<PAGE>   1
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                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549


                                    FORM 10-Q


(Mark one)

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

                For the quarterly period ended September 30, 2000

                                       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 0-20034


                          ELITE INFORMATION GROUP, INC.
             (Exact name of registrant as specified in its charter)


                DELAWARE                                         41-1522214
                --------                                         ----------
    (State or other jurisdiction of                           (I.R.S. Employer
     incorporation or organization)                          Identification No.)


       5100 WEST GOLDLEAF CIRCLE
        LOS ANGELES, CALIFORNIA                                    90056
        -----------------------                                    -----
(Address of principal executive offices)                         (Zip code)


                                 (323) 642-5200
                                 --------------
              (Registrant's telephone number, including area code)


        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 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 October 31, 2000 there were 9,419,123 shares of Common Stock, $.01
par value, outstanding.


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                                  Page 1 of 14


<PAGE>   2

                          ELITE INFORMATION GROUP, INC.
                                TABLE OF CONTENTS


<TABLE>
<CAPTION>
                                                                           PAGE
                                                                          NUMBER
                                                                          ------
<S>                                                                       <C>
PART I FINANCIAL INFORMATION:

Item 1.  Financial Statements

         Consolidated Statement of Operations -
                Three and nine months ended September 30, 2000
                and September 30, 1999                                      3

         Consolidated Balance Sheet -
                September 30, 2000 and December 31, 1999                    4

         Consolidated Statement of Cash Flows -
                Nine months ended September 30, 2000 and
                September 30, 1999                                          5

         Notes to Consolidated Financial Statements                       6 - 7

Item 2.  Management's Discussion and Analysis of
                Financial Condition and Results of Operations             7 - 10

Item 3.  Quantitative and Qualitative Disclosures about Market Risk        11


PART II OTHER INFORMATION:

Item 6. Exhibits and Reports on Form 8-K                                   11

SIGNATURE                                                                  12
</TABLE>


                          ----------------------------

PRODUCTS MENTIONED IN THIS REPORT ARE USED FOR IDENTIFICATION PURPOSES ONLY AND
MAY BE TRADE NAMES OR TRADEMARKS OF ELITE INFORMATION GROUP, INC., ITS
SUBSIDIARIES OR THIRD PARTIES.

                          ----------------------------




                                       2
<PAGE>   3

PART I - FINANCIAL INFORMATION:

ITEM 1.  FINANCIAL STATEMENTS


                          ELITE INFORMATION GROUP, INC.
                      CONSOLIDATED STATEMENT OF OPERATIONS
                      (In thousands, except per share data)
                                   (Unaudited)


<TABLE>
<CAPTION>
                                                                   Three months ended         Nine months ended
                                                                      September 30,             September 30,
                                                                    2000         1999         2000         1999
                                                                  --------     --------     --------     --------
<S>                                                               <C>          <C>          <C>          <C>
Net revenue                                                       $ 12,858     $ 15,381     $ 39,933     $ 43,770
                                                                  --------     --------     --------     --------
Operating expenses:
  Cost of revenue                                                    7,513        8,573       22,607       24,088
  Research and development                                           1,607        1,125        4,378        3,140
  Sales and marketing                                                2,622        2,203        7,763        7,033
  General and administrative                                         1,487        1,437        4,834        5,197
  Amortization of goodwill and other acquired intangibles              354          401          850        1,242
  Write-off of in-process research and development                   1,000           --        1,000           --
                                                                  --------     --------     --------     --------
       Total operating expenses                                     14,583       13,739       41,432       40,700
                                                                  --------     --------     --------     --------
Operating income (loss)                                             (1,725)       1,642       (1,499)       3,070
Loss on disposition of non-strategic business unit                      --           --           --         (295)
Interest income, net                                                   462          354        1,325          777
                                                                  --------     --------     --------     --------
Income (loss) from continuing operations before income taxes        (1,263)       1,996         (174)       3,552
Income tax benefit (provision) for continuing operations             1,113         (779)         567       (1,548)
                                                                  --------     --------     --------     --------
Income (loss) from continuing operations                              (150)       1,217          393        2,004
                                                                  --------     --------     --------     --------
Discontinued Operations:
  Loss from discontinued operations, net of income tax                  --           --           --         (382)
  Gain on sale of discontinued operations, net of income tax            --           --           --        4,919
                                                                  --------     --------     --------     --------
Net income (loss)                                                 $   (150)    $  1,217     $    393     $  6,541
                                                                  ========     ========     ========     ========

