                                             production

Austin, TX                                  Data processing services,
 Building 1                      35,000      general offices and
 Building 2                      41,000      operations

Nunawading, Victoria             30,000     NCS Australasia Pty. Ltd,
(Melbourne)                                  (joint venture) general
Australia (1)                                offices, data processing
                                             services, sales and
                                             marketing

Rotherham, South Yorkshire       34,000     Documents design and
England (1)                                  production, general offices,
                                             sales and marketing
--------------------------

(1)    Denotes owned facility.

(2)   Construction  of a 56,000  square  foot  addition  to be used for the same
      general purpose will commence in May, 1998 with  completion  estimated for
      the last quarter of 1998.

      The Company  believes that its  facilities,  with the  construction of the
addition described above, will be adequate to meet its current needs.


ITEM 3.  LEGAL PROCEEDINGS

     On April 30, 1997, the Company was served with a Summons and Complaint in a
lawsuit filed against the Company by Edu-Cap,  Inc. (formerly University Support
Services,  Inc.)  ("Edu-Cap") in the United States District  Court,  District of
Minnesota,  Fourth Division.  See also Item 5 of the Company's Current Report on
Form 8-K dated April 30,1997.  In the lawsuit,  Edu-Cap  alleges  certain claims
against  the  Company in  connection  with three  student  loan  processing  and
servicing   agreements   between  the  Company  and   Edu-Cap.   Edu-Cap   seeks
out-of-pocket  damages, an undisclosed amount of lost profits,  and has tendered
to NCS certain student loans with unpaid  principal,  interest and late charges,
which  loans  it  claims  are or  have  been in  default  and  were  incorrectly
originated or serviced by NCS. The Company tendered the defense of the claims to
its insurer,  and the insurer  accepted the defense  subject to a reservation of
rights. The Company has filed an Answer to Edu-Cap's Complaint denying Edu-Cap's
claims,  and the Company  intends to vigorously  defend against the lawsuit.  In
addition,  the  Company  has filed a  Counterclaim  against  Edu-Cap and a claim
against a corporation  affiliated with Edu-Cap seeking compensatory damages. The
case is in the early  stages of  discovery,  and  Edu-Cap  has not set forth the
factual basis for its lost profits claims. The Company does not believe that the
outcome in this  litigation  would  result in a material  adverse  effect on the
Company's financial position or results of operations.


ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     There were no  matters  submitted  during the fourth  quarter of the fiscal
year  ended  January  31,  1998  to a  vote  of  security  holders  through  the
solicitation of proxies or otherwise.


                                     PART II


ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

     "Quarterly  Market Data" included in the Annual Report to Stockholders  for
the year ended January 31, 1998 is incorporated herein by reference.


ITEM 6.  SELECTED FINANCIAL DATA

     "Five Year Financial  Data"  included in the Annual Report to  Stockholders
for the year ended January 31, 1998 is incorporated herein by reference.


ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS

     "Management's   Discussion  and  Analysis  of  Results  of  Operations  and
Financial  Condition" included in the Annual Report to Stockholders for the year
ended January 31, 1998 is incorporated herein by reference.


ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     Not applicable.


ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

     The following  consolidated  financial statements and supplementary data of
the  registrant  and  its  subsidiaries,   included  in  the  Annual  Report  to
Stockholders  for the year ended  January  31, 1998 are  incorporated  herein by
reference:

     Consolidated Balance Sheets -- January 31, 1998 and 1997

     Consolidated Statements of Income -- Years ended January 31, 1998, 1997 and
       1996

     Consolidated  Statements of Changes in Stockholders'  Equity -- Years ended
       January 31, 1998, 1997 and 1996

     Consolidated Statements of Cash Flows -- Years ended January 31, 1998, 1997
       and 1996

     Notes to Consolidated Financial Statements -- January 31, 1998

     Report of Independent Auditors dated March 2, 1998

     Quarterly Results of Operations (Unaudited)


ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
         FINANCIAL DISCLOSURE

     None.

                                    PART III


ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

     "Election  of  Directors"  included  in  the  Company's   definitive  proxy
statement for the Annual Meeting of  Stockholders to be held on May 21, 1998 and
"Executive Officers of the Registrant" in Part I of this report are incorporated
herein by reference.


ITEM 11.  EXECUTIVE COMPENSATION

     "Summary  Compensation Table" and "Stock Options" included in the Company's
definitive  proxy statement for the Annual Meeting of Stockholders to be held on
May 21, 1998 are incorporated herein by reference.


ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     "Election  of  Directors"  and  "Ownership  of NCS Common  Stock by Certain
Beneficial Owners and Executive  Officers" included in the Company's  definitive
proxy  statement for the Annual  Meeting of  Stockholders  to be held on May 21,
1998 is incorporated herein by reference.


ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     "Election  of  Directors"  included  in  the  Company's   definitive  proxy
statement for the Annual Meeting of  Stockholders  to be held on May 21, 1998 is
incorporated herein by reference.


                                     PART IV

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.

