##### Table of Contents





UNITED STATES
 SECURITIES AND EXCHANGE
    COMMISSION
 Washington, D.C.
    20549
  Form 10-Q
  (Mark One)þ

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the quarterly period ended
    July 30, 2010Oro

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the transition period
    from          to          .   Commission File Number: 0-17017
  Dell Inc.
    Delaware

74-2487834(State or other jurisdiction
    of incorporation or organization)

(I.R.S. Employer Identification No.)    One Dell Way
 Round Rock, Texas 78682
    1-800-BUY-DELL
    þ o
  Regulation S-T þ o
  Rule 12b-2
  Large accelerated
    filer þ

Accelerated
    filer oNon-accelerated
    filer o  (Do
    not check if a smaller reporting company)

Smaller reporting
    company o   Rule 12b-2 o þ




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##### Table of Contents





CAUTIONARY
    NOTE REGARDING FORWARD-LOOKING STATEMENTS
  Form 10-K




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##### 



INDEX
  PagePART I - FINANCIAL
    INFORMATIONItem 1.
    Financial StatementsCondensed Consolidated Statements of Financial
    Position at July 30, 2010 (unaudited), and
    January 29, 2010


1Condensed Consolidated Statements of Income for
    the three and six months ended July 30, 2010 (unaudited),
    and July 31, 2009 (unaudited)


2Condensed Consolidated Statements of Cash Flows
    for the six months ended July 30, 2010 (unaudited), and
    July 31, 2009 (unaudited)


3Notes to Condensed Consolidated Financial
    Statements (unaudited)


4Item 2.
    Managements Discussion and Analysis of Financial Condition
    and Results of Operations


29Item 3.
    Quantitative and Qualitative Disclosures About Market
    Risk


43Item 4.
    Controls and Procedures


43PART II - OTHER INFORMATIONItem 1.
    Legal Proceedings


45Item 1A.
    Risk Factors


45Item 2.
    Unregistered Sales of Equity Securities and Use of
    Proceeds


46Item 6.
    Exhibits


46EX-3.1EX-3.2EX-12.1EX-31.1EX-31.2EX-32.1




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##### Table of Contents



PART I 
    FINANCIAL INFORMATION  ITEM 1.
    FINANCIAL
    STATEMENTS  DELL
    INC.
 CONDENSED CONSOLIDATED
    STATEMENTS OF FINANCIAL POSITION
   July 30,

January 29,2010

2010(unaudited)ASSETSCurrent assets:Cash and cash equivalents

$
11,694


$
10,635Short-term investments


744



373Accounts receivable, net


6,565



5,837Financing receivables, net


3,272



2,706Inventories, net


1,372



1,051Other current assets


3,562



3,643Total current assets


27,209



24,245Property, plant, and equipment, net


1,980



2,181Investments


633



781Long-term financing receivables, net


622



332Goodwill


4,264



4,074Purchased intangible assets, net


1,638



1,694Other non-current assets


294



345Total assets

$
36,640


$
33,652LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Short-term debt

$
1,627


$
663Accounts payable


12,465



11,373Accrued and other


3,812



3,884Short-term deferred services revenue


3,009



3,040Total current liabilities


20,913



18,960Long-term debt


3,623



3,417Long-term deferred services revenue


3,311



3,029Other non-current liabilities


2,632



2,605Total liabilities


30,479



28,011Commitments and contingencies (Note 12)Stockholders equity:Common stock and capital in excess of $.01 par value; shares
    authorized: 7,000; shares issued: 3,365 and 3,351, respectively;shares outstanding: 1,945 and 1,957, respectively


11,608



11,472Treasury stock at cost: 945 shares and 919 shares,
    respectively


(28,304
)


(27,904
)Retained earnings


22,984



22,110Accumulated other comprehensive loss


(127
)


(37
)Total stockholders equity


6,161



5,641Total liabilities and stockholders equity

$
36,640


$
33,652    1




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##### Table of Contents



DELL
    INC.
 CONDENSED CONSOLIDATED
    STATEMENTS OF INCOME
   Three Months Ended

Six Months EndedJuly 30,

July 31,

July 30,

July 31,2010

2009

2010

2009Net revenue:Products

$
12,645


$
10,623


$
24,731


$
20,855Services, including software related


2,889



2,141



5,677



4,251Total net revenue


15,534



12,764



30,408



25,106Cost of net revenue:Products


10,931



8,978



21,316



17,764Services, including software related


2,017



1,395



3,990



2,783Total cost of net revenue


12,948



10,373



25,306



20,547Gross margin


2,586



2,391



5,102



4,559Operating expenses:Selling, general, and administrative


1,679



1,571



3,509



3,184Research, development, and engineering


162



149



329



290Total operating expenses


1,841



1,720



3,838



3,474Operating income


745



671



1,264



1,085Interest and other, net


(49
)


(42
)


(117
)


(44
)Income before income taxes


696



629



1,147



1,041Income tax provision


151



157



261



279Net income

$
545


$
472


$
886


$
762Earnings per share:Basic

$
0.28


$
0.24


$
0.45


$
0.39Diluted

$
0.28


$
0.24


$
0.45


$
0.39Weighted-average shares outstanding:Basic


1,952



1,955



1,956



1,952Diluted


1,960



1,960



1,967



1,956    2




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##### Table of Contents



DELL
    INC.
 CONDENSED CONSOLIDATED
    STATEMENTS OF CASH FLOWS
   Six Months EndedJuly 30,

July 31,2010

2009Cash flows from operating activities:Net income

$
886


$
762Adjustments to reconcile net income to net cash provided by
    operating activities:Depreciation and amortization


511



402Stock-based compensation


156



146Effects of exchange rate changes on monetary assets and
    liabilities denominated in foreign currencies


37



26Deferred income taxes


(55
)


(140
)Provision for doubtful accounts - including financing
    receivables


217



210Other


4



19Changes in assets and liabilities, net of effects from
    acquisitions:Accounts receivable


(896
)


(593
)Financing receivables


(413
)


(379
)Inventories


(318
)


29Other assets


36



(24
)Accounts payable


1,131



1,318Deferred services revenue


265



44Accrued and other liabilities


12



17Change in cash from operating activities


1,573



1,837Cash flows from investing activities:Investments:Purchases


(1,063
)


(776
)Maturities and sales


838



982Capital expenditures


(191
)


(179
)Proceeds from sale of facility and land


18



16Acquisition of business, net of cash received


(222
)


(3
)Change in cash from investing activities


(620
)


40Cash flows from financing activities:Repurchase of common stock


(400
)


-Issuance of common stock under employee plans


9



-Issuance (repayment) of commercial paper (maturity 90 days
    or less), net


724



(100
)Proceeds from debt


609



1,491Repayments of debt


(819
)


(12
)Other


2



-Change in cash from financing activities


125



1,379Effect of exchange rate changes on cash and cash equivalents


(19
)


