<PAGE>

================================================================================

                                 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 June 30, 2001

                                      Or

[ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934 (NO FEE REQUIRED) For the transition period
     from       to

                        Commission file number: 0-20993

                                DTM CORPORATION
            (Exact name of registrant as specified in its charter)


              Texas                                   74-2487065
 (State or other jurisdiction of                   (I.R.S. Employer
 incorporation or organization)                   Identification No.)


1611 Headway Circle, Building 2, Austin, Texas                  78754
 (Address of principal executive officer)                    (Zip Code)


                                (512) 339-2922
             (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 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   .
                                       ---    ---

There were 7,129,771 shares of our common stock outstanding on August 8, 2001.


================================================================================
<PAGE>

DTM Corporation
FORM 10-Q
FOR THE QUARTER ENDED JUNE 30, 2001

                               TABLE OF CONTENTS
                                                                           PAGE
                                                                          NUMBER
                                                                          ------

Part I        FINANCIAL INFORMATION

Item 1.       Condensed Consolidated Statement of Income for the
               three months ended June 30, 2001 and 2000                     1

              Condensed Consolidated Statement of Income for the
               six months ended June 30, 2001 and 2000                       2

              Condensed Consolidated Balance Sheets as of
               June 30, 2001 and December 31, 2000                           3

              Condensed Consolidated Statements of Cash Flows for
               the six months ended June 30, 2001 and 2000                   4

              Notes to Condensed Consolidated Financial Statements           5

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

Item 3.       Quantitative and Qualitative Disclosures About Market Risk    19

Part II       OTHER INFORMATION

Item 1.       Legal Proceedings                                             20

Item 6.       Exhibits and Reports on Form 8-K                              20
<PAGE>

                                    PART I
                             FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

DTM Corporation
Consolidated Statement of Income
Three Months Ended

<TABLE>
<CAPTION>
                                                                June 30,
Unaudited                                                 2001              2000
                                               ----------------------------------------
                                                        (In thousands, except
                                                          per share amounts)
<S>                                            <C>               <C>
Revenues
  Products                                             $ 9,021           $ 8,865
  Service and support                                    2,139             1,468
                                               ----------------------------------------
                                                        11,160            10,333
Cost of sales:
  Products                                               3,886             3,878
  Service and support                                    1,455               989
                                               ----------------------------------------
                                                         5,341             4,867
                                               ----------------------------------------
Gross profit                                             5,819             5,466
Operating expenses:
  Selling, general and administrative                    3,231             3,481
  Research and development                                 853               840
                                               ----------------------------------------
                                                         4,084             4,321
                                               ----------------------------------------
Operating income                                         1,735             1,145
Other income (expense):
  Interest expense, net                                    (21)              (36)
  Gain on fixed asset disposals                             87                --
                                               ----------------------------------------
                                                            66               (19)
                                               ----------------------------------------
Income before income taxes and
  extraordinary item                                     1,801             1,109
Income tax expense                                         575               346
                                               ----------------------------------------
Income before extraordinary item                         1,226               763
Extraordinary item - Merger costs                        1,031                --
                                               ----------------------------------------

Net income                                             $   195           $   763
                                               ========================================

Basic earnings per share:
  Income before extraordinary item                     $  0.17           $  0.11
  Extraordinary item                                     (0.14)               --
                                               ----------------------------------------
  Net income                                           $  0.03           $  0.11
Diluted earnings per share:
  Income before extraordinary item                     $  0.16           $  0.11
  Extraordinary item                                     (0.13)               --
                                               ----------------------------------------
  Net income                                           $  0.03           $  0.11
                                               ========================================

Weighted average shares outstanding:
  Basic                                                  7,126             7,030
  Diluted                                                7,520             7,222
</TABLE>

See accompanying notes.

                                       1
<PAGE>

<TABLE>
<CAPTION>
DTM Corporation
Consolidated Statement of Income
Six Months Ended                                            June 30,
Unaudited                                              2001              2000
                                               ----------------------------------------
<S>                                            <C>               <C>
                                                        (In thousands, except
                                                          per share amounts)
Revenues
  Products                                             $16,966           $15,664
  Service and support                                    3,816             2,822
                                               ----------------------------------------
                                                        20,782            18,486
Cost of sales:
  Products                                               7,923             7,003
  Service and support                                    2,939             1,902
                                               ----------------------------------------
                                                        10,862             8,905
                                               ----------------------------------------
Gross profit                                             9,920             9,581
Operating expenses:
  Selling, general and administrative                    6,148             6,177
  Research and development                               1,810             1,714
                                               ----------------------------------------
                                                         7,958             7,891
                                               ----------------------------------------
Operating income                                         1,962             1,690
Other income (expense):
  Interest expense, net                                    (34)              (55)
  Gain on fixed asset disposals                             69                --
                                               ----------------------------------------
                                                            35               (55)
                                               ----------------------------------------
Income before income taxes and
  extraordinary item                                     1,997             1,635
Income tax expense                                         639               510
                                               ----------------------------------------
Income before extraordinary item                         1,358             1,125
Extraordinary charge - Merger costs                      1,031                --
                                               ----------------------------------------

Net income                                             $   327           $ 1,125
                                               ========================================

Basic earnings per share:
    Income before extraordinary item                   $  0.19           $  0.16
    Extraordinary charge                                 (0.14)               --
                                               ----------------------------------------
    Net income                                         $  0.05           $  0.16
                                               ========================================
Diluted earnings per share:
    Income before extraordinary item                   $  0.18           $  0.16
    Extraordinary charge                                 (0.14)               --
                                               ----------------------------------------
    Net income                                         $  0.04           $  0.16
                                               ========================================

Weighted average shares outstanding:
  Basic                                                  7,107             7,018
  Diluted                                                7,455             7,222
</TABLE>

See accompanying notes

                                       2
<PAGE>

<TABLE>
<CAPTION>
DTM Corporation
Consolidated Balance Sheets
Unaudited                                            June 30,           December 31,
                                                       2001                2000
                                               ----------------------------------------
                                                            (In thousands)
<S>                                               <C>                  <C>
Assets
Current assets:
  Cash                                                 $  1,252            $  2,529
  Accounts receivable, net                                9,912               8,411
  Inventories                                             3,888               3,643
  Prepaid expenses and other                                409                 502
  Deferred income taxes                                     611                 611
                                               ----------------------------------------
  Total current assets                                   16,072              15,696
Property, net                                             1,736               1,842
Capitalized software development costs, net                 477                 360
Patent and license fees, net                                373                 489
                                               ----------------------------------------