     (a)  List of Financial Statements and Financial Statement Schedules

     (1)  The following  consolidated  financial statements of National Computer
          Systems,  Inc.  and  subsidiaries,  included  in the Annual  Report to
          Stockholders  for the year ended January 31, 1998, are incorporated by
          reference in Item 8:

          Consolidated Balance Sheets -- January 31, 1998 and 1997

          Consolidated  Statements  of Income -- Years ended  January 31,  1998,
            1997 and 1996

          Consolidated  Statements of Changes in  Stockholders'  Equity -- Years
            ended January 31, 1998, 1997 and 1996

          Consolidated Statements of Cash Flows -- Years ended January 31, 1998,
            1997 and 1996

          Notes to Consolidated Financial Statements -- January 31, 1998

          Report of Independent Auditors dated March 2, 1998

     (2)  Consolidated   financial  statement  schedules  of  National  Computer
          Systems, Inc. and subsidiaries required to be filed by Item 14(d):

          All schedules for which provision is made in the applicable accounting
          regulations of the Securities and Exchange Commission are not required
          under the related instructions or are inapplicable, and therefore have
          been omitted.

     (3) Listing of Exhibits:


 EXHIBIT

     3.1     Restated Articles of Incorporation, as amended.

     3.2     Bylaws,  as  amended  and  restated,  are  incorporated  herein  by
             reference to Exhibit 3.2 to the NCS Form 8-K dated March 4, 1996.

     4.1     Instruments  with  respect to  long-term  debt where the total debt
             authorized thereunder does not exceed 10% of the consolidated total
             assets of the registrant are not being filed;  the registrant  will
             furnish  a copy  of any  such  instrument  to the  Commission  upon
             request.

     4.2     Amended and  Restated  Rights  Agreement  dated as of March 4, 1996
             between  NCS  and  Norwest  Bank  Minnesota,  National  Association
             (including  the form of Right  Certificate  attached  as  Exhibit B
             thereto)  is  incorporated  herein  by  reference  to  Exhibit 1 to
             Amendment No. 2 to Form 8-A/A dated March 13, 1996.

     4.3     Credit  Agreement dated as of November 17, 1997 between NCS and The
             First National Bank of Chicago (as Agent);  Norwest Bank Minnesota,
             National  Association;  Suntrust Bank,  Central  Florida,  National
             Association;  and The  Bank of  Tokyo -  Mitsubishi  Ltd.,  Chicago
             Branch is  incorporated  herein by  reference  to  Exhibit 4 to the
             Company's Form 10-Q for the quarter ended October 31, 1997.

     *10.1   Change of Control  Agreement  dated April 15, 1996,  by and between
             NCS  and  certain  executives  of NCS  is  incorporated  herein  by
             reference to Exhibit 10.2 to the Company's Form 10-Q for the fiscal
             quarter ended April 30, 1996.

     *10.2   NCS 1984  Employee  Stock  Option  Plan is  incorporated  herein by
             reference to Exhibit 10 to the Company's  Form 10-Q for the quarter
             ended July 31, 1984.

     *10.3   NCS 1986  Employee  Stock  Option  Plan is  incorporated  herein by
             reference to Exhibit 10D to the Company's  Form 10-K for the fiscal
             year ended January 31, 1986.

     *10.4   NCS Non-Employee Director Stock Option Plan, as amended.

     *10.5   NCS 1990 Employee  Stock Option Plan, as amended,  is  incorporated
             herein by reference to Exhibit 10.1 to the Company's  Form 10-Q for
             the quarter ended October 31, 1995.

     *10.6   NCS 1995 Employee  Stock Option Plan, as amended,  is  incorporated
             herein by reference to Exhibit 10.2 to the Company's  Form 10-Q for
             the quarter ended October 31, 1995.

     *10.7   NCS 1990  Long-Term  Incentive  Plan, as amended,  is  incorporated
             herein by reference to Exhibit 10.3 to the Company's  Form 10-Q for
             the quarter ended October 31, 1995.

     *10.8   NCS 1992 Employee  Stock  Purchase Plan is  incorporated  herein by
             reference to Exhibit 10I to the Company's  Form 10-K for the fiscal
             year ended January 31, 1992.

     *10.9   Description  of Retirement  Arrangements  with David C. Malmberg is
             incorporated  herein by  reference  to Exhibit 19 to the  Company's
             Form 10-Q for the fiscal quarter ended October 31, 1992.

     *10.10  Amended and Restated Severance Agreement dated May 23, 1996, by and
             between  NCS and  Russell A.  Gullotti  is  incorporated  herein by
             reference to Exhibit 10.1 to the Company's Form 10-Q for the fiscal
             quarter ended April 30, 1996.

     *10.11  Agreement  dated  August 22, 1994 between NCS and Charles W. Oswald
             is  incorporated  herein  by  reference  to  Exhibit  10(b)  to the
             Company's Form 10-Q for the fiscal quarter ended October 31, 1994.

     *10.12  Oswald  Stock  Option Plan is  incorporated  herein by reference to
             Exhibit  100 to the  Company's  Form 10-K for the fiscal year ended
             January 31, 1995.

