<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 March 31, 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 offices)                         (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 7,127,642 shares of our common stock outstanding on April 27, 2001.


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

DTM Corporation
FORM 10-Q
FOR THE QUARTER ENDED MARCH 31, 2001

                               TABLE OF CONTENTS

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

Item 1.    Condensed Consolidated Statement of Income for the
             three months ended March 31, 2001 and 2000                   1

           Condensed Consolidated Balance Sheets as of
             March 31, 2001 and December 31, 2000                         2

           Condensed Consolidated Statements of Cash Flows for the
             three months ended March 31, 2001 and 2000                   3

           Notes to Condensed Consolidated Financial Statements           4

Item 2.    Management's Discussion and Analysis of Financial
             Condition and Results of Operations                          8

Item 3.    Quantitative and Qualitative Disclosures About Market Risk     18

Part II    OTHER INFORMATION

Item 1.    Legal Proceedings                                              19

Item 6.    Exhibits and Reports on Form 8-K                               19
</TABLE>
<PAGE>
                                    PART 1
                             FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS


DTM Corporation
Consolidated Statement of Income
Three Months Ended                            March 31,
Unaudited                                 2001        2000
                                     ----------------------------
                                       (In thousands, except per
                                            share amounts)

Revenues
  Products                              $ 7,945    $ 6,799
  Service and support                     1,677      1,354
                                     ----------------------------
                                          9,622      8,153
Cost of sales:
  Products                                4,037      3,125
  Service and support                     1,484        913
                                     ----------------------------
                                          5,521      4,038
                                     ----------------------------

Gross profit                              4,101      4,115

Operating expenses:
  Selling, general and administrative     2,917      2,696
  Research and development                  957        874
                                     ----------------------------
                                          3,874      3,570
                                     ----------------------------
Operating income                            227        545

Other income (expense):
  Interest expense, net                     (13)       (19)
  Loss on fixed asset disposals             (18)         --
                                     ----------------------------
                                            (31)       (19)
                                     ----------------------------

Income before income taxes                  196        526

Income tax expense                           64        164
                                     ----------------------------

Net income                              $   132    $   362
                                     ============================

Earnings per share:
  Basic earnings per share              $  0.02    $  0.05
  Diluted earnings per share            $  0.02    $  0.05

Weighted average shares outstanding:
  Basic                                   7,087      7,005
  Diluted                                 7,388      7,270


See accompanying notes.

                                       1
<PAGE>

DTM Corporation
Consolidated Balance Sheets
Unaudited                                      March 31,        December 31
                                                  2001              2000
                                             ------------------------------
                                                      (In thousands)
Assets
Current assets:
  Cash                                        $    1,159        $  2,529
  Accounts receivable, net                         8,221           8,411
  Inventories                                      3,907           3,643
  Prepaid expenses and other                         483             502
  Deferred income taxes                              611             611
                                             ------------------------------
  Total current assets                            14,381          15,696
Property, net                                      1,891           1,842
Capitalized software development costs, net          442             360
Patent and license fees, net                         432             489
                                             ------------------------------

Total assets                                  $   17,146        $ 18,387
                                             ==============================

Liabilities and shareholders' equity
  Current liabilities:
  Bank line of credit                         $       --        $      -
  Accounts payable                                 2,447           3,062
  Deferred revenues and customer deposits          2,330           2,432
  Employee and agent compensation                  1,021           1,582
  Income taxes                                       524             501
                                             ------------------------------
  Total current liabilities                        6,322           7,577

Shareholders' equity:
  Common stock - 7,090,989 shares
     outstanding at March 31, 2001                     1               1
  Additional paid-in capital                      54,270          54,241
  Accumulated deficit                            (43,156)        (43,288)
  Accumulated other comprehensive loss              (291)           (144)
                                             ------------------------------
  Total shareholders' equity                      10,824          10,810
                                             ------------------------------

Total liabilities and shareholders' equity    $   17,146        $ 18,387
                                             ==============================


See accompanying notes.

                                       2
<PAGE>

<TABLE>
<CAPTION>
DTM Corporation
Consolidated Statements of Cash Flows                                       Three Months Ended
(Unaudited)                                                                      March 31,
                                                                           2001            2000
                                                                    --------------------------------
                                                                              (In thousands)
<S>                                                                 <C>                    <C>
Operating activities
Net income                                                              $   132            $   362
Adjustments to reconcile net income to net cash
 provided by (used in) operating activities:
   Depreciation and amortization                                            369                383
   Provision for doubtful accounts                                            -                  -
   Provision for obsolescence                                                32                 30
   Foreign currency exchange (gain)/loss                                    (68)                63
   Loss on disposal of equipment                                             18                  -
   Changes in assets and liabilities:
       Accounts receivable                                                  190               (860)
       Inventory                                                           (296)              (281)
       Prepaid expenses and other assets                                     19               (205)
       Accounts payable and accrued expenses                               (615)              (208)
       Deferred service revenues                                           (102)               114
       Income taxes                                                          23               (389)
       Employee and agent compensation                                     (561)              (650)
                                                                    ----------------------------------