91Change in cash and cash equivalents


1,059



3,347Cash and cash equivalents at beginning of period


10,635



8,352Cash and cash equivalents at end of period

$
11,694


$
11,699    3




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DELL
    INC.
  NOTES TO CONDENSED
    CONSOLIDATED FINANCIAL STATEMENTS
   NOTE 1 
    BASIS OF PRESENTATION
  Basis of Presentation Form 10-K
    Recently
    Issued and Adopted Accounting Pronouncements
  Revenue Arrangements with Multiple Deliverables 
     4




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DELL
    INC.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
 (unaudited)
        Variable Interest Entities and Transfers of Financial Assets
    and Extinguishments of Liabilities
  Recently
    Issued Accounting Pronouncements
  Credit Quality of Financing Receivables and the Allowance for
    Credit Losses
  Reclassifications
 5




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##### Table of Contents



DELL
    INC.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
 (unaudited)
  NOTE 2 
    INVENTORIES
  July 30,

January 29,2010

2010(in millions)Inventories:Production materials

$
673


$
487Work-in-process


199



168Finished goods


500



396Inventories

$
1,372


$
1,051
   NOTE 3 
    FAIR VALUE MEASUREMENTS
    July 30, 2010

January 29, 2010Level 1

Level 2

Level 3

Total

Level 1

Level 2

Level 3

TotalQuoted







QuotedPrices







Pricesin Active

Significant





in Active

SignificantMarkets for

Other

Significant



Markets for

Other

SignificantIdentical

Observable

Unobservable



Identical

Observable

UnobservableAssets

Inputs

Inputs



Assets

Inputs

Inputs(in millions)Assets:Cash equivalents:Commercial paper

$
-


$
549


$
-


$
549


$
-


$
197


$
-


$
197U.S. government and agencies


-



82



-



82



-



-



-



-Debt securities:U.S. government and agencies


-



55



-



55



-



66



-



66U.S. corporate


-



545



31



576



-



553



30



583International corporate


-



630



-



630



-



391



-



391State and municipal governments


-



-



-



-



-



2



-



2Equity and other securities


-



96



-



96



-



90



-



90Retained interest


-



-



-



-



-



-



151



151Derivative instruments


-



120



-



120



-



96



-



96Total assets

$
-


$
2,077


$
31


$
2,108


$
-


$
1,395


$
181


$
1,576Liabilities:Derivative instruments

$
-


$
37


$
-


$
37


$
-


$
12


$
-


$
12Total liabilities

$
-


$
37


$
-


$
37


$
-


$
12


$
-


$
12  6




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##### Table of Contents



DELL
    INC.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
 (unaudited)
    Cash Equivalents
  Debt Securities
  Equity and Other Securities 
  Retained Interest
  Derivative Instruments .
 7




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##### Table of Contents



DELL
    INC.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
 (unaudited)
    Three Months EndedJuly 30, 2010

July 31, 2009Retained

U.S.



Retained

U.S.Interest

Corporate

Total

Interest

Corporate

Total(in millions)Balance at beginning of the period

$
-


$
30


$
30


$
504


$
28


$
532Net unrealized gains (losses) included in
    earnings(a)


-



1



1



17



1



18Issuances and settlements


-



-



-



100



-



100Transfers out of
    Level 3(b)


-



-



-



(502
)


-



(502
)Balance at end of period

$
-


$
31


$
31


$
119


$
29


$
148Six Months EndedJuly 30, 2010

July 31, 2009Retained

U.S.



Retained

U.S.Interest

Corporate

Total

Interest

Corporate

Total(in millions)Balance at beginning of period

$
151


$
30


$
181


$
396


$
27


$
423Net unrealized gains (losses) included in
    earnings(a)


-



1



1



8



2



10Issuances and settlements


-



-



-



217



-



217Transfers out of
    Level 3(b)


(151
)


-



(151
)


(502
)


-



(502
)Balance at end of period

$
-


$
31


$
31


$
119


$
29


$
148     (a)
    
    The unrealized gains and losses on
    U.S. corporate represent accrued interest for assets that were
    still held at July 30, 2010, and July 31, 2009.  (b)
    
    Represents transfers out resulting
    from the SPE consolidation. See Note 5 of Notes to
    Condensed Consolidated Financial Statements for additional
    information on retained interest.  Assets and Liabilities Measured at Fair Value on a
    Nonrecurring Basis
 8




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DELL
    INC.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
 (unaudited)
  NOTE 4 
    INVESTMENTS
    July 30, 2010

January 29, 2010Fair



Unrealized

Unrealized

Fair



Unrealized

UnrealizedValue

Cost

Gain

(Loss)

Value

Cost

Gain

(Loss)(in millions)Investments:U.S. government and agencies

$
55


$
55


$
-


$
-


$
65


$
65


$
-


$
-U.S. corporate


375



375



-



-



233



232



1



-International corporate


314



314



-



-



75



75



-



-Total short-term investments


744



744



-



-



373



372



1



-U.S. government and agencies


-



-



-



-



1



1



-



-U.S. corporate


201



201



1



(1
)


350



349



2



(1
)International corporate


316



316



1



(1
)


316



316



1



(1
)State and municipal governments


-



-



-



-



2



2



-



-Equity and other securities


116



116



-



-



112



112



-



-Total long-term investments


633



633



2



(2
)


781



780



3



(2
)Total investments

$
1,377


$
1,377


$
2


$
(2
)

$
1,154


$
1,152


$
4


$
(2
)   available-for-sale.
  other-than-temporarily other-than-temporary available-for-sale
 9




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##### Table of Contents



DELL
    INC.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
 (unaudited)
  NOTE 5 
    FINANCIAL SERVICES
  Dell Financial Services L.L.C.
       10




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##### Table of Contents



DELL
    INC.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
 (unaudited)
  Financing
    Receivables
    July 30,

January 29,2010

2010(in millions)Financing receivables, net:Customer receivables:Revolving loans, gross

$
1,976


$
2,046Fixed-term leases and loans, gross


1,938



824Customer receivables, gross


3,914



2,870Allowance for losses


(277
)


(237
)Customer receivables, net


3,637



2,633Residual interest


257



254Retained interest


-



151Financing receivables, net

$
3,894


$
3,038Short-term

$
3,272


$
2,706Long-term


622



332Financing receivables, net

$
3,894


$
3,038
     July 30,

January 29,2010

2010(Pro forma)(in millions)Customer receivables, gross:Consolidated receivables

$
3,914


$
2,870Receivables in previously nonconsolidated SPEs


-



774Customer receivables, gross

$
3,914


$
3,644Customer receivables 60 days or more delinquent

$
125


$
138
  11




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##### Table of Contents



DELL
    INC.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
 (unaudited)
    July 30,

January 29,2010

2010(in millions)Financing receivables held by consolidated VIEs, net:Short-term, net

$
1,068


$
277Long-term, net


239



-Financing receivables held by consolidated VIEs, net

$
1,307


$
277
     Three Months Ended

Six Months EndedJuly 30,

July 31,

July 30,

July 31,2010

2009

2010

2009(in millions)Allowances for losses:Balance at beginning of period

$
285


$
154


$
237


$
149Incremental allowance due to VIE consolidation


-



-



16



-Expense charged to income statement


62



55



150



96Principal charge-offs


(57
)