Net income (loss) per share - continuing operations
    - Basic                                                       $  (0.02)    $   0.15     $   0.05     $   0.24
    - Diluted                                                     $  (0.02)    $   0.14     $   0.05     $   0.23

Net income (loss) per share - discontinued operations
    - Basic                                                             --           --           --     $  (0.05)
    - Diluted                                                           --           --           --     $  (0.04)

Net income per share - gain on sale of discontinued operations
    - Basic                                                             --           --           --     $   0.59
    - Diluted                                                           --           --           --     $   0.58

Net income (loss) per share
    - Basic                                                       $  (0.02)    $   0.15     $   0.05     $   0.79
    - Diluted                                                     $  (0.02)    $   0.14     $   0.05     $   0.77

Weighted average shares outstanding
    - Basic                                                          8,542        8,322        8,515        8,283
    - Diluted                                                        8,542        8,604        8,758        8,535
</TABLE>


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




                                       3
<PAGE>   4

                          ELITE INFORMATION GROUP, INC.
                           CONSOLIDATED BALANCE SHEET
                 (In thousands, except share and per share data)


<TABLE>
<CAPTION>
                                                                         September 30,   December 31,
                                                                              2000           1999
                                                                         -------------   ------------
                                                                           (Unaudited)
<S>                                                                         <C>            <C>
ASSETS
Current assets:
    Cash and cash equivalents                                               $ 26,859       $ 31,152
    Receivables                                                               16,157         23,669
    Deferred income taxes                                                      3,980          3,321
    Other current assets                                                         586            972
                                                                            --------       --------
        Total current assets                                                  47,582         59,114
Property and equipment                                                         3,387          2,503
Software costs                                                                   435            718
Intangible assets                                                             10,679          3,557
Other assets                                                                     167            224
                                                                            --------       --------
                                                                            $ 62,250       $ 66,116
                                                                            ========       ========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
    Accounts payable-trade                                                  $  4,954       $  5,260
    Accrued compensation                                                       2,862          2,860
    Other accrued liabilities                                                  4,773          5,042
    Deferred revenue and customer deposits                                    12,817         16,871
    Income taxes payable                                                         746            414
                                                                            --------       --------
        Total current liabilities                                             26,152         30,447
                                                                            --------       --------
Deferred income taxes                                                            560            804
                                                                            --------       --------
Other liabilities                                                                 17              2
                                                                            --------       --------
Stockholders' equity:
    Common stock, $.01 par value; Authorized 20,000,000 shares; Issued
     shares were 9,419,123 and 9,355,373, respectively                            94             94
    Paid-in capital                                                           39,264         39,384
    Less treasury stock, at cost, 876,286
       and 950,743 shares, respectively                                       (4,219)        (4,604)
    Accumulated earnings (deficit)                                               382            (11)

                                                                            --------       --------
         Total Stockholders' Equity                                           35,521         34,863
                                                                            --------       --------
                                                                            $ 62,250       $ 66,116
                                                                            ========       ========
</TABLE>


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




                                       4
<PAGE>   5

                          ELITE INFORMATION GROUP, INC.
                      CONSOLIDATED STATEMENT OF CASH FLOWS
                                 (In thousands)
                                   (Unaudited)


