DETAILS INC, 10-K, 2000-03-30

DETAILS INC
10-K, 2000-03-30
PRINTED CIRCUIT BOARDS

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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

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

FORM 10-K

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

For the year ended December 31, 1999

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

For the transition period from _______ to _______

Commission File Number: 333-41187
333-41211

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DDi CAPITAL CORP.
DYNAMIC DETAILS, INCORPORATED
(Exact Names of Registrants as Specified in their Charters)

California 33-0780382
California 33-0779123
(State or Other Jurisdiction (I.R.S. Employer
of Incorporation or Organization) Identification No.)

1220 Simon Circle Anaheim, California 92806
(Address of Principal Executive Offices) (Zip Code)

(714) 688-7200
(Registrants' Telephone Number, including Area Code)

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

Securities registered pursuant to Section 12(b) of the Act:

Name of Each Exchange
Title of Each Class on Which Registered
------------------- ---------------------
None None

Securities registered pursuant to Section 12(g) of the Act:

Name of Each Exchange
Title of Each Class on Which Registered
------------------- ---------------------
None None

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

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 for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days: Yes [X] No [_].

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

On December 31, 1999, all of the voting stock of Dynamic Details,
Incorporated was held by DDi Capital Corp. and all of the voting stock of DDi
Capital Corp. was held by DDi Intermediate Holdings Corp. which is wholly
owned by DDi Corp., formerly known as DDi Holdings Corp.

As of December 31, 1999, Dynamic Details, Incorporated had 100 shares of
common stock, par value $.01 per share, outstanding and DDi Capital Corp. had
1,000 shares of common stock, par value $.01 per share, outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

The following documents are incorporated herein by reference:

None
===============================================================================
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DDi CAPITAL CORP.
AND ITS WHOLLY-OWNED SUBSIDIARY
DYNAMIC DETAILS, INCORPORATED

FORM 10-K INDEX

<TABLE>
<CAPTION>
Page
----
PART I

<C> <S> <C>
Item 1 Business...................................................... 3
Item 2 Description of Property....................................... 12
Item 3 Legal Proceedings............................................. 12
Item 4 Submission of Matters to a Vote of Security Holders........... 12

PART II

Item 5 Market for the Registrants' Common Stock...................... 12
Item 6 Selected Financial Data....................................... 13
Item 7 Management's Discussion and Analysis of Financial Condition
and Results of Operations..................................... 16
Item 7A Quantitative and Qualitative Disclosures About Market Risk.... 29
Item 8 Financial Statements and Supplementary Data................... 30
Item 9 Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure...................................... 30

PART III

Item 10 Directors and Executive Officers of the Registrant............ 31
Item 11 Executive Compensation........................................ 33
Item 12 Security Ownership of Certain Beneficial Owners and
Management.................................................... 41
Item 13 Certain Relationships and Related Transactions................ 44

PART IV

Item 14. Exhibits, Financial Statement Schedules, and Reports on Form
8-K........................................................... 45
</TABLE>

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Except for the historical information contained herein, this Annual Report
on Form 10-K contains forward-looking statements that involve risks and
uncertainties. Actual results could differ materially from those discussed
here. Readers should pay particular attention to the considerations described
in "Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations--Factors that May Affect Future Results."

PART I.

ITEM 1. BUSINESS

Introduction

DDi Capital Corp. ("DDi Capital") is a wholly-owned subsidiary of DDi
Intermediate Holdings Corp. ("Intermediate") which is a wholly-owned
subsidiary of DDi Corp. (f/k/a DDi Holdings Corp. or "Holdings"), and Dynamic
Details, Incorporated ("DDi") is a wholly-owned subsidiary of DDi Capital. In
October 1997, in connection with a recapitalization, Holdings incorporated DDi
as a new wholly-owned subsidiary, and contributed substantially all of its
assets, subject to certain liabilities, to DDi. In November 1997, Holdings
organized DDi Capital as a wholly-owned subsidiary, and in February 1998,
Holdings contributed substantially all of its assets (consisting primarily of
all of the shares of capital stock of DDi), subject to certain liabilities,
including senior discount notes, to DDi Capital. In July 1998, Holdings
organized Intermediate as a wholly-owned subsidiary and contributed its
ownership of DDi Capital to Intermediate. As used herein, the "Company" means
Holdings and its wholly-owned subsidiaries, including DDi Capital and DDi, or
their predecessor entities as the context requires. Each registrant has its
principal executive offices at 1220 Simon Circle, Anaheim, California and
their telephone number is (714) 688-7200.

In December 1997, DDi acquired all of the outstanding shares of common stock
of Colorado Springs Circuits, Inc., a Colorado corporation d/b/a Dynamic
Details, Inc. - Colorado Springs ("NTI"). The acquisition of NTI is described
in more detail under "Item 7. Management's Discussion and Analysis of
Financial Condition and Results of Operations--Company History and Significant
Transactions--Colorado Facility."

In July 1998, DDi merged with Dynamic Circuits, Inc. ("DCI"), a Delaware
corporation. DCI was primarily a manufacturer of complex printed circuit
boards and related components based in Silicon Valley and with additional
facilities in Texas, Georgia and Massachusetts. The merger with DCI is
described in more detail under "Item 7. Management's Discussion and Analysis
of Financial Condition and Results of Operations--Company History and
Significant Transactions--DCI Merger."

In December 1999, DDi implemented a plan to consolidate its Colorado
operations into its Texas facility and to close the Colorado facility. DDi
expects to complete this consolidation and closure by March 31, 2000. DDi is
currently serving the majority of the customers who were serviced by the
Colorado facility out of the Texas facility. By combining Texas and Colorado
operations, DDi is eliminating lower-margin product lines and decreasing
overhead costs, and expects to gain efficiency through better capacity
utilization and streamlined management.

On January 28, 2000 Holdings filed a registration statement for an initial
public offering of its common stock. Upon the completion of its offering,
Holdings intends to use the proceeds to redeem all of the senior discount
notes issued by Intermediate and 40% of the senior discount notes issued by
DDi Capital. The remainder of the proceeds will be used to repay a portion of
the indebtedness under DDi's senior credit facility and a portion of the debt
assumed in the MCM acquisition, as described below, and to pay cash
consideration in connection with the MCM acquisition. However, there can be no
assurance the offering will be successfully completed.

On March 22, 2000, Holdings entered into an agreement to acquire MCM
Electronics Limited ("MCM"), a time-critical electronics manufacturing service
provider based in the United Kingdom. Holdings expects to consummate this
acquisition on the closing date of its proposed initial public offering.
Holdings will pay the current MCM investors a combination of common stock and
cash. A portion of MCM's debt will remain outstanding. MCM will be a wholly-
owned subsidiary of Holdings. Its assets will not be available to the
creditors of DDi Capital or DDi. There can be no assurance that the MCM
acquisition will be consummated.

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Overview

DDi provides technologically advanced, time-critical electronics design,
development and manufacturing services to original equipment manufacturers and
other providers of electronics manufacturing services. DDi targets the fast-
growing communications and networking equipment industries, which are
characterized by aggressive new product development programs demanding the
rapid application of advanced technology and design.

Customers use DDi's services to develop and produce a wide variety of end
products, including communications switching and transmission equipment,
wireless base stations, work stations, high-end computing equipment and data
networking equipment. The technologically advanced, time-critical segment of
the electronics manufacturing services industry in which DDi operates is
characterized by rapid growth, high margins and significant customer
diversity.

Industry Background

Electronics manufacturing services, or EMS, companies provide a range of
services to electronics original equipment manufacturers, or OEMs. The EMS
industry is growing rapidly, and industry revenues have increased from
approximately $22 billion in 1993 to approximately $73 billion in 1999.
Industry sources expect industry revenues to grow at approximately 20%
annually to approximately $149 million in 2003. Industry growth is fueled by
increases in the rate of outsourcing combined with steady, underlying growth
in the electronics equipment industry. In 1998, approximately 17% of the cost
of goods sold by electronics OEMs was attributable to components and products
outsourced to EMS providers. This percentage is expected to reach 33% by 2003.

Electronics manufacturing services were historically labor-intensive
functions outsourced by OEMs to obtain additional capacity during periods of
high demand and initially consisted mainly of printed circuit board assembly.
Early EMS providers acted essentially as subcontractors, providing production
capacity on a transactional basis. With advances in process technology, EMS
providers developed additional capabilities and were able both to improve
quality and to reduce OEMs' costs. Over time, OEMs came to rely on EMS
providers to perform a broader array of manufacturing services, including
design and development activities. In recent years, EMS providers have
expanded their range of services to encompass design, product development,
packaging and distribution and overall supply chain management.

By using EMS providers, OEMs are able to focus on their core competencies,
including product development, sales, marketing and customer service.
Outsourcing allows OEMs to take advantage of the manufacturing expertise,
advanced technology and capital investment of EMS providers, to achieve
overall cost benefits and to enhance their competitive position by:

. reducing time to market and time to volume production;

. reducing operating costs and invested capital;

. improving supply chain management;

. focusing their resources on core competencies;

. accessing advanced manufacturing capabilities and process technologies;
and

. improving access to global markets.

The fast-growing communications and networking equipment industries
represent large and attractive markets for electronic manufacturing services.
These industries are characterized by increasingly rapid product introductions
driven by, among other factors, the demand for network infrastructure to
handle increased voice and data traffic created by the Internet.
Communications equipment manufacturers are at a relatively early stage of the
outsourcing trend, and industry sources predict these manufacturers will
increasingly utilize EMS providers, such as DDi, for design, development and
manufacturing services.

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The DDi Customer Solution

DDi engineers technologically advanced materials for customers within
extremely short turnaround times, which distinguishes it from traditional
electronics manufacturing service providers, and provides its customers with a
competitive advantage in delivering their new products to market quickly.
Customers benefit from the following components of the DDi customer solution:

. Time-critical Service. Based on industry data, management believes DDi
is one of the largest providers of quick-turn complex printed circuit
boards in the United States. DDi can deliver highly complex printed
circuit boards to customers in as little as 24 hours. Approximately 50%
of net sales in 1999 were generated from services delivered in 10 days
or less.

. Advanced Technology. The focus on time-critical design, development and
manufacturing services requires DDi engineers to remain on the cutting
edge of electronics technology, and customers benefit from the expertise
DDi has developed as they seek to introduce new products. Approximately
50% of net sales in 1999 involved the design or manufacture of printed
circuit boards with at least eight layers, an industry-accepted measure
of complexity. In addition, many of DDi's lower layer-count boards are
complex as a result of the incorporation of other technologically
advanced features.

. Proactive Sales Force. The DDi sales force, based in Silicon Valley,
enables current and prospective customers to understand and exploit wide
range of services provided by DDi facilities across the country. DDi
achieved a net increase of approximately 150 customers in 1999.

. Relationships with Research and Development Personnel. In many cases,
DDi stations design engineers on-site in customers' product development
divisions. As a result, DDi helps customers develop workable technical
solutions to their concepts for next generation products.

. Experienced and Incentivized Management. The management team, led by
Charles D. Dimick and Bruce D. McMaster, collectively has nearly 100
years of experience in the electronics manufacturing services industry.

DDi believes that these attributes allow it to consistently meet and exceed
customers' expectations and that, as a result, DDi will continue to attract
leading original equipment manufacturers and other providers of electronics
manufacturing services as customers.

Strategy

DDi's goal is to be the leading provider of technologically advanced, time-
critical electronics manufacturing services. To achieve this goal, DDi intends
to:

Continue the Focus on the Fast-Growing Communications and Networking
Equipment Industries. DDi focuses marketing efforts on the fast-growing
communications and networking equipment industries, and target established
original equipment manufacturers, emerging providers of next-generation
technology and electronics manufacturing service providers serving these
industries. The communications and networking equipment industries represented
approximately 55% of net sales for the year ended December 31, 1999.

Capitalize on Strong Customer Relationships and Design Expertise to
Participate in Future Product Introductions and Further Outsourcing
Programs. DDi has served established original equipment manufacturers for many
years, through multiple product generations. DDi has positioned itself as a
strategic partner in customers' new product initiatives by focusing on direct
relationships with customers' research and development personnel. As a result,
DDi has developed expertise and gained knowledge of customers' new product
design programs, all of which positions DDi as a preferred service provider
for future product generations.

Strengthen Technology and Process Management Leadership in the Time-Critical
Segment of the Electronics Manufacturing Services Industry and Continue to
Improve Quality and Delivery Times by Incorporating Emerging Technologies and
Consistently Refining Manufacturing Processes. DDi has

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consistently been among the earliest users of new developments in printed
circuit board design, development and manufacturing and is continuously
incorporating new technology into its manufacturing processes in order to
further improve quality and reduce delivery times. Because DDi concentrates on
cutting-edge methods, DDi has the ability to service emerging providers of
next-generation technology. This ability allows DDi to build customer
relationships with companies with the potential for significant growth and
enables DDi to provide these cutting-edge methods to customers accustomed to
more traditional methods. DDi has developed process management expertise over
time and is continuously enhancing its ability to quickly adapt design and
production facilities on demand to serve time-critical customer needs. DDi
believes this expertise and ability position it as an industry leader in
providing flexible and responsive technologically advanced, time-critical
services.

Leverage Leadership in Quick-Turn Design and Manufacturing Services to
Further Expand Assembly Operations and Other Value-Added Services. As a quick-
turn design and manufacturing service provider, DDi gains early access to
customers' product development processes, giving DDi the opportunity to
leverage the provision of design services into providing other value-added
services including assembly of printed circuit boards and other electronic
components and total system assembly and integration of electronics products.
DDi predominantly uses these additional capabilities in customers' new product
development programs to enable them to further reduce their time to market and
overall cost.

Expand International Presence to Better Serve the Needs of Customers Seeking
to Outsource Their Worldwide Design and Manufacturing Activities. DDi has a
European sales office based in London supporting its growing European sales
effort. Following the completion of Holdings' acquisition of MCM, the Company
will be able to serve a growing number of European customers from MCM's four
U.K. facilities. The European market offers significant growth opportunities
as large electronics equipment manufacturers are increasing their global
distribution and are seeking electronics manufacturing service providers with
the ability to operate in multiple markets. DDi will continue to serve Asian
customers from its U.S. facilities.

Pursue Selected Acquisition Opportunities, Including Asset Divestitures by
Original Equipment Manufacturers. DDi has actively pursued acquisitions to
enhance service offerings, expand geographic presence and increase production
capabilities. An increasing number of original equipment manufacturers are
divesting their production capabilities as an integral part of their
manufacturing strategy. DDi has completed an acquisition and a merger since
1997, and intends to continue to selectively pursue strategic acquisition
opportunities, including asset divestitures by original equipment
manufacturers, that it believes will complement internal growth. Holdings
expects to complete the acquisition of MCM on or after the completion of
Holdings' initial public offering.

Services

DDi provides a suite of value-added, integrated services, used by customers
predominantly in the development of their new products, including:

On-campus and In-the-field Design of Complex Printed Circuit Boards. DDi
targets design and development engineering services primarily at the earliest
stages of the new product development process. DDi provides design and
engineering assistance early in new product development to ensure that both
mechanical and electrical considerations are integrated into a cost-effective
manufacturing solution. DDi designs and develops printed circuit boards that
meet or exceed established operating parameters for new products. In doing so,
DDi often recommends and assists in implementing design changes to reduce
manufacturing costs and lead times, increase manufacturing yields and improve
the quality of the finished product.

Printed circuit boards are the basic platforms used to interconnect
electronic components and can be found in virtually all electronic products,
including consumer electronics, computers and automotive, telecommunications,
industrial, medical, military and aerospace equipment. Printed circuit boards
used in consumer electronic products are generally less technologically
sophisticated, employing lower layer counts and

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requiring less manufacturing sophistication than printed circuit boards used
in high-end commercial equipment. Communications and networking equipment
manufacturers require more complex multi-layer interconnections with advanced
materials.

Time-critical Development and Fabrication of Prototype Complex Printed
Circuit Boards. DDi's time-critical, or quick-turn, services are used in the
design, test and launch phases of new electronics product development and are
generally delivered within 10 to 20 days or in as little as 24 hours. Larger
volumes of printed circuit boards are needed as a product progresses past the
testing, design and pre-production phases. The advanced design, development
and manufacturing technologies DDi employs facilitate quick-turn production of
complex, multi-layered printed circuit boards utilizing technologically-
advanced methods. The ability to provide these services on a quick-turn and
longer lead-time delivery basis involves working closely with customers from
the initial design of new products through development and launch.

Assembly of Printed Circuit Boards, Backpanels and Other Components of
Electronics Products. DDi assembles printed circuit boards, backpanels, card
cages and wire harnesses on a low volume, quick-turn basis. Backpanels are
large printed circuit boards, and card cages and wire harnesses integrate
wires with connectors and terminals to transmit electricity between two or
more points. As the electronics industry has worked to increase component
speed and performance, the design of these components has become more
integrated. DDi has responded to this trend and provides these additional
assembly services to complement design and development capabilities.

Assembly and Integration of Customers' Complete Systems and Products. DDi
provides full system assembly services, predominantly for products in
development by original equipment manufacturers. These services require
logistical capabilities and supply chain management to rapidly acquire
components, assemble prototype products, perform complex testing and deliver
products to the customer.

Customers and Markets

More than 1,400 original equipment manufacturers and electronics
manufacturing services companies representing a wide range of end-user markets
used DDi's services in 1999, a net increase of approximately 150 customers in
1999. DDi measures customers as those companies that place at least two orders
in a twelve-month period. DDi's customers principally consist of leading
communications and networking equipment and computer companies, as well as
medical, automotive, industrial and aerospace equipment manufacturers. During
1999, sales to DDi's largest customer, Alcatel, accounted for less than 8% of
net sales, and sales to its ten largest customers accounted for less than 40%
of sales. DDi has been successful at retaining customers and has worked with
its three largest customers since 1991.

Approximately 80% of net sales are made to original equipment manufacturers,
and the remainder are to electronics manufacturing service providers. The
following table shows, for the periods indicated, the percentage of sales in
each of the principal end-user markets DDi served for the years ended December
31, 1997, 1998 and 1999.

<TABLE>
<CAPTION>
Year Ended
December 31,
----------------
End-User Markets 1997 1998 1999
- ---------------- ---- ---- ----
<S> <C> <C> <C>
Communications and networking equipment....................... 34% 53% 55%
Computer and peripherals...................................... 45 24 21
Medical, automotive, industrial and test instruments.......... 6 11 9
Aerospace equipment........................................... 6 3 2
Other......................................................... 9 9 13
--- --- ---
Total....................................................... 100% 100% 100%
=== === ===
</TABLE>

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The following table indicates, for the year ended December 31, 1999, the
largest original equipment manufacturers, or OEMs, and electronics
manufacturing services, or EMS, customers in terms of net sales, in
alphabetical order, and the primary end products for which DDi provided its
services.