(30
)


(103
)


(60
)Interest charge-offs


(13
)


(6
)


(23
)


(12
)Balance at end of period

$
277


$
173


$
277


$
173   Customer
    Receivables
    
    Revolving loans offered under private label credit financing
    programs provide qualified customers with a revolving credit
    line for the purchase of products and services offered by Dell.
    Revolving loans bear interest at a variable annual percentage
    rate that is tied to the prime rate. Based on historical payment
    patterns, revolving loan transactions are typically repaid
    within 12 months. Revolving loans are included in
    short-term financing receivables. From time to time, account
    holders may have the opportunity to finance their Dell purchases
    with special programs during which, if the outstanding balance
    is paid in full by a specific date, no interest is charged.
    These special programs generally range from six to
    12 months. At July 30, 2010, and January 29,
    2010, receivables under these special programs were
    $381 million and $442 million, respectively.
    Dell enters into sales-type lease arrangements with customers
    who desire lease financing. Leases with business customers have
    fixed terms of generally two to four years. Future maturities of
    minimum lease payments at July 30, 2010 for Dell are as
    follows: Fiscal 2011  $502 million; Fiscal
    2012  $667 million; Fiscal 2013 
    $377 million; Fiscal 2014 and beyond 
    $75 million. Fixed-term loans are offered to qualified
    small businesses, large commercial accounts, governmental
    organizations, and educational entities. 12




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##### Table of Contents



DELL
    INC.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
 (unaudited)
  Residual
    Interest
  value-at-risk other-than-temporary
  Asset
    Securitizations
  
    The gross balance of securitized receivables reported
    off-balance sheet as of January 29, 2010, was
    $774 million, and the associated debt was
    $624 million. As discussed above, as of the beginning of
    Fiscal 2011, all previously nonconsolidated qualified special
    purpose entities were consolidated. Upon consolidation of these
    customer receivables and associated debt at the beginning of
    Fiscal 2011, Dells retained interest in securitized
    receivables of $151 million at January 29, 2010, was
    eliminated. A $13 million decrease to beginning retained
    earnings for Fiscal 2011 was recorded as a cumulative effect
    adjustment due to adoption of the new accounting guidance.
    During the second quarters of Fiscal 2011 and Fiscal 2010,
    $524 million and $262 million of customer receivables,
    respectively, were funded via securitization through SPEs.
    During the six months ended July 30, 2010, and
    July 31, 2009, $1 billion and $495 million,
    respectively, of customer receivables were funded via
    securitization through SPEs.
    The structured financing debt related to the fixed-term lease
    and loan, and revolving loan securitization programs was
    $918 million and $788 million as of July 30,
    2010, and January 29, 2010, respectively. This includes
    $624 million at January 29, 2010, held by
    nonconsolidated SPEs. The debt is collateralized solely by the
    financing receivables in the programs. The debt has a variable
    interest rate and an average duration of 12 to 36 months
    based on the terms of the underlying financing receivables. The
    maximum debt capacity related to the securitization programs is
    $1.1 billion. See Note 6 of the Notes to the Condensed
    Consolidated Financial Statements for additional information
    regarding the structured financing debt.
    During the first half of Fiscal 2011, Dell entered into interest
    rate swap agreements to effectively convert a portion of the
    structured financing debt from a floating rate to a fixed rate.
    The interest rate swaps qualified for hedge accounting treatment
    as cash flow hedges. See Note 7 of Notes to Condensed
    Consolidated Financial Statements for additional information
    about interest rate swaps.  Retained
    Interest
     13




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##### Table of Contents



DELL
    INC.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
 (unaudited)
    Three Months

Six MonthsEnded

EndedJuly 31,

July 31,2009

2009(in millions)Retained interest:Retained interest at beginning of period

$
504


$
396Issuances


125



252Distributions from conduits


(25
)


(35
)Net accretion


14



24Change in fair value for the period


3



(16
)Impact of special purpose entity consolidation


(502
)


(502
)Retained interest at end of period

$
119


$
119     Weighted Average Key AssumptionsMonthlyPayment

Credit

DiscountRates

Losses

Rates

Life(lifetime)

(annualized)

(months)Time of transfer valuation of retained interest


5%



1%



12%



19     
    Net principal charge-offs on securitized receivables were
    $30 million for the three months ended July 31, 2009,
    which when annualized represents 8.8% of the average outstanding
    securitized financing receivable balance for the period.
    Net principal charge-offs on securitized receivables were
    $66 million for the six months ended July 31, 2009,
    which when annualized represents 9.7% of the average outstanding
    securitized financing receivable balance for the period. 14




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##### Table of Contents



DELL
    INC.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
 (unaudited)
  NOTE 6 
    BORROWINGS
    July 30,

January 29,2010

2010(in millions)Long-Term DebtNotes:$400 million issued on June 10, 2009, at 3.375% due
    June 2012 (2012 Notes) with interest
    payable June 15 and December 15
    (includes hedge accounting adjustments)

$
404


$
401$600 million issued on April 17, 2008, at 4.70% due
    April 2013 (2013 Notes) with interest
    payable April 15 and October 15
    (includes hedge accounting adjustments)


613



599$500 million issued on April 1, 2009, at 5.625% due
    April 2014 (2014 Notes) with interest
    payable April 15 and October 15


500



500$500 million issued on April 17, 2008, at 5.65% due
    April 2018 (2018 Notes) with interest
    payable April 15 and October 15


499



499$600 million issued on June 10, 2009, at 5.875% due
    June 2019 (2019 Notes) with interest
    payable June 15 and December 15


600



600$400 million issued on April 17, 2008, at 6.50% due
    April 2038 (2038 Notes) with interest
    payable April 15 and October 15


400



400Senior Debentures$300 million issued on April 3, 1998, at 7.10% due
    April 2028 with interest payable April 15 and
    October 15 (includes the impact of interest rate swap
    terminations)


392



394OtherIndia term loan: entered into on October 15, 2009, at 8.9%
    due October 2011 with interest payable monthly


23



24Structured financing debt


192



-Total long-term debt


3,623



3,417Short-Term DebtCommercial paper


900



496Structured financing debt


726



164Other


1



3Total short-term debt


1,627



663Total debt

$
5,250


$
4,080
      15




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##### Table of Contents



DELL
    INC.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
 (unaudited)
    sale-and-lease
  Structured Financing Debt 
  Commercial Paper 
    NOTE 7 
    DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES
  Derivative
    Instruments
    Cash Flow
    Hedges
   16




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##### Table of Contents



DELL
    INC.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
 (unaudited)
          Fair
    Value Hedges
     17




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##### Table of Contents



DELL
    INC.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
 (unaudited)
  Effect of
    Derivative Instruments on the Condensed Consolidated Statements
    of Financial Position and the Condensed Consolidated Statements
    of Income
  Gain (Loss)Recognizedin Accumulated