<TABLE>
<CAPTION>
                                                                      Nine months ended
                                                                         September 30,
                                                                      2000           1999
                                                                    --------       --------
<S>                                                                 <C>            <C>
Cash flows from operating activities:
    Net income                                                      $    393       $  6,541
    Adjustments to reconcile net income to net cash
      provided by operating activities:
        Depreciation and amortization                                  1,774          2,770
        Write-off of in-process research and development               1,000             --
        Deferred income taxes                                           (903)         1,427
        Loss on sale of non-strategic business unit                       --            295
        Gain on sale of discontinued operations                           --         (4,919)
        Changes in assets and liabilities excluding effects of
           businesses acquired and disposed
                Receivables                                            9,343          1,940
                Accounts payable - trade                                (345)         1,052
                Accrued compensation                                    (116)           748
                Deferred revenue and customer deposits                (4,446)        (1,979)
                Income taxes                                             332           (378)
                Other, net                                              (285)           316
                                                                    --------       --------
        Net cash provided by operating activities                      6,747          7,813
                                                                    --------       --------
Cash flows from investing activities:
    Purchase of property and equipment                                (1,953)          (558)
    Purchase of Law Manager, Inc.                                     (9,200)            --
    Net proceeds from sale of discontinued operations                     --          8,619
    Cash used in disposition of non-strategic business unit               --           (699)
                                                                    --------       --------
        Net cash provided (used) by investing activities             (11,153)         7,362
                                                                    --------       --------
Cash flows from financing activities:
    Proceeds from issuance of common stock                               113             --
                                                                    --------       --------
        Net cash provided by financing activities                        113             --
                                                                    --------       --------
Net increase (decrease) in cash and cash equivalents                  (4,293)        15,175
Cash and cash equivalents, beginning of period                        31,152         15,273
                                                                    --------       --------
Cash and cash equivalents, end of period                            $ 26,859       $ 30,448
                                                                    ========       ========
</TABLE>


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




                                       5
<PAGE>   6

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)



NOTE 1 - BASIS OF PRESENTATION

        For the periods presented, the consolidated financial statements of
Elite Information Group, Inc. ("Elite" or the "Company") reflect as continuing
operations the results of operations and financial position of the Company's
wholly-owned subsidiary Elite Information Systems, Inc. ("EIS"). On July 11,
2000, the Company acquired all of the outstanding capital stock of Law Manager
Inc. ("LMI") and results for this new operation are reflected in the Company's
financial statements since the date of acquisition (see Note 3). Additionally,
during the third quarter of 1999, the Company began start-up operations of its
Elite.com subsidiary, the results for which are reflected in the Company's
financial statements beginning in the second half of last year. During the
second quarter of 1999 the Company sold its Customer Relationship Management
business ("CRM") (see Note 2). The operating results for CRM are presented in
the Consolidated Statement of Operations as discontinued operations and prior
periods have been restated to reflect the Company's continuing operations. Also,
on March 5, 1999 the Company sold all of the outstanding shares of The
Minicomputer Company of Maryland, Inc. ("TMC") to a holding company owned by TMC
management.

        The consolidated financial statements of the Company include all
adjustments of a normal recurring nature which, in the opinion of management,
are necessary for a fair presentation of financial position as of September 30,
2000 and results of operations and cash flows for the interim periods presented.
The results of operations for the three and nine months ended September 30, 2000
are not necessarily indicative of the results to be expected for the entire
year.

        The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, certain information and footnotes required by
generally accepted accounting principles are not included herein. These interim
financial statements should be read in conjunction with the consolidated
financial statements and notes thereto for the year ended December 31, 1999 as
reported by the Company in its Annual Report on Form 10-K.