<TABLE>
<CAPTION>
OEM Customers End Products
- ------------- ------------
<S> <C>
Alcatel................... Communications switching and transmission equipment,
networking equipment
Marconi Communications.... Communications switching and transmission equipment,
networking equipment
IBM....................... Network servers
Intel..................... Personal computers
3Com...................... Networking equipment
<CAPTION>
EMS Customers End Products
- ------------- ------------
<S> <C>
Celestica................. Communications and computing equipment
Jabil..................... Communications and computing equipment
Solectron................. Communications and computing equipment
</TABLE>

Technology, Development and Processes

DDi maintains a strong commitment to research and development and focus its
efforts on enhancing existing capabilities as well as developing new
technologies. DDi's close involvement with customers in the early stages of
their product development positions DDi at the leading edge of technical
innovation in the design of quick-turn and complex printed circuit boards.
DDi's staff of nearly 300 experienced engineers, chemists and laboratory
technicians works in conjunction with its sales staff to identify specific
needs and develop innovative, high performance solutions to customer issues.
This method of product development allows customers to augment their own
internal development teams while providing DDi with the opportunity to gain an
in-depth understanding of its customers' businesses and enabling it to better
anticipate and serve customers' future needs.

The market for DDi's products and services is characterized by rapidly
changing technology and continuing process development. In recent years, the
trend in the electronics equipment industry has been to increase speed and
performance of components while at the same time reducing their size. This
trend requires increasingly complex printed circuit boards with higher
densities. The future success of DDi's business will depend in large part upon
its ability to maintain and enhance technological capabilities, develop and
market products and services that meet changing customer needs, and
successfully anticipate or respond to technological changes on a cost-
effective and timely basis. In the last two years, DDi has made substantial
investments in equipment and technology to meet these needs and maintain its
competitive advantage.

The highly specialized equipment DDi uses is among the most advanced in the
industry. DDi provides a number of advanced technologies, including:

. Microvias. Microvias are small holes, or vias, generally created with
lasers employing depth control rather than mechanical drills, through
which printed circuit board layers are interconnected. Microvias
generally have diameters between .001 and .005 inches.

. Blind or Buried Vias. Blind or buried vias are small holes which
interconnect inner layers of high layer-count printed circuit boards.

. Ball Grid Arrays. A ball grid array is a method of mounting an
integrated circuit or other component to a printed circuit board. Rather
than using pins, also called leads, the component is attached with small
balls of solder at each contact. This method allows for greater
component density and is used in printed circuit boards with higher
layer counts.

. Flip Chips. Flip chips are structures that house circuits which are
interconnected without leads. They are utilized to minimize printed
circuit board surface area when compact packaging is required.

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. Multichip Module-Laminates. Multichip module-laminates are a type of
printed circuit board design that allows for the placement of multiple
integrated circuits or other components in a limited surface area.

. Advanced Substrates. Advanced substrates are a recent generation of
printed circuit board materials that enable the use of ball grid arrays,
flip chips and multichip module laminates. They are used for products
requiring high-frequency transmission and have thermal properties
superior to standard materials.

DDi is qualified under various industry standards, including Bellcore
compliance for communications products and UL (Underwriters Laboratories)
approval for electronics. In addition, DDi production facilities are ISO-9002
certified. These certifications require that DDi meet standards related to
management, production and quality control, among others.

Manufacturing

DDi produces highly complex, technologically advanced multi-layer and low-
layer printed circuit boards, backpanel assemblies, printed circuit board
assemblies, card cage and wire harness assemblies and full system assembly and
integration that meet increasingly tight tolerances and specifications
demanded by original equipment manufacturers. The manufacture of printed
circuit boards involves several steps: etching the circuit image on copper-
clad epoxy laminate, pressing the laminates together to form a panel, drilling
holes and depositing copper or other conducive material to form the inter-
layer electrical connections and, lastly, cutting the panels to shape. Certain
advanced interconnect products require additional critical steps, including
dry film imaging, photoimageable soldermask processing, computer-controlled
laser drilling and routing, automated plating and process controls and
achievement of controlled impedance.

Multi-layering, which involves placing multiple layers of electrical
circuitry on a single printed circuit board or backpanel, expands the number
of circuits and components that can be contained on the interconnect product
and increases the operating speed of the system by reducing the distance that
electrical signals must travel. Increasing the density of the circuitry in
each layer is accomplished by reducing the width of the circuit tracks and
placing them closer together on the printed circuit board or backpanel.

Interconnect products having narrow, closely spaced circuit tracks are known
as fine line products. The manufacture of complex multi-layer interconnect
products often requires the use of sophisticated circuit interconnections,
called blind or buried vias, between printed circuit board layers and
adherence to strict electrical characteristics to maintain consistent circuit
transmission speeds, referred to as controlled impedance. These technologies
require very tight lamination and etching tolerances and are especially
critical for printed circuit boards with ten or more layers.

Manufacture of printed circuit boards used in backpanel assemblies requires
specialized expertise and equipment because of the larger size of the
backpanel relative to other printed circuit boards and the increased number of
holes for component mounting. DDi has no patents for these proprietary
techniques and relies primarily on trade secret protection.

Accomplishing these operations in time-critical situations requires the
attention of highly-qualified personnel. Furthermore, DDi's manufacturing
systems are managed to maximize flexibility to accommodate widely varying
projects for different customers with minimal or no turnover time. DDi seeks
to maximize the use of production and manufacturing capacity through the
efficient management of time-critical production schedules.

Sales and Marketing

DDi's marketing strategy focuses on developing close working relationships
with customers early in the design phase and throughout the lifecycle of the
product. Accordingly, senior management personnel and

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engineering staff advise customers with respect to applicable technology,
manufacturing feasibility of designs and cost implications through on-line
computer technical support and direct customer communication. DDi has focused
marketing efforts on developing long-term relationships with research and
development personnel at key customers in high-growth segments of the
electronics equipment industry.

DDi employs a targeted sales effort to help optimize market share at the
customer level. In order to establish individual salesperson accountability
for each client, each customer is assigned one member of the sales staff for
all services across all facilities. DDi has developed a comprehensive database
and allocation process to control calling and cross-selling effort, and has a
global account program for coordinating sales to its top 20 customers. The
success of DDi's sales strategy is demonstrated by the net addition of over
approximately 150 customers in 1999.

DDi markets its design, development and manufacturing services through an
internal sales force of approximately 100 individuals and an expansive sales
network consisting of 14 organizations comprised of approximately 80
manufacturers' representatives across the United States. Approximately half of
net sales in 1999 were generated through manufacturers' representatives. For
many of these manufacturers' representatives, DDi is the largest revenue
source and the exclusive supplier of quick-turn and pre-production printed
circuit boards. In 1997, DDi opened a sales office in London, England, and
plans to continue expanding international sales efforts.

Suppliers

Raw materials inventory is small relative to sales and must be regularly and
rapidly replenished. DDi uses just-in-time procurement practices to maintain
raw materials inventory at low levels, and works closely with suppliers to
incorporate technological advances in the raw materials purchased. Because DDi
provides primarily lower-volume quick-turn services, this inventory policy
does not hamper the ability to complete customer orders. Although certain
suppliers are preferred for some raw materials, multiple sources exist for all
materials. Adequate amounts of all raw materials have been available in the
past and this should continue in the foreseeable future.

The primary raw materials used in production are core materials (copperclad
layers of fiberglass of varying thickness impregnated with bonding materials)
and chemical solutions (copper, gold, etc.) for plating operations,
photographic film and carbide drill bits.

Competition

The electronics manufacturing services industry is highly fragmented and
characterized by intense competition. DDi principally competes in the time-
critical segment of the industry against independent, small private companies
and integrated subsidiaries of large, broadly based volume producers, as well
as the internal capacity of original equipment manufacturers. Competition in
the market segment DDi serves, unlike in the electronics manufacturing
services industry generally is not driven by price. Instead, because customers
are willing to pay a premium for a responsive, broad-reaching capability to
produce customized complex products in a very short time, DDi competes
primarily on the basis of quick turnaround, product quality and customer
service. In addition, DDi does not compete in the high volume production
manufacturing aspect of the industry and as a result is less exposed to
competition from low cost manufacturers who compete on price in the commodity
segment of this market.

Backlog

Although DDi obtains firm purchase orders from customers, customers
typically do not make firm orders for delivery of products more than 30 to 90
days in advance. The backlog of expected product sales covered by firm
purchase orders is not a meaningful measure of future sales since orders may
be rescheduled or canceled.

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Governmental Regulation

DDi's operations are subject to certain federal, state and local regulatory
requirements relating to environmental compliance and site cleanups, waste
management and health and safety matters. In particular, it is subject to
regulations promulgated by:

. the Occupational Safety and Health Administration pertaining to health
and safety in the workplace;

. the Environmental Protection Agency pertaining to the use, storage,
discharge and disposal of hazardous chemicals used in the manufacturing
processes; and

. corresponding state agencies.

To date the costs of compliance and environmental remediation have not been
material. Nevertheless, additional or modified requirements may be imposed in
the future. If such additional or modified requirements are imposed, or if
conditions requiring remediation were found to exist, DDi may be required to
incur substantial additional expenditures.

Employees

As of December 31, 1999, after giving effect to the consolidation of the
Colorado operations into the Texas facility, the Company had approximately
1,800 employees, none of whom are represented by unions. Of these employees,
approximately 1,550 were involved in manufacturing and engineering, 100 worked
in sales and marketing and 150 worked in accounting, systems and other support
capacities. The Company has not experienced any labor problems resulting in a
work stoppage and believes it has good relations with its employees.

ITEM 2. DESCRIPTION OF PROPERTY

The Company conducts its manufacturing operations within approximately
409,000 square feet of building space. The Company's significant facilities
are as follows:

<TABLE>
<CAPTION>
Remaining
Location Function Square Feet Lease Term
- -------- ---------- ----------- ---------------
<S> <C> <C> <C>
Anaheim, California...................... Operations 125,000 1 to 6 years(a)
Garland, Texas........................... Operations 86,000 N/A(b)
Milpitas, California..................... Operations 40,000 1.5 years(c)
Milpitas, California..................... Operations 32,000 2.5 years(c)
Dallas, Texas............................ Operations 49,000 2 years
Marlborough, Massachusetts............... Operations 33,000 6.5 years
La Grange, Georgia....................... Operations 30,000 9 months(c)
Milpitas, California..................... Storage 9,000 4 years
Sunnyvale, California.................... Storage 5,000 1 year
-------
409,000
</TABLE>
- --------
(a) All of these leases have an option to renew or to purchase the property at
fair market value after a specified date during the lease term.

(b) The Company owns this facility.

In addition to the facilities listed above, the Company also occupies space
for its operations in various states aggregating approximately 17,000 square
feet, as well as space for its Europe operations aggregating approximately
1,500 square feet.

The Company believes its facilities are currently adequate for its operating
needs.

11
<PAGE>

ITEM 3. LEGAL PROCEEDINGS

The Company is a party to various legal actions arising in the ordinary
course of its business. The Company believes that the resolution of these
legal actions will not have a material adverse effect on its financial
position or results of operations.

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

None.

PART II

ITEM 5. MARKET FOR THE REGISTRANTS' COMMON STOCK

There is no established trading market for the common stock of DDi or DDi
Capital. As of December 31, 1999, DDi had 100 shares of common stock, par
value $.01 per share, outstanding, all of which were held by DDi Capital, and
DDi Capital had 1,000 shares of Common Stock, par value $.01 per share
outstanding, all of which were held by Intermediate, which is wholly-owned by
Holdings. DDi's ability to pay dividends is limited under an indenture dated
as of November 18, 1997 between DDi and State Street Bank & Trust Co. as
trustee (the "Senior Subordinated Note Indenture"), and under the senior
credit facilities. See "Description of Indebtedness" within Managements'
Discussion and Analysis of Financial Condition and Results of Operations.
DDi Capital's ability to pay dividends is limited under an indenture dated
November 18, 1997, as supplemented by a supplemental indenture dated February
10, 1998 among Holdings, DDi Capital and State Street Bank & Trust Co. as
trustee (the "Indenture").

12
<PAGE>

ITEM 6. SELECTED FINANCIAL DATA

The following selected financial data as of and for the dates and periods
indicated have been derived from the consolidated financial statements of DDi,
DDi Capital and Holdings, as predecessor to both DDi Capital and DDi, as
described in "Company History and Significant Transactions" within Management's
Discussion and Analysis of Financial Condition and Results of Operations. The
selected financial data with respect to the consolidated statement of
operations for each of the two years ended December 31, 1996 and the balance
sheet as of the end of each such fiscal year is that of Holdings, and is not
included herein. The selected historical consolidated statement of operations
data for the years ended December 31, 1997, 1998 and 1999 and the historical
consolidated balance sheet data as of December 31, 1998 and 1999 were derived
from the audited historical consolidated financial statements of DDi Capital
and DDi included elsewhere herein. You should read the data set forth below in
conjunction with "Management's Discussion and Analysis of Financial Condition
and Results of Operations" and the consolidated financial statements and the
related notes thereto appearing elsewhere herein.

<TABLE>
<CAPTION>
Year Ended December 31,
---------------------------------------------------------------------------------
Pre-
Recapitalization
Company DDi DDi DDi
------------------ DDi Capital DDi Capital DDi Capital
1995 1996 1997 1997 1998 1998 1999 1999
-------- -------- ------ ------- ------- ------- ------ -------
(in millions)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Consolidated Statement of
Operations Data:
Net sales................ $ 59.4 $ 67.5 $ 78.8 $ 78.8 $ 174.9 $ 174.9 $292.5 $292.5
Cost of goods sold....... 25.2 30.5 38.7 38.7 119.3 119.3 201.4 201.4
-------- ------- ------ ------ ------- ------- ------ ------
Gross profit............. 34.2 37.0 40.1 40.1 55.6 55.6 91.1 91.1
Operating expenses:
Sales and marketing..... 5.3 6.0 7.3 7.3 12.8 12.8 23.6 23.6
General and
administration......... 1.8 1.9 2.1 2.1 8.5 8.5 16.1 16.1
Amortization of
intangibles............ -- -- -- -- 10.9 10.9 22.3 22.3
Restructuring and
related charges(a)..... -- -- -- -- -- -- 7.0 7.0
Stock compensation and
related bonuses(b)..... -- -- 31.3 31.3 -- -- -- --
Compensation to the
former CEO............. 0.4 1.1 2.1 2.1 -- -- -- --
Write-off of acquired
in-process research and
development(c)......... -- -- -- -- 39.0 39.0 -- --
-------- ------- ------ ------ ------- ------- ------ ------
Operating income (loss).. 26.7 28.0 (2.7) (2.7) (15.6) (15.6) 22.1 22.1
Interest expense, net.... 0.3 9.4 17.8 25.2 27.5 35.3 32.5 41.4
-------- ------- ------ ------ ------- ------- ------ ------
Income (loss) before
taxes and extraordinary
loss.................... 26.4 18.6 (20.5) (27.9) (43.1) (50.9) (10.4) (19.3)
Income tax benefit
(expense)............... (0.4) (6.2) 8.0 10.9 (0.4) 2.6 1.9 5.2
-------- ------- ------ ------ ------- ------- ------ ------
Income (loss) before
extraordinary loss...... 26.0 12.4 (12.5) (17.0) (43.5) (48.3) (8.5) (14.1)
Extraordinary loss....... -- -- (1.6) (1.6) (2.4) (2.4) -- --
-------- ------- ------ ------ ------- ------- ------ ------
Net income (loss)........ $ 26.0 $ 12.4 $(14.1) $(18.6) $ (45.9) $ (50.7) $ (8.5) $(14.1)
======== ======= ====== ====== ======= ======= ====== ======
Other Financial Data:
Depreciation............. $ 1.1 $ 2.0 $ 2.6 $ 2.6 $ 9.2 $ 9.2 $ 14.4 $ 14.4
Capital expenditures..... 2.9 10.2 6.6 6.6 18.0 18.0 18.2 18.2
Supplemental Data:
Adjusted EBITDA(d)....... 28.2 31.2 33.3 33.3 45.4 45.4 68.8 68.8
Net cash from operating
activities.............. 26.1 12.2 9.1 9.1 18.9 18.9 24.8 24.8
Net cash used in
investing activities.... (2.9) (3.6) (44.9) (44.9) (194.8) (194.8) (18.5) (18.5)
Net cash from (used in)
financing activities.... (26.4) (8.9) 41.1 41.1 172.4 172.4 (7.5) (7.5)
Ratio of earnings to
fixed charges(e)........ 46.6x 3.0x -- (f) -- (f) -- (f) -- (f) 0.7x 0.5x
</TABLE>

13
<PAGE>

<TABLE>
<CAPTION>
December 31,
--------------------------------------------------------------------
Pre-
Recapitalization
Company DDi DDi DDi
----------------- DDi Capital DDi Capital DDi Capital
1995 1996 1997 1997 1998 1998 1999 1999
-------- -------- ------- ------- ------ ------- ----- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Consolidated Balance Sheet Data:
Cash and cash equivalents....... $ 0.5 $ 0.2 $ 5.4 5.4 $ 1.9 $ 1.9 $ 0.6 $ 0.6
Working capital................. (2.3) (3.5) 20.8 23.6 13.2 13.2 19.1 19.1
Total assets.................... 13.1 27.5 102.6 108.9 358.5 362.2 350.0 353.6
Total debt, including current
maturities..................... 2.0 94.1 212.6 273.5 369.5 438.3 358.3 436.0
Stockholders' equity
(deficit)(g)................... 2.5 (72.7) (136.5) (191.2) (77.9) (138.0) (80.0) (147.0)
</TABLE>
- --------
(a) The 1999 restructuring and related charges represent the charge recorded
in December 1999 in connection with the announced consolidation of the
Colorado operations into the Texas facility and the closure of the
Colorado facility. The charge consists of $4.5 for severance and other
exit costs and $2.5 related to the impairment of net property, plant and
equipment.
(b) Represents the charge for stock compensation and related bonuses recorded
for vested stock options exchanged in conjunction with the
recapitalization.
(c) Represents the allocation of a portion of the purchase price in the DCI
merger to in-process research and development. At the date of the merger,
technological feasibility of the in-process research and development
projects had not been reached and the technology had no alternative
future uses. Accordingly, DDi expensed the portion of the merger
consideration allocated to in-process research and development.
(d) EBITDA means earnings before net interest expense, income taxes,
depreciation and amortization. Adjusted EBITDA is presented because
management believes it is an indicator of the ability to incur and
service debt and is used by the Company's lenders in determining
compliance with financial covenants. However, adjusted EBITDA should not
be considered as an alternative to cash flow from operating activities,
as a measure of liquidity or as an alternative to net income as a measure
of operating results in accordance with generally accepted accounting
principles. The definition of adjusted EBITDA may differ from definitions
of adjusted EBITDA used by other companies.