Location of Gain (Loss)

Gain (Loss)Derivatives in

OCI, Net

Reclassified

Reclassified

Location of Gain (Loss)

Gain (Loss)Cash Flow

of Tax, on

from Accumulated

from Accumulated

Recognized in Income

Recognized inHedging

Derivatives

OCI into Income

OCI into Income

on Derivative

Income on DerivativeRelationships

(Effective Portion)

(Effective Portion)

(Effective Portion)

(Ineffective Portion)

(Ineffective Portion)(in millions)For the three months ended July 30, 2010Foreign exchange





Total net revenue

$
77contracts

$
(60
)

Total cost of net revenue


(10
)Interest rate contracts


1


Interest and other, net


-


Interest and other, net

$
-Total

$
(59
)



$
67




$
-For the three months ended July 31, 2009Foreign exchange





Total net revenue

$
(147
)contracts

$
(289
)

Total cost of net revenue


(23
)

Interest and other, net

$
-Total

$
(289
)



$
(170
)



$
-For the six months ended July 30, 2010Foreign exchange





Total net revenue

$
123contracts

$
(19
)

Total cost of net revenue


(28
)Interest rate contracts


1


Interest and other, net


-


Interest and other, net

$
-Total

$
(18
)



$
95




$
-For the six months ended July 31, 2009Foreign exchange





Total net revenue

$
74contracts

$
(413
)

Total cost of net revenue


(10
)

Interest and other, net

$
-Total

$
(413
)



$
64




$
-     Other
    Derivative Instruments
   18




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##### Table of Contents



DELL
    INC.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
 (unaudited)
  Derivative
    Instruments Additional Information
        July 30, 2010Other

Other

Other

OtherCurrent

Non-Current

Current

Non-Current

TotalAssets

Assets

Liabilities

Liabilities

Fair Value(in millions)Derivatives Designated as Hedging InstrumentsForeign exchange contracts in an asset position

$
158


$
3


$
42


$
-


$
203Foreign exchange contracts in a liability position


(149
)


-



(68
)


(1
)


(218
)Interest rate contracts in an asset position


-



23



-



-



23Interest rate contracts in a liability position


-



-



-



(4
)


(4
)Net asset (liability)


9



26



(26
)


(5
)


4Derivatives not Designated as Hedging InstrumentsForeign exchange contracts in an asset position


103



-



18



-



121Foreign exchange contracts in a liability position


(18
)


-



(22
)


-



(40
)Interest rate contracts in a liability position


-



-



-



(2
)


(2
)Net asset (liability)


85



-



(4
)


(2
)


79Total derivatives at fair value

$
94


$
26


$
(30
)

$
(7
)

$
83   January 29, 2010Other

Other

Other

OtherCurrent

Non-Current

Current

Non-Current

TotalAssets

Assets

Liabilities

Liabilities

Fair Value(in millions)Derivatives Designated as Hedging InstrumentsForeign exchange contracts in an asset position

$
181


$
5


$
-


$
-


$
186Foreign exchange contracts in a liability position


(80
)


-



(9
)


-



(89
)Interest rate contracts in an asset position


-



1



-



-



1Net asset (liability)


101



6



(9
)



-


98Derivatives not Designated as Hedging InstrumentsForeign exchange contracts in an asset position


63



-



2



-



65Foreign exchange contracts in a liability position


(74
)


-



(5
)


-



(79
)Net asset (liability)


(11
)


-



(3
)


-



(14
)Total derivatives at fair value

$
90


$
6


$
(12
)

$
-


$
84  19




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##### Table of Contents



DELL
    INC.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
 (unaudited)
     NOTE 8 
    ACQUISITIONS
        NOTE 9 
    GOODWILL AND INTANGIBLE ASSETS
  Goodwill
    Small andLarge



MediumEnterprise

Public

Business

Consumer

Total(in millions)Balance at January 29, 2010

$
1,361


$
2,026


$
389


$
298


$
4,074Goodwill acquired during the period


58



70



53



-



181Adjustments


1



5



-



3



9Balance at July 30, 2010

$
1,420


$
2,101


$
442


$
301


$
4,264  20




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##### Table of Contents



DELL
    INC.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
 (unaudited)
     NOTE 10 
    WARRANTY AND DEFERRED EXTENDED WARRANTY REVENUE
    Three Months Ended

Six Months EndedJuly 30,

July 31,

July 30,

July 31,2010

2009

2010

2009(in millions)Warranty liabilityWarranty liability at beginning of period

$
927


$
1,032


$
912


$
1,035Costs accrued for new warranty contracts and changes in
    estimates for pre-existing
    warranties(a),

    (b)


298



193



608



487Services obligations honored


(249
)


(253
)


(544
)


(550
)Warranty liability at end of period

$
976


$
972


$
976


$
972Current portion

$
652


$
501


$
652


$
501Non-current portion


324



471



324



471Warranty liability at end of period

$
976


$
972


$
976


$
972Three Months Ended

Six Months EndedJuly 30,

July 31,

July 30,

July 31,2010

2009

2010

2009(in millions)Deferred extended warranty revenue:Deferred extended warranty revenue at beginning of period

$
5,971


$
5,576


$
5,910


$
5,587Revenue deferred for new extended
    warranties(b)


973



950



1,855



1,699Revenue recognized


(835
)


(758
)


(1,656
)


(1,518
)Deferred extended warranty revenue at end of period

$
6,109


$
5,768


$
6,109


$
5,768Current portion

$
2,835


$
2,730


$
2,835


$
2,730Non-current portion


3,274



3,038



3,274



3,038Deferred extended warranty revenue at end of period

$
6,109


$
5,768


$
6,109


$
5,768     (a)
    
    Changes in cost estimates related
    to pre-existing warranties are aggregated with accruals for new
    standard warranty contracts. Dells warranty liability
    process does not differentiate between estimates made for
    pre-existing warranties and new warranty obligations.  (b)
    
    Includes the impact of foreign
    currency exchange rate fluctuations. 21




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##### Table of Contents



DELL
    INC.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
 (unaudited)
  NOTE 11 
    SEVERANCE AND FACILITY ACTIONS
      Three Months EndedJuly 30, 2010

July 31, 2009Severance

Facility



Severance

FacilityCosts

Actions

Total

Costs

Actions

Total(in millions)Balance at the beginning of period

$
49


$
30


$
79


$
173


$
10


$
183Severance and facility charges to provision


12



-



12



62



4



66Cash paid


(32
)


(2
)


(34
)


(65
)


(1
)


(66
)Other
    adjustments(a)


(3
)


(1
)


(4
)


4



1



5Balance at the end of the period

$
26


$
27


$
53


$
174


$
14


$
188Six Months EndedJuly 30, 2010

July 31, 2009Severance

Facility



Severance

FacilityCosts

Actions

Total

Costs

Actions

Total(in millions)Balance at the beginning of period

$
78


$
27


$
105


$
88


$
10


$
98Severance and facility charges to provision


32



7



39



237



4



241Cash paid


(80
)