Net cash provided by operating activities                                  (859)            (1,641)

Investing activities
Purchases of machinery and equipment                                       (295)              (302)
Capitalized software development costs                                     (145)               (43)
Patent and license expenditures                                             (22)               (14)
Proceeds from sale of machinery and equipment                                 1                  -
                                                                    ----------------------------------

Net cash used by investing activities                                      (461)              (359)

Financing activities
Proceeds from exercise of stock options                                      29                120
Draws on line of credit from financial institutions                         830              1,323
Repayments on credit lines                                                 (830)                 -
                                                                    ----------------------------------

Net cash provided by financing activities                                    29              1,443

Effect of foreign exchange rate changes                                     (79)              (133)
                                                                    ----------------------------------

Net change in cash                                                       (1,370)             (690)

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

Cash at end of period                                                  $  1,159            $   815
                                                                    ==================================
</TABLE>

See accompanying notes.

                                       3
<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 March 31, 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.

<TABLE>
<CAPTION>
                                                                 2001            2000
                                                           ---------------------------------
<S>                                                        <C>                  <C>
For the Three Months Ended March 31:
Net income (A)                                                $  132,000        $  362,000

Average shares of common stock outstanding (B)                 7,087,000         7,005,000
Dilutive effect of employee and director stock options           301,000           265,000
                                                           ---------------------------------
Common stock and common stock equivalents (C)                  7,388,000         7,270,000
                                                           =================================

Earnings per share:
     Basic (A/B)                                              $     0.02        $     0.05
     Diluted (A/C)                                            $     0.02        $     0.05
</TABLE>



3.   Inventory

     Inventory consisted of the following:

<TABLE>
<CAPTION>
                                                                            March 31,       December 31,
                                                                               2001             2000
                                                                       -----------------------------------
                                                                                   (In thousands)

<S>                                                                     <C>                  <C>
Raw materials and purchased parts                                           $   3,516        $   2,869
Finished goods                                                                    779            1,129
                                                                       -----------------------------------
                                                                                4,295            3,998
Reserve for inventory obsolescence                                               (388)            (355)
                                                                       -----------------------------------
                                                                            $   3,907        $   3,643
                                                                       ===================================
</TABLE>

                                       4
<PAGE>

     4.  Comprehensive Income

         Comprehensive income for the interim periods was as follows:

                                                2001            2000
                                             --------------------------
                                                    (In thousands)

For the Three Months Ended March 31:
Net income                                   $    132        $    362
Foreign currency translation                     (147)            (70)
                                             --------------------------
Comprehensive Income                         $    (15)       $    292
                                             ==========================



     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 this 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                                          14,209
                                                                  -------------
Issued and outstanding at March 31, 2001                              7,090,989
                                                                  =============



         At March 31, 2001, there were 1,114,746 shares of common stock reserved
for issuance in connection with the 1999 Stock Option Plan (883,015 shares) and
for exercise of outstanding options issued in connection with a prior plan
(231,731 shares).

         Beginning in 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 $29,000 and $36,000 in the three-month periods ended March 31, 2001
and 2000, respectively.

                                       5
<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                                       (14,209)            2.157
  Canceled                                           (724)            7.239
                                              ----------------------------------
Outstanding at March 31, 2001                   1,013,901          $  2.590
                                              ==================================

         A summary of information about stock options outstanding and
exercisable at March 31, 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                     276,670                   8.0                        193,666
         $   1.470                      54,000                   8.0                         18,500
         $   1.750                      47,600                   8.8                         16,660
         $   2.000                      85,000                   6.8                         85,000
         $  2.0625                      48,600                   7.1                         34,012
         $   2.230                     221,997                   6.1                        221,997
         $   2.438                       5,000                   9.1                              -
         $   2.500                      13,000                   9.2                              -
         $   3.125                      25,900                   9.8                              -
         $   3.375                      25,100                   9.9                              -
         $   3.500                      75,000                   9.7                              -
         $   3.625                      14,900                   8.9                          5,215
         $   3.969                      24,000                   9.8                              -
         $   5.250                      38,400                   9.5                              -
         $   8.030                      49,000                   6.1                         49,000
         $  13.530                       6,908                   6.1                          6,908
         $  14.670                       2,826                   6.1                          2,826
                                  ------------                                       --------------
                                     1,013,901                                              633,784
                                  ============                                       ==============
</TABLE>