The following table sets forth a reconciliation of EBITDA to adjusted
EBITDA for each period included herein:
<TABLE>
<CAPTION>
Year Ended
December 31,
---------------------------------
1995* 1996* 1997** 1998** 1999**
----- ----- ------ ------ ------
(in millions)
<S> <C> <C> <C> <C> <C>
EBITDA....................................... $27.8 $30.1 $(0.1) $43.5 $58.8
Former CEO compensation(1) .................. 0.4 1.1 2.1 -- --
Management fee(2)............................ -- -- -- -- 1.1
Executive severance(3)....................... -- -- -- 0.8 --
Stock compensation and bonuses(4)............ -- -- 31.3 -- --
Restructuring and related charges(5)(6)...... -- -- -- -- 7.0
Non-cash expense allocations and other(7).... -- -- -- 1.1 1.9
----- ----- ----- ----- -----
Adjusted EBITDA.............................. $28.2 $31.2 $33.3 $45.4 $68.8
===== ===== ===== ===== =====
</TABLE>
- --------
* Pre-Recapitalization Company
** DDi Capital and DDi
(1) Reflects elimination of compensation to the former CEO whose employment
agreement was terminated in October 1997.
(2) Reflects elimination of the Bain management fee incurred under the Bain
management agreement, which will be terminated in connection with
Holdings' proposed initial public offering.
(3) Reflects one-time severance payments to two executives who were
terminated as a result of redundancies created by the DCI merger.
(4) Reflects elimination of the charge for stock compensation and related
bonuses recorded for vested stock options exchanged in conjunction with
the recapitalization.
(5) Reflects elimination of the charge recorded for the consolidation and
closure of the Colorado facility. See note (a) above.
(6) In December 1999, management implemented a plan to consolidate the
Colorado operations into the Texas facility and to close the Colorado
facility, which operated at a loss in 1999. DDi is currently serving a
majority of the customers who were serviced by the Colorado facility out
of the Texas facility, and based on a detailed customer-by-customer
analysis, DDi believes it will retain

14
<PAGE>

customers and accounts representing approximately 75% of the Colorado
facility's net sales. The capacity of the Texas facility would have been
sufficient to service this portion of the revenue stream in 1999. If DDi had
serviced this revenue stream in the Texas facility with the Texas facility's
cost structure:
. Colorado net sales would have decreased from $30.2 to $22.7;
. the cost of goods sold related to those sales would have decreased from
$30.8 (the actual cost of goods sold of the Colorado facility) to $19.1
(the product of $22.7 and the cost of goods sold ratio achieved in the
Texas facility);
. the operating expenses associated with those sales would have decreased
from $3.7 to $2.3 (the product of $22.7 and the operating expense ratio
achieved in the Texas facility); and
. depreciation and amortization (which are included in operating expenses
and cost of goods sold) would have decreased by $0.7. As a result, 1999
operating income and EBITDA associated with those sales would have
increased by $5.6 and $4.9, respectively. The $4.9 increase is not
reflected in the above table. There can be no assurance that actual
results would have been, or that future results will be, consistent with
the foregoing assumptions.
(7) Reflects non-cash expense allocations to the Company by its parent,
Intermediate, of $0.8 and $1.9 million in 1998 and 1999, respectively, and
approximately $0.3 million of non-operating income adjustments recorded in
1998.

(e) For purposes of computing this ratio, earnings consist of income before
income taxes plus fixed charges. Fixed charges consist of interest
expense and the estimated interest portion of rent expense.
(f) Historical earnings were deficient in covering fixed charges for DDi and
DDi Capital by $20.5 million and $27.9 million, respectively in 1997 and
by $43.1 million and $50.9 million, respectively, in 1998. On a pro forma
basis, assuming the Company's senior subordinated notes and senior
discount notes were outstanding at the beginning of 1997 and after
eliminating the non-recurring stock compensation and related bonuses, the
ratio of earnings to fixed charges would have been 3.2 x and 2.4 x for DDi
and DDi Capital, respectively in 1997. On a pro forma basis, assuming the
merger with DCI was consummated at the beginning of 1998 and after
eliminating the non-recurring $39 million write off of acquired in-process
research and development related to the merger with DCI, the ratio of
earnings to fixed charges would have been 0.8x and 0.6x for DDi and DDi
Capital, respectively, in 1998.
(g) The decrease in the net capital deficiency from December 31, 1998 to
December 31, 1999 reflects the net losses incurred by DDi and DDi Capital
for the year ended December 31, 1999. The decrease in the net capital
deficiency from December 31, 1997 to December 31, 1998 reflects capital
contributions in connection with the DCI merger (see Note 14 to the
consolidated financial statements), partially offset by the net losses
incurred by DDi and DDi Capital for the year ended December 31, 1998. The
net capital deficiency as of December 31, 1997 reflects the
Recapitalization that took place in October of 1997 and the net capital
deficiency as of December 31, 1996 reflects the Initial Recapitalization
that took place in January of 1996.

15
<PAGE>

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

Overview

DDi provides technologically advanced, time-critical electronics design,
development and manufacturing services to original equipment manufacturers and
other electronics manufacturing service providers. DDi targets the fast-
growing communications and networking equipment industries, which are
characterized by aggressive new product development programs demanding the
rapid application of advanced technology and design.

Time-critical. DDi can deliver highly complex printed circuit boards to
customers in as little as 24 hours. Approximately 50% of net sales for the
year ended December 31, 1999 were generated from services delivered in 10 days
or less.

Technologically advanced. Approximately 50% of net sales during the same
period involved the design or manufacture of printed circuit boards with at
least eight layers, an industry-accepted measure of complexity. In addition,
many lower layer-count boards are complex as a result of the incorporation of
technologically advanced features.

Growth rate. Net sales have grown at a compound annual growth rate of 63%
from $67.5 million for the year ended December 31, 1996 to $292.5 million for
the year ended December 31, 1999, inclusive of the growth attributable to the
acquisition of Colorado Springs Circuits, Inc., or NTI, in 1997 and the merger
with Dynamic Circuits, Inc., or DCI, in 1998. Prices for products and services
are predominantly a function of delivery time, complexity and overall market
demand. In 1999 average price per printed circuit board panel increased from
the levels DDi would have achieved in 1998 if the DCI merger had occurred on
January 1, 1998.

Due to the use of debt to finance recapitalizations, the acquisition of NTI
and the merger with DCI, net interest expense has increased from 1995 to 1999.
Beginning in 1998, results of operations have also been impacted by the
amortization of intangibles resulting from the acquisition and the merger. In
1999, DDi Capital's net loss of $14.1 million reflected $41.5 million of net
interest expense and DDi's net loss of $8.5 million reflected $32.5 million of
net interest expense. Such net losses also reflect $22.3 million of
amortization of intangibles and a $7.0 million charge related to the Colorado
consolidation.

DDi recognizes revenue upon shipment or, in the case of services, at the
time the service is performed. Substantially all sales are made on the basis
of purchase orders rather than long-term agreements.

From time to time, the Company engages in discussions concerning prospective
acquisitions. On March 22, 2000, Holdings agreed to acquire MCM, headquartered
in the United Kingdom, for total consideration of approximately $86 million,
including assumed debt. MCM focuses on the technologically advanced, time-
critical segment of the electronics manufacturing industry. MCM will be a
wholly-owned subsidiary of Holdings and its assets will not be available to
creditors of DDi Capital and DDi.

Company History and Significant Transactions

DDi was organized in 1978. In 1991, DDi installed new management, headed by
Bruce D. McMaster, and began to focus primarily on time-critical electronics
manufacturing services.

Recapitalization

In October 1997, DDi was recapitalized by investors led by Bain Capital,
Celerity Partners and Chase Capital Partners, which collectively invested
$62.4 million.

In connection with the recapitalization, DDi incurred the following
nonrecurring charges:

. fees and interest charges on bridge loans (aggregating $14.5 million);

. $31.3 million for the accelerated vesting of variable employee stock
options and related bonuses;

16
<PAGE>

. $2.7 million for the early extinguishment of long-term debt, before
income taxes; and

. $1.2 million for the buyout of the former CEO's employment contract.

Colorado Facility (formerly NTI)

In December 1997, DDi acquired Colorado Springs Circuits, Inc., or NTI, for
approximately $38.9 million. NTI manufactured printed circuit boards requiring
lead times of twenty days or more for original equipment manufacturers. At
that time, the acquisition provided DDi with additional capacity and access to
new customers.

The NTI acquisition was accounted for under the purchase method of
accounting and approximately $27 million in goodwill was recorded (which is
being amortized over a period of twenty-five years).

In December 1999, management implemented a plan to consolidate the Colorado
operations into the Texas facility and to close the Colorado facility, which
operated at a loss in 1999. DDi is currently serving a majority of the
customers who were serviced by the Colorado facility out of the Texas
facility, and based on a detailed customer-by-customer analysis, DDi believes
it will retain customers and accounts representing approximately 75% of the
Colorado facility's net sales. The capacity of the Texas facility would have
been sufficient to service this portion of the revenue stream in 1999. By
combining the Texas and Colorado operations, DDi is eliminating lower-margin
product lines and decreasing overhead costs, and expects to gain efficiency
through better capacity utilization and streamlined management.

If DDi had serviced this revenue stream in the Texas facility with the Texas
facility's cost structure:

. Colorado net sales would have decreased from $30.2 million to $22.7
million;

. the cost of goods sold related to those sales would have decreased from
$30.8 million (the actual cost of goods sold of the Colorado facility)
to $19.1 million (the product of $22.7 million and the cost of goods
sold ratio achieved in the Texas facility);

. the operating expenses associated with those sales would have decreased
from $3.7 million to $2.3 million (the product of $22.7 million and the
operating expense ratio achieved in the Texas facility); and

. depreciation and amortization (which is included in operating expenses
and cost of goods sold) would have decreased by $0.7 million.

As a result, 1999 operating income and EBITDA associated with those sales
would have increased by $5.6 million and $4.9 million, respectively. There can
be no assurance that actual results would have been, or future results will
be, consistent with the foregoing assumptions.

DCI Merger

On July 23, 1998, DDi merged with Dynamic Circuits, Inc., or DCI, for an
aggregate consideration paid to DCI stockholders of approximately $250
million. A portion of the consideration was paid in cash, and the balance of
the consideration (approximately $73 million) was paid through the issuance of
Holdings capital stock. Concurrent with this transaction, Holdings contributed
its investment in DCI through Intermediate and through DDi Capital to DDi.

DCI provided design and manufacturing services relating to complex printed
circuit boards, backpanel assemblies and electromechanical interconnect
devices with operations in California, Texas, Georgia and Massachusetts. It
was led by Charles D. Dimick, who became Holdings' Chairman following the
merger. DCI experienced a growth in net sales of more than 67% during 1997,
and its net sales for the six months ended June 30, 1998 were more than double
its net sales for the six months ended June 30, 1997.

The DCI merger was accounted for under the purchase method of accounting and
DDi recorded approximately $120 million in goodwill (which is being amortized
over 20 years), approximately $60 million of

17
<PAGE>

identifiable intangible assets (which are being amortized over their estimated
useful lives of 10 years, using an accelerated method of amortization,
reflecting the relative contribution of each developed technology in periods
following the acquisition date), and approximately $21 million and $4 million,
respectively, of intangible assets associated with DCI's customer
relationships and tradenames and assembled workforce assets (which are being
amortized on a straight-line basis over their estimated useful lives of 18
years and 4 years, respectively). DDi also identified $39 million of acquired
in-process research and development investments, which was expensed in the
fourth quarter ended December 31, 1998.

Since the DCI merger, DDi has continued to invest in the development of the
various in-process research and development technologies that existed at DCI
at the time of the merger. DDi believes that research and development efforts
are reasonably consistent with DCI's plans at the time of the merger, given
the inherent uncertainties involved in estimating the technological hurdles of
developing next-generation technologies. Approximately 70% of the $2.1 million
planned total cost to complete the projects had been incurred as of December
31, 1999. This investment has enabled DDi to market products incorporating
some of the technologies included in DCI's plan. No significant adjustments
have been made in the economic assumptions or expectations on which management
had based their merger decision.

Initial Public Offering of Holdings

On January 28, 2000, Holdings filed with the Securities and Exchange
Commission a registration statement on Form S-1 in connection with the
proposed initial public offering of its common stock. The registration
statement was amended on March 2 and March 22, 2000. Holdings intends to use
most of the net proceeds of the offering to repay some of its indebtedness and
that of its subsidiaries, including a portion of both the DDi Capital senior
discount notes and the DDi senior credit facilities. There can be no assurance
Holdings will successfully complete its offering.

MCM Acquisition

On March 22, 2000, Holdings entered into an agreement to acquire MCM
Electronics Limited ("MCM"), a time-critical electronics manufacturing service
provider based in the United Kingdom. Holdings expects to consummate this
acquisition on the closing date of the proposed initial public offering of its
common stock. Holdings will pay the current MCM investors a combination of its
common stock and cash. A portion of MCM's debt will remain outstanding. MCM
will be a wholly-owned subsidiary of Holdings. Its assets will not be
available to the creditors of DDi Capital or DDi. There can be no assurance
that the MCM acquisition will be consummated.

18
<PAGE>

Results of Operations

The following table sets forth income statement data expressed as a
percentage of net sales for the periods indicated:

<TABLE>
<CAPTION>
Year Ended December 31,
-------------------------------------------------
DDi DDi DDi
DDi Capital DDi Capital DDi Capital
1997 1997 1998 1998 1999 1999
----- ------- ----- ------- ----- -------
<S> <C> <C> <C> <C> <C> <C>
Net sales................... 100.0 % 100.0 % 100.0 % 100.0 % 100.0 % 100.0 %
Cost of goods sold.......... 49.1 % 49.1 % 68.2 % 68.2 % 68.8 % 68.8 %
----- ----- ----- ----- ----- -----
Gross profit................ 50.9 % 50.9 % 31.8 % 31.8 % 31.2 % 31.2 %
Operating expenses:
Sales and marketing....... 9.2 % 9.2 % 7.3 % 7.3 % 8.1 % 8.1 %
General and
administration........... 2.7 % 2.7 % 4.8 % 4.8 % 5.5 % 5.5 %
Amortization of
intangibles.............. -- -- 6.3 % 6.3 % 7.6 % 7.6 %
Restructuring and related
charges.................. -- -- -- -- 2.4 % 2.4 %
Stock compensation and
related bonuses.......... 39.7 % 39.7 % -- -- -- --
Compensation to the former
CEO...................... 2.7 % 2.7 % -- -- -- --
Write-off of acquired in-
process research and
development.............. -- -- 22.3 % 22.3 % -- --
----- ----- ----- ----- ----- -----
Operating income (loss)..... (3.4)% (3.4)% (8.9)% (8.9)% 7.6 % 7.6 %
Interest expense (net)...... 22.8 % 32.1 % 15.7 % 20.2 % 11.1 % 14.2 %
----- ----- ----- ----- ----- -----
Loss before income taxes and
extraordinary loss......... (26.2)% (35.5)% (24.6)% (29.1)% (3.5)% (6.6)%
Income tax benefit
(expense).................. 10.2 % 13.8 % (0.3)% 1.5 % 0.6 % 1.8 %
Extraordinary loss, net of
income tax benefit......... (2.0)% (2.0)% (1.4)% (1.4)% -- --
----- ----- ----- ----- ----- -----
Net loss.................... (18.0)% (23.7)% (26.3)% (29.0)% (2.9)% (4.8)%
===== ===== ===== ===== ===== =====
</TABLE>

Year Ended December 31, 1999 Compared to the Year Ended December 31, 1998

Net sales increased $117.6 million (67%) to $292.5 million in 1999, from
$174.9 million in 1998. The facilities DDi operated achieved internal sales
growth of approximately $31.0 million. The balance resulted from the inclusion
in 1999 of a full year of DCI sales. Sales growth accelerated in the second
half of 1999 as production of more complex and larger panels increased average
sales price per panel. On a pro forma basis giving effect to the DCI merger,
net sales increased by over 25% for the six months ended December 31, 1999 as
compared to the corresponding six months in 1998.

Gross profit increased $35.5 million (64%) to $91.1 million in 1999, from
$55.6 million in 1998. The increase resulted from the merger with DCI, which
contributed $32.8 million to the increase. Partially offsetting this increase
was a $0.6 million gross loss in the Colorado facility in 1999 due to a
decrease in panel production in that operation, compared to a $1.6 million
gross profit in that facility in 1998. Management announced a plan to close
the Colorado facility in December 1999. See "--Company History and Significant
Transactions--Colorado Facility (formerly NTI)." DDi experienced increased
pricing pressure early in the first quarter of 1999, with increased
competition following the slowdown in Asian markets in late 1998. Pricing
stabilized late in the first quarter of 1999 and has recovered strongly
through the remainder of 1999.

Sales and marketing expenses increased $10.8 million (84%) to $23.6 million
in 1999, from $12.8 million in 1998. The increase is due to the inclusion of
DCI's results for the full year ended December 31, 1999 (approximately $5.9
million), growth in sales force to accommodate existing and anticipated near-
term increases in customer demand (approximately $3.5 million), and an
increase in commissions and other variable expenses relating to increased
sales volume (approximately $1.4 million).

19
<PAGE>

General and administration expenses increased $7.5 million (89%) to $16.1
million to 1999, from $8.5 million in 1998. The increase is due to the
inclusion of DCI's results for the full year ended December 31, 1999
(approximately $4.9 million), an increase in staffing and other back-office
expenditures to support growth in the design operations and the company as a
whole (approximately $2.4 million) and an increase in fees under the
management agreement with an affiliate of Bain Capital, Inc. (approximately
$1.1 million). Partially offsetting these increases was a non-recurring charge
of approximately $0.8 million recorded in 1998, representing severance-related
costs for certain executives terminated as a result of the DCI merger.

Amortization of intangibles increased $11.4 million (105%) to $22.3 million
in 1999, from $10.9 million in 1998. The merger with DCI accounts for $11.2
million of this increase.

Restructuring and related charges were $7.0 million in 1999, representing
one-time costs incurred in connection with management's decision to close the
Colorado facility. These charges consist of $4.5 million for severance and
other exit costs and $2.5 million of costs related to the impairment of net
property, plant and equipment. See note 15 to the consolidated financial
statements for further information about these charges.

Write-off of acquired in-process research and development totaled $39.0
million in 1998. This charge represents the appraised value of the in-process
research and development component of the total merger consideration paid in
the DCI merger. See Note 14 to the consolidated financial statements for
further information about this charge. There was no comparable expense in
1999.

Net interest expense increased $6.2 million (18%) to $41.5 million for DDi
Capital, from $35.3 million in 1998. Net interest expense increased $5.0
million (18%) to $32.5 million in 1999 for DDi, from $27.5 million in 1998.
The increase in net interest expense is attributable to the increased level of
borrowings in connection with the merger with DCI.

The income tax benefit was $5.2 million in 1999 for DDi Capital, as compared
to a benefit of $2.7 million in 1998. The income tax benefit was $1.9 million
in 1999 for DDi, as compared to income tax expense of $0.5 million in 1998.
The difference between the effective tax rate and the statutory federal tax
rate of 35% is attributable to the acquired in-process research and
development charge recorded in 1998 and goodwill amortization in each period.
As these expenses are non-deductible, no related income tax benefit is
recorded. Due to the consolidation of the Colorado and Texas operations and
the closure of the Colorado facility in December 1999, management believes
that a portion of the Colorado net operating loss carryforwards may not be
realized. Accordingly, a valuation allowance was established in 1999 for
deferred income tax benefits related to these carryforwards. See Note 12 to
the consolidated financial statements for a reconciliation of the tax benefit
recorded in each period to the corresponding amount of income tax determined
by applying the U.S. Federal income tax rate to the loss before income taxes
and for additional information relating to the Colorado net operating loss
carryforwards.