Total assets                                           $ 18,658            $ 18,387
                                               ========================================

Liabilities and shareholders' equity
Current liabilities:
  Bank line of credit                                  $      3   $              --
  Accounts payable                                        2,932               3,062
  Deferred revenues and customer deposits                 2,631               2,432
  Employee and agent compensation                         1,090               1,582
  Income taxes                                              959                 501
                                               ----------------------------------------
  Total current liabilities                               7,615               7,577

Shareholders' equity:
  Common stock - 7,129,771 shares
     outstanding at June 30, 2001                             1                   1
  Additional paid-in capital                             54,349              54,241
  Accumulated deficit                                   (42,961)            (43,288)
  Accumulated other comprehensive loss                     (346)               (144)
                                               ----------------------------------------
  Total shareholders' equity                             11,043              10,810
                                               ----------------------------------------

Total liabilities and shareholders' equity             $ 18,658            $ 18,387
                                               ========================================
</TABLE>

See accompanying notes.

                                       3
<PAGE>

<TABLE>
<CAPTION>
DTM Corporation
Consolidated Statements of Cash Flows                         Six Months Ended
(Unaudited)                                                       June 30,
                                                            2001               2000
                                                     ----------------------------------
                                                               (In thousands)
<S>                                                  <C>               <C>
Operating activities
Income before extraordinary item                             $ 1,358            $ 1,125
Adjustments to reconcile net income to net cash
 provided by (used in) operating activities:
   Depreciation and amortization                                 760                725
   Provision for doubtful accounts                                 -                  -
   Provision for obsolescence                                     81                 56
   Foreign currency exchange loss                                 19                225
   Gain on disposal of equipment                                 (69)                 -
   Changes in assets and liabilities:
      Accounts receivable                                     (1,501)            (1,625)
      Inventory                                                 (326)              (171)
      Prepaid expenses and other assets                           93                (45)
      Accounts payable and accrued expenses                     (650)              (426)
      Deferred service revenues                                  199                174
      Income taxes                                               458                (69)
      Employee and agent compensation                           (492)              (536)
                                                     ----------------------------------

Net cash used in operating activities before
  extraordinary item                                             (70)              (567)
Extraordinary charge - Merger costs                           (1,031)                 -
Accounts payable relating to merger                              520                  -
                                                     ----------------------------------
Net cash used in operating activities                           (581)              (567)

Investing activities
Purchases of machinery and equipment                            (420)              (659)
Capitalized software development costs                          (256)               (54)
Patent and license expenditures                                  (36)               (29)
Proceeds from sale of machinery and equipment                    126                 50
                                                     ----------------------------------

Net cash used by investing activities                           (586)              (692)

Financing activities
Proceeds from exercise of stock options                          108                156
Draws on line of credit from financial institutions            2,498              3,590
Repayments on credit lines                                    (2,495)            (2,593)
                                                     ----------------------------------

Net cash provided by financing activities                        111              1,153

Effect of foreign exchange rate changes                         (221)              (258)
                                                     ----------------------------------

Net change in cash                                            (1,277)              (364)

Cash at beginning of period                                    2,529              1,505
                                                     ----------------------------------

Cash at end of period                                        $ 1,252            $ 1,141
                                                     ==================================



</TABLE>

See accompanying notes

                                       4
<PAGE>

                                DTM Corporation

             Notes to Condensed Consolidated Financial Statements
                                  (Unaudited)

1.   Basis of Presentation

     The accompanying unaudited condensed consolidated financial statements of
DTM Corporation ("DTM") have been prepared in accordance with generally accepted
accounting principles for interim financial information. Accordingly, they do
not include all of the information and notes required by generally accepted
accounting principles for complete financial statements. In the opinion of
management, all adjustments (consisting of normal recurring accruals) considered
necessary for a fair presentation have been included. Operating results for the
three months ended June 30, 2001 are not necessarily indicative of the results
that may be expected for the year ending December 31, 2001. For further
information, refer to the consolidated financial statements and related
footnotes of the Company for the year ended December 31, 2000 as disclosed in
the Annual Report on Form 10-K filed with the Securities and Exchange Commission
on March 19, 2001.

2.   Earnings per share

     Basic earnings per share are computed on the basis of the weighted average
number of common shares outstanding. Diluted earnings per share presented herein
is computed on the basis of the weighted average number of common shares
outstanding plus the effect of outstanding stock options using the "treasury
stock" method.

3.   Inventory

     Inventory consisted of the following:

<TABLE>
<CAPTION>

                                                                                 June 30,          December 31,
                                                                                   2001                2000
                                                                             -----------------------------------
                                                                                          (In thousands)
<S>                                                                           <C>                <C>
Raw materials and purchased parts                                                $3,089              $2,869
Finished goods                                                                    1,235               1,129
                                                                             -----------------------------------
                                                                                  4,324               3,998
Reserve for inventory obsolescence                                                 (436)               (355)
                                                                             -----------------------------------
                                                                                 $3,888              $3,643
                                                                             ===================================
</TABLE>

4.    Comprehensive Income

      Comprehensive income for the interim periods was as
      follows:
<TABLE>
<CAPTION>
                                                                                   2001                2000
                                                                             -----------------------------------
                                                                                       (In thousands)
<S>                                                                          <C>                 <C>
For the Three Months Ended June 30:
Net income                                                                        $ 195              $  763
Foreign currency translation                                                        (55)                 37
                                                                             -----------------------------------
Comprehensive Income                                                              $ 140              $  800
                                                                             ===================================
For the Six Months Ended June 30:
Net income                                                                        $ 327              $1,125
Foreign currency translation                                                       (202)                (33)
                                                                             -----------------------------------
Comprehensive Income                                                              $ 125              $1,092
                                                                             ===================================
</TABLE>

                                       5
<PAGE>

5.   Contingencies

     Beginning in 1996, we initiated patent infringement litigation in France,
Germany and Italy against a competitor and against one of that competitor's
customers. In this interim period, the German judge received the report from an
expert hired to advise the court on the technical issues. In 1997, we also
initiated patent infringement litigation in Japan against the same competitor's
distributor in the Pacific Rim. In September 1999, the Japanese court issued a
preliminary injunction barring sale of the competitor's infringing product in
Japan. In the interim period, the Tokyo High Court ruled that the rulings of the
Japanese Patent Office were in error. We are appealing this to the Tokyo Supreme
Court. It is not possible at this time to predict the final outcome of the
proceedings in Japan or the proceedings throughout Europe.