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


NOTE 2 - DISCONTINUED OPERATIONS

        On May 19, 1999, the Company sold its Customer Relationship Management
business, based in Charlotte, North Carolina, to Science Applications
International Corporation ("SAIC"). During the second quarter ended June 30,
1999, the Company recorded a gain on sale of discontinued operations of $4.9
million, after an income tax provision of $2.9 million, related to this
disposition. The gain on sale included certain transaction costs and reserve
provisions associated with the sale. The Company received approximately $14.3
million in cash proceeds from the transaction. Operating results for CRM are
classified as discontinued operations on the Company's Consolidated Statement of
Operations.


NOTE 3 - SIGNIFICANT TRANSACTIONS

        On December 14, 1999, the Company entered into a merger agreement to be
acquired by Solution 6 Holdings Limited ("Solution 6") (ASX:SOH), which is based
in Sydney, Australia. As contemplated in the merger agreement, on December 21,
1999 Solution 6 initiated an all cash tender offer to purchase 100% of the
outstanding shares of Elite common stock. The tender offer was conditioned upon,
among other things, obtaining necessary regulatory approvals including clearance
of the transaction from the Federal Trade Commission ("FTC"). On May 11, 2000,
the Company announced that it had terminated its merger agreement with Solution
6 because of the FTC's opposition to the merger.

        On July 11, 2000, the Company acquired all of the outstanding capital
stock of Law Manager, Inc. The aggregate consideration paid by the Company
consists of an initial closing payment of $10.9 million, plus certain working
capital payments to be determined after closing and payment of an additional $4
million over a three year period commencing on the first anniversary of closing,
subject to certain conditions. The consideration paid to date by the Company was
funded by its existing cash reserves.




                                       6
<PAGE>   7

        Law Manager, Inc. is a software company that specializes in providing
advanced case management, docketing, records management and e-commerce systems,
as well as a full range of implementation services, to large law firms,
corporate legal departments and government agencies.


NOTE 4 - NEW ACCOUNTING PRONOUNCEMENTS

        In December 1999, the Securities and Exchange Commission ("SEC")
released Staff Accounting Bulletin No. 101 ("SAB 101") that provides the staff's
views in applying generally accepted accounting principles to selected revenue
recognition issues. The Company is currently required to adopt SAB 101 for the
fourth quarter of 2000. In October 2000, the SEC issued additional guidance on
SAB 101 in the form of the Frequently Asked Questions and Answers publication.
Management is in the process of analyzing the effect, if any, that the
provisions of SAB 101 will have on the Company's consolidated results of
operations and financial condition.

        In March 2000, the Financial Accounting Standards Board ("FASB") issued
interpretation No. 44 ("FIN 44"), "Accounting for Certain Transactions Involving
Stock Compensation". FIN 44 provides guidance for issues arising in applying APB
25, "Accounting for Stock Issued to Employees". FIN 44 applies to new awards,
exchanges of awards in a business combination, modification of outstanding
awards and changes in grantee status on or after July 1, 2000, other than
provisions regarding re-pricing and the definition of an employee, which are
effective after December 15, 1998. Application of FIN 44 did not impact the
Company's financial reporting.

NOTE 5 - CREDIT FACILITY

        On May 16, 2000, the Company entered into a two-year, $10 million
revolving credit agreement with Mellon Bank, N.A. No borrowings were outstanding
under the credit facility at September 30, 2000. Borrowings under the credit
facility will bear interest at the Company's choice of an adjusted LIBOR or
prime rate, as defined in the credit agreement. The credit facility is secured
by substantially all of the Company's tangible and intangible assets.
Additionally, the credit agreement contains customary covenants that require
compliance with certain financial ratios and targets, and restricts the
incurrence of additional indebtedness, payment of dividends and acquisitions or
dispositions of assets, among other things. The credit facility expires in April
2002.

NOTE 6 - SUBSEQUENT EVENT

        On November 13, 2000, The Company announced that its Board of Directors
had authorized a stock buy-back program to purchase from time-to-time on the
open market, or through negotiated purchases, up to 1,000,000 shares of the
Company's common stock. The shares acquired will become treasury shares and
would be available for various corporate purposes. The funds required for the
stock purchases are expected to be provided from the Company's cash and cash
equivalent balances on hand and internally generated cash flow. The timing and
amount of shares purchased will depend upon market conditions and other factors.
The stock buy-back program will terminate on November 8, 2001, unless extended.