Year Ended December 31, 1998 Compared to the Year Ended December 31, 1997

Net sales increased $96.1 million (122%) to $174.9 million in 1998 from
$78.8 million in 1997. The facilities DDi operated achieved internal sales
growth of approximately $8 million, caused by a 13% increase in the average
panel selling price realized at the Anaheim facility which was driven by a
demand for higher layer count and more technologically advanced printed
circuit boards; and growth in volume of units shipped attributable to
increased demand from contract manufacturing customers. The balance of the
sales growth resulted from the acquisition of NTI and the merger with DCI.

Gross profit increased $15.5 million (39%) to $55.6 million in 1998 from
$40.1 million in 1997. The increase resulted from the acquisition of NTI and
the merger with DCI, which added $1.6 million and $14.2 million, respectively,
to gross profit. Partially offsetting these increases were costs of $0.7
million incurred in 1998 related to the newly formed design centers. The
decline in gross profit as a percent of net sales to 32% in 1998 from 51% in
1997 resulted from the acquisition of the pre-production and assembly
facilities attributable to the DCI merger and NTI acquisition. NTI
historically had lower margins than DDi's other operations.

20
<PAGE>

Sales and marketing expenses increased $5.5 million (75%) to $12.8 million
in 1998, from $7.3 million in 1997. The increase is due to the acquisition of
NTI and the merger with DCI, which added $1.4 million and $4.2 million,
respectively, to sales and marketing expenses. Such increases reflect the
inclusion of NTI's results for the full year ended December 31, 1998 and DCI's
results following the date of the DCI merger.

General and administration expenses increased $6.4 million (305%) to $8.5
million in 1998, from $2.1 million in 1997. The increase is due to the
acquisition of NTI and the merger with DCI, which added $1.9 million and $3.9
million, respectively, to general and administration expenses. Included in
these increases is approximately $0.8 million accrued in 1998 for severance-
related costs for certain employees of these divisions. Such increases reflect
the inclusion of NTI's results for the full year ended December 31, 1998 and
DCI's results following the date of the DCI merger.

Amortization of intangibles of $10.9 million in 1998 resulted from the
acquisition of NTI in December 1997 and the merger with DCI in July 1998. The
amortization of goodwill from the acquisition of NTI in 1997 was immaterial.

Net interest expense increased $10.1 million (40%) to $35.3 million in 1998
for DDi Capital, from $25.2 million in 1997. Net interest expense increased
$9.6 million (54%) to $27.5 million in 1998 for DDi, from $17.9 million in
1997. The increase in interest expense was due to an increase in the level of
borrowings in connection with the recapitalization, the acquisition of NTI and
the merger with DCI.

The income tax benefit was $2.7 million in 1998 for DDi Capital, as compared
to a benefit of $10.9 million in 1997. Income tax expense was $0.5 million in
1998 for DDi, as compared to an income tax benefit of $8.0 million in 1997. In
1998, the difference between the effective tax rate and the statutory federal
income tax rate of 35% is attributable to the non-deductible acquired in-
process research and development charge, for which no income tax benefit is
recorded. See Note 12 to the consolidated financial statements for a
reconciliation of the tax provision (benefit) recorded in each period to the
corresponding amount of income tax determined by applying the U.S. Federal
income tax rate to income (loss) before income taxes.

In both 1998 and 1997, DDi recorded losses on the early extinguishment of
debt resulting from the write-off of unamortized debt issue costs. The early
extinguishment of debt in 1997 resulted from the recapitalization and the NTI
acquisition. The extinguishment in 1998 resulted from the DCI merger. These
losses are presented as extraordinary losses, net of related income tax
benefit.

Quarterly Financial Information

The following table presents selected quarterly financial information for
each of the eight quarters ended December 31, 1999. This information is
unaudited but, in management's opinion, reflects all adjustments, consisting
only of normal recurring adjustments that management considers necessary for a
fair presentation of this information in accordance with generally accepted
accounting principles. These quarterly results are not necessarily indicative
of future results.

<TABLE>
<CAPTION>
Three Months Ended
-------------------------------------------------------------------------
Mar. 31, June 30, Sept. 30, Dec. 31, Mar. 31, June 30, Sept. 30, Dec. 31,
1998 1998 1998 1998 1999 1999 1999 1999
-------- -------- --------- -------- -------- -------- --------- --------
(in millions)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net sales............... $28.3 $26.3 $61.2 $59.1 $59.2 $71.7 $82.9 $78.7
Cost of goods sold...... 16.4 16.1 41.4 45.4 41.8 50.2 57.2 52.2
----- ----- ----- ----- ----- ----- ----- -----
Gross profit............ $11.9 $10.2 $19.8 $13.7 $17.4 $21.5 $25.7 $26.5
===== ===== ===== ===== ===== ===== ===== =====
</TABLE>

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<PAGE>

The quarterly financial information is presented on an actual historical
basis, not on a pro forma basis for the DCI merger, which closed on July 23,
1998. The decline in net sales and gross profit in the three months ended
December 31, 1998 compared with the previous three months is the result of a
decrease in average sales price per printed circuit board panel resulting from
a decline in international demand caused by the Asian financial crisis in the
second half of 1998. The decline in net sales for the three months ended
December 31, 1999 compared to the three months ended September 30, 1999 is the
result of seasonality and a slowdown in purchase orders related to concerns
about the Year 2000 issue. Gross profit in the same period increased due to an
increase in the average price per panel.

Liquidity and Capital Resources

DDi's principal sources of liquidity are cash provided by operations and
borrowings under various debt agreements. The principal uses of cash have been
to finance mergers and acquisitions, meet debt service requirements, and
finance capital expenditures. DDi anticipates that these uses, including
acquisition opportunities currently under review, will continue to be the
principal uses of cash in the future.

Net cash provided by operating activities for the years ended December 31,
1999, 1998 and 1997 was $24.8 million, $18.9 million and $9.1 million,
respectively. Fluctuations in net cash provided by operating activities are
attributable to increases and decreases in net income before non-cash charges
and normal fluctuations in working capital. In 1997, however, net cash
provided by operating activities was reduced by a $10.0 million cash bonus
paid as part of the stock compensation expenses incurred in connection with a
recapitalization.

Net cash used in investing activities for the years ended December 31, 1999,
1998 and 1997 was $18.5 million, $194.8 million and $44.9 million,
respectively. These activities consist of capital expenditures in each period
and cash of $38.9 million used in the acquisition of NTI in 1997 and $178.7
million used in the merger with DCI in 1998 (see Note 14 to the consolidated
financial statements).

Capital expenditures were $18.2 million, $18.0 million and $6.6 million in
1999, 1998 and 1997, respectively. Of these amounts, approximately $2.1
million and $0.6 million were incurred in 1998 and 1997, respectively, under
capital lease obligations. Anticipated capital expenditures for 2000 will be
consistent with 1999 levels.

Net cash provided by (used in) financing activities for the years ended
December 31, 1999, 1998 and 1997 was $(7.5) million, $172.4 million and $41.1
million, respectively. Principal financing activities in 1999 included
payments of debt, capital lease and note obligations and the generation of net
proceeds from the restructuring of interest rate exchange agreements (see Note
8 to the consolidated financial statements). Principal financing activities in
1998 included repayment of existing debt facilities and borrowings on new debt
facilities in connection with the merger with DCI. Principal financing
activities in 1997 included increased borrowings, distributions to
shareholders and shareholder transactions in connection with a
recapitalization.

As of December 31, 1999, DDi Capital and DDi had borrowings of approximately
$436 million and $358 million, respectively. DDi has a $45.0 million revolving
credit facility. As of December 31, 1999, DDi had no borrowings outstanding
under the revolving credit facility and had $0.7 million reserved against the
revolving credit facility for a letter of credit. The minimum principal
payment obligation under DDi's senior credit facility is $5.9 million for
2000. No other debt instruments require minimum principal repayments during
such period. The Company intends to use the proceeds from an anticipated
Holdings equity offering to repay some of DDi Capital's and DDi's debt.

The senior credit facility, the senior subordinated notes, the DDi Capital
senior discount notes and the Intermediate senior discount notes are described
below in "Description of Indebtedness."

Based on current level of operations, management believes that cash
generated from operations, available cash, the proceeds of Holdings' planned
equity offering and amounts available under the senior credit facility

22
<PAGE>

will be adequate to meet the debt service requirements, capital expenditures
and working capital needs of current operations for at least the next twelve
months, although no assurance can be given in this regard. DDi will require
additional financing if management decides to consummate additional
acquisitions. The Company is highly leveraged and future operating performance
and ability to service or refinance the DDi Capital senior discount notes, the
Intermediate senior discount notes and the senior subordinated notes and to
extend or refinance the senior credit facility will be subject to future
economic conditions and to financial, business and other factors, many of
which are beyond DDi's control.

Description of Indebtedness

Senior Credit Facility

DDi has entered into a credit agreement, for which The Chase Manhattan Bank
is the collateral, co-syndication and administrative agent and for which
Bankers Trust Company is the documentation and co-syndication agent. The
lenders are a syndicate comprised of various banks, financial institutions or
other entities which hold transferable interests in the senior credit
facility. The senior credit facility, as of December 31, 1999 consists of:

. Tranche A term facility of up to approximately $102.6 million;

. Tranche B term facility of up to $149.1 million; and

. a revolving line of credit of up to $45.0 million, including revolving
credit loans, letters of credit and swing line loans.

Holdings intends to use some of the proceeds of its planned initial public
offering to reduce the indebtedness under the senior credit facility, which
was $251.7 million as of December 31, 1999.

The senior credit facility is jointly and severally guaranteed by DDi
Capital and its subsidiaries and secured by the assets of all of its
subsidiaries, and future domestic subsidiaries of DDi will guarantee the
senior credit facility and secure that guarantee with their assets. The senior
credit facility requires DDi to meet financial ratios and benchmarks and to
comply with other restrictive covenants.

The Tranche A term facility amortizes in quarterly installments from June
1999 until July 2004. The Tranche B term facility amortizes in quarterly
installments from June 1999 until September 2004 at which time the remaining
outstanding loans under the Tranche B term facility becomes repayable in two
equal quarterly installments with a final payment in April 2005. The revolving
line of credit terminates in July 2004.

Borrowings under the senior credit facility bear interest at varying rates
based, at the DDi option, on either LIBOR plus 225 basis points or the bank
rate plus 125 basis points (in the case of Tranche A) and LIBOR plus 250 basis
points or the bank rate plus 150 basis points (in the case of Tranche B). The
overall effective interest rate at December 31, 1999 was 8.90%. DDi is
required to pay to the lenders under the senior credit facility a commitment
on the average unused portion of the revolving credit facility and a letter of
credit fee on each letter of credit outstanding. It must apply proceeds of
sales of debt, equity or material assets to prepayment on its senior credit
facility, subject to some exceptions, and must also, in some circumstances,
pay excess cash flow to the lenders under its senior credit facility.

Prior to the effectiveness of Holdings' initial public offering, DDi expects
to enter into an amendment to the credit agreement governing the senior credit
facility. In connection with the amendment, DDi will pay its lenders a fee of
25 basis points on the outstanding balance of borrowings under the credit
agreement. The amendment will permit Holdings to use the proceeds of its
planned initial public offering to repay other debt and to pay cash
consideration in connection with the acquisition of MCM. The amendment will
also provide that future prepayments of the Tranche B term facility will
require a premium of up to 2%, declining to par within two years.

23
<PAGE>

Senior Subordinated Notes

The senior subordinated notes were issued in an aggregate principal amount
of $100,000,000 and will mature on November 15, 2005. The senior subordinated
notes were issued under an indenture dated as of November 18, 1997 between
DDi, as issuer, and State Street Bank and Trust Company, as trustee, and are
senior subordinated unsecured obligations of DDi. Cash interest on the senior
subordinated notes accrues at the rate of 10% per annum and is payable semi-
annually in arrears on each May 15 and November 15 of each year.

On or after November 15, 2001, the senior subordinated notes may be redeemed
at the option of DDi, in whole at any time or in part from time to time, at a
redemption price that is greater than the accreted value of the notes, plus
accrued and unpaid interest, if any, to the redemption date. Additionally, at
any time on or prior to November 15, 2000, DDi may use the net proceeds of one
or more equity offerings to redeem up to 40% of the senior subordinated notes
at a redemption price equal to 110% of the principal amount thereof plus
accrued and unpaid interest, if any, to the redemption date, subject to some
restrictions.

DDi Capital Senior Discount Notes

The DDi Capital senior discount notes were issued in an aggregate principal
amount at maturity of $110,000,000 and will mature on November 15, 2007. The
senior discount notes were issued under an indenture dated as of November 18,
1997 between Holdings, as issuer, and State Street Bank and Trust Company, as
trustee, as supplemented by the supplemental indenture dated as of February
10, 1998 between DDi Capital and the trustee. The senior discount notes are
senior unsecured obligations of DDi Capital. The senior discount notes were
issued at a discount to their aggregate principal amount at maturity and will
accrete in value until November 15, 2002 at a rate per annum equal to 12.5%,
compounded semi-annually. Cash interest on the senior discount notes will not
accrue prior to November 15, 2002. Thereafter, interest will accrue at the
rate of 12.5% per annum, payable semi-annually in arrears on each May 15 and
November 15 of each year commencing May 15, 2003 to the holders of record on
the immediately preceding May 1 and November 1, respectively.

On or after November 15, 2002, the senior discount notes may be redeemed at
the option of DDi Capital, in whole at any time or in part from time to time,
at a redemption price that is greater than the accreted value of the notes,
plus accrued and unpaid interest, if any, to the redemption date.
Additionally, at any time on or prior to November 15, 2000, DDi Capital may
use the net proceeds of one or more of equity offerings by Holdings to redeem
up to 40% of the senior discount notes at a redemption price (expressed as a
percentage of the accreted value thereof) equal to 112.5%, subject to some
restrictions.

Holdings intends to use some of the proceeds from its planned initial public
offering to redeem 40% of these notes.

Intermediate Senior Discount Notes

In July 1998, Intermediate issued senior discount notes due 2008. The
proceeds of this issuance amounted to approximately $33 million and were
contributed through DDi Capital to DDi in conjunction with the merger with DCI
(see Note 14 to the consolidated financial statements). The Intermediate
senior discount notes have a stated maturity of June 30, 2008, an interest
rate of 13.5% per annum and a stated principal amount at maturity of
approximately $67 million, although approximately 43% of the stated principal
amount of the debt is due December 2003. The debt is redeemable at
Intermediate's option at specified redemption prices. As of December 31, 1999,
the outstanding accreted value of these senior discount notes was $40.8
million. As the repayment of the Intermediate senior discount notes is the
obligation of Intermediate, the carrying amount of the associated liability is
reflected in the books and records of Intermediate and, therefore, not
included in the consolidated financial statements of the Company. Although the
Intermediate senior discount notes do not require principal or interest
payments until December 2003, Intermediate does not have, and may not in the
future have, any assets other than the common stock of DDi Capital. The net
cash flows from DDi are currently the only source of cash to repay the
obligations under the Intermediate senior discount notes. In addition, these
discount notes impose restrictions on the incurrence of indebtedness by
Intermediate, DDi Capital and DDi. The Note Purchase Agreement contains
covenants limiting, among other things, dividends, asset sales, and
transactions with affiliates. These restrictions apply both to Intermediate,
DDi Capital and DDi.

24
<PAGE>

Under the terms of the indenture relating to the senior discount rates,
Holdings may use the net proceeds of its planned initial public offering to
redeem all of the Intermediate senior discount notes outstanding at a price
that would provide the noteholders with a 20% per annum return on the price at
which the notes were issued, plus accrued and unpaid interest thereon.
Approximately 50% of the Intermediate senior discount notes are held by
investment funds advised by Sankaty Advisors, Inc., an affiliate of Bain
Capital.

Holdings intends to redeem all of the Intermediate senior discount notes
outstanding using some of the proceeds of its planned initial public offering.

FORWARD-LOOKING STATEMENTS

A number of the matters and subject areas discussed in this Form 10-K are
forward-looking in nature. The discussion of such matters and subject areas is
qualified by the inherent risks and uncertainties surrounding future
expectations generally, and also may differ materially from the Company's
actual future experience involving any one or more of such matters and subject
areas. The Company wishes to caution readers that all statements other than
statements of historical facts included in this Annual Report on Form 10-K
regarding the Company's financial position and business strategy, may
constitute forward-looking statements. All of these forward-looking statements
are based on estimates and assumptions made by management of the Company,
which although believed to be reasonable, are inherently uncertain. Therefore,
undue reliance should not be placed on such estimates and statements. No
assurance can be given that any of such estimates or statements will be
realized and it is likely that actual results will differ materially from
those contemplated by such forward-looking statements. Factors that may cause
such differences include: (1) increased competition; (2) increased costs;
(3) inability to consummate acquisitions on attractive terms; (4) loss or
retirement of key members of management; (5) increases in the Company's cost
of borrowings or unavailability of additional debt or equity capital on terms
considered reasonable by management; (6) failure to successfully complete
Holdings' planned initial public offering; (7) adverse state, federal or
foreign legislation or regulation or adverse determinations by regulators; (8)
changes in general economic conditions in the markets in which the Company may
compete and fluctuations in demand in the electronics industry; and (9)
ability to sustain historical margins as the industry develops. The Company
has attempted to identify, in context, certain of the factors that it
currently believes may cause actual future experience and results to differ
from the Company's current expectations regarding the relevant matter or
subject area. In addition to the items specifically discussed in the
foregoing, the Company's business and results of operations is subject to the
rules and uncertainties described under the heading "Factors That May Affect
Future Results" contained herein, however, the operations and results of the
Company's business also may be subject to the effect of other risks and
uncertainties. Such risks and uncertainties include, but are not limited to,
items described from time to time in the Company's reports filed with the
Securities and Exchange Commission.

FACTORS THAT MAY AFFECT FUTURE RESULTS

Substantial Indebtedness

The Company is highly leveraged. As of December 31, 1999, indebtedness was
approximately $436 million for DDi Capital and $358 million for DDi. As of
December 31, 1999, there was $44.3 million available under the senior credit
facility for future borrowings for general corporate purposes and working
capital needs. The historical loss before income taxes for DDi and DDi Capital
in 1999 was ($10.4) million and ($19.3) million, respectively. The ratio of
earnings to fixed charges for the year ended December 31, 1999 was 0.7:1.0 and
0.5:1.0 for DDi and DDi Capital, respectively. In addition, subject to the
restrictions in the DDi Capital senior discount notes, senior subordinated
notes and senior credit facility, DDi and its subsidiaries may incur
additional indebtedness in an unrestricted amount from time to time to finance
acquisitions or capital expenditures or for other purposes.

As a result of our level of debt and the terms of our debt instruments:

. our vulnerability to adverse general economic conditions is heightened;

. we will be required to dedicate a substantial portion of our cash flow
from operations to repayment of debt, limiting the availability of cash
for other purposes;

25
<PAGE>

. we are and will continue to be limited by financial and other
restrictive covenants in our ability to borrow additional funds,
consummate asset sales, enter into transactions with affiliates or
conduct mergers and acquisitions;

. our flexibility in planning for, or reacting to, changes in our business
and industry will be limited;

. we are sensitive to fluctuations in interest rates because some of our
debt obligations are subject to variable interest rates; and

. our ability to obtain additional financing in the future for working
capital, capital expenditures, acquisitions, general corporate purposes
or other purposes may be impaired.