     For several years, this same competitor has alleged that our products are
infringing on patents that it licenses from a third-party. In December 2000,
this competitor filed a patent infringement suit against us in federal court in
California. They allege that we have infringed and continue to infringe certain
U.S. patents. In a February 2001 press release, this competitor claimed damages
of $20 million. It is not possible at this time to predict the final outcome of
these proceedings.

6.   Common Stock

     Activity in the interim period in DTM's common stock was as follows:

                                                                     Shares
                                                                   Outstanding
                                                                  -------------

Issued and outstanding at the beginning of the year                 7,076,780
Shares issued under stock plans                                        52,991
                                                                  -------------
Issued and outstanding at June 30, 2001                             7,129,771
                                                                  =============

     At June 30, 2001, there were 1,075,650 shares of common stock reserved for
issuance in connection with the 1999 Stock Option Plan (859,625 shares) and for
exercise of outstanding options issued in connection with a prior plan (216,025
shares).

     Since April 1999, we have retained an affiliate of one of our major
shareholders to perform certain financial advisory services. These related party
fees are included in selling, general and administrative expenses and amounted
to $57,000 and $64,000 in the six-month periods ended June 30, 2001 and 2000,
respectively.

                                       6
<PAGE>

7.   Stock Options

     A summary of the stock option activity, and related information for the
interim period is as follows:

                                                       2001
                                         -------------------------------------
                                                                 Weighted
                                                            Average Exercise
                                          Stock Options           Price
                                         -------------------------------------

Outstanding at beginning of year             953,834              $2.517
 Granted at fair market value                 75,000               3.479
 Exercised                                   (52,991)              2.046
 Canceled                                     (3,873)              5.021
                                         -------------------------------------
Outstanding at June 30, 2001                 971,971              $2.607
                                         =====================================

     A summary of information about stock options outstanding and exercisable at
June 30, 2001 is as follows:

<TABLE>
<CAPTION>

  Weighted-Average                                                       Weighted-Average
     Exercise                            Options                             Remaining           Options
      Price                            Outstanding                        Contractual Life     Exercisable
---------------------------------------------------------------------------------------------------------------
<S>                              <C>                                  <C>                   <C>
     $  1.250                            264,220                                 7.7            184,951
     $  1.470                             54,000                                 7.9             37,000
     $  1.750                             47,600                                 8.6             16,660
     $  2.000                             77,500                                 6.5             77,500
     $  2.0625                            48,000                                 6.9             48,000
     $  2.230                            206,605                                 5.9            206,605
     $  2.438                              5,000                                 8.9              5,000
     $  2.500                             13,000                                 8.9              4,550
     $  3.125                             25,900                                 9.5                  -
     $  3.375                             24,600                                 9.7                  -
     $  3.500                             75,000                                 9.5                  -
     $  3.625                             10,225                                 8.7              3,579
     $  3.969                             24,000                                 9.6                  -
     $  5.250                             37,900                                 9.2                  -
     $  8.030                             49,000                                 5.9             49,000
     $ 13.530                              6,908                                 5.9              6,908
     $ 14.670                              2,512                                 5.9              2,512
                                       -------------                                          -----------
                                          971970                                                642,265
                                       =============                                          ===========
</TABLE>

                                       7
<PAGE>

8.   Geographic and Customer Information

     We operate in one industry segment: the development, manufacturing and
service of selective laser sintering systems and related products. Operations
outside of the United States consist principally of sales, marketing and
customer support. Revenues are attributed to geographic areas based upon the
location of the customers. The following is a summary of geographic area data
for the interim periods:

<TABLE>
<CAPTION>                                                                          2001               2000
                                                                             ----------------------------------
                                                                                      (In thousands)
<S>                                                                         <C>                <C>
For the Three Months Ended June 30:
Revenues from external customers:
 North America                                                                  $ 6,205            $ 4,444
 Europe                                                                           4,045              3,924
 Pacific Rim                                                                        910              1,965
                                                                             ----------------------------------
                                                                                $11,160            $10,333
                                                                             ==================================
For the Six Months Ended June 30:
Revenues from external customers:
 North America                                                                  $ 9,725            $ 8,620
 Europe                                                                           8,804              6,841
 Pacific Rim                                                                      2,253              3,025
                                                                             ----------------------------------
                                                                                $20,782            $18,486
                                                                             ==================================
</TABLE>

  9.    Tender Offer By 3D Systems Corporation and Extraordinary Charge

        3D Systems Corp. and DTM Corporation announced on April 3, 2001 that
they have signed a definitive merger agreement under which 3D Systems would
purchase all of the outstanding shares of common stock of DTM for $5.80 per
share in cash. On June 6, 2001, the Antitrust Division of the U.S. Department of
Justice filed a civil action to block the merger on anticompetitive grounds. 3D
Systems Corporation has been extending its tender offer deadline in an attempt
to negotiate the consent of the Department of Justice to allow the merger to be
completed. 3D has announced that it has received a commitment from a bank for a
loan sufficient to allow it to fund this transaction.

     In the quarter ended June 30, 2001, the company recorded as an expense
approximately $1.0 million in transaction costs incurred in the quarter in
connection with the ongoing tender offer by 3D Systems Corp. to acquire all of
DTM's outstanding stock.  DTM was required to expense these transaction costs
because its agreements with 3D Systems do not provide for the reimbursement of
DTM's expenses. At this time no tax benefit relating to these expenses has been
provided as the tender offer is ongoing.