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


RESULTS OF OPERATIONS

        The consolidated financial statements of Elite Information Group, Inc.
("Elite" or the "Company") reflect the results of operations and financial
position of the Company's wholly owned subsidiary Elite Information Systems,
Inc. ("EIS"). On July 11, 2000, the Company acquired all of the outstanding
capital stock of Law Manager, Inc. ("LMI") and results for this new operation
are reflected in the Company's financial statements since the date of
acquisition (see Note 3 of Notes to Consolidated Financial Statements included
in Item 1). Additionally, during the third quarter of 1999, the Company began
start-up operations of its Elite.com subsidiary, the results of which are
reflected in the Company's financial statements beginning in the second half of
1999.

        During the second quarter of 1999, the Company sold its Customer
Relationship Management business ("CRM") (see Note 2 of Notes to Consolidated
Financial Statements included in Item 1). The operating results for CRM are
presented on the Consolidated Statement of Operations as discontinued operations
and prior periods have been restated to reflect the




                                       7
<PAGE>   8

Company's continuing operations. Also, on March 5, 1999 the Company sold all of
the outstanding shares of The Minicomputer Company of Maryland, Inc. ("TMC") to
a holding company owned by TMC management.

        Based in Los Angeles, California, EIS is an international software
product and services company that provides a comprehensive suite of financial
and practice management software applications for law firms and other
professional services organizations of all sizes. EIS software products are
often sold with related services to aid the customer in implementation, data
conversion and user training efforts. The company's products can be licensed
outright and installed onsite at the customer's location or rented through an
ASP hosting solution ("e-Connect from Elite") where EIS maintains the hardware
and software that is accessed remotely by the customer.

        Elite.com provides Internet-based time tracking and billing services to
smaller professional services companies including legal, management consulting,
computer systems consulting and integration, accounting and engineering.
Elite.com utilizes hosted, Internet-based applications and services delivered
through its various partners and alliances.

        LMI is a software company that specializes in providing advanced case
management, docketing, records management and e-commerce systems, as well as a
full range of implementation services, to large law firms, corporate legal
departments and government agencies.

        The Company's revenue for the third quarter ended September 30, 2000
totaled $12.9 million. Excluding LMI revenue of $1.2 million, revenue for the
Company was $11.7 million, down 24% from the $15.4 million reported for the
third quarter of 1999. Revenue for the first nine months of 2000 was $39.9
million versus revenue for the first nine months of 1999 of $43.8 million.
Compared to the prior year, revenue for the first nine months of 2000 includes
significantly lower new contract license and related implementation services
revenue, partially offset by increased maintenance revenue and LMI revenue. The
increase in maintenance revenue for the current year reflects the continued
expansion of the Company's customer base.

        The reduction in new contract revenues for the Company in the third
quarter and first nine months of 2000 versus the prior year can be attributed to
a lower level of new business and a resulting reduction in backlog, which
represents the amount of unearned software license and implementation services
revenue on signed customer contracts. Such backlog totaled $11.6 million at
December 31, 1999, compared to $26.4 million at the end of 1998. The Company's
backlog as of December 31, 1998 reflected exceptional new contract signing
levels in the second half of 1998 due in part to customers' Y2K planning.
However, lower new business levels in the second half of 1999 contributed to a
significant reduction in backlog.