The Company's ability to pay principal and interest on it indebtedness and
to satisfy its other debt obligations will depend upon its future operating
performance, which will be affected by prevailing economic conditions and
financial, business and other factors, certain of which are beyond its
control, as well as the availability of revolving credit borrowings under the
senior credit facility or successor facilities. The Company anticipates that
its operating cash flow, together with borrowings under the senior credit
facility and the proceeds of Holdings' planned initial public offering, will
be sufficient to meet its operating expenses and to service its debt
requirements as they become due. If the Company is unable to service its
indebtedness, it will be forced to take actions such as reducing or delaying
capital expenditures, selling assets, restructuring or refinancing its
indebtedness (which could include the DDi Capital senior discount notes and
the senior subordinated notes), or seeking additional equity capital. There is
no assurance that any of these remedies can be effected on satisfactory terms,
if at all.

Holdings Initial Public Offering

Holdings expects to complete an initial public offering of its common stock
in the near future. It will use the net proceeds of the offering to reduce
indebtedness of the Company, including partial redemption of the DDi Capital
senior discount notes, partial repayment of the senior credit facility, and
the redemption of all of the Intermediate senior discount notes.

Following the initial public offering, the Company expects that its
principal sources of funds during 2000 will be cash generated from operating
activities and borrowings under the senior credit facility. These funds may
not be sufficient if changes in economic conditions or industry occur that are
beyond the Company's control. The Company may require additional equity or
debt financing to finance acquisitions. There can be no assurance that
additional financing will be available when required or, if available, will be
on terms satisfactory to the Company. In addition, the Company may be required
to use proceeds from debt and equity financings to repay debt.

If Holdings initial public offering does not occur, the Company will remain
highly leveraged and therefore subject to significant interest expense. This
interest expense, and the restrictions contained in the debt instruments,
would in that case continue to have an effect on results of operations.

Restrictions Imposed by Terms of Indebtedness

The terms of the Company's indebtedness restrict, among other things, DDi
Capital's and DDi's ability to incur additional indebtedness, pay dividends or
make certain other restricted payments, consummate certain asset sales, enter
into certain transactions with affiliates, incur indebtedness, merge or
consolidate with any other person or sell, assign, transfer, lease, convey or
otherwise dispose of all or substantially all of the assets of the Company.
DDi Capital and DDi are also required to maintain specified financial ratios
and satisfy certain financial condition tests. Their ability to meet those
financial ratios and tests can be affected by events beyond their control, and
there can be no assurance that they will meet those tests. A breach of any of
these covenants could result in a default under some or all of the Company's
indebtedness agreements. Upon the occurrence of an event of default, lenders
under such indebtedness could elect to declare all amounts outstanding
together with accrued interest, to be immediately due and payable. If the
Company were unable to repay such amounts, the lenders could proceed against
the collateral granted to them to secure that indebtedness. Substantially all
the assets of the Company and its subsidiaries are pledged as security under
the senior credit facility.

26
<PAGE>

Technological Change and Process Development

The market for DDi's products and services is characterized by rapidly
changing technology and continuing process development. The future success of
DDi's business will depend in large part upon its ability to maintain and
enhance its technological capabilities, to develop and market products and
services that meet changing customer needs, and to successfully anticipate or
respond to technological changes on a cost-effective and timely basis.
Research and development expenses are expected to increase as manufacturers
make demands for products and services requiring more advanced technology on a
quicker turnaround basis. The Company is more leveraged than some of its
principal competitors, and therefore may not be able to respond to
technological changes as quickly as these competitors.

In addition, the electronics manufacturing services industry could in the
future encounter competition from new or revised technologies that render
existing technology less competitive or obsolete or that reduce the demand for
DDi's services. There can be no assurance that DDi will effectively respond to
the technological requirements of the changing market. To the extent DDi
determines that new technologies and equipment are required to remain
competitive, the development, acquisition and implementation of such
technologies and equipment may require DDi to make significant capital
investments. There can be no assurance that DDi will be able to obtain capital
for these purposes in the future or that any investments in new technologies
will result in commercially viable technological processes.

Dependence on a Core Group of Significant Customers

Although DDi has a large number of customers, net sales to its largest
customer accounted for approximately 8% of our net sales in 1999. Net sales to
the ten largest customers accounted for approximately 40% of net sales during
the same period. DDi may depend upon a core group of customers for a material
percentage of net sales in the future. Substantially all sales are made on the
basis of purchase orders rather than long-term agreements. There can be no
assurance that significant customers will order services from DDi in the
future or that they will not reduce or delay the amount of services ordered.
Any reduction or delay in orders could negatively impact revenues. In
addition, DDi generates significant accounts receivable in connection with
providing services to customers. If one or more significant customers were to
become insolvent or otherwise were unable to pay for the services provided,
results of operations would be adversely affected.

Dependence on Communications and Networking Equipment

As part of its business strategy, DDi expects that it will continue to grow
by pursuing acquisitions of other companies, assets or product lines that
complement or expand existing business. DDi expects to complete the
acquisition of MCM on or after the completion of Holdings' planned initial
public offering. Competition for attractive companies in industry is
substantial. DDi cannot assure you that it will be able to identify suitable
acquisition candidates or to finance and complete transactions that it
selects. In addition, existing credit facilities restrict the Company's
ability to acquire the assets or business of other companies. The attention of
management may be diverted, and operations may be otherwise disrupted. Failure
effectively to execute this acquisition strategy may cause the growth of
revenues to suffer.

Ability to Integrate Acquired Businesses and Manage Expansion

Since December 1997, the Company has consummated a merger and an
acquisition. The Company has a limited history of owning and operating its
businesses on a consolidated basis. There can be no assurance that it will be
able to meet performance expectations or successfully integrate acquired
businesses on a timely basis without disrupting the quality and reliability of
service to customers or diverting management resources. The Company expects to
complete the acquisition of MCM on or after the completion of Holdings'
planned initial public offering. This rapid growth has placed and may continue
to place a significant strain on management, financial resources and
information, operating and financial systems. If the Company is unable to
manage this growth effectively, its rate of growth and our revenues may be
adversely affected.

27
<PAGE>

Ability to Implement the Company's Operating and Acquisition Strategy

No assurances can be given that the Company or its management team will be
able to implement successfully the operating strategy described herein,
including the ability to identify, negotiate and consummate future
acquisitions on terms management considers favorable.

Costs of International Expansion

The Company is expanding into new foreign markets. Holdings expects to
complete its acquisition of MCM on or after the completion of its planned
initial public offering. Entry into foreign markets may require considerable
management time as well as, in the case of new operations, start-up expenses
for market development, hiring and establishing office facilities before any
significant revenues are generated. As a result, operations in new foreign
markets may achieve low margins or may be unprofitable. The Company will be
unable to utilize net operating losses incurred by foreign operations to
reduce U.S. income taxes. Therefore, as the Company expands internationally,
it may not experience the operating margins it expects, and revenues may be
negatively impacted.

Variability of Orders

DDi's operating results have fluctuated in the past because it sells on a
purchase-order basis rather than pursuant to long-term contracts. DDi is
therefore sensitive to variability in customers' demand. Because DDi times
expenditures in anticipation of future sales, its operating results may be
less estimated if the timing and volume of customer orders do not match
expectations. Furthermore, DDi may not be able to capture all potential
revenue in a given period if customers' demand for quick-turnaround services
exceeds capacity during that period. Because of these factors, you should not
rely on quarter-to-quarter comparisons of DDi's results of operations as an
indication of future performance. Because a significant portion of DDi's
operating expenses are fixed, even a small revenue shortfall can have a
disproportionate effect on operating results. It is possible that, in future
periods, results may be below the expectations of public market analysts and
investors.

A substantial portion of DDi's net sales are derived from quick-turn
services for which it provides both the materials and the manufacturing
services. As a result, DDi often bears the risk of fluctuations in the cost of
materials, and the risk of generating scrap and excess inventory, which can
affect gross profit margins. DDi forecasts future inventory needs based upon
the anticipated demands of its customers. Inaccuracies in making these
forecasts or estimates could result in a shortage or an excess of materials,
either of which could negatively affect production schedules and margins.

Intellectual Property

The Company's success depends in part on proprietary technology and
manufacturing techniques. The Company has no patents for these proprietary
techniques and relies primarily on trade secret protection. Litigation may be
necessary to protect its technology and determine the validity and scope of
the proprietary rights of competitors. Intellectual property litigation could
result in substantial costs and diversion of management and other resources.
If any infringement claim is asserted against the Company, it may seek to
obtain a license of the other party's intellectual property rights. There is
no assurance that a license would be available on reasonable terms or at all.

Environmental Matters

DDi's operations are regulated under a number of federal, state and foreign
environmental and safety laws and regulations that govern, among other things,
the discharge of hazardous materials into the air and water, as well as the
handling, storage and disposal of such materials. These laws and regulations
include the Clean Air Act, the Clean Water Act, the Resource Conservation and
Recovery Act, and the Comprehensive Environmental Response, Compensation and
Liability Act, as well as analogous state and foreign laws. Compliance with
these environmental laws is a major consideration for DDi because it uses in
its manufacturing process materials

28
<PAGE>

classified as hazardous such as ammoniacal etching solutions, copper and
nickel. In addition, because DDi is a generator of hazardous wastes, it may be
subject to potential financial liability for costs associated with an
investigation and any remediation of sites at which DDi has arranged for the
disposal of hazardous wastes if such sites become contaminated. Even if DDi
fully complies with applicable environmental laws and is not directly at fault
for the contamination, it may still be liable. The wastes DDi generates
include spent ammoniacal etching solutions, solder stripping solutions and
hydrochloric acid solution containing palladium; waste water which contains
heavy metals, acids, cleaners and conditioners; and filter cake from equipment
used for on-site
waste treatment. Violations of environmental laws could subject DDi to
revocation of its effluent discharge permits. Any such revocations could
require DDi to cease or limit production at one or more of its facilities,
thereby negatively impacting revenues.

Competition

The printed circuit board industry is highly fragmented and characterized by
intense competition. DDi principally competes with independent and captive
manufacturers of complex quick-turn and longer-lead printed circuit boards.
DDi's principal competitors include other independent small private companies
and integrated subsidiaries of more broadly based volume producers, that also
manufacture multilayer printed circuit boards and other electronic assemblies.
Some of DDi's principal competitors are less highly-leveraged than DDi and may
have greater financial and operating flexibility. Moreover, DDi may face
additional competitive pressures as a result of changes in technology.

Competition in the complex quick-turn and longer-lead printed circuit board
industry has increased due to the consolidation trend in the industry, which
results in potentially better capitalized and more effective competitors.
DDi's basic technology is generally not subject to significant proprietary
protection, and companies with significant resources or international
operations may enter the market. Increased competition could result in price
reductions, reduced margins or loss of market share, any of which could
materially adversely affect DDi's business, financial condition and results of
operations.

Dependence on Key Management

DDi's success will continue to depend to a significant extent on its
executive and other key management personnel. Although DDi has entered into
employment agreements with certain of its executive officers, there can be no
assurance that DDi will be able to retain its executive officers and key
personnel or attract additional qualified management in the future.

Controlling Stockholders

Investors affiliated with Bain Capital, Inc., Celerity Partners, LLC and The
Chase Manhattan Bank together hold approximately 64.1% of the outstanding
voting stock of Holdings, the sole stockholder of Intermediate, which is the
sole stockholder of DDi Capital which, in turn, is the sole stockholder of
DDi. By virtue of such stock ownership, these entities have the power to
control all matters submitted to stockholders of Holdings and its
subsidiaries, to elect a majority of the directors of Holdings and its
subsidiaries, and to exercise control over the business, policies and affairs
of the Company. After the completion of the offering and Holdings' acquisition
of MCM, these entities are expected to hold approximately 35.6% of Holdings'
outstanding voting stock.

29
<PAGE>

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest Rate Risk

In 1998, DDi entered into interest rate exchange agreements ("Swap
Agreements") to minimize the impact of an increase in interest rates on it
long-term variable interest rate debt. In January 1999, DDi modified certain
features of the Swap Agreements. In return for a reduction in the blended
fixed rate of interest paid by DDi (to 4.96% per annum), the counterparties
were granted the option to terminate their respective agreements on January
31, 2002. In June 1999, DDi elected to terminate and concurrently replace the
Swap Agreements. The Swap Agreements were terminated to generate additional
free cash flow available from the unrealized gain that existed at the time of
termination. The termination of the Swap Agreements did not have a material
impact on DDi's results of operations.

The new interest rate exchange agreements ("New Swap Agreements"), effective
June 30, 1999, represent an effective cash flow hedge, consistent with the
nature of the Swap Agreements. Under the terms of the New Swap Agreements, DDi
pays a maximum annual rate of interest applied to a notional amount equal to
the principal balance of the senior term facility for the period June 30, 1999
through August 31, 2001. During this period, DDi's maximum annual rate is
5.65% for a given month, unless 1-month LIBOR for that month equals or exceeds
7.00%, in which case DDi pays 7.00% for that month. From September 1, 2001
through the scheduled maturity of the senior term facility in 2005, DDi pays a
fixed annual rate of 7.35% applied to a notional amount equal to 50% of the
principal balance of the senior term facility during that period. See Note 8
to the Consolidated Financial Statements.

As a result of the termination and replacement of the Swap Agreements, the
maximum rate of interest to be paid has increased through January 31, 2002.
The New Swap Agreements, however, provide DDi with greater protection against
increases in interest rates from January 31, 2002 through the maturity of the
senior term facility in 2005. This rate protection results from the New Swap
Agreements not providing an option, which was available to the counterparties
of the Swap Agreements, to terminate the agreements on January 31, 2002.

Under the terms of the New Swap Agreements, through August 31, 2001 there
are no periodic cash settlements when the 1-month LIBOR rate (6.5% at December
31, 1999) remains below 5.65%. When the 1-month LIBOR rate falls between 5.65%
to 7.00% for a settlement period through such date, DDi pays 5.65% and
receives 1-month LIBOR for such settlement period. An immediate 10% increase
in the 1-month LIBOR rate (amounting to 65 basis points) would have the effect
of increasing the 1-month LIBOR rate to 7.15%. The net effect of such a rate
change would be to reduce DDi's interest expense related to these instruments
for the difference between 7.15% and 5.65%, applied to the notional amount of
the New Swap Agreements in each period. This impact over the 12 months ended
December 31, 2000 would amount to approximately $3.8 million.

In addition to the New Swap Agreements, DDi's significant financial
instruments at December 31, 1999 include the 10.0% senior subordinated notes,
12.5% DDi Capital senior discount notes, senior term facility, and the
revolving credit facility. See Note 6 to the consolidated financial
statements. No other financial instruments expose DDi to significant interest
rate risk.

Any change in interest rates would not have an effect on the interest
expense to be incurred on the senior subordinated notes and DDi Capital senior
discount notes as each of these instruments bears a fixed rate of interest.

The senior term Facility bears interest at 1-month LIBOR plus an applicable
margin. An immediate 10% increase in interest rates would increase DDi's
interest expense related to this debt instrument over the 12 months ending
December 31, 2000 by approximately $1.6 million.

The revolving credit facility bears interest at (1) 2.25% per annum plus the
applicable LIBOR rate (6.5% at December 31, 1999) or (2) 1.25% per annum plus
the federal reserve reported overnight funds rate (8.25% at December 31,
1999). In addition, DDi is required to pay a fee of 1/2 of 1% per annum on the
average unused commitment under the revolving credit facility. As of December
31, 1999, DDi had no borrowings outstanding

30
<PAGE>

on the revolving credit facility and had $0.7 million reserved against the
revolving credit facility for a letter of credit. Based upon such balance, an
immediate 10% change in interest rates would not materially affect the
interest expense to be incurred on this facility over the 12 months ending
December 31, 2000.

Foreign Currency Exchange Risk

As of the date of this report, all of DDi's sales are denominated in U.S.
dollars and as a result, DDi has relatively little exposure to foreign
currency exchange risk with respect to sales made. DDi does not use forward
exchange contracts to hedge exposures to foreign currency denominated
transactions and does not utilize any other derivative financial instruments
for trading or speculative purposes. Therefore, the effect of an immediate 10%
change in exchange rates would not have an impact on DDi's operating results
over the 12 month period ending December 31, 2000.

Recently Issued Accounting Standards

In June 1997, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 130, "Reporting
Comprehensive Income." SFAS No. 130 establishes requirements for reporting and
disclosure of comprehensive income and its components. This statement became
effective for our fiscal year ending December 31, 1998. Reclassification of
prior year financial statements for comparative purposes is required. Through
December 31, 1999, we have no elements which give rise to reporting
comprehensive income.

In June 1997, the FASB also issued SFAS No, 131, "Disclosures about Segments
of an Enterprise and Related Information." SFAS No. 131 modifies the
disclosure requirements for reportable operating segments. This statement
became effective for our fiscal year ending December 31, 1998.
Reclassification of prior year financial statements for comparative purposes
is required unless deemed impractical. This pronouncement has had no
significant impact on our reporting practices since its adoption; and until
such time that we diversify our operations, management believes such
pronouncement will not be applicable.

In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities." SFAS No. 133 establishes accounting and
reporting standards for derivative instruments and hedging activities. It
requires that an entity recognize all derivatives as either assets or
liabilities in the statement of financial position and measure those
instruments at fair value. SFAS No 137, issued by the FASB in July 1999,
establishes a new effective date for SFAS No. 133. This statement, as amended
by SFAS No. 137, is effective for all fiscal quarters of fiscal years
beginning after June 15, 2000 and is therefore effective for us beginning with
our fiscal quarter ending March 31, 2001. Based upon the nature of the
financial instruments and hedging activities in effect as of the date of this
filing, this pronouncement would require us to reflect the fair value of our
derivative instruments (see Note 8 to our consolidated financial statements)
on the consolidated balance sheet. Changes in fair value of these instruments
will be reflected as a component of comprehensive income.

31
<PAGE>

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The information required by this Item 8 is set forth on pages F-1 to F-30 of
this Annual Report on Form 10-K and is hereby incorporated into this Item 8.

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

None.

32
<PAGE>

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

Management

The following table sets forth the Company's directors and executive
officers, their ages as of December 31, 1999, and the positions currently held
by each person:

<TABLE>
<CAPTION>
Name Age Office
- ---- --- ------
<S> <C> <C>
Bruce D. McMaster....... 38 President, Chief Executive Officer and Director of
Holdings, President and Chief Executive Officer of DDi
Capital and DDi
Charles D. Dimick....... 43 Chairman and Director of Holdings, Director of DDi
Capital and DDi
Joseph P. Gisch......... 43 Chief Financial Officer of Holdings, DDi Capital and DDi,
Director of DDi Capital and DDi
John Peters............. 45 Vice President of Holdings
Greg Halvorson.......... 38 Vice President of Holdings
Terry L. Wright......... 40 Vice President of Holdings
David Dominik........... 43 Director of Holdings, DDi Capital and DDi
Edward W. Conard........ 43 Director of Holdings
Stephen G. Pagliuca..... 44 Director of Holdings
Prescott Ashe........... 32 Director of Holdings, DDi Capital and DDi
Stephen M. Zide......... 39 Director of Holdings
Mark R. Benham.......... 48 Director of Holdings
Christopher Behrens..... 38 Director of Holdings
</TABLE>

We anticipate that two additional directors not otherwise affiliated with
the Company or any of Holdings' stockholders will be elected to Holdings'
board of directors following a planned public offering of its common stock.