                                       6
<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:

                                                   2001             2000
                                              --------------------------------
                                                       (In thousands)
For the Three Months Ended March 31:
Revenues from external customers:
  North America                                  $    3,520       $    4,176
  Europe                                              4,759            2,917
  Pacific Rim                                         1,343            1,060
                                              --------------------------------
                                                 $    9,622       $    8,153
                                              ================================


     9.  Tender Offer By 3D Systems Corporation

         3D Systems Corporation (Nasdaq:TDSC) has made a tender offer to
purchase all of the outstanding shares of common stock of DTM for $5.80 per
share in cash. 3D has set May 29, 2001 as the tender offer deadline. 3D's offer
is conditioned upon it receiving tenders for 67% of our shares by the deadline
and its ability to close the financing necessary to fund the transaction. 3D has
announced that it has received a commitment from a bank for a loan sufficient to
allow it to fund this transaction.

                                       7
<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 Sinterstation(R) 2500/plus/. All
Sinterstation systems utilize a process called SLS(R) 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 Sinterstation 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.

                                       8
<PAGE>

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:

                                     2001       2000          2001 vs. 2000
                                     ----       ----          -------------
                                     (In thousands, except per share amounts)

First Quarter Ended March 31:
Revenues                            $9,622     $8,153   Up $1,469    Up 18.0%
Operating income                      $227       $545   Down $318    Down 58.4%
Net income                            $132       $362   Down $230    Down 63.5%
Diluted earnings per share           $0.02      $0.05   Down $0.03   Down 60.0%


Comparison of the Three months ended March 31, 2001 to the Three months ended
March 31, 2000

     Revenues. Revenues increased 18.0% to $9.6 million in the first quarter of
2001, compared to $8.2 million in the first quarter of 2000. The components of
revenues were as follows:

                                     2001       2000        2001 vs. 2000
                                     ----       ----        -------------
                                     (In thousands, except per share amounts)

First Quarter Ended March 31:
Machines and accessories            $4,429     $4,033   Up $396      Up  9.8%
Sintering materials                 $3,516     $2,766   Up $750      Up 27.1%
Services and support                $1,677     $1,354   Up $323      Up 23.9%

System volume in machine and
accessories
  Revenues                              17         15   Up  2        Up 13.3%
Average systems in the field           396        315   Up 81        Up 25.7%


     Machine and accessories revenues increased due to increased 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. Services and support revenues increased somewhat less than the rise in
average installed base. Our international revenues for the first quarter of 2001
were $6.1 million or 63.4% of total revenues, compared to 48.8% in the first
quarter of 2000. Our revenues derived form North America customers contracted by
15.7% in the first quarter of 2001 compared to the first quarter of 2000.

     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.

                                       9
<PAGE>

     Gross Profit. Gross profit was $4.1 million, or 42.6% of revenue, in the
first quarter of 2001, compared to $4.1 million, or 50.5% of total revenue, in
the first quarter of 2000. A program to expedite delivery of certain sintering
materials from our supplier in Europe to our facilities in Austin negatively
impacted product margins. This program to use expedited delivery was put in
place to address tightness in supplies. We returned to more normal delivery
practices in the second quarter of 2001. Product margins were also negatively
impacted by supplier price increases in our plastic sintering materials. Product
margins were benefited by higher-margin sintering materials revenues becoming a
larger portion of product revenues. Service and Support gross margins decreased
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. In addition, service margins were negatively impacted in the
first quarter of 2001 by higher than anticipated parts costs.

     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 $2.9 million, or 30.3% of revenues, in the first
quarter of 2001, compared to $2.7 million, or 33.1% of revenues, in the first
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
$957,000, or 10.0% of revenues in the first quarter of 2001, compared to
$874,000, or 10.7% of revenues, in the first quarter of 2000. In 2001, we are
focusing on specific development initiatives directed at manufacturing
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 first quarter of 2001 was
$13,000, compared to interest expense of $19,000 for the first quarter of 2000.

     Income Taxes. The estimated effective tax rate in the first quarter of 2001
was 32.7%, compared to 31.2% in the first 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.

     Net Income. We had net income of $132,000 in the first quarter of 2001,
compared to net income of $362,000 in the first quarter of 2000. This $230,000
decrease was primarily due increases in our cost of sales relating to our
plastic sintering materials and service and support.

                                       10
<PAGE>

Liquidity and Capital Resources

     At March 31, 2001, we had a cash balance of $1.2 million and had $3.5
million available under our line of credit.

     During the three months ended March 31, 2001, operating activities used
$859,000 in net cash, compared to a use of $1.6 million in the comparable period
of 2000.