        New sales for the Company during the third quarter and first nine months
of 2000 continued to be relatively weak reflecting overall softness in the
market, largely attributable to the after-effects of Y2K and a general slow-down
in big-ticket software purchases in the legal market. The Company believes its
lower 2000 sales level also reflected delayed purchase decisions by prospective
customers over uncertainty surrounding the Company's pending merger with
Solution 6 Holdings Ltd., which was terminated in May of this year. At September
30, 2000, the Company's backlog of booked business stood at $7.3 million. Based
on the rising volume of new customer proposals, the Company currently
anticipates new contract signing levels to increase. However, because of its
reduced backlog levels, the Company expects it operating results for the fourth
quarter to be below those achieved in the prior year.

        Gross profit, which represents net revenue less cost of revenue, for
the three months ended September 30, 2000 was $5.3 million, down from $6.8
million in the same period of 1999. The Company's gross margin percent for the
third quarter was 41.6% versus 44.3% in the prior year. The Company's gross
margin percent without LMI was 40.0% for this year's third quarter. For the nine
months ended September 30, 2000, gross profit was $17.3 million (or 43.4% of
revenue) versus $19.7 million (or 45.0% of revenue) for the same period of 1999.
The Company's cost of revenue consists primarily of expenses for deployable
resources such as implementation personnel and contract labor, salaries and
related expenses for the Company's customer support department, and amounts paid
to third party software vendors. The Company's gross margin percent compared to
the prior year reflects increased costs related to the Company's Elite.com
service, which began operations in the second half of 1999, along with the
impact of recording lower software license revenues which typically provide
higher margins.

        Research and development expenses for this year's third quarter of $1.6
million (or 12.5% of revenue) increased from $1.1 million (or 7.3% of revenue)
in 1999. Such expenses for the first nine months of 2000 totaled $4.4 million
(or 11.0% of revenue) compared to $3.1 million (or 7.2% of revenue) for the
first nine months of the prior year. Research and




                                       8
<PAGE>   9

development expenses consist primarily of salaries and expenses of the Company's
research and development personnel and outside consultants. The higher expenses
in 2000 over the same period last year can be attributed primarily to costs
related to Elite.com. The increased expenses for 2000 also reflect ongoing
efforts to develop new versions of the Elite suite of products, along with new
Web-based products, to allow the Company to continue to provide innovative
software solutions as the needs of its customer base and target markets change.
No software development costs were capitalized in either 2000 or 1999.

        Sales and marketing expenses totaled $2.6 million (or 20.4% of revenue)
for the third quarter of 2000 compared to $2.2 million (or 14.3% of revenue) in
the same period of 1999. Year-to-date expenses of $7.8 million (or 19.4% of
revenue) were up from $7.0 million (or 16.1% of revenue) in the same period last
year. Sales and marketing expenses consist primarily of salaries, commissions,
travel and promotional expense. Excluding costs for Elite.com, sales and
marketing expenses for 2000 are actually down from the prior year, primarily due
to lower sales commissions related to lower new contract signing volume.

        General and administrative expenses of $1.5 million (or 11.6% of
revenue) for the third quarter of 2000 were up slightly from $1.4 million (or
9.3% of revenue) in the third quarter of 1999. These expenses totaled $4.8
million (or 12.1% of revenue) for the first nine months of this year compared to
$5.2 million (or 11.9% of revenue) in the first nine months of last year.
General and administrative expenses consist mainly of salaries of corporate
executive, legal, financial and human resources personnel, as well as
professional fees and insurance costs. General and administrative expenses for
the first half of 1999 included certain overhead costs related to the Company's
former corporate structure, which included its CRM operations that were sold in
the prior year (See Note 2 of Notes to Consolidated Financial Statements
included in Item 1). Expenses for the current year include approximately
$600,000 of costs incurred for outside legal and consulting services related to
Elite's terminated merger transaction with Solution 6 (See Note 3 of Notes to
Consolidated Financial Statements included in Item 1).

        As part of the LMI acquisition, the Company recorded a $1 million charge
in the third quarter to write-off the estimated value of LMI's in-process
research and development.