Bruce D. McMaster joined us in 1985 and has served as President since 1991
and as a Director and Chief Executive Officer since 1997. He has over 21 years
of experience in the EMS industry. Before becoming the Company's President,
Mr. McMaster worked in various management capacities in our engineering and
manufacturing departments.

Charles D. Dimick joined the Company in 1998 upon our merger with DCI. He is
the Chairman, a Director and the President of, Dynamic Details Incorporated,
Silicon Valley. He has over 21 years of experience in the EMS industry. Mr.
Dimick founded DCI in 1991 and served as its president and chief executive
officer until the merger. Previously, he was a senior vice president of sales
and marketing at Sigma Circuits.

Joseph P. Gisch has served as Chief Financial Officer since 1995. From 1986
to 1995, Mr. Gisch was a partner at the accounting firm of McGladrey & Pullen,
LLP where he was responsible for the audit, accounting and information systems
for a variety of manufacturing clients. Mr. Gisch was responsible for DDi's
general accounting and income tax matters. Mr. Gisch has not been responsible
for any of DDi's audit services since 1991.

John Peters joined us in 1998 upon DDi's merger with DCI. He has been Vice
President, Sales and Marketing, since 1999. He was the senior vice president
of sales and marketing of Dynamic Details Incorporated, Silicon Valley from
1998 to 1999. Mr. Peters served as vice president of sales and marketing of
DCI from 1992 to 1998.

Greg Halvorson joined DDi in 1998 upon the merger with DCI. He is a Vice
President and the Senior Vice President of Operations of Dynamic Details
Incorporated, Silicon Valley. Prior to joining DDi, Mr. Halvorson served as
vice president of operations of DCI from 1995 to 1998. Mr. Halvorson spent six
years at Pacific Circuits as plant manager and head of engineering before
which he was manager of computer-aided manufacturing at Sigma Circuits.

Terry L. Wright joined DDi in 1991 and has served as Vice President,
Engineering since 1995. Prior to joining DDi, Mr. Wright was a general manager
at Applied Circuit Solutions and a quality assurance manager at Sigma
Circuits.

33
<PAGE>

David Dominik has served as a Director since November 1998. Mr. Dominik is a
co-founder and managing director of Convergence Capital Group and a special
limited partner of Bain Captial, Inc. Mr. Dominik was a managing director of
Bain Capital, Inc. from 1990 to March 2000. Previously, Mr. Dominik was a
general partner of Zero Stage Capital, a venture capital firm focused on
early-stage companies, and assistant to the chairman of Genzyme Corporation, a
biotechnology firm. From 1982 to 1984, he worked as a management consultant at
Bain & Company. Mr. Dominik was elected as a director of DCI in 1996. Mr.
Dominik also serves as a director of ChipPAC, Inc., Integrated Circuit
Systems, Inc. and OneSource.

Edward W. Conard has served as a Director since 1997. He has been a managing
director of Bain Capital, Inc. since March 1993. From 1990 to 1992, Mr. Conard
was a director of Wasserstein Perella, an investment banking firm that
specializes in mergers and acquisitions. Prior to that, he was a vice
president at Bain & Company, where he headed the firm's operations practice
area. Mr. Conard also serves as a director of Waters Corporation, Cambridge
Industries, Alliance Corp., ChipPAC, Inc., Medical Specialties, Inc. and U.S.
Synthetic.

Stephen G. Pagliuca has served as a Director since January 2000. Mr.
Pagliuca has been a managing director of Bain Capital, Inc. since May 1993 and
a general partner of Bain Venture Capital, Inc. since 1989. Prior to joining
Bain Capital, Mr. Pagliuca was a partner at Bain & Company. Mr. Pagliuca also
worked as a senior accountant and international tax specialist for Peat
Marwick Mitchell & Company in the Netherlands. He is also a director of
Gartner Group, Coram Healthcare, Epoch Senior Living, Wesley Jessen
Visioncare, Dade Behring Inc. and Vivra Specialty Partners.

Prescott Ashe has served as a Director since 1997. Mr. Ashe has been a
principal at Bain Capital, Inc. since June 1998 and was an associate at Bain
Capital, Inc. from December 1992 to June 1998. Prior to that, he was an
analyst at Bain Capital, Inc. and a consultant at Bain & Company. Mr. Ashe
also serves as a director of ChipPAC, Inc., Integrated Circuit Systems, Inc.,
and SMTC Corporation.

Stephen M. Zide has served as a Director since 1997. Mr. Zide has been a
managing director at Pacific Equity Partners since 1998. Previously he was an
associate at Bain Capital, Inc., and prior to that he was a partner at the law
firm of Kirkland & Ellis. Mr. Zide is also a director of Alliance Laundry
Systems, L.L.C.

Mark R. Benham has served as a Director since November 1998. Mr. Benham was
a co-founder of Celerity Partners, L.L.C. and has been a partner since 1992.
Previously he was a senior investment officer of Citicorp Venture Capital,
Ltd., and prior to that he was an advisor to Yamaichi UniVen Co., Ltd., the
venture capital subsidiary of Yamaichi Securities International. Mr. Benham is
a director of SubMicron Systems Corporation, Rapid Design Service, Inc., SMTC
Corporation and Starcom Holdings, Inc.

Christopher Behrens has served as a Director since 1997. He has been a
principal of Chase Capital Partners since 1994 and a general partner since
January 1999. Prior to joining Chase Capital Partners, Mr. Behrens was a vice
president in the Merchant Banking Group of The Chase Manhattan Bank from 1990
to 1994. Mr. Behrens is a director of Patina Oil & Gas, Portola Packaging and
a number of other private companies.

At present, all Directors are elected and serve until a successor is duly
elected and qualified or until the earlier of his death, resignation or
removal. All members of the Board of Directors of Holdings set forth herein
were elected by class vote pursuant to Holdings' Articles of Incorporation.
There are no family relationships between any of the Directors or executive
officers of Holdings, DDi Capital or DDi. Executive officers of Holdings, DDi
Capital and DDi are elected by and serve at the discretion of their respective
boards of directors.

34
<PAGE>

ITEM 11. EXECUTIVE COMPENSATION

Compensation of Executive Officers

The following table sets forth information concerning the compensation for
the years ended December 31, 1999, 1998 and 1997 for the Company's chief
executive officer and its five other most highly compensated executive
officers at the end of the last fiscal year. For ease of reference, these
executive officers are collectively referred to throughout this section as
"named executive officers."

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
Annual Compensation Long Term Compensation
---------------------------- ---------------------------------------
Other Restricted Securities
Annual Stock Underlying All Other
Salary Bonus Compensation Awards Options Compensation
Name and Principal Position Year ($) ($) ($) ($) (#) ($)
- --------------------------- ---- ------- ------- ------------ ---------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Bruce D. McMaster....... 1999 451,737 42,500 -- (1) -- -- --
President and Chief 1998 432,423 69,694 -- (1) -- -- --
Executive Officer 1997 379,326 356,188 4,580,153(2) 241,026(7) 48,205.1(8) 1,088,558(13)
23,735(3)
3,808(4)

Charles D. Dimick....... 1999 447,408 42,500 6,000(4) -- -- --
Chairman 5,197(5)
464,994(6)
1998 190,076 31,281 3,000(4) -- 39,008.0(9) 387,496(14)
39,684(5) 2,127.2(10) 1,815,690(15)
816,721(6) 4,953.3(11)
1997 -- -- -- -- -- --

Joseph P. Gisch......... 1999 272,057 20,000 -- (1) -- -- --
Chief Financial 1998 269,346 18,967 -- (1) -- 10,000(12) --
Officer 1997 262,847 62,077 651,791(2) 40,171(7) 8,034.2(8) 155,198(13)
3,384(3)
2,195(4)

John Peters............. 1999 329,926 42,500 6,000(4) -- -- --
Vice President, 1,411(5)
Sales and Marketing 168,439(6)
1998 126,539 22,104 3,000(4) -- 13,892.8(9) 315,778(14)
10,547(5) 757.6(10) 650,688(15)
126,363(6) 1,764.1(11)
1997 -- -- -- -- -- --

Greg Halvorson.......... 1999 271,287 20,000 6,000(4) -- -- --
Vice President, 5,848(5)
Operations 313,663(6)
1998 112,692 22,104 3,000(4) -- 51,947.0(9) 1,523,861(14)
48,460(5) 2,832.8(10) 1,992,703(15)
198,975(6) 6,596.3(11)
1997 -- -- -- -- -- --

Lee W. Muse, Jr*........ 1999 376,442 42,500 -- (1) -- -- --
1998 355,981 69,694 -- (1) -- -- --
1997 314,769 356,188 3,810,922(2) 187,464(7) 37,492.8(8) 905,802(13)
19,750(3)
891(4)
</TABLE>

35
<PAGE>

- --------
* We do not expect Mr. Muse to continue his employment with DDi after the
expiration of his employment contract on October 28, 2000.
(1) The perquisites and other benefits paid did not exceed the lesser of
$50,000 or 10% of the total annual salary and bonus of such named
executive officer.
(2) Reflects amounts paid to such named executive officers to satisfy certain
tax obligations incurred in connection with the exercise of options to
purchase shares of common stock on October 28, 1997 in connection with a
recapitalization.
(3) Reflects the grant of 4,747.0, 676.8 and 3,950.0 shares of Class A common
stock to Mr. McMaster, Mr. Gisch and Mr. Muse, respectively, as
compensation for services rendered in their executive capacity.
(4) Reflects payments made in connection with the use of a personal
automobile.
(5) Represents payments under our cash bonus plan made at the time of the
exercise of options to purchase shares of Class A common stock which were
issued in connection with the DCI merger.
(6) Reflects deferred cash distributions made in connection with the exchange
of options to purchase shares of common stock of DCI for options to
purchase shares of Class A common stock and Class L common stock.
(7) Reflects the purchase of 50,620.2, 8,436.7 and 39,371.3 shares of
restricted Class A common stock by Mr. McMaster, Mr. Gisch and Mr. Muse
respectively, at a purchase price of $5.00 per share and the subsequent
repurchase by us from each of Mr. McMaster, Mr. Gisch and Mr. Muse of
2,415.2, 402.5 and 1,878.5 shares of restricted Class A common stock,
respectively, at a purchase price of $5.00 per share in connection with
the NTI acquisition. These named executive officers purchased these
shares by issuing an interest bearing note to DDi. The outstanding
principal amounts of the interest bearing notes of such named executive
officers were reduced by approximately $12,076, $2,013 and $9,392,
respectively, to reflect the repurchase by DDi of the shares of
restricted Class A common stock, as described above, in connection with
the NTI acquisition. In 1998, each of Mr. McMaster and Mr. Muse agreed to
forfeit 1,900 and 1,300 shares, respectively, of restricted Class A
common stock, which shares were subsequently issued to certain of DDi's
employees, and the outstanding principal amounts of the interest bearing
notes of such named executive officers were reduced by approximately
$9,500 and $6,500, respectively, to reflect the forfeiture. Additionally,
each of Mr. McMaster and Mr. Muse agreed to transfer 5,700 and 4,300
shares, respectively, of restricted Class A common stock, to Mr. Gisch
and the outstanding principal amounts of the interest bearing notes of
Mr. McMaster and Mr. Muse were reduced by approximately, $28,500 and
$21,500, respectively, and the outstanding principal amount of the
interest bearing note of Mr. Gisch was increased by approximately $50,000
to reflect the transfer. The restricted stock vests in 48 equal monthly
installments beginning November 28, 1997. DDi has the right to repurchase
the unvested restricted shares of Class A common stock held by a named
executive officer for the original purchase price in the event that the
named executive officer ceases to be employed by DDi.
(8) The options represent the net number of options to purchase shares of
Class A common stock at an exercise price of $61.17 per share,
substantially above the current fair market value of the Class A common
stock ($5.00 per share), issued October 28, 1997 after accounting for the
reduction in the number of shares available upon exercise of the options
as described below. The options vest in 48 equal monthly installments
beginning November 28, 1997. In connection with the NTI acquisition, Mr.
McMaster, Mr. Gisch and Mr. Muse agreed to permit DDi to cancel options
to purchase 2,415.2, 402.5 and 1,878.5 shares of Class A common stock,
respectively, at an exercise price of $61.17 per share. Additionally, in
1998 each of Mr. McMaster and Mr. Muse agreed to permit DDi to cancel
options to purchase 1,900 and 1,300 shares, respectively, of Class A
common stock at an exercise price of $61.17 per share, which options were
subsequently granted by DDi to certain of our other employees.
Additionally, each of Mr. McMaster and Mr. Muse agreed to permit DDi to
cancel options to purchase 5,700 and 4,300 shares of Class A common
stock, respectively, at an exercise price of $61.17 per share, which
options were subsequently granted by DDi to Mr. Gisch.
(9) The options represent options to purchase shares of Class A common stock
at an exercise price equal to $1.58 per share issued in connection with
the DCI merger to replace options to purchase shares of DCI common stock.

36
<PAGE>

(10) The options represent options to purchase shares of Class A common stock
at an exercise price equal to $61.17 per share issued in connection with
the DCI merger to replace options to purchase shares of DCI common stock.
(11) The options represent options to purchase shares of Class L common stock
at an exercise price equal to $364.09 per share issued in connection with
the DCI merger to replace options to purchase shares of DCI common stock.
(12) The options represent options to purchase shares of Class A common stock
at an exercise price of $61.17 issued to Mr. Gisch after each of Mr.
McMaster and Mr. Muse agreed to permit the Company to cancel options to
purchase 5,700 and 4,300 shares of Class A common stock, respectively, at
an exercise price of $61.17 per share.
(13) Reflects compensation earned by the named executive officer on October
28, 1997 for services rendered in their executive capacity prior to that
date that are payable on October 28, 2000 whether or not such named
executive officer is still employed by the Comapny.
(14) Reflects deferred cash distributions payable in connection with the
exchange of options to purchase shares of common stock of DCI for options
to purchase shares of Class A common stock and Class L common stock in
connection with the DCI merger. Each amount listed excludes the amounts
of deferred compensation actually paid to the named executive officer in
1998 and 1999. See note 6 to this table.
(15) Represents amounts payable under a cash bonus plan in connection with the
exercise of outstanding options to purchase shares of Class A common
stock and Class L common stock issued in connection with the DCI merger.
Each amount listed excludes amounts actually paid to the named executive
officer under the cash bonus plan in 1998 and 1999. See note 5 to this
table.

Option Grants in Last Year

No named executive officers were granted options to purchase shares of
common stock during the year ended December 31, 1999.

Option Exercises in Last Year and Year-End Option Values

The following table sets forth information for the named executive officers
concerning stock option exercises during the last year and options outstanding
at the end of the last year.

AGGREGATED OPTION EXERCISES IN 1999
AND YEAR-END OPTIONS VALUES

<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Underlying Unexercised In-The-Money Options At
Shares Acquired Options At Fiscal Year-End Fiscal Year-End
On Exercise Value Realized (Exercisable/Unexercisable) (Exercisable/Unexercisable)
Name (#) ($)(2) (#) ($)(2)
---- --------------- -------------- --------------------------- ---------------------------
<S> <C> <C> <C> <C>
Bruce D. McMaster....... -- -- 21,994.4/18,610.7(3) 0/0
4,203.8/0(4) 126,589/0
Charles D. Dimick....... 3,305.2(1) 11,304 4,957.9/3,888.0(5) 16,956/13,297
11,292.1/300.4(6) 0/0
4,462.6/699.5(7) 0/0
Joseph P. Gisch......... -- -- 9,768.5/8,265.7(3) 0/0
599.3/0(4) 18,047/0
John Peters............. 897.2(1) 3,068 1,796.4/4,492.0(5) 6,144/15,363
3,956.4/245.0(6) 0/0
1,193.7/570.4(7) 0/0
Greg Halvorson.......... 3,719.1(1) 12,719 3,677.7/12,017.0(5) 12,578/41,098
2,177.5/655.3(6) 0/0
5,070.4/1,525.9(7) 0/0
Lee W. Muse, Jr......... -- -- 17,275.3/14,617.6(3) 0/0
3,498.0/0(4) 105,335/0
</TABLE>

37
<PAGE>

- --------
(1) Represents shares of Class A common stock purchased at an exercise price
of $1.5762 per share.
(2) Value is based on the difference between the option exercise price and
the fair market value as of December 31, 1999. The fair market value of
the Class A common stock and the Class L common stock was determined by
the board of directors.
(3) Represents options to purchase shares of Class A common stock at an
exercise price of $61.17 per share. The options vest in 48 equal monthly
installments beginning November 28, 1997.
(4) Represents options to purchase shares of Class L common stock at an
exercise price of $70.19 per share. The options to purchase such shares
of Class L common stock replaced options to purchase shares of common
stock that were rolled over in connection with the recapitalization as
part of the management rollover equity and converted into options to
purchase shares of Class A common stock and shares of Class L common
stock.
(5) Represents options to purchase shares of Class A common stock at an
exercise price of $1.58 per share. The options to purchase such shares of
Class A common stock replaced options to purchase shares of common stock
of DCI that were rolled over in connection with the DCI merger and
converted into options to purchase shares of Class A common stock and
shares of Class L common stock. During 1999, Mr. Dimick agreed to permit
the Company to cancel options to purchase 1,620.7 shares of Class A
common stock with an exercise price of $1.58, options to purchase 205.8
shares of Class L common stock with an exercise price of $364.09 and
options to purchase 88.4 shares of Class A common stock with an exercise
price of $61.17 which options were subsequently granted to another of
DDi's employees.
(6) Represents options to purchase shares of Class A common stock at an
exercise price of $61.17 per share. The unvested options vest in 22 equal
monthly installments beginning January 28, 1999. The options to purchase
such shares of Class A common stock replaced shares and options to
purchase shares of common stock of DCI that were rolled over in
connection with the DCI merger and converted into shares and options to
purchase shares of Class A common stock and shares of Class L common
stock.
(7) Represents options to purchase shares of Class L common stock at an
exercise price of $364.09 per share. The options to purchase such shares
of Class L common stock replaced options to purchase shares of common
stock of DCI that were rolled over in connection with the DCI merger and
converted into options to purchase shares of Class A common stock and
shares of Class L common stock.

Employment Contracts, Termination of Employment and Change of Control
Arrangements

Mr. McMaster is currently employed as President and Chief Executive Officer
pursuant to an agreement dated September 1, 1995, as amended, effective until
October 28, 2000. Under this agreement, Mr. McMaster received an annual base
salary of $375,000 in 1997, $425,000 in 1998 and $450,000 in 1999. His 2000
base salary is $475,000. In addition, Mr. McMaster is eligible for an annual
bonus based upon the achievement of EBITDA targets and received an award,
pursuant to the agreement, of 4,747.0 shares of Class A common stock, on
October 28, 1997. Mr. McMaster's employment agreement contains customary
confidentiality provisions and a non-compete clause effective for the duration
of the term of the agreement. In addition, pursuant to an agreement entered
into at the time of the Company's October 1997 recapitalization, Mr. McMaster
will be entitled to receive an additional bonus of $1,088,558 in consideration
of his services prior to October 28, 1997, which will be payable on October
28, 2000 whether or not he is still employed by DDi.