(6
)


(86
)


(155
)


(1
)


(156
)Other
    adjustments(a)


(4
)


(1
)


(5
)


4



1



5Balance at the end of the period

$
26


$
27


$
53


$
174


$
14


$
188     (a)
    
    Other adjustments relate primarily
    to foreign currency translation adjustments.    Three Months Ended

Six Months EndedJuly 30,

July 31,

July 30,

July 31,2010

2009

2010

2009(in millions)Severance and facility charges to provision

$
12


$
66


$
39


$
241Accelerated depreciation and other facility charges


12



21



42



31Total severance and facility action costs

$
24


$
87


$
81


$
272  22




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##### Table of Contents



DELL
    INC.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
 (unaudited)
    Three Months Ended

Six Months EndedJuly 30,

July 31,

July 30,

July 31,2010

2009

2010

2009(in millions)Severance and facility action costs:Cost of revenue

$
14


$
14


$
43


$
79Selling, general, and administrative


9



71



34



191Research, development, and engineering


1



2



4



2Total severance and facility action costs

$
24


$
87


$
81


$
272   NOTE 12 
    COMMITMENTS AND CONTINGENCIES
  Restricted Cash
  Legal Matters time-to-time
    Investigations and Related Litigation
     23




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##### Table of Contents



DELL
    INC.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
 (unaudited)
  Rules 10b-5,
    Rule 13a-14 Rules 12b-20,
      Securities Litigation
 24




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##### Table of Contents



DELL
    INC.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
 (unaudited)
  Other Litigation
  Other Matters
    NOTE 13 
    COMPREHENSIVE INCOME
    Three Months Ended

Six Months EndedJuly 30,

July 31,

July 30,

July 31,2010

2009

2010

2009(in millions)Comprehensive incomeNet income

$
545


$
472


$
886


$
762Change related to hedging instruments, net


(127
)


(119
)


(114
)


(477
)Change related to marketable securities, net


(1
)


3



(2
)


3Foreign currency translation adjustments


(8
)


(26
)


26



(34
)Comprehensive income

$
409


$
330


$
796


$
254  25




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##### Table of Contents



DELL
    INC.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
 (unaudited)
  NOTE 14 
    INCOME AND OTHER TAXES
        NOTE 15 
    EARNINGS PER SHARE
   26




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##### Table of Contents



DELL
    INC.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
 (unaudited)
    Three Months Ended

Six Months EndedJuly 30,

July 31,

July 30,

July 31,2010

2009

2010

2009(in millions, except per share amounts)Numerator:Net income

$
545


$
472


$
886


$
762Denominator:Weighted-average shares outstanding:Basic


1,952



1,955



1,956



1,952Effect of dilutive options, restricted stock units, restricted
    stock, and other


8



5



11



4Diluted


1,960



1,960



1,967



1,956Earnings per share:Basic

$
0.28


$
0.24


$
0.45


$
0.39Diluted

$
0.28


$
0.24


$
0.45


$
0.39   NOTE 16 
    SEGMENT INFORMATION
   27




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##### Table of Contents



DELL
    INC.
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
 (unaudited)
    Three Months Ended

Six Months EndedJuly 30,

July 31,

July 30,

July 31,2010

2009

2010

2009(in millions)Net revenue:Large Enterprise

$
4,549


$
3,285


$
8,795


$
6,685Public


4,580



3,798



8,436



6,969Small and Medium Business


3,535



2,820



7,059



5,787Consumer


2,870



2,861



6,118



5,665Net revenue

$
15,534


$
12,764


$
30,408


$
25,106Consolidated operating income:Large Enterprise

$
288


$
172


$
571


$
364Public


369



383



667



676Small and Medium Business


323



246



636



476Consumer


(21
)


89



(4
)


88Consolidated segment operating income


959



890



1,870



1,604Severance and facility actions


(24
)


(87
)


(81
)


(272
)Broad based long-term
    incentives(a)


(87
)


(92
)


(174
)


(168
)Amortization of intangible assets


(87
)


(40
)


(175
)


(79
)Acquisition-related
    costs(b)


(16
)


-



(36
)


-Other(c)


-



-



(140
)


-Consolidated operating income

$
745


$
671


$
1,264


$
1,085     (a)
    
    Broad based long-term incentives
    include stock-based compensation and other long-term incentives
    that are not allocated to Dells global segments.  (b)
    
    Acquisition-related charges consist
    primarily of retention payments, integration costs, and
    consulting fees.  (c)
    
    Other includes the
    $100 million settlement for the SEC investigation and a
    $40 million settlement for a securities litigation lawsuit.  NOTE 17 
    SUBSEQUENT EVENT
   28




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##### Table of Contents



ITEM 2. MANAGEMENTS
    DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
    OPERATIONS  SPECIAL NOTE:  All percentage amounts and ratios
    were calculated using the underlying data in thousands. Our
    fiscal year is the 52 or 53 week period ending on the
    Friday nearest January 31. Unless the context indicates
    otherwise, references in this managements discussion and
    analysis to we, us, our and
    Dell mean Dell Inc. and our consolidated
    subsidiaries. This managements discussion and analysis
    should be read in conjunction with our Annual Report on
    Form 10-K
    for the fiscal year ended January 29, 2010, and the
    consolidated financial statements and related notes included in
    that report.
  OVERVIEW
       29




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##### Table of Contents



CONSOLIDATED
    RESULTS OF OPERATIONS
    Three Months Ended

Six Months EndedJuly 30, 2010



July 31, 2009

July 30, 2010



July 31, 2009% of

%



% of



% of

%



% ofDollars

Revenue

Change

Dollars

Revenue

Dollars

Revenue

Change

Dollars

Revenue(in millions, except per share amounts and percentages)Net revenueProducts

$
12,645



81.4%



19%


$
10,623



83.2%


$
24,731



81.3%



19%


$
20,855



83.1%Services, including software related


2,889



18.6%



35%



2,141



16.8%



5,677



18.7%



34%



4,251



16.9%Total net revenue

$
15,534



100.0%



22%


$
12,764



100.0%


$
30,408



100.0%



21%


$
25,106



100.0%Gross marginProducts

$
1,714



13.6%



4%


$
1,645



15.5%


$
3,415



13.8%



10%


$
3,091



14.8%Services, including software related


872



30.2%



17%



746



34.8%



1,687



29.7%



15%



1,468



34.5%Total gross margin

$
2,586



16.6%



8%


$
2,391



18.7%


$
5,102



16.8%



12%


$
4,559



18.2%Operating expenses

$
1,841



11.8%



7%


$
1,720



13.5%


$
3,838



12.6%



10%


$
3,474



13.8%Operating income

$
745



4.8%



11%


$
671



5.2%


$
1,264



4.2%



16%


$
1,085



4.3%Net income

$
545



3.5%



16%


$
472



3.7%


$
886



2.9%



16%


$
762



3.0%Earnings per share diluted

$
0.28



N/A



17%


$
0.24



N/A


$
0.45



N/A



15%


$
0.39



N/A   year-over-year year-over-year, year-over-year
  year-over-year,
  Revenue
  Product Revenue year-over-year
  Services Revenue, including software
    related year-over-year year-over-year
 30