     Accounts receivable, less allowance, represented approximately 76 days of
quarter sales at March 31, 2001, compared to 64 days at December 31, 2000.
Inventory, less allowance, represented approximately 64 days on hand at March
31, 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 Sinterstation Systems built for internal use. For 2001, we have incurred
$461,000 of capital expenditures, compared to $359,000 in the comparable period
of 2000.

     DTM has a $3.5 million secured line of credit through May 2001. The
interest rate is 1.5% over prime. Customer remittances are applied against any
outstanding loans. At March 31, 2001, the borrowing base exceeded the loan
limit, and there was no 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.

                                       11
<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 likely would 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 $600,000 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 May Delay Or Stop The Merger.

     The Antitrust Division of the United States Department of Justice has
contacted us seeking information about the offer and the merger. The Antitrust
Division lawyers have indicated that their inquiry is directed to whether there
are likely to be any anticompetitive effects resulting from the transaction. We
are cooperating fully with the inquiry.

     The Antitrust Division and the Federal Trade Commission frequently
scrutinize the legality under the antitrust laws of transactions such as the
proposed acquisition of DTM. At any time before or after the acquisition of the
shares of common stock of DTM pursuant to the offer, the Antitrust Division or
the Federal Trade Commission could take any action under the antitrust laws that
it deems necessary or desirable in the public interest, including seeking to
enjoin the purchase of the shares pursuant to the offer or the consummation of
the merger or seeking the divestiture of shares acquired by 3D or the
divestiture of substantial assets of DTM, or its subsidiaries, or 3D. Private
parties may also bring legal action under the

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<PAGE>

antitrust laws under certain circumstances. We cannot assure you that a
challenge to the offer on antitrust grounds will not be made or, if a challenge
is made, of the result of that challenge.


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 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 in principle 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. In connection with the agreement, the plaintiff has
cancelled his request for expedited discovery. At the date of this filing, we
have not yet entered into a written agreement embodying the terms of our
understanding but expect to do so shortly. We cannot assure you that we will
enter into an agreement to settle the class action or that any written agreement
entered into to settle the action will reflect the terms of our agreement in
principle. If we do not settle the action, a court may determine to enjoin the
offer and the merger or subject us to an adverse judgment in a substantial
amount. In addition, the litigation process is costly and may divert
management's attention from our daily operations. If a court permanently enjoins
the offer or requires us to pay damages, we will not be entitled to recoup our
transaction costs associated with the offer and our business may be materially
adversely affected. Alternatively, if a court temporarily enjoins the offer, we
also may incur substantial litigation costs, the closing of the offer and merger
will be delayed, which will increase our transaction costs and our operations
and financial condition may be materially adversely affected.

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

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<PAGE>

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
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,

                                       14
<PAGE>

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
Sinterstation 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 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 Sinterstation users, we 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 Sinterstation 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 Sinterstation 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.

                                       15
<PAGE>

     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 one model of Sinterstation Systems for sale. The sale of
Sinterstation Systems comprised the majority of our annual revenues. The
Sinterstation 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.

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 Sinterstation System components,
powdered sintering materials and accessories from single-source, third-party
suppliers. 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.

     Customer demand for DuraForm(R), 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.

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

                                       16
<PAGE>

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.

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 633,784
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-

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<PAGE>

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.

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<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

               None

      (b) Reports on Form 8-K

               The following reports on Form 8-K were filed during the quarter
               ended March 31, 2001:

                    REPORT DATED MARCH 16, 2001 - Item 5, Other Events. On
               January 23, 2001, our board of directors appointed Dr. Paul W.
               Murill to serve as a director until the next election of
               directors.

                    REPORT DATED APRIL 6, 2001 - Item 5, Other Events. On April
               2, 2001, we entered into an agreement and plan of merger with 3D
               Systems Corporation and Tiger Deals, Inc., a wholly-owned
               subsidiary of 3D Systems pursuant to which 3D Systems would
               acquire DTM in a cash tender offer. The commencement of the
               tender offer is subject to 3D Systems' ability to secure
               financing. The merger agreement provides that 3D Systems will
               commence a tender offer for any and all outstanding shares of
               DTM's common stock at a purchase price of $5.80 per share, upon
               the terms and subject to the conditions set forth in the merger
               agreement, no later than five business days after receiving
               financing commitments in an amount sufficient to fund the
               acquisition and to provide for 3D Systems' ongoing working
               capital needs.

                    On March 30, 2001, DTM entered into severance agreements
               with: John S. Murchison, III, DTM's Chief Executive Officer, and
               Geoffrey W. Kreiger, Patrick Lordi, Kevin McAlea and Ronald K.
               Skaggs, each of which is a Vice President of DTM.

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<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:  May 15, 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



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