        The Company reported net interest income of $462,000 and $1.3 million
for the third quarter and first nine months of 2000, respectively. Interest
income for the same periods last year totaled $354,000 and $777,000,
respectively. The increased interest income in the current year reflects the
Company's investment return on its higher cash and cash equivalent balances. The
Company's improved cash position can be attributed to its positive cash flow
from operations and proceeds received from the sale of its CRM business (See
Note 2 of Notes to Consolidated Financial Statements included in Item 1),
partially offset by the amount paid to acquire LMI (See Note 3 of Notes to
Consolidated Financial Statements included in Item 1).

        The income tax benefit for continuing operations in the third quarter of
2000 was $1.1 million and for the first nine months of the year was $567,000.
The Company's income tax benefit for the third quarter and year-to-date reflects
$750,000 of tax refunds received for research and experimentation credits.
Excluding the effect of tax credits, the Company's income tax provision exceeds
the income tax expense at statutory rates primarily due to the permanent
difference of non-deductible goodwill amortization and state income taxes.


YEAR 2000 COMPLIANCE

        As a software vendor, the so-called "Year 2000 compliance" or "Y2K"
issue is an issue that the Company has had to address with respect to its
products as well as software and systems provided by others that the Company
uses internally. During the Year 2000 date transition, the Company did not
experience any failure of mission critical systems nor has it experienced any
significant problem with regard to third party suppliers. Similarly, to
management's knowledge, the Company's customers have not experienced any
significant Year 2000 problems with the Company's software products and
services. The Company does not anticipate any material adverse effect to its
business or its customers in the future as a result of Year 2000 related
problems; however, it is possible that such problems might still arise.

        The Company may be subject to Year 2000 claims or litigation by: its
customers; customers of divested businesses where the Company retained potential
product liabilities, including the CRM business; customers of its recently
acquired LMI business; or other parties. Although the ultimate outcome of any
litigation is uncertain, the Company does not believe that the ultimate amount
of liability, if any, from such actions would have a material adverse effect on
the Company. To date, the Company has not been subject to any such claims or
litigation.




                                       9
<PAGE>   10

        As the Company did not, nor does it expect to, experience any
significant Year 2000 problems, the Company does not currently expect to incur
any significant additional costs related to its Year 2000 compliance efforts.
All incremental costs associated with the Year 2000 compliance issue will
continue to be expensed as incurred.


LIQUIDITY AND CAPITAL RESOURCES

        The Company's cash and cash equivalents totaled $26.9 million at
September 30, 2000 compared to $31.2 million at December 31, 1999. Working
capital at September 30, 2000 was $21.4 million compared to $28.7 million at
December 31, 1999. On July 11, 2000 the Company made a $10.9 million cash
payment associated with the acquisition of LMI (See Note 3 of Notes to
Consolidated Financial Statements included in Item 1).

        On May 16, 2000, the Company entered into a two-year, $10 million
revolving credit agreement with Mellon Bank, N.A. No borrowings were outstanding
under the credit facility at September 30, 2000. Borrowings under the credit
facility will bear interest at the Company's choice of an adjusted LIBOR or
prime rate, as defined in the credit agreement. The credit facility is secured
by substantially all of the Company's tangible and intangible assets.
Additionally, the credit agreement contains customary covenants that require
compliance with certain financial ratios and targets, and restricts the
incurrence of additional indebtedness, payment of dividends and acquisitions or
dispositions of assets, among other things. The credit facility expires in April
2002. Management believes that the Company's cash and cash equivalent balances,
anticipated cash flow from operations and other external sources of available
credit will be sufficient to meet the Company's future cash requirements.


NEW ACCOUNTING PRONOUNCEMENTS

        In December 1999, the Securities and Exchange Commission ("SEC")
released Staff Accounting Bulletin No. 101 ("SAB 101") that provides the staff's
views in applying generally accepted accounting principles to selected revenue
recognition issues. The Company is currently required to adopt SAB 101 for the
fourth quarter of 2000. In October 2000, the SEC issued additional guidance on
SAB 101 in the form of the Frequently Asked Questions and Answers publication.
Management is in the process of analyzing the effect, if any, that the
provisions of SAB 101 will have on the Company's consolidated results of
operations and financial condition.