                                       8
<PAGE>

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


Business Environment and Risk Factors


     The following discussion and analysis should be read in conjunction with
the information set forth under the heading Unaudited Condensed Consolidated
Financial Statements and notes thereto, as well as the section below under the
heading "Risk Factors That May Affect Future Results and Safe Harbor Statement."
Our future operating results may be affected by various trends and factors,
which are beyond our control. These include, among other factors, changes in
general economic conditions, rapid or unexpected changes in technologies and
uncertain business conditions that affect the rapid prototyping and rapid
tooling industry. Accordingly, past results and trends should not be used by
investors to anticipate future results or trends.

     With the exception of historical information, the matters discussed below
under the heading "Results of Operations" and "Liquidity and Capital Resources"
may include forward-looking statements that involve risks and uncertainties. All
statements, trends and other information contained in this Quarterly Report on
Form 10-Q relating to markets for our products and trends in revenue, gross
margin and anticipated expense levels constitute forward-looking statements.
These forward-looking statements generally can be identified by the use of words
such as "anticipate", "believe", "plan", "estimate", "expect", "intend", "may",
and "should" and other similar terminology. We wish to caution readers that a
number of important factors, including those identified in the section entitled
"Risk Factors That May Affect Future Results and Safe Harbor Statement" as well
as factors discussed elsewhere in this report and in the other reports filed
with the Securities and Exchange Commission, could affect our actual results and
cause actual results to differ materially from those forward-looking statements.

Overview


     DTM develops, manufactures, and markets advanced rapid prototyping and
manufacturing systems that include a Vanguard and Vanguard HS. All of our
systems utilize a process called SLS selective laser sintering and any of
several plastic or metal SLS materials to create three-dimensional objects from
CAD designs. Leading manufacturers throughout the world, in a range of
industries, use SLS systems to rapidly create production-quality parts,
functional prototypes, and tooling for their products. Sinterstation users can
realize numerous benefits as they develop and manufacture products, including
but not limited to the following:

     .  ability to efficiently produce low-volume/high-value products;

     .  design complex part shapes that could not be fabricated under
        conventional methods;

     .  ability to even customize every product to the customer's exact needs;

     .  time savings;

     .  lower development costs, more efficient testing;

     .  capability to prototype and test more design options; and

     .  the competitive advantage associated with bringing new products to
        market faster.


     DTM's systems address industry's growing need for rapidly produced,
durable, testable prototypes and end-use parts.

                                       9
<PAGE>

     3D Systems Corp. and DTM Corporation announced on April 3, 2001 that they
have signed a definitive merger agreement under which 3D Systems would purchase
all of the outstanding shares of common stock of DTM for $5.80 per share in
cash.  On June 6, 2001, the Antitrust Division of the U.S. Department of Justice
filed a civil action to block the merger on anticompetitive grounds. 3D Systems
Corporation has been extending its tender offer deadline in an attempt to
negotiate the consent of the Department of Justice to allow the merger to be
completed. 3D has announced that it has received a commitment from a bank for a
loan sufficient to allow it to fund this transaction.

Revenue Recognition Policies Summary

     We recognize revenue only when finished products are shipped, title and
risks of ownership have transferred to the buyer, the remaining obligations are
insignificant and collection of the related receivable is probable. We recognize
service and support revenues when performed, or in the case of service
contracts, over the contract period. Deferred revenue equal to the estimated
cost of warranty is recorded on each system sale and recognized as service and
support revenue over the warranty period.

Results Of Operations

     Key operating results for interim periods of 2001 versus the comparable
periods in 2000 are summarized as follows:

<TABLE>
 <CAPTION>
                                                       2001         2000              2001 vs. 2000
                                                    --------      -------            -----------------
                                                            (In thousands, except per share amounts)
<S>                                               <C>            <C>            <C>            <C>
Second Quarter Ended June 30:
Revenues                                            $ 11,160      $10,333       Up $827            Up 8.00%
Operating income                                    $  1,735      $ 1,145       Up $590            Up 51.5%
Income before extraordinary Item                    $  1,226      $   763       Up $463            Up 60.7%
Extraordinary item - Merger costs                  ($  1,031)           -      Up $1,031              NM
Net Income                                          $    195      $   763      Down $568          Down 74.4%
Diluted earnings per share before
  extraordinary Item                                $   0.16      $  0.11      Up $0.05            Up 45.5%
Extraordinary Item - Merger Costs                  ($   0.13)           -      Up $0.13               NM
Net Income                                          $   0.03      $  0.11     Down $0.08          Down 72.7%

Six Months Ended June 30:
Revenues                                            $ 20,782      $18,486      Up $2,296           Up 12.4%
Operating income                                    $  1,962      $ 1,690       Up $272            Up 16.1%
Income before extraordinary Item                    $  1,358      $ 1,125       Up $233            Up 20.7%
Extraordinary item - Merger costs                  ($  1,031)           -      Up $1,031              NM
Net Income                                          $    327      $ 1,125      Down $798          Down 70.9%
Diluted earnings per share before
  extraordinary Item                                $   0.18      $  0.16      Up $0.02            Up 12.5%
Extraordinary Item - Merger Costs                  ($   0.14)           -      Up $0.14               NM
Net Income                                          $   0.04      $  0.16     Down $0.12      Down 75.0%
</TABLE>

                                       10
<PAGE>

Comparison of the Three months ended June 30, 2001 to the Three months ended
June 30, 2000

     Revenues. Revenues increased 8.0% to $11.2 million in the second quarter of
2001, compared to $10.3 million in the second quarter of 2000.  The components
of revenues were as follows:

<TABLE>
<CAPTION>
                                                        2001        2000              2001 vs. 2000
                                                      ------      ------           -----------------
                                                           (In thousands, except per share amounts)
<S>                                             <C>           <C>         <C>                <C>
Second Quarter Ended June 30:
Machines and accessories                              $5,308      $6,094     Down  $786      Down 12.9%
Sintering materials                                   $3,713      $2,771     Up    $942      Up   34.0%
Services and support                                  $2,139      $1,468      Up   $671      Up   45.7%

System volume in machine and accessories
    Revenues                                              19          21      Down    2          Down 9.5%
Average systems in the field                             415         335       Up   80           Up   23.9%
</TABLE>

     Machine and accessories revenues decreased due to a decrease in unit
volume. Sales of powdered sintering materials increased faster than the rise in
average installed base, primarily due to greater consumption rates in the
installed base. Our international revenues for the second quarter of 2001 were
$4.9 million or 44.4% of total revenues, compared to $5.9 million or 57.0% of
total revenues in the second quarter of 2000. This decrease of 15.9% in
international revenues is due to the price compression of our systems sold in
Europe, the negative impact of the softening of the Euro to the Dollar, and the
downturn of the economy in the Asia Pacific Rim Region. Our revenues derived
from North America customers increased by 29.7% in the second quarter of 2001
compared to the second quarter of 2000. This increase is primarily due to the
increase of unit sales in North America.