Mr. Dimick is currently employed as Chairman and as President of Dynamic
Details Incorporated, Silicon Valley pursuant to an agreement dated July 23,
1998 which expires in July 2001. Under this agreement, Mr. Dimick received an
annual base salary at an annual rate of $420,000 in 1998, subject to increases
during the remainder of the contract. His 2000 base salary is $475,000. In
addition, Mr. Dimick is eligible for an annual bonus based upon the
achievement of EBITDA targets and received an award, pursuant to the
agreement, of 39,008 Class A cash bonus units valued at $1.5725 per unit and
4,953.3 Class L cash bonus units valued at $363.2381 per unit, which cash
bonus units vest on the same schedule applicable to the vesting of the options
to purchase shares of Class A common stock and shares of Class L common stock
granted in connection with the DCI merger and are payable in accordance with
the terms of the cash bonus plan. Mr. Dimick also entered into a

38
<PAGE>

non-compete agreement with the Company which contains customary
confidentiality provisions and a non-compete clause effective for the duration
of the term of the agreement.

Mr. Gisch is currently employed as Chief Financial Officer pursuant to an
agreement dated September 19, 1995, as amended, effective until October 28,
2000. Under this agreement, Mr. Gisch received an annual base salary of
$252,000 in 1997, $265,000 in 1998 and $275,000 in 1999. His 2000 base salary
is $287,500. In addition, Mr. Gisch is eligible for an annual bonus based upon
the achievement of EBITDA targets and received an award, pursuant to the
agreement, of 676.8 shares of Class A common stock on October 28, 1997. Mr.
Gisch's employment agreement contains customary confidentiality provisions. In
addition, pursuant to an agreement entered into at the time of the Company's
October 1997 recapitalization, Mr. Gisch will be entitled to receive an
additional bonus of $155,198 in consideration of his services prior to October
28, 1997, which will be payable on October 28, 2000, whether or not he is
still employed by the Company.

Mr. Peters is currently employed as a Vice President and as the Senior Vice
President of Sales of Dynamic Details Incorporated, Silicon Valley pursuant to
an agreement dated July 23, 1998 which expires in October 2000. Under this
agreement, Mr. Peters received an annual base salary at an annual rate of
$280,000 in 1998, subject to increases during the remainder of the contract.
In addition, Mr. Peters is eligible for an annual bonus based upon the
achievement of EBITDA targets and received an award, pursuant to the
agreement, of 13,892.7542 Class A cash bonus units valued at $1.5725 per unit
and 1,764.1301 Class L cash bonus units valued at $363.2381 per unit, which
cash bonus units vest on the same schedule applicable to the vesting of the
options to purchase shares of Class A common stock and shares of Class L
common stock granted in connection with the DCI merger and are payable in
accordance with the terms of the cash bonus plan. Mr. Peters also entered into
a non-compete agreement with the Company which contains customary
confidentiality provisions and a non-compete clause effective for the duration
of the term of the agreement.

Mr. Halvorson is currently employed as a Vice President and as Senior Vice
President of Operations of Dynamic Details Incorporated, Silicon Valley
pursuant to an agreement dated July 23, 1998 which expires in October 2000.
Under this agreement, Mr. Halvorson received an annual base salary at an
annual rate of $250,000 in 1998, subject to increases during the remainder of
the contract. In addition, Mr. Halvorson is eligible for an annual bonus based
upon the achievement of EBITDA targets and received an award, pursuant to the
agreement, of 36,896.9904 Tranche A Class A cash bonus units valued at $1.5725
per unit, 15,050.0027 Tranche B Class A cash bonus units valued at $0.6163 per
unit, 4,685.2544 Tranche A Class L cash bonus units valued at $363.2381 per
unit and 1,911.0798 Tranche B Class L cash bonus units valued at $142.3681 per
unit, which cash bonus units vest on the same schedule applicable to the
vesting of the options to purchase shares of Class A common stock and shares
of Class L common stock granted in connection with the DCI merger and are
payable in accordance with the terms of the cash bonus plan. Mr. Halvorson
also entered into a non-compete agreement with the Company which contains
customary confidentiality provisions and a non-compete clause effective for
the duration of the term of the agreement.

Mr. Muse is currently employed as a Vice President pursuant to an agreement
dated September 1, 1995, as amended, effective until October 28, 2000. Under
this agreement, Mr. Muse received an annual base salary of $300,000 in 1997,
$350,000 in 1998 and $375,000 in 1999. In addition, Mr. Muse is eligible for
an annual bonus based upon the achievement of EBITDA targets and received an
award, pursuant to the agreement, of 3,950.0 shares of Class A common stock on
October 28, 1997. Mr. Muse's employment agreement contains customary
confidentiality provisions and a non-compete clause effective for the duration
of the term of the agreement. In addition, pursuant to an agreement entered
into at the time of the Company's October 1997 recapitalization, Mr. Muse will
be entitled to receive an additional bonus of $905,802 in consideration of his
services prior to October 28, 1997, which will be payable on October 28, 2000,
whether or not he is still employed by the Company.

Stock Plans and Related Transactions

On October 28, 1997, the board of directors of Holdings adopted, and its
stockholders approved, our 1997 Details, Inc. Equity Incentive Plan, or the
1997 Plan, which authorized the granting of Holdings stock options and the
sale of Holdings Class A common stock to current or future employees,
directors, consultants or

39
<PAGE>

advisors. The board of directors is authorized to sell or otherwise issue
Class A common stock at any time prior to the termination of the 1997 Plan in
such quantity, at such price, on such terms and subject to such conditions as
established by it up to an aggregate of 235,000 shares of Class A common
stock, subject to adjustment upon the occurrence of certain events to prevent
any dilution or expansion of the rights of participants that might otherwise
result from the occurrence of such events. Currently there are no shares of
Class A common stock available for grant under the 1997 Plan.

In connection with the DCI merger, the Holdings board of directors adopted,
and its stockholders approved, the Details Holdings Corp.-Dynamic Circuits
1996 Stock Option Plan and the Details Holdings Corp.-Dynamic Circuits 1997
Stock Option Plan (together the "DCI Stock Option Plans"), which authorized
the granting of stock options and the sale of Class A common stock and Class L
common stock in connection with the DCI merger. The terms applicable to
options issued under the DCI Stock Option Plans are substantially similar to
the terms applicable to the options to purchase shares of DCI outstanding
immediate prior to the DCI acquisition. These terms include vesting from the
date of acquisition through 2002. An optionholder's scheduled vesting is
dependent upon continued employment with DDi. Upon termination of employment,
any unvested options as of the termination date are forfeited.

In connection with the DCI merger, Holdings converted each DCI stock option
award into the right to receive a cash payment and an option to purchase
shares of Holdings Class A common stock and shares of Holdings Class L common
stock. The options granted bear exercise prices of either $1.58 ($1.58
Options) or $61.17 ($61 Options) for the purchase of Class A shares or $364.09
for Class L Shares. The board of directors is authorized to sell or otherwise
issue Class A common stock and Class L common stock at any time prior to the
termination of the applicable DCI Stock Option Plan in such quantity, at such
price, on such terms and subject to such conditions as established by it up to
an aggregate of 222,600 shares of Class A common stock and 28,300 shares of
Class L common stock, in the case of the Details Holdings Corp.- Dynamic
Circuits 1996 Stock Option Plan, and 46,000 shares of Class A common stock and
5,850 shares of Class L common stock in the case of the Details Holdings
Corp.-Dynamic Circuits 1997 Stock Option Plan (in each case, subject to
adjustment upon the occurrence of certain events to prevent any dilution or
expansion of the rights of participants that might otherwise result from the
occurrence of such events). There are currently 3,458 options to purchase
shares of Class A common stock and 3,340 options to purchase shares of Class L
common stock available for grant under the DCI Stock Option Plans. As of
December 31, 1999, the options outstanding under the DCI Stock Option Plans
had weighted average remaining contractual lives of approximately seven years.

In 1998, each of Mr. McMaster and Mr. Muse agreed to permit Holdings to
cancel options to purchase 7,600 and 5,600 shares, respectively, of Holdings
Class A common stock at an exercise price of $61.17 per share, which options
were subsequently granted to certain of our other employees. In 1999, Mr.
Dimick agreed to permit Holdings to cancel options to purchase 1,620.7 shares
of Class A common stock at an exercise price of $1.58 per share, 205.8 shares
of Class L common stock at an exercise price of $364.09 per share and 88.4
shares of Class A common stock at an exercise price of $61.17 per share, which
options were subsequently granted to another of our employees.

2000 Equity Incentive Plan

The 2000 Equity Incentive Plan, or the "2000 Plan," is expected to be
adopted by Holdings' board of directors and approved by its stockholders prior
to the completion of its initial public offering. As of the date of this
report, no awards have been made under the 2000 Plan. No future grants will be
made under existing plans upon the effectiveness of the 2000 Plan.

The 2000 Plan provides for the grant of incentive stock options to DDi's
employees (including officers and employee directors) and for the grant of
nonstatutory stock options to DDi's employees, directors and consultants. A
nonstatutory stock option is a stock option that is not intended to qualify as
an incentive stock option under Section 422 of the Internal Revenue Code. The
holder of a nonstatutory stock option generally is

40
<PAGE>

taxed on the difference between the exercise price and the fair market value
when exercised. The 2000 Plan also provides for the grant of stock
appreciation rights, restricted stock, unrestricted stock, deferred stock, and
securities (other than stock options) which are convertible into or
exchangeable for common stock on such terms and conditions as our board
determines.

Employee Stock Purchase Plan

The Employee Stock Purchase Plan, or ESPP, is expected to be adopted by the
Holdings board of directors and approved by its stockholders prior to the
completion of its initial public offering. The ESPP will be established to
give eligible employees a convenient means of purchasing shares of Holdings
common stock through payroll deductions at a discounted price.

Director Compensation

The Company currently pays no compensation to non-employee directors, and
pays no additional remuneration to employees or executives for their service
as directors.

Committees of the Board of Directors

Prior to Holdings' planned initial public offering, Holdings' board of
directors had two committees, the audit committee and the compensation
committee. The board may also establish other committees to assist in the
discharge of its responsibilities.

The audit committee makes recommendations to the board of directors
regarding the independent auditors to be approved by the stockholders, reviews
the independence of the independent auditors, approves the scope of the annual
audit activities of the independent auditors, approves the audit fee payable
to the independent auditors and reviews such audit results with the
independent auditors. Following the initial public offering by Holdings
offering, the audit committee will be comprised of Mr. Dominik and the two
additional directors to be elected following the offering, and, following this
offering, will be comprised of a majority of directors not otherwise
affiliated with the Company or any of its principal stockholders.
PricewaterhouseCoopers LLP presently serves as the Company's independent
auditors.

The compensation committee provides a general review of our compensation and
benefit plans to ensure that they meet corporate objectives. In addition, the
compensation committee reviews the chief executive officer's recommendations
on compensation of the Company's officers and adopting and changing major
compensation policies and practices, and reports its recommendations to the
whole board of directors for approval and authorization. The compensation
committee administers the stock plans and is comprised of Messrs. Conard,
Dominik and Ashe.

Compensation Committee Interlocks and Insider Participation

The members of the compensation committee do not receive compensation for
their services as directors.

41
<PAGE>

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

All of DDi Capital's issued and outstanding capital stock is owned by
Intermediate which is wholly-owned by Holdings.

As of December 31, 1999, Holdings outstanding equity securities consisted of
3,522,183.0 shares of Class A common stock and 396,330.2 shares of Class L
common stock. The Class A common stock consists of seven separate classes (A-1
through A-7), which have different rights with respect to the election of
directors. All of the shares of Class A common stock entitle the holder to one
vote per share on all matters to be voted upon by our stockholders except for
Class A-7, which is nonvoting. The Class L common stock is identical to the
Class A common stock except that the Class L common stock is entitled to a
preference over the Class A common stock with respect to any distribution by
us to holders of our capital stock equal to the original cost of such shares
($364.09) plus an amount which accrues on a daily basis at a rate of 12% per
annum, compounded quarterly. The Class L common stock is convertible into
Class A common stock upon a vote of a majority of the holders of the
outstanding Class L common stock upon an initial public offering or in other
specified circumstances.

Unless otherwise indicated below, to DDi's knowledge, all persons listed
below have sole voting and investment power with respect to their shares of
common stock, except to the extent authority is shared by spouses under
applicable law. Unless otherwise indicated below, each entity or person listed
below maintains a mailing address of c/o DDi Corp., 1220 Simon Circle,
Anaheim, California 92806.

The number of shares beneficially owned by each stockholder is determined
under rules promulgated by the Securities and Exchange Commission. The
information is not necessarily indicative of beneficial ownership for any
other purpose. Under these rules, beneficial ownership includes any shares as
to which the individual or entity has sole or shared voting or investment
power and any shares as to which the individual or entity has the right to
acquire beneficial ownership within 60 days after December 31, 1999 through
the exercise of any stock option, warrant or other right. The inclusion in the
following table of those shares, however, does not constitute an admission
that the named stockholder is a direct or indirect beneficial owner.

42
<PAGE>

<TABLE>
<CAPTION>
Shares Beneficially Owned (**)
-------------------------------------------------------------------------
Class A Common Stock Class L Common Stock
-------------------------------------- ---------------------------------
Warrants Warrants
and and
Name and Address Shares Options Total % Shares Options Total %
---------------- ----------- --------- ----------- ---- --------- -------- --------- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Principal Stockholders:
Bain Capital Funds (1)........... 1,386,596.0 17,510.5 1,404,106.5 39.7% 172,464.4 -- 172,464.4 43.5%
c/o Bain Capital, Inc.
Two Copley Place
Boston, Massachusetts 02116
Celerity Partners, L.L.C. (2).... 275,491.5 9,560.2 285,051.7 8.0 34,643.2 -- 34,643.2 8.7
11111 Santa Monica Boulevard;
Suite 1111
Los Angeles, California 90025
Chase Manhattan Entities (3)..... 386,912.0 70,210.8 457,122.8 12.7 47,820.6 8,677.8 56,498.4 13.9
c/o Chase Manhattan Capital, L.P.
380 Madison Avenue
12th Floor
New York, New York 10017
KB Mezzanine Fund II, L.P. ...... 203,075.1 11,074.3 214,149.4 6.1 25,786.9 -- 25,786.9 6.5
c/o Equinox Investment Partners
LLC
19 Olde Kings Highways
South Darien, CT 06820

Directors and Executive Officers:
Bruce D. McMaster................ 195,089.1 23,686.3 218,775.4 6.2 14,290.7 4,203.8 18,494.5 4.6
Charles D. Dimick (4)............ 199,523.9 17,323.4 216,847.3 6.1 21,711.7 4,393.7 26,105.4 6.5
Joseph P. Gisch.................. 39,382.7 10,519.9 49,902.6 1.4 1,955.6 599.3 2,554.9 *
John Peters...................... 70,753.2 6,086.2 76,821.4 2.2 8,018.8 1,231.7 9,250.5 2.3
Greg Halvorson................... 36,252.4 6,170.6 42,422.9 1.2 -- 5,108.4 5,108.4 1.3
Lee W. Muse, Jr. ................ 140,729.0 18,604.2 159,331.1 4.4 9,465.4 3,498.0 12,963.5 3.2
Christopher Behrens (5).......... 386,912.0 25,531.2 412,443.2 11.6 47,820.6 3,155.6 50,976.1 12.8
Edward W. Conard (6)............. 364,032.5 2,748.4 366,780.9 10.4 45,163.5 -- 45,163.5 11.4
David Dominik (6)................ 364,032.5 2,748.4 366,780.9 10.4 45,163.5 -- 45,163.5 11.4
Stephen G. Pagliuca (6).......... 364,032.5 2,748.4 366,780.9 10.4 45,163.5 -- 45,163.5 11.4
Prescott Ashe (7)................ 364,032.5 2,748.4 366,780.9 10.4 45,163.5 -- 45,163.5 11.4
Stephen Zide (7)................. 364,032.5 2,748.4 366,780.9 10.4 45,163.5 -- 45,163.5 11.4
Mark R. Benham (8)............... 275,491.5 9,560.2 285,051.7 8.1 34,643.2 -- 34,643.2 8.7
All Directors and executive
officers as a group
(14 persons) (6)(7)(8).......... 1,746,956.6 133,602.7 1,880,559.3 51.4 193,225.5 42,104.8 235,330.3 53.7
</TABLE>
- --------
* Indicates beneficial ownership of less than 1% of the issued and
outstanding Class A common stock or Class L common stock.
** The number of shares of Class A common stock and Class L common stock
deemed outstanding on December 31, 1999 with respect to a person or group
includes (a) 3,522,183.0 shares of Class A common stock and 396,330.2
shares of Class L common stock outstanding on such date and (b) all options
and warrants that are currently exercisable or will become exercisable
within 60 days of December 31, 1999 by the person or group in question.
(1) Includes shares of Class A common stock and Class L common stock held by
Bain Capital Fund V, L.P., ("Fund V"); Bain Capital Fund V-B, L.P. ("Fund
V-B"); BCIP Associates ("BCIP"); and BCIP Trust Associates, L.P. ("BCIP
Trust" and collectively with Fund V, Fund V-B and BCIP, the "Bain Capital
Funds").
(2) Consists of shares owned by Celerity Dynamo, L.L.C., Celerity Liquids,
L.L.C. and Celerity Details, L.L.C. Celerity Partners, L.L.C. and its
managing members control each of such entities, which disclaim beneficial
ownership of any such shares in which it does not have a pecuniary
interest.
(3) Consists of shares owned by Chase Manhattan Capital, L.P., Chase
Securities Inc. and DI Investors, L.L.C., all of which are affiliates of
The Chase Manhattan Corporation. Chase Manhattan Capital, L.P. is the
managing member of DI Investors, L.L.C. and owns a majority of the
interests therein. Accordingly, Chase Manhattan Capital, L.P. may be
deemed to beneficially own shares owned by DI Investors, L.L.C. Each of
Chase Manhattan Capital, L.P., DI Investors, LLC and Chase Securities Inc.
disclaims beneficial ownership of any such shares in which it does not
have a pecuniary interest.
(4) Includes 4,000.0 shares of Class A common stock held by Mr. Dimick's minor
child.