     *10.13  NCS  1997  Long-Term  Incentive  Plan  is  incorporated  herein  by
             reference to Exhibit 10.13 to the Company's  Form 10-K for the year
             ended January 31, 1997.

     *10.14  NCS 1997  Employee  Stock  Option  Plan is  incorporated  herein by
             reference to Exhibit 10.14 to the Company's  Form 10-K for the year
             ended January 31, 1997.

     *10.15  NCS Corporate  Management  Incentive  Plan -- 1997 is  incorporated
             herein by reference to Exhibit 10.16 to the Company's Form 10-K for
             the fiscal year ended January 31, 1997.

     *10.16  NCS Corporate Management Incentive Plan -- 1998.

     *10.17  NCS 1998 Employee Stock Purchase Plan

     13      Portions of NCS' Annual Report to Stockholders  for the fiscal year
             ended January 31, 1998.

     21      Significant Subsidiaries.

     23      Consent of Independent Auditors.

     24      Power of Attorney authorizing J.W. Fenton, Jr. to sign the NCS Form
             10-K  for the  year  ended  January  31,  1998 on  behalf  of other
             officers and directors.

     27      Financial  Data  Schedules,   including   Restated  Financial  Data
             Schedules  for the fiscal year ended  January 31, 1997 and 1996 and
             for the quarterly periods ended April 30, July 31 and October 31 in
             1997 and 1996.

     99      Cautionary  statements  identifying  important  factors  that could
             cause the Company's  actual results to differ from those  projected
             in forward looking statements.

----------------
*    Indicates  management contract or compensatory plan or arrangement required
     to be filed as an exhibit to this report.


     (b)  Reports on Form 8-K

          There  were no reports  on Form 8-K filed for the three  months  ended
          January 31, 1998.

     (c)  Exhibits

          The  response to this  portion of Item 14 is  submitted  as a separate
          section of this report.

     (d)  Financial Statement Schedules

          Financial  Statement  Schedules have been omitted because they are not
          required or are inapplicable.


<PAGE>


                                   SIGNATURES

    Pursuant  to the  requirements  of  Section  13 or 15(d)  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.

                         NATIONAL COMPUTER SYSTEMS, INC.
Dated: April 22, 1998                           By:    /s/ J. W. FENTON, JR.
                                                      ------------------------
                                                           J. W. Fenton, Jr.
                               SECRETARY-TREASURER

     Pursuant to the  requirements of the Securities  Exchange Act of 1934, this
report  has  been  signed  below  by the  following  persons  on  behalf  of the
registrant and in the capacities and on the dates indicated.

By     RUSSELL A. GULLOTTI *               Chairman of the Board of Directors,
       ------------------------            President and Chief Executive
       Russell A. Gullotti                 Officer(principal executive officer)

By     DAVID C. COX *                      Director
       ------------------------
       David C. Cox

By     MOSES JOSEPH*                       Director
       ------------------------
       Moses Joseph

By     JEAN B. KEFFELER*                   Director
       ------------------------
       Jean B. Keffeler

By     CHARLES W. OSWALD *                 Director
       ------------------------
       Charles W. Oswald

By     STEPHEN G. SHANK *                  Director
       ------------------------
       Stephen G. Shank

By     JOHN E. STEURI *                    Director
       ------------------------
       John E. Steuri

By     JOHN W. VESSEY *                    Director
       ------------------------
       John W. Vessey

By     JEFFREY W. TAYLOR *                 Vice President and Chief
       ------------------------            Financial Office (principal
       Jeffrey W. Taylor                   financial officer and
                                           principal accounting officer)

     *  Executed  on behalf  of the  indicated  officers  and  directors  of the
registrant  by  J.  W.  Fenton,   Jr.,   Secretary-Treasurer,   duly   appointed
attorney-in-fact.

   /s/ J. W. FENTON, JR.
-----------------------------------                      Dated: April 22, 1998
       J. W. Fenton, Jr.
      (ATTORNEY-IN-FACT)



<PAGE>


                                    FORM 10-K
                         NATIONAL COMPUTER SYSTEMS, INC.
                   FOR THE FISCAL YEAR ENDED JANUARY 31, 1998

                                  EXHIBIT INDEX



 EXHIBIT
--------

  3.1       Restated Articles of Incorporation, as amended.

  10.4      NCS Non-Employee Director Stock Option Plan, as amended.

  10.16     NCS Corporate Management Incentive Plan -- 1998.

  10.17     NCS 1998 Employee Stock Purchase Plan.

  13        Portions  of NCS' Report to  Stockholders  for the fiscal year ended
            January 31, 1998.

  21        Significant Subsidiaries.

  23        Consent of Independent Auditors.

  24        Power of Attorney  authorizing a certain person to sign the NCS Form
            10-K for the year ended January 31, 1998 on behalf of other officers
            and directors.

  27        Financial  Data  Schedules,   including   Restated   Financial  Data
            Schedules  for the fiscal years ended  January 31, 1997 and 1996 and
            for the quarterly  periods ended April 30, July 31 and October 31 in
            1997 and 1996.

  99        Cautionary statements identifying important factors that could cause
            the  Company's  actual  results to differ  from those  projected  in
            forward looking statements.