     Revenues in past periods may not be indicative of revenues in the future,
which may be affected by other business environment and risk factors discussed
below, as well as other factors included elsewhere herein.

     Gross Profit.  Gross profit was $5.8 million, or 52.1% of revenue, in the
second quarter of 2001, compared to $5.5 million, or 52.9% of total revenue, in
the second quarter of 2000. Product margins were also negatively impacted by
4.1% because supplier price increases in our plastic sintering materials.
Product margins were benefited because of higher-margin sintering materials
revenues becoming a larger portion of product revenues. Service and Support
gross margins were steady from the prior year period due to investments we have
made to improve our response times and capabilities to address the low-volume
manufacturing opportunities.

     There is a risk that the increasing strength of the U.S. dollar may cause
gross margin percentages to decline. Other factors, including pricing pressures
internationally and changes in material and labor costs, may also have an
adverse effect on gross margins. Past gross margins are not necessarily
indicative of future gross margins.

     Selling, General and Administrative Expenses.  Selling, general and
administrative expenses were $3.2 million, or 29% of revenues, in the second
quarter of 2001, compared to $3.5 million, or 33.7% of revenues, in the second
quarter of 2000. Selling, general and administrative expenses may vary as a
percentage of revenues in the future.

     Research and Development Expenses. Research and development expenses were
$853,000, or 7.6% of revenues in the second quarter of 2001, compared to
$840,000, or 8.1% of revenues, in the second quarter of 2000. In 2001, we are
focusing on specific development initiatives directed at manufacturing

                                       11
<PAGE>

applications and direct metal parts. Should the planned increase in revenues not
support the planned increase in research and development, which is targeted to a
level below 10% of revenues, we will attempt to delay the planned investments.
Research and development expense may increase in absolute dollars in future
periods, and such expenditures may vary as a percentage of sales. There can be
no assurance that our research and development efforts will result in
commercially successful new technology and products in the future, and those
efforts may be affected by other factors.

     Interest Expense. Net interest expense for the second quarter of 2001 was
$21,000, compared to interest expense of $36,000 for the second quarter of 2000.

    Income Taxes. The estimated effective tax rate in the second quarter of 2001
was 31.9%, compared to 31.2% in the second quarter of 2000.

     As a result of the February 1999 change in control of DTM, utilization of
net operating loss carry forwards will be subject to additional annual limits of
approximately $500,000. At December 31, 2000, we had approximately $6.8 million
of federal net operating loss carry forwards. These net operating loss carry
forwards begin to expire in 2002. We have not recognized any benefit from the
future use of loss carry forwards for these periods due to uncertainties
regarding the realization of deferred tax assets based upon the taxable earnings
history. At December 31, 2000, we also had other long-term deferred tax assets
totaling $1.3 million that also are fully reserved for the same reason.

     Income Before Extraordinary Item.  We had income before extraordinary item
of $1,226,000 in the second quarter of 2001, compared to income before
extraordinary item (net income) of $763,000 in the second quarter of 2000.  This
is an increase of 61.1% of prior period and is primarily attributable to
increased sales and control of our operating expenses.

     Net Income. We had net income of $195,000 in the second quarter of 2001,
compared to net income of $763,000 in the second quarter of 2000. This $568,000
decrease was due to the extraordinary item charge of merger costs that were
incurred in the second quarter 2001.

                                       12
<PAGE>

Liquidity and Capital Resources


     At June 30, 2001, we had a cash balance of $1.2 million and had $4.5
million available under our line of credit.

     During the six months ended June 30, 2001, operating activities used
$70,000 in net cash, exclusive of the merger expenses, compared to a use of
$567,000 in the comparable period of 2000. During the three months ended June
30, 2001, merger expenses used an additional $511,000 of net cash.

     Accounts receivable, less allowance, represented approximately 80 days of
quarter sales at June 30, 2001, compared to 64 days at December 31, 2000.
Inventory, less allowance, represented approximately 66 days on hand at June 30,
2001, compared to 56 days at December 31, 2000.

     Investing activities include expenditures for patents and licenses,
capitalized software costs and furniture and equipment, principally consisting
of our SLS Systems built for internal use. For 2001, we have incurred $586,000
of capital expenditures, compared to $692,000 in the comparable period of 2000.

     DTM has a $4.5 million secured line of credit through May 2002. The
interest rate is 1.25% over prime. Customer remittances are applied against any
outstanding loans. At June 30, 2001, the borrowing base exceeded the loan limit,
and there was a $3,000 loan outstanding.

     We believe that we have the financial resources needed to meet business
requirements, including capital expenditures, working capital requirements and
operating lease commitments for facilities and equipment through December 31,
2001. However, there can be no assurance that this will be the case.

                                       13
<PAGE>

RISK FACTORS THAT MAY AFFECT FUTURE RESULTS AND SAFE HARBOR STATEMENT

     Investors are cautioned that this Quarterly Report on Form 10-Q contains
forward-looking statements that involve risks and uncertainties, including the
following: (i) our plans, strategies, objectives, expectations and intentions
are subject to change at any time at the discretion of management and the Board
of Directors; (ii) our plans and results of operations will be affected by our
ability to manage growth and working capital; and (iii) our business is highly
competitive and the entrance of new competitors or the expansion of the
operations by existing competitors in the Company's markets could adversely
affect our plans and results of operations. In addition, we identify the risk
factors discussed below which may affect our actual results and may cause actual
results to differ materially from those contained in forward looking statements.