        In March 2000, the Financial Accounting Standards Board ("FASB") issued
interpretation No. 44 ("FIN 44"), "Accounting for Certain Transactions Involving
Stock Compensation". FIN 44 provides guidance for issues arising in applying APB
25, "Accounting for Stock Issued to Employees". FIN 44 applies to new awards,
exchanges of awards in a business combination, modification of outstanding
awards and changes in grantee status on or after July 1, 2000, other than
provisions regarding re-pricing and the definition of an employee, which are
effective after December 15, 1998. Application of FIN 44 did not impact the
Company's financial reporting.


FORWARD LOOKING STATEMENTS

        This Quarterly Report on Form 10-Q contains certain statements that are,
or may be, "forward-looking statements" within the meaning of Section 21E of the
Securities Exchange Act of 1934, as amended, and Section 27A of the Securities
Act of 1933, as amended, that represent the Company's expectations or beliefs
concerning future events, including the Company's future product initiatives,
sales and financial performance. For this purpose, any statements that are not
statements of historical fact may be deemed to be forward-looking statements.
Such forward-looking statements are about matters that are inherently subject to
risks and uncertainties. Factors that could influence the matters discussed in,
and cause actual results to vary materially from any results expressed or
implied by, such forward-looking statements include the timing and amount of
revenue that may be recognized by the Company, continuation of current expense
trends, unsuccessful integration of acquired businesses, absence of unforeseen
changes in the Company's markets, continued acceptance of the Company's existing
services and products in the Company's existing markets and the acceptance of
these services and products in new markets, the ability to timely complete the
development of new products and services, customer acceptance of new products
and services and general changes in the economy, Year 2000 risks discussed in
the "Year 2000 Compliance" section of this quarterly report on Form 10-Q, as
well as matters discussed in "Risks and Uncertainties" in the Company's Annual
Report on Form 10-K for the year ended December 31, 1999. There can be no
assurance that such future events or projected results will be achieved, and
actual results could differ materially.




                                       10
<PAGE>   11

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

        The Company has limited exposure to market risk for changes in interest
rates related to the Company's cash and cash equivalents. The Company maintains
an investment policy designed to ensure the safety and preservation of its cash
and cash equivalents by limiting default risk, market risk and reinvestment risk
by depositing its cash and cash equivalents in major financial institutions.


PART II - OTHER INFORMATION

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a)      EXHIBITS:

<TABLE>
<CAPTION>
         Exhibit No.                   Description
         -----------                   -----------
         <S>            <C>
             11         Computation of earnings per share

             27         Financial Data Schedule, which is submitted
                        electronically to the Securities and Exchange
                        Commission for information only and not filed.
</TABLE>

(b)     REPORTS ON FORM 8-K:

        The Company filed a Form 8-K on July 21, 2000 to report the acquisition
of all of the outstanding capital stock of Law Manager, Inc. ("LMI") pursuant to
a Stock Purchase Agreement dated as of July 7, 2000. This Form 8-K was amended
on September 25, 2000 to incorporate LMI's audited financial statements for the
year ended December 31, 1999 and the unaudited pro forma condensed consolidated
financial information for Elite Information Group, Inc. and LMI for the year
ended December 31, 1999 and for the three months ended March 31, 2000.




                                       11
<PAGE>   12


                                   SIGNATURE

        Pursuant to the requirements of Section 13 or 15(d) of the Securities
and Exchange Act of 1934, the Registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.



                                          ELITE INFORMATION GROUP, INC.



Date:  November 13, 2000                  By: /s/ Barry D. Emerson
       -----------------                      ----------------------------------
                                              Barry D. Emerson, Vice President,
                                              Treasurer, Chief Financial Officer





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