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##### Table of Contents



year-over-year year-over-year,
    Gross
    Margin
  Products year-over-year,
  Services, including software related
    Severance
    and Facility Actions
    Vendor
    Rebate Programs
   31




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##### Table of Contents



Operating
    Expenses
  year-over-year
  Three Months Ended

Six Months EndedJuly 30, 2010



July 31, 2009

July 30, 2010



July 31, 2009% of

%



% of



% of

%



% ofDollars

Revenue

Change

Dollars

Revenue

Dollars

Revenue

Change

Dollars

Revenue(in millions, except percentages)Operating expensesSelling, general, and administrative

$
1,679



10.8%



7%


$
1,571



12.3%


$
3,509



11.5%



10%


$
3,184



12.7%Research, development, and engineering


162



1.0%



9%



149



1.2%



329



1.1%



13%



290



1.1%Operating expenses

$
1,841



11.8%



7%


$
1,720



13.5%


$
3,838



12.6%



10%


$
3,474



13.8%   
    Selling, General, and Administrative 
    During the second quarter of Fiscal 2011, selling, general and
    administrative (SG&A) expenses increased
    year-over-year,
    while SG&A expenses as a percentage of net revenue
    decreased. The increase in SG&A expenses was primarily
    attributable to increases in compensation-related expenses of
    approximately $116 million due to an increase in headcount
    resulting from our acquisitions. SG&A expenses related to
    headcount and infrastructure reductions through our on-going
    cost optimization efforts were $9 million for the second
    quarter of Fiscal 2011 compared to $71 million for the same
    period in the prior year. During the second quarter of Fiscal
    2011, we also had a
    year-over-year
    increase of $30 million related to advertising and
    promotion costs. SG&A expenses for the second quarter of
    Fiscal 2011 also included approximately $15 million of
    costs related to our acquisitions, which includes costs incurred
    for recent acquisitions as well as integrations costs related to
    Perot Systems.  year-over-year,
 32




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##### Table of Contents




    Research, Development, and Engineering 
    During the second quarter and first six months of Fiscal 2011,
    research, development and engineering (RD&E)
    expenses remained approximately 1% of revenue, consistent with
    the prior year. We manage our research, development, and
    engineering spending by targeting those innovations and products
    that we believe are most valuable to our customers and by
    relying upon the capabilities of our strategic relationships. We
    will continue to invest in RD&E activities to support our
    growth and to provide for new, competitive products.  Operating
    and Net Income
  
    Operating Income  During the second
    quarter and first half of Fiscal 2011, operating income
    increased 11% and 16%, respectively. The increases were
    primarily due to increases in gross margin dollars of 8% and 12%
    for the second quarter and first half of Fiscal 2011,
    respectively. A 7% and 10%
    year-over-year
    increase in operating expenses during the second quarter and
    first half of Fiscal 2011, respectively, negatively impacted
    operating income, while operating expenses as a percentage of
    net revenue decreased during the same periods.
    Net Income  For the second quarter and
    first half of Fiscal 2011, net income increased
    year-over-year
    for both periods by 16% to $545 million and
    $886 million, respectively. Net income was positively
    impacted by increases in operating income and a lower effective
    tax rate for the second quarter and first half of Fiscal 2011.
    The lower effective tax rates were offset by higher interest
    expenses. See Income and Other Taxes and
    Interest and Other, net sections below for
    discussions of our effective tax rates and interest and other,
    net.  Segment
    Discussion
     
    Three Months Ended

Six Months EndedJuly 30, 2010



July 31, 2009

July 30, 2010



July 31, 2009% of

%



% of



% of

%



% ofDollars

Revenue(a)

Change

Dollars

Revenue(a)

Dollars

Revenue(a)

Change

Dollars

Revenue(a)(in millions, except percentages)Large EnterpriseNet revenue

$
4,549



29%



38%


$
3,285



26%


$
8,795



29%



32%


$
6,685



27%Operating income


288



6%



68%



172



5%



571



7%



57%



364



5%PublicNet revenue

$
4,580



30%



21%


$
3,798



30%


$
8,436



28%



21%


$
6,969



28%Operating income


369



8%



(4%
)


383



10%



667



8%



(1%
)


676



10%Small and Medium BusinessNet revenue

$
3,535



23%



25%


$
2,820



22%


$
7,059



23%



22%


$
5,787



23%Operating income


323



9%



32%



246



9%



636



9%



34%



476



8%ConsumerNet revenue

$
2,870



18%



0%


$
2,861



22%


$
6,118



20%



8%


$
5,665



22%Operating income (loss)


(21
)


(1%
)


(124%
)


89



3%



(4
)


0%



(105%
)


88



2%     (a)
    
    Operating income percentage of
    revenue is stated in relation to the respective segment. 33




---



##### Table of Contents




    Large Enterprise The
    year-over-year
    increase in Large Enterprises revenue for the second
    quarter of Fiscal 2010 was mainly attributable to improved
    demand. Many of our customers who delayed or canceled IT
    projects as a result of the economic slowdown have resumed IT
    spending. Large Enterprise experienced
    year-over-year
    increases in revenue across all product lines during the second
    quarter of Fiscal 2011. Revenue from servers and networking and
    services increased 54% and 56%, respectively. The increase in
    services revenue was largely due to the integration of Perot
    Systems. Demand for our client products also increased, with
    mobility and desktop PC revenue increasing 51% and 35%
    year-over-year,
    respectively. During the second quarter of Fiscal 2011, Large
    Enterprises revenue increased
    year-over-year
    across all regions.  year-over-year, year-over-year,
  year-over-year
  
    Public During the second quarter of
    Fiscal 2011, Public experienced a
    year-over-year
    increase in revenue across all product and service categories.
    Services contributed the largest increase, with a 116% increase
    in revenue over the prior year. The increase in services revenue
    was primarily a result of our integration of Perot Systems.
    Revenue from servers and networking and desktop PCs had double
    digit
    year-over-year
    increases of 12% and 10%, respectively. Publics revenue
    grew during the second quarter of Fiscal 2011 across all
    regions, though demand from U.S. state and local governments and
    our Europe-based Public customers was muted due to fiscal budget
    constraints.  year-over-year year-over-year.
  year-over-year
  
    Small and Medium Business During the
    second quarter of Fiscal 2011, SMB experienced a
    year-over-year
    increase in revenue with double digit percentage increases
    across all product categories. The revenue growth was led by 32%
    and 29% increases in mobility and desktop PCs revenue,
    respectively, and a 28% increase in servers and networking
    revenue. The improved demand environment was a major contributor
    to the increase in revenue for SMB. SMB revenue experienced
    year-over-year
    growth across all regions during the second quarter of Fiscal
    2011, while our BRIC revenue grew 63%
    year-over-year.  year-over-year.
  year-over-year
 34