CERTAIN RISKS THAT MAY CAUSE THE PURCHASE OF OUR SHARES BY 3D SYSTEMS
---------------------------------------------------------------------
CORPORATION TO BE DELAYED OR TO FALL THROUGH
--------------------------------------------

The Merger Is Subject To Conditions. If these Conditions Are Not Met, the
Acquirer May Decide Not Buy DTM Shares Or Reimburse Us For Our Expenses.

     3D Systems Corporation (Nasdaq:TDSC) and DTM Corporation announced on April
3, 2001 that the companies had signed a definitive merger agreement under which
3D Systems will attempt to purchase all of the outstanding shares of common
stock of DTM for $5.80 per share in cash in a tender offer. This price
represents a substantial premium over the $3.50 trading range that existed just
prior to the merger announcement.

     The ability of the parties to consummate the tender offer and the other
transactions contemplated by the merger agreement are subject to a number of
significant risks and uncertainties.  In particular, in the event that 3D
Systems fails to maintain financing commitments in an amount sufficient to fund
the acquisition and provide for its ongoing working capital needs, 3D Systems
would be unable to complete the tender offer. Such failure to complete the
tender offer might cause DTM's stock price to decline to levels at or below
where it was prior to the announcement of the transactions contemplated by the
merger agreement. Accordingly, investors should proceed with caution before
engaging in transactions in DTM's stock in contemplation of the tender offer or
the merger with 3D Systems. In addition, DTM has incurred, and will continue to
incur, substantial expenses in connection with the transactions contemplated by
the merger agreement. Our expenses are expected to exceed $1.0 million even if
the merger does not go through.  In the event that 3D Systems fails to obtain
sufficient financing to complete the tender offer, 3D Systems would not be
obligated to reimburse DTM for such expenses.  As a result, DTM's operating
results and financial condition, both in current and future periods, would be
adversely affected.

Regulatory Authorities Have Stopped The Merger.

     On June 6, 2001 the Antitrust Division of the United States Department of
Justice filed a civil action to permanently enjoin the acquisition of DTM by 3D
Systems on antitrust grounds. 3D Systems is working with the Department of
Justice in an effort to reach a settlement that would enable 3D Systems to
complete the acquisition of DTM. There can be no assurance that 3D Systems will
be able to reach a settlement with the Department of Justice.

Certain Parties Have Filed a Lawsuit Against Us Seeking, Among Other Relief, To
Stop The Merger and We May Incur Substantial Costs Defending This and Any Other
Similar Lawsuit.

     On April 6, 2001, a purported class action lawsuit under the caption
Spinner v. Goldstein was filed in the 200th Judicial District Court of Travis
County, Austin, Texas, naming us, certain of our directors and 3D Systems
Corporation as defendants.  The complaint was amended on May 2, 2001.  The
complaint as

                                       14
<PAGE>

amended asserts that the $5.80 cash consideration to be paid in the merger is
inadequate and does not represent the value of the assets and the future
prospects of DTM. The amended complaint also alleges that the individual
defendants breached their fiduciary obligations to the public shareholders of
DTM in approving the merger agreement and that the tender offer documents
distributed to the shareholders of DTM in connection with the tender fail to
disclose material information.

     The complaint seeks, among other things, preliminary and permanent
injunctive relief prohibiting us from consummating the merger, and if the merger
is consummated, an order rescinding the merger and awarding damages to the
purported class.  The complaint also seeks unspecified damages, attorney fees
and other relief.  The plaintiffs have requested document production from 3D
Systems Corporation and us on an expedited basis. None of the defendants have
filed an answer to the complaint.

     We have reached an agreement with the representative of the purported class
in this lawsuit, providing for the settlement of the action. The terms of the
settlement are confidential, but, in general, are not expected to have a
material adverse effect on us or otherwise delay the completion of the offer or
the merger.

CERTAIN RISKS ASSOCIATED WITH OUR BUSINESS
------------------------------------------

We are Heavily Dependent on Our Intellectual Property and Proprietary Rights and
We are Currently Involved in Litigation Regarding these Rights

     In pursuing protection for our proprietary rights in our Sinterstation
Systems, materials and related technology, we currently rely on a combination of
patent, copyright, trademark and trade secret rights, as well as contractual
provisions. We seek patent protection for our selective laser sintering
technology. However, patent protection may not always be available. There can be
no assurance that patents will be issued under any or all of the patent
applications to which we have rights. In addition, the laws of various countries
in which our products may be sold may not protect our products and intellectual
property rights to the same extent as the laws of the United States.

     We are currently involved in significant litigation with EOS GmbH Electro
Optical Systems in Germany, France, Italy and Japan, with regard to our
proprietary rights to selective laser sintering technology. If we are
unsuccessful in this litigation, our competitive position may be adversely
affected in those countries.

     In addition, we can give no assurance that the issued patents to which we
hold rights will be adequate to protect our interests or, if challenged, held
valid. Our competitors could develop non-infringing systems, materials or
technologies that are equivalent or superior to ours. Others may also practice
technology believed by us to be covered by our patents or other legal or
contractual protections regardless of the fact that it may be legally protected.
Any litigation to enforce our intellectual property rights would be expensive
and time-consuming.  While we defend our intellectual property vigorously, there
can be no assurance that we will be successful in our various litigation in many
countries. If we were unsuccessful in enforcing our intellectual property rights
or other contractual rights in the context of third-party offers to sell
selective laser sintering systems or sintering powders or if we were found to
have violated state or federal antitrust laws, our future revenues might be
adversely affected.

     Furthermore, unrelated third parties hold many patents and pending patent
applications under which we are not a licensee that relate to the design and
manufacture of rapid prototyping systems and materials. If such a third party
brought infringement litigation against us, and if we were not successful in
defending such litigation or in obtaining a license, the business and financial
performance could be materially adversely affected. EOS has filed a patent
infringement suit against us in federal court in California. In a February 2001
press release related to the filing of the suit, EOS claimed damages of $20

                                       15
<PAGE>

million. Our defense in this suit will be time consuming and costly. Should we
not prevail in this suit our operations will be materially affected.

We License Key Intellectual Property and We Are Currently Having a Royalty
Payment Dispute with the Licensor

     The University of Texas System licenses certain key intellectual property
used in the selective laser sintering process to us. As a licensee, our rights
to practice the technology are not absolute. Early last year we gave notice to
The University of Texas System of changes we had made in our royalty
calculations to reflect business practices we adopted in the fall of 1999. We
informed them that these changes had the effect of reducing the average royalty
due them per machine sold. They have communicated in writing to us that they do
not accept these changes. We met with representatives of The University of Texas
System to provide them a better understanding of our position and of the
methodologies that we now use in our calculation of royalties due them. We are
currently in discussions with them to resolve our differences. The University of
Texas could terminate, attempt to terminate or amend the license if we could be
shown to be in material default of the terms of the license. Even if we had a
basis for objection, defense of our rights as a licensee could be costly, and
the outcome would be uncertain. Loss of significant rights as a licensee under
this license could have a material adverse effect on our business and financial
performance.

We Depend on Markets that Are in their Early Stages of Development

     The market for rapid prototyping products and services, such as those
marketed by DTM, remains in an early stage of development and includes multiple,
competing technologies, many of which are not yet fully developed. Participants
in this market are moving to address new applications, many of which may not yet
be known or accepted by potential users. Rapid prototyping requires that a
three-dimensional CAD file describe a design, and organizations which are not
currently using three-dimensional CAD are not, generally, potential customers
for rapid prototyping products and services. Significant education of the end
user in both three-dimensional CAD modeling and rapid prototyping in general has
in some cases been a prerequisite to product acceptance. It is not clear at this
time which of the competing technologies will gain broad market acceptance.

     The markets for rapid manufacturing products and rapid tooling products,
such as those marketed by DTM, are in an even earlier stage of development than
rapid prototyping. Participants in these markets, including DTM, are moving to
address new applications, many of which may not yet be known or accepted by
potential users. The companies who use traditional casting methods for metal
parts and traditional-machining methods to make injection-molding tooling have
made large capital investments in traditional equipment and have mature
infrastructures for doing so. They may be highly resistant to adopting new
technologies. There can be no assurance that rapid manufacturing technologies
and rapid tooling technologies will evolve to the point that the perceived value
will overcome perceived risks.

Our Market Is Highly Competitive

     The market for rapid prototyping systems is competitive. In marketing our
SLS Systems, we experience competition from many sources. Certain of our
competitors are better known and have greater financial, research and
development, production and marketing resources than us. Currently, the design
and manufacturing applications that our products address is primarily
accomplished using machining, milling and grinding equipment. The suppliers of
such traditional equipment are large and numerous. Large amounts of capital have
already been expended on such traditional equipment, and there exists a cultural
bias to its use in many manufacturing organizations. The principal worldwide
competitors in rapid prototyping are 3D Systems Corporation and Stratasys, Inc.
EOS GmbH Electro Optical Systems is a significant competitor in Europe and in
the Pacific Rim countries. Competition has increased as a result of the
introduction of new products or product enhancements by these competitors and
the entry into the industry by other companies. Increased competition has in the
past resulted, and may in the future continue

                                       16
<PAGE>

to result, in price reductions, reduced margins and loss of market share, all of
which have materially adversely affected our business and financial results.

     While we historically have not faced competition in the supply of powdered
sintering materials and services to SLS System users, we may eventually face
competition upon suitability and upon price. We already experience competition
for technical services to our installed base as many of our customers have
technical skills and resources to effectively support the equipment without
factory assistance. We may also face external competition for such technical
services from other service organizations, and such competition for services
will likely be based upon capability and price.

Our Operating Results Have Fluctuated Substantially from Quarter to Quarter and
Are Likely to Continue

     In prior years, our revenues and operating results have varied at times
substantially from quarter to quarter and may continue to do so. We typically
experience a relatively long lead-time, often from six to 24 months, to complete
a SLS System sale. Our combined procurement and manufacturing cycle is currently
three months. Furthermore, new product introductions, seasonality of customer
buying patterns and other factors can cause fluctuations in quarterly results.
In prior years, these fluctuations have precluded, and may preclude again, us
from managing inventories effectively from quarter to quarter.

     The failure to complete a particular SLS System sale in any given quarter
may have a material adverse effect on our business and financial performance for
that quarter, and quarterly fluctuations could cause a material adverse effect
on the price at which our common stock trades. The tendency for a large number
of our sales made during a quarter to be completed at or near the end of the
quarter also hinders our ability to predict sales, control sales prices and
enforce our standard terms.

We May Not Obtain Sufficient Capital to Fund Our Needs and Additional Funding
May Be Dilutive to Current Security Holders

     Our future capital requirements will depend on a number of factors,
including our profitability, growth rate, working capital requirements, expenses
associated with protection of our patents and other intellectual property, and
costs of future research and development activities. We currently plan to fund
these activities through operations.

     Future operating results will depend, in part, on our ability to obtain and
manage capital sufficient to finance our business. To the extent that funds
expected to be generated from operations are not sufficient to meet current or
planned operating requirements, we will seek to obtain additional funds through
bank credit facilities, equity or debt financing, collaborative or other
arrangements with corporate partners and from other sources.  Additional funding
may not be available when needed or on acceptable terms, which could have a
material adverse effect on our business, financial condition and results of
operations.  If adequate funds are not available, we may be required to delay or
to eliminate certain expenditures or to license to third parties the rights to
commercialize technologies that we would otherwise seek to develop ourselves.
In addition, in the event that we obtain any additional funding, such financing
may have a substantially dilutive effect on the holders of our securities.

We have Limited Product Offerings

     We currently offer two models of SLS Systems for sale. The sale of SLS
Systems comprised the majority of our annual revenues. The SLS Systems are
priced in excess of $250,000, and a new purchaser must also consider the ongoing
operating expense commitment associated with the acquisition of such a system.
In a downturn or a soft market, our dependence upon a limited range of products,
as opposed to a wide range of products at different price points, has caused our
financial performance to be adversely affected and may do so again.