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##### Table of Contents




    Consumer Consumers revenue
    remained flat
    year-over-year
    during the second quarter of Fiscal 201l as all relevant product
    and service categories, except for Consumer mobility products,
    experienced
    year-over-year
    declines. Consumer mobility revenue increased by 9%
    year-over-year
    while revenue from desktop PCs decreased 8% during the second
    quarter of Fiscal 2011. The continuing shift in consumer
    preference from desktops to notebooks has contributed to
    continued revenue mix shifts to mobility products. Partially
    offsetting the increase in mobility products revenue for the
    second quarter of Fiscal 2011 was a decrease of 21% in software
    and peripherals revenue, which was largely due to a
    $53 million transaction in the second quarter of Fiscal
    2010, in which a vendor purchased our contractual right to share
    in future revenues from product renewals sold by the vendor. We
    did not have a similar transaction during the second quarter of
    Fiscal 2011. At a country level, our U.S. revenue decreased 15%
    year-over-year
    for the second quarter of Fiscal 2011 due to softer demand,
    while our
    non-U.S.
    regions experienced 21% revenue growth. Revenue from BRIC grew
    68%
    year-over-year
    for the second quarter of Fiscal 2011. We expanded our global
    retail presence over the prior year and now reach approximately
    66,000 retail locations worldwide, compared to 40,000 at the end
    of the second quarter of Fiscal 2010. Our global retail
    expansion has increased our customer base.    year-over-year year-over-year.
 35




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##### Table of Contents



Revenue
    by Product and Services Categories
      Three Months Ended

Six Months EndedJuly 30, 2010



July 31, 2009

July 30, 2010



July 31, 2009% of

%



% of



% of

%



% ofDollars

Revenue

Change

Dollars

Revenue

Dollars

Revenue

Change

Dollars

Revenue(in millions, except percentages)Net revenue:Enterprise products:Servers and networking

$
1,890



12%



35%


$
1,403



11%


$
3,675



12%



37%


$
2,689



11%Storage


624



4%



13%



551



4%



1,178



4%



9%



1,085



4%Services


1,915



12%



57%



1,218



10%



3,806



12%



55%



2,456



10%Software and peripherals


2,535



17%



6%



2,382



19%



5,031



17%



9%



4,628



18%Client products:Mobility


4,700



30%



21%



3,891



30%



9,263



30%



19%



7,766



31%Desktop PCs


3,870



25%



17%



3,319



26%



7,455



25%



15%



6,482



26%Net revenue

$
15,534



100%



22%


$
12,764



100%


$
30,408



100%



21%


$
25,106



100%   Enterprise
    Solutions
  Servers and Networking year-over-year, year-over-year, year-over-year tm
  Storage year-over-year tm year-over-year small-to-medium
  Services year-over-year
 36




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##### Table of Contents



year-over-year
  Software and Peripherals year-over-year
    Client
  Mobility year-over-year year-over-year,
  Desktop PCs year-over-year year-over-year, year-over-year, year-over-year
 37




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##### Table of Contents



Interest
    and Other, Net
    Three Months Ended

Six Months EndedJuly 30,

July 31,

July 30,

July 31,2010

2009

2010

2009(in millions)Interest and other, net:Investment income, primarily interest

$
11


$
15


$
19


$
36Gains on investments, net


3



-



3



1Interest expense


(46
)


(39
)


(93
)


(68
)Foreign exchange


(7
)


(26
)


(37
)


(26
)Other


(10
)


8



(9
)


13Interest and other, net

$
(49
)

$
(42
)

$
(117
)

$
(44
)   year-over-year
  year-over-year
  year-over-year
  Income
    and Other Taxes
     38




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##### Table of Contents



ACCOUNTS
    RECEIVABLE
    FINANCING
    RECEIVABLES
       39




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##### Table of Contents



OFF-BALANCE
    SHEET ARRANGEMENTS
    LIQUIDITY
    AND CAPITAL COMMITMENTS
  Current
    Market Conditions
        Form 10-K
  Liquidity
   40




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##### Table of Contents



non-U.S.
    Six Months EndedJuly 30,

July 31,2010

2009(in millions)Net change in cash from:Operating activities

$
1,573


$
1,837Investing activities


(620
)


40Financing activities


125



1,379Effect of exchange rate changes on cash and cash equivalents


(19
)


91Change in cash and cash equivalents

$
1,059


$
3,347
   Operating Activities
  Investing Activities 
  Financing Activities year-over-year
   41




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##### Table of Contents



Key Performance Metrics
    July 30,

July 31,2010

2009Days of sales
    outstanding(a)


41



42Days of supply in
    inventory(b)


10



7Days in accounts
    payable(c)


(87
)


(84
)Cash conversion cycle


(36
)


(35
)
     (a)
    
    Days of sales outstanding
    (DSO) calculates the average collection period of
    our receivables. DSO is based on the ending net trade
    receivables and the most recent quarterly revenue for each
    period. DSO also includes the effect of product costs related to
    customer shipments not yet recognized as revenue that are
    classified in other current assets. DSO is calculated by adding
    accounts receivable, net of allowance for doubtful accounts, and
    customer shipments in transit and dividing that sum by average
    net revenue per day for the current quarter (90 days). At
    July 30, 2010, and July 31, 2009, DSO and days of
    customer shipments not yet recognized were 38 and 3 days,
    and 38 and 4 days, respectively.  (b)
    
    Days of supply in inventory
    (DSI) measures the average number of days from
    procurement to sale of our product. DSI is based on ending
    inventory and most recent quarterly cost of sales for each
    period. DSI is calculated by dividing inventory by average cost
    of goods sold per day for the current quarter (90 days).  (c)
    
    Days in accounts payable
    (DPO) calculates the average number of days our
    payables remain outstanding before payment. DPO is based on
    ending accounts payable and most recent quarterly cost of sales
    for each period. DPO is calculated by dividing accounts payable
    by average cost of goods sold per day for the current quarter
    (90 days).   42




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##### Table of Contents



Capital
    Commitments
  Share Repurchase Program
  Capital Expenditures
  Restricted Cash
  RECENTLY
    ISSUED AND ADOPTED ACCOUNTING PRONOUNCEMENTS
   
  ITEM 3.
    QUANTITATIVE
    AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK  Form 10-K Form 10-K.
  ITEM 4.
    CONTROLS
    AND PROCEDURES  Rule 13a-14
 43




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##### Table of Contents



EVALUATION
    OF DISCLOSURE CONTROLS AND PROCEDURES
  Evaluation of Disclosure Controls and
    Procedures Rules 13a-15(e)
    SEC Settlement Undertakings
  