                                       17
<PAGE>

We Depend on a Limited Number of Management and Key Personnel

      Our success depends to a substantial extent on a relatively few key
management employees. Losing the services of one or more key employees could
have a material adverse effect on our business and financial performance. Our
success also depends on our ability to continue to attract highly talented
technical personnel. Candidates with appropriate training and expertise may be
in short supply in the geographic areas where we are attempting to recruit
personnel. We have put in place incentive compensation plans intended to provide
motivation for continued employment of key employees. We can give no assurance
that we will be able to retain employees or continue to attract, assimilate and
retain other skilled personnel.

We Depend on a Limited Number of Third-Party Suppliers

      We subcontract for manufacture of major SLS System components, powdered
sintering materials and accessories from single-source, third-party suppliers.

     Customer demand for DuraForm, our popular powdered sintering materials, has
at times come close to exceeding the supply. We have worked with our supplier to
modify the suppliers manufacturing process to increase the amounts available to
our customers. However, until such time that raw stock capacity is increased,
which is not expected until late 2001, demand may outstrip the supply.

     A disruption in supply or failure of a supplier to remain competitive in
functionality or price could have a material adverse effect on our sales or
reputation for timely delivery, and, hence, on our business, financial
performance and results of operations.

Our Operating Results Are Heavily Dependent on Sales to Customers Located
Outside the U.S.

     Revenues from customers located outside the U.S. represented the majority
of our total revenues in the recent three years. We believe that continued
growth and profitability requires expansion of sales in international markets.
This expansion may be costly and time-consuming and may not generate returns for
a significant period of time, if at all.

     Fluctuations in exchange rates as well as interest rates have significantly
affected our sales in foreign markets. In particular, a strengthening U.S.
dollar has adversely affected the price competitiveness against a major foreign
competitor of our products and services in the international markets.  A
significant and increasing portion of international sales are denominated in
currencies other than U.S. dollars, thereby exposing the Company to gains and
losses on non-U.S. currency transactions. There can be no assurance that any
hedging activity by us to limit currency exchange risk will be successful in
avoiding exchange-related losses. Nor can there be assurance that the exposure
to risks associated with international operations will not continue to have a
material adverse effect on our liquidity, capital resources and results of
operations. The regulatory environment, including import/export laws, protective
trade policies and currency controls of foreign governments, also could
materially adversely affect our business and financial performance.

Proactive Finance Group, LLC has Significant Influence on All Shareholder Votes

      Proactive Finance Group, LLC and its affiliates currently controls
approximately 49.2% of our outstanding common stock. At this percentage,
Proactive could control elections of the board of directors and could control or
substantially affect the outcome of most matters submitted to the shareholders
for their vote or consent. Proactive could also cause, prevent or delay a change
in control.

                                       18
<PAGE>

We May Be Subject to Product Liability Claims

      Products as complex as those we offer may contain undetected defects or
errors when first introduced or as enhancements are released that, despite our
testing, are not discovered until after the product has been installed and used
by customers, which could result in delayed market acceptance of the product or
damage to our reputation and business. We attempt to include provisions in our
agreements with customers that are designed to limit the exposure to potential
liability for damages arising out of defects or errors in our products. However,
the nature and extent of such limitations vary from customer to customer, and it
is possible that such limitations may not be effective as a result of
unfavorable judicial decisions or laws enacted in the future. The sale and
support of our products entails the risk of product liability claims. Any such
claim brought against us, regardless of its merit, could result in material
expense to us, diversion of management time and attention, and damage to our
business reputation and ability to retain existing customers or attract new
customers.

Our Stock Price May Be Affected when Additional Shares Are Sold

     Sales of shares of our common stock into the market by Proactive or
employees exercising options could cause a decline in the price of our stock.
All of the 3,509,357 shares of our common stock currently owned by Proactive are
tradable, subject to the resale limitations of Rule 144, as promulgated by the
U.S. Securities and Exchange Commission that are applicable to an affiliate of a
company. In addition, we have granted Proactive certain demand registration
rights. Also, if we propose to register any of our securities under the
Securities Act of 1933, whether for our own account, for the account of other
shareholders or for both, Proactive is entitled to notice of such registration
and is entitled to include its shares of common stock in the registration.

     Our employees hold immediately exercisable options to purchase 642,265
shares of our common stock. We registered the issuance and the sale of the
shares of common stock that would be issued upon exercise of options under the
stock option plans on a Form S-8 Registration Statements. As a result, the
common stock acquired by employees upon exercise of options outstanding under
the stock option plans will be freely tradable (subject to compliance with
certain provisions of Rule 144, in the case of our affiliates).

Our Market Price Is Volatile

      Our common stock is listed on The Nasdaq SmallCap Stock Market.
Historically, the stock market has experienced volatility that has particularly
affected the market price of common stock of technology-related companies. That
volatility sometimes has been unrelated to the operating performance of such
companies. Moreover, our stock is thinly traded, and we have a relatively small
public float of only approximately 3.6 million shares. These factors may cause
our stock price to be even more variable.


ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.


     Information related to quantitative and qualitative disclosures regarding
market risk is set forth in Management's Discussion and Analysis of Financial
Condition and Results of Operations and the risk factors under Item 2 above.
Such information is incorporated by reference herein.

                                       19
<PAGE>

                                    PART II
                               OTHER INFORMATION


ITEM 1. LEGAL PROCEEDINGS

See notes to financial statements and Risk Factors.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K.

     (a) Exhibits

              10.1  Amendment to Loan Agreements between Silicon Valley Bank and
                    DTM Corporation, dated June 8, 2001

     (b) Reports on Form 8-K

          None

                                       20
<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.

Dated:  August 14, 2001

                         DTM CORPORATION
                         (Registrant)


                                By:  /s/ John S. Murchison, III
                                     -----------------------------------------
                                         John S. Murchison, III
                                         President and Chief Executive Officer


                                By:  /s/ Geoffrey W. Kreiger
                                     -----------------------------------------
                                         Geoffrey W. Kreiger
                                         Vice President of Finance,
                                         Treasurer and Secretary

                                       21
<PAGE>

                               Index to Exhibits
                               -----------------

Number                    Description
------                    -----------

10.1    Amendment of Loan and Security Agreements between DTM Corporation and
        Silicon Valley Bank, dated June 8, 2001

                                       22