    For a minimum period of three years, enhance our disclosure
    review committee (DRC) processes by having qualified
    outside securities counsel attend all DRC meetings and review
    all of our SEC periodic filings prior to filing.
    Within 30 days after court approval of the settlement,
    retain an independent consultant not unacceptable to the SEC
    staff to review and evaluate our disclosure processes, practices
    and controls and to recommend changes designed to improve those
    processes, practices and controls, and, within 90 days
    after issuance of the independent consultants report
    containing such review, evaluation and recommendations, which
    will be due within 120 days, adopt and implement all
    recommendations contained in the report.
    For a minimum period of three years, provide annual training
    reasonably designed to minimize the possibility of future
    violations of the disclosure requirements of the federal
    securities laws, with a focus on disclosures required in
    managements discussion and analysis of financial condition
    and results of operations, for (1) members of the Audit
    Committee of our Board of Directors; (2) members of the
    DRC; (3) our senior officers; (4) our internal
    disclosure counsel; (5) personnel in our internal audit
    department that perform assurance services; (6) all persons
    required to certify in our filings with the SEC that such
    filings make adequate disclosure under the federal securities
    laws; and (7) all other persons employed by us who have
    responsibility for the review of our filings with the SEC.      CHANGES
    IN INTERNAL CONTROL OVER FINANCIAL REPORTING
   44




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##### Table of Contents



PART II 
    OTHER INFORMATION  ITEM 1.
    LEGAL
    PROCEEDINGS    Form 10-K
 ITEM 1A.
    RISK FACTORS  Form 10-K Form 10-K
  Form 10-K,
  We are subject to the risk of temporary suspension or
    debarment from contracting with U.S. federal, state and local
    governments as a result of settlements of an SEC investigation
    by our company and our Chairman and CEO.
   45




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##### Table of Contents



ITEM 2.
    UNREGISTERED
    SALES OF EQUITY SECURITIES AND USE OF PROCEEDS  PURCHASES
    OF COMMON STOCK
  Share
    Repurchase Program
    Total

ApproximateNumber of

Dollar ValueShares

of Shares ThatPurchased

May Yet Beas Part of

PurchasedTotal

Weighted

Publicly

Under theNumber of

Average

Announced

AnnouncedShares

Price Paid

Plans or

Plans orPeriod

Purchased(a)

per Share

Programs(b)

Programs(b)(in millions, except average price paid per share)May 1, 2010, through May 28, 2010


-


$
-



-


$
4,343May 29, 2010, through June 25, 2010


14


$
13.87



14


$
4,143June 26, 2010, through July 30, 2010


-


$
-



-


$
4,143Total


14


$
13.87



14     (a)
    
    Includes 3,645 shares withheld
    to cover employee tax obligations for restricted stock awards
    vested during quarter ended July 30, 2010 at an average
    price of $13.39 per share.  (b)
    
    On December 4, 2007, we
    publicly announced that our Board of Directors had authorized a
    share repurchase program for up to $10 billion of our
    common stock over an unspecified amount of time.  ITEM 6.
    EXHIBITS  Exhibits
 46




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##### Table of Contents



SIGNATURE
    DELL INC.Date: August 26, 2010

/s/ THOMAS W. SWEETThomas W. SweetVice President, Corporate Finance andChief Accounting Officer(On behalf of the registrant and asprincipal accounting officer)  47




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##### Table of Contents



INDEX TO
    EXHIBITS
  ExhibitNo.



Description of Exhibit3
.1



Restated Certificate of Incorporation, as amended3
.2



Restated Bylaws, as amended and effective as of August 16,
    20104
.1



Indenture, dated as of April 27, 1998, between Dell
    Computer Corporation and Chase Bank of Texas, National
    Association (incorporated by reference to Exhibit 99.2 of
    Dells Current Report on
    Form 8-K
    filed April 28, 1998, Commission File
    No. 0-17017)4
.2



Officers Certificate pursuant to Section 301 of the
    Indenture establishing the terms of Dells 7.10% Senior
    Debentures Due 2028 (incorporated by reference to
    Exhibit 99.4 of Dells Current Report on
    Form 8-K
    filed April 28, 1998, Commission File
    No. 0-17017)4
.3



Form of Dells 7.10% Senior Debentures Due 2028
    (incorporated by reference to Exhibit 99.6 of Dells
    Current Report on
    Form 8-K
    filed April 28, 1998, Commission File
    No. 0-17017)4
.4



Indenture, dated as of April 17, 2008, between Dell Inc.
    and The Bank of New York Trust Company, N.A., as trustee
    (including the form of notes) (incorporated by reference to
    Exhibit 4.1 of Dells Current Report on
    Form 8-K
    filed April 17, 2008, Commission file
    No. 0-17017)4
.5



Indenture, dated April 6, 2009, between Dell Inc. and The
    Bank of New York Mellon Trust Company, N.A., as trustee
    (incorporated by reference to Exhibit 4.1 of Dells
    Current Report on
    Form 8-K
    filed April 6, 2009, Commission file
    No. 0-17017)4
.6



First Supplemental Indenture, dated April 6, 2009, between
    Dell Inc. and The Bank of New York Mellon Trust Company,
    N.A., as trustee (incorporated by reference to Exhibit 4.2
    of Dells Current Report on
    Form 8-K
    filed April 6, 2009, Commission file
    No. 0-17017)4
.7



Form of 5.625% Notes due 2014 (incorporated by reference to
    Exhibit 4.3 of Dells Current Report on
    Form 8-K
    filed April 6, 2009, Commission file
    No. 0-17017)4
.8



Second Supplemental Indenture, dated as of June 15, 2009,
    between Dell Inc. and The Bank of New York Mellon
    Trust Company, N.A., as trustee (incorporated by reference
    to Exhibit 4.1 of Dells Current Report on
    Form 8-K
    filed June 15, 2009, Commission file
    No. 0-17017)4
.9



Form of 3.375% Notes due 2012 (incorporated by reference to
    Exhibit 4.2 of Dells Current Report on
    Form 8-K
    filed June 15, 2009, Commission file
    No. 0-17017)4
.10



Form of 5.875% Notes due 2019 (incorporated by reference to
    Exhibit 4.3 of Dells Current Report on
    Form 8-K
    filed June 15, 2009, Commission file
    No. 0-17017)12
.1



Computation of Ratio of Earnings to Fixed Charges31
.1



Certification of Michael S. Dell, Chairman and Chief Executive
    Officer, pursuant to
    Rule 13a-14(a)
    under the Securities Exchange Act of 1934, as adopted pursuant
    to Section 302 of the Sarbanes-Oxley Act of 200231
.2



Certification of Brian T. Gladden, Senior Vice President and
    Chief Financial Officer, pursuant to
    Rule 13a-14(a)
    under the Securities Exchange Act of 1934, as adopted pursuant
    to Section 302 of the Sarbanes-Oxley Act of 200232
.1



Certifications of Michael S. Dell, Chairman and Chief Executive
    Officer, and Brian T. Gladden, Senior Vice President and Chief
    Financial Officer, pursuant to 18 U.S.C. Section 1350, as
    adopted pursuant to Section 906 of the Sarbanes-Oxley Act
    of 2002     
    
    Filed with this report.
    
    Furnished with this report. 48