43
<PAGE>

(5) Mr. Behrens is a general partner of Chase Capital Partners, which is a
non-managing member of Chase Manhattan Capital, LLC and which manages the
investments of Chase Manhattan Capital, LLC and, accordingly, may be
deemed to beneficially own shares owned by Chase Manhattan Capital, LLC
and DI Investors, LLC. Mr. Behrens disclaims beneficial ownership of any
such shares in which he does not have a pecuniary interest. The address of
Mr. Behrens is c/o Chase Capital Partners, 380 Madison Avenue, 12th Floor,
New York, New York 10017.
(6) The shares of Class A common stock and Class L common stock included in
the table represent shares held by BCIP and BCIP Trust. Messrs. Conard and
Pagliuca are each Managing Directors of Bain Capital, Inc. and Messrs.
Conard, Pagliuca and Dominik are each general partners of BCIP and BCIP
Trust and, accordingly, may be deemed to beneficially own shares owned by
such funds. Each such person disclaims beneficial ownership of any such
shares in which he does not have a pecuniary interest. The address of each
such person is c/o Bain Capital, Inc., Two Copley Place, Boston,
Massachusetts 02116.
(7) The shares of Class A common stock and Class L common stock included in
the table represent shares held by BCIP and BCIP Trust. Mr. Zide is a
managing director of Pacific Equity Partners and was formerly an associate
of Bain Capital, Inc. Mr. Ashe is a principal of Bain Capital, Inc. Each
such person is a partner of BCIP and BCIP Trust and, accordingly, may be
deemed to beneficially own shares owned by such funds. Each such person
disclaims beneficial ownership of any such shares in which he does not
have a pecuniary interest. The address of each such person is c/o Bain
Capital, Inc., Two Copley Place, Boston, Massachusetts 02116.
(8) Mr. Benham is a Managing Member of Celerity Partners, L.L.C., and controls
each of Celerity Details, L.L.C., Celerity Liquids, L.L.C. and Celerity
Dynamo, L.L.C. and, accordingly, may be deemed to beneficially own shares
owned by Celerity Details, L.L.C., Celerity Liquids, L.L.C. and Celerity
Dynamo, L.L.C. Mr. Benham disclaims beneficial ownership of any such
shares in which he does not have a pecuniary interest. The address of Mr.
Benham is c/o Celerity Partners, 11111 Santa Monica Boulevard, Suite 1111,
Los Angeles, California 90025.

44
<PAGE>

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The following summary of the Management Agreement is a description of the
material provisions of those agreements and is subject to, and qualified in
its entirety by reference to, those agreements, each of which has been
previously filed with the Securities and Exchange Commission.

Management Agreement

A management agreement among Bain Capital Partners V, L.P. ("Bain"),
Holdings and its subsidiaries, DDi Capital and DDi, will be terminated by
mutual consent of the parties in connection with a proposed initial public
offering of the common stock of Holdings, and Holdings will use some of the
proceeds of this offering to pay Bain a fee of approximately $3.25 million. In
1999, Bain was paid a fee of approximately $1.1 million. The management
agreement includes customary indemnification provisions in favor of Bain.
Investment funds associated with Bain are Holdings' largest stockholders.

Certain Loans and Payments to Named Executive Officers

In connection with the exercise of certain options and the purchase of
certain shares of restricted stock in 1997, Holdings accepted as payment from
each named executive officer purchasing such shares a note bearing interest at
5.57% per annum. Mr. McMaster, Mr. Gisch, Mr. Muse and Mr. Wright had
outstanding loan balances, excluding accrued interest, at December 31, 1999 of
approximately $273,806, $44,844, $214,742, and $73,810, respectively. Holdings
has agreed to permit these executive officers to repay their respective loan
obligations with proceeds received from the sale of stock.

Directors' Relationships with Major Stockholders

Eight of our directors are affiliated with our major stockholders. Charles
D. Dimick and Bruce D. McMaster are executive officers, stockholders and
directors. David Dominik, Edward W. Conard, Stephen G. Pagliuca and Prescott
Ashe are affiliated with the Bain Capital funds. Mark R. Benham is a partner
in Celerity Partners, L.L.C., and Christopher Behrens is a general partner of
Chase Capital Partners, an affiliate of The Chase Manhattan Bank.

Certain Interests of the Former CEO

The Company leases the buildings and certain equipment located at its
Anaheim, California facility pursuant to lease arrangements entered into with
the Swenson Family Trust, a trust controlled by the Company's founder and
former shareholder, James I. Swenson, and his wife. Under the terms of these
leases, the Company paid approximately $108,000 per month in 1999 as base rent
subject to applicable adjustment based upon changes in the consumer price
index. The leases have a remaining term of 6 years with an option to renew for
an additional 10 years or to purchase the property at fair market value upon
expiration. See "Description of Property."

Other Related Party Payments

Sankaty High Yield Asset Partners, L.P., an affiliate of the Bain Capital
funds, will receive a portion of the net proceeds from Holdings' planned
initial public offering from the redemption of the Intermediate senior
discount notes and the repayment of some of the indebtedness under the senior
credit facility.

Chase Manhattan Capital, LLC, one of Holdings' stockholders, is an
affiliated of The Chase Manhattan Bank, which serves as the administrative
agent and participates as a lender under the senior credit facility and is a
counterparty to one of DDi's interest rate exchange agreements, under terms
similar to those of the other participants and counterparties. Some of the net
proceeds of Holdings' planned initial public offering will be used to repay a
portion of the indebtedness under the senior credit facility.

Sales to Affiliate of Major Stockholders

Investment funds associated with Bain Capital, Inc. and Celerity Partners,
L.L.C. are also stockholders of SMTC Corporation, one of DDi's customers.
Sales to SMTC Corporation, which totaled less than $2.5 million or less than
1% of net sales in 1999, are on terms equivalent to those made available to
other customers.

45
<PAGE>

PART IV

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

(a)(1) Financial Statements

INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
Page
----
<S> <C>
Report of Independent Accountants........................................ F-1

Consolidated Balance Sheets as of December 31, 1999 and 1998............. F-2

Consolidated Statements of Operations for the Years Ended December 31,
1999, 1998 and 1997..................................................... F-3

Consolidated Statements of Stockholders' Deficit for the Years Ended
December 31, 1999, 1998 and 1997........................................ F-4

Consolidated Statements of Cash Flows for the Years Ended December 31,
1999, 1998 and 1997..................................................... F-6

Notes to Consolidated Financial Statements............................... F-7
</TABLE>

(a)(2) Financial Statement Schedules.

Not applicable.

(a)(3) Exhibits.

Certain of the following exhibits have been previously filed with the
Commission pursuant to the requirements of the Securities Act. Such exhibits
are identified by the parenthetical references following the listing of each
such exhibit and are incorporated herein by reference.

<TABLE>
<CAPTION>
Exhibit Description
------- -----------
<C> <S>
3.1 DDi Capital Corp. Articles of Incorporation, as amended. (Previously
filed as Exhibit 3.1 to Registration Statement No. 333-41187, as
amended)
3.1.1 Amendment to the Articles of Incorporation of DDi Capital Corp. dated
December 15, 1998. (Previously filed as Exhibit 3.1.1 to Registrants'
1998 Annual Report on Form 10-K)
3.2 DDi Capital Corp. By-laws. (Previously filed as Exhibit 3.2 to
Registration Statement No. 333-41187, as amended)
3.3 Dynamic Details, Incorporated Articles of Incorporation, as amended.
(Previously filed as Exhibit 3.1 to Registration Statement No. 333-
41211, as amended)
3.3.1 Amendment to the Articles of Incorporation of Dynamic Details,
Incorporated dated December 15, 1998. (Previously filed as Exhibit
3.3.1 to Registrants' 1998 Annual Report on Form 10-K)
3.4 Dynamic Details, Incorporated By-laws. (Previously filed as Exhibit
3.2 to Registration Statement No. 333-41211, as amended)
4.1 Indenture dated as of November 18, 1997. (Previously filed as Exhibit
4.1 to Registration Statement No. 333-41187, as amended)
4.2 Supplemental Indenture dated as of February 10, 1998. (Previously
filed as Exhibit 4.2 to Registration Statement No. 333-41187, as
amended)
4.3 Exchange and Registration Rights Agreement dated as of November 18,
1997. (Previously filed as Exhibit 4.3 to Registration Statement No.
333-41187, as amended)
4.4 Indenture dated as of November 18, 1997. (Previously filed as Exhibit
4.1 to Registration Statement No. 333-41211)
4.5 Exchange and Registration Rights Agreement dated as of November 18,
1997. (Previously filed as Exhibit 4.2 to Registration Statement No.
333-41211, as amended)
</TABLE>

46
<PAGE>

<TABLE>
<CAPTION>
Exhibit Description
------- -----------
<C> <S>
10.1 Stock Contribution and Merger Agreement dated July 23, 1998 by and
among Details Holding Corp. and Dynamic Circuits Inc. and the
Stockholders of Dynamic Circuits Inc. (Previously filed as Exhibit
2.1 to Form 8-K dated July 23, 1998)
10.2 Credit Agreement dated as of July 23, 1998, as Amended and Restated as
of August 28, 1998, and as further amended by the First Amendment
thereto dated March 10, 1999. (Previously filed as Exhibit 10.2 to
Registrants' 1998 Annual Report on Form 10-K)
10.3 Credit Agreement dated as of July 23, 1998. (Previously filed as
Exhibit 4.1 to Form 8-K dated July 23, 1998.)
10.4 First Amendment dated as of December 5, 1997 to Credit Agreement dated
as of October 28, 1997. (Previously filed as Exhibit 10.1 to
Registration Statement No. 333-41187, as amended)
10.5 Credit Agreement dated as of October 28, 1997, as Amended and Restated
as of December 5, 1997. (Previously filed as Exhibit 10.2 to
Registration Statement No. 333-41187, as amended)
10.6 Details Holdings Corp.--Dynamic Circuits 1996 Stock Option Plan dated
as of July 23, 1998. (Previously filed as Exhibit 10.6 to
Registrants' 1998 Annual Report on Form 10-K)
10.7 Details Holdings Corp.--Dynamic Circuits 1997 Stock Options Plan dated
as of July 23, 1998. (Previously filed as Exhibit 10.7 to
Registrants' 1998 Annual Report on Form 10-K)
10.8 Details Holdings Corp. Bonus Plan dated as of July 23, 1998.
(Previously filed as Exhibit 10.8 to Registrants' 1998 Annual Report
on Form 10-K)
10.9 Management Agreement dated October 28, 1997. (Previously filed as
Exhibit 10.6 to Registration Statement No. 333-41187, as amended)
10.10 Amended and Restated Recapitalization Agreement dated as of October 4,
1997. (Previously filed as Exhibit 10.2 to Registration Statement No.
333-41187, as amended)
10.11 Stockholders Agreement dated October 28, 1997. (Previously filed as
Exhibit 10.3 to Registration Statement No. 333-41187, as amended)
10.12 1997 Details, Inc. Equity Incentive Plan. (Previously filed as Exhibit
10.7 to Registration Statement No. 333-41187, as amended)
10.13 1996 Employee Stock Option Plan dated December 31, 1996. (Previously
filed as Exhibit 10.8 to Registration Statement No. 333-41187, as
amended)
10.14 1996 Performance Stock Option Plan dated December 31, 1996.
(Previously filed as Exhibit 10.9 to Registration Statement No. 333-
41187, as amended)
10.15 Real Property Master Lease Agreement dated January 1, 1996.
(Previously filed as Exhibit 10.4 to Registration Statement No. 333-
41187, as amended)
10.16 Personal Property Master Lease Agreement dated January 1, 1996.
(Previously filed as Exhibit 10.5 to Registration Statement No. 333-
41187, as amended)
10.17 McMaster Employment Agreement dated September 1, 1995, as amended
October 28, 1997. (Previously filed as Exhibit 10.10 to Registration
Statement No. 333-41187, as amended)
10.18 Gisch Employment Agreement dated September 19, 1995 as amended October
28, 1997. (Previously filed as Exhibit 10.11 to Registration
Statement No. 333-41187, as amended)
10.19 Muse Employment Agreement dated September 1, 1995, as amended October
28, 1997. (Previously filed as Exhibit 10.12 to Registration
Statement No. 333-41187, as amended)
10.20 Wright Employment Agreement dated September 1, 1995, as amended
October 28, 1997. (Previously filed as Exhibit 10.13 to Registration
Statement No. 333-41187, as amended)
10.21 Dimick Employment Agreement dated July 23, 1998. (Previously filed as
Exhibit 10.21 to Registrants' 1998 Annual Report on Form 10-K)
10.22 Halvorson Employment Agreement dated July 23, 1998. (Previously filed
as Exhibit 10.22 to Registrants' 1998 Annual Report on Form 10-K)
</TABLE>

47
<PAGE>

<TABLE>
<CAPTION>
Exhibit Description
------- -----------
<C> <S>
10.23 Peters Employment Agreement dated July 23, 1998. (Previously filed as
Exhibit 10.23 to Registrants' 1998 Annual Report on Form 10-K)
10.24 Naroian Employment Agreement dated July 23, 1998. (Previously filed as
Exhibit 10.24 to Registrants' 1998 Annual Report on Form 10-K)
10.25 Employee Incentive Compensation Plan dated January 2, 1997 between
Details, Inc. and Michael P. Moisan. (Previously filed as Exhibit
10.20 to Registration Statement No. 333-41187, as amended)
10.26 NTI Stock Purchase Agreement dated December 19, 1997. (Previously
filed as Exhibit 10.4 to Registration Statement No. 333-41187, as
amended)
10.27 NTI Real Property Lease Agreement dated as of June 15, 1994.
(Previously filed as Exhibit 10.16 to Registration Statement No. 333-
41187, as amended)
10.28 NTI Real Property Lease Agreement dated as of June 15, 1994.
(Previously filed as Exhibit 10.17 to Registration Statement No. 333-
41187, as amended)
10.29 NTI Real Property Lease Agreement dated as of June 15, 1994.
(Previously filed as Exhibit 10.18 to Registration Statement No. 333-
41187, as amended)
10.30 DCI Real Property Lease Agreement dated as of July 22, 1991.
(Previously filed as Exhibit 10.30 to Registrants' 1998 Annual Report
on Form 10-K)
10.31 DCI Real Property Lease Agreement dated as of March 20, 1997.
(Previously filed as Exhibit 10.31 to Registrants' 1998 Annual Report
on Form 10-K)
10.32 DCI Real Property Lease Agreement dated as of November 12, 1997.
(Previously filed as Exhibit 10.32 to Registrants' 1998 Annual Report
on Form 10-K)
10.33 DCI Real Property Lease Agreement dated as of August 18, 1998.
(Previously filed as Exhibit 10.33 to Registrants' 1998 Annual Report
on Form 10-K)
10.34 Cuplex Real Property Lease Agreement dated as of April 14, 1998.
(Previously filed as Exhibit 10.34 to Registrants' 1998 Annual Report
on Form 10-K)
10.35 Cuplex Real Property Lease Agreement dated as of May 13, 1996.
(Previously filed as Exhibit 10.35 to Registrants' 1998 Annual Report
on Form 10-K)
10.36 Cuplex Real Property Lease Agreement dated as of November 2, 1995.
(Previously filed as Exhibit 10.36 to Registrants' 1998 Annual Report
on Form 10-K)
12.1 DDi Capital Corp. and Dynamic Details, Incorporated statement re:
computation of ratio of earnings to fixed charges.
21.1 Subsidiaries of the Registrants (Previously filed as Exhibit 21.1 to
Registrants' 1998 Annual Report on Form 10-K)
24.1 Power of Attorney dated March 15, 1999 relating to signing of Form 10-
K.
25.1 Statement of Eligibility on Form T-1 of State Street Bank and Trust
Company as Trustee.
(Previously filed as Exhibit 25.1 to Registration Statement No. 333-
41187, as amended)
25.2 Statement of Eligibility on Form T-1 of State Street Bank and Trust
Company as Trustee.
(Previously filed as Exhibit 25.1 to Registration Statement No. 333-
41211, as amended)
27.1 Dynamic Details, Incorporated Financial Data Schedule.
27.2 DDi Capital Corp. Financial Data Schedule.
</TABLE>

(b) Reports on Form 8-K

The Company has not filed any reports on Form 8-K during the last quarter of
the period covered by this report.

Supplemental information to be furnished with reports filed pursuant to
Section 15(d) of the Act by Registrants which have not registered securities
pursuant to Section 12 of the Act:

No annual report covering the Registrants' last fiscal year or any proxy
material with respect to a meeting of securityholders has been sent to any of
the Registrants' securityholders.

48
<PAGE>

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, DDi Capital Corp. has duly caused this annual report to
be signed on its behalf by the undersigned, thereto duly authorized, in the
city of Anaheim, state of California, on the 30th day of March, 2000.

DDi CAPITAL CORP.

/s/ Joseph P. Gisch
By: _________________________________
Name: Joseph P. Gisch
Title: Chief Financial Officer

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

<TABLE>
<CAPTION>
Signature Title
--------- -----

<S> <C>
* President and Chief Executive Officer
________________________________________ (principal executive officer)
Bruce D. McMaster

/s/ Joseph P. Gisch Chief Financial Officer and Director
________________________________________ (principal financial and accounting officer)
Joseph P. Gisch

* Director
________________________________________
Charles D. Dimick

* Director
________________________________________
David Dominik

* Director
________________________________________
Prescott Ashe

/s/ Joseph P. Gisch
*By: ___________________________________
Joseph P. Gisch
as Attorney-in-Fact
March 30, 2000
</TABLE>

49
<PAGE>

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, Dynamic Details, Incorporated has duly caused this annual
report to be signed on its behalf by the undersigned, thereto duly authorized,
in the city of Anaheim, state of California, on the 30th day of March, 2000.

DYNAMIC DETAILS, Incorporated

/s/ Joseph P. Gisch
By: _________________________________
Name: Joseph P. Gisch
Title: Chief Financial Officer

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

<TABLE>
<CAPTION>
Signature Title
--------- -----

<C> <S>
* President and Chief Executive Officer
________________________________________ (principal executive officer)
Bruce D. McMaster

/s/ Joseph P. Gisch Chief Financial Officer and Director
________________________________________ (principal financial and accounting officer)
Joseph P. Gisch

* Director
________________________________________
Charles D. Dimick

* Director
________________________________________
David Dominik
* Director
________________________________________
Prescott Ashe

/s/ Joseph P. Gisch
By: ____________________________________
Joseph P. Gisch
as Attorney-in-Fact
March 30, 2000
</TABLE>

50
<PAGE>

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors
DDi Capital Corp. and
Dynamic Details, Incorporated

In our opinion, the consolidated financial statements listed in the index
appearing under Item 14(a)(1) on page 46 present fairly, in all material
respects, the financial position of DDi Capital Corp. ("DDi Capital") and its
subsidiary, and Dynamic Details, Incorporated and subsidiaries ("DDi")
(collectively, the "Company") at December 31, 1999 and 1998, and the results
of their operations and their cash flows for each of the three years in the
period ended December 31, 1999, in conformity with accounting principles
generally accepted in the United States. These financial statements are the
responsibility of the Company's management; our responsibility is to express
an opinion on these financial statements based on our audits. We conducted our
audits of these statements in accordance with auditing standards generally
accepted in the United States which require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We
believe that our audits provide reasonable basis for the opinion expressed
above.

/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP

Costa Mesa, California
February 14, 2000

F-1
<PAGE>

DDi CAPITAL AND DDi

CONSOLIDATED BALANCE SHEETS
(In thousands)

<TABLE>
<CAPTION>
December 31,
-----------------------------------------
1998 1998 1999 1999
--------- ----------- -------- --------
DDi
DDi DDi Capital DDi Capital
--------- ----------- -------- --------
ASSETS
------

<S> <C> <C> <C> <C>
Current assets:
Cash and cash equivalents......... $ 1,905 $ 1,905 $ 644 $ 644
Accounts receivable, net ......... 34,764 34,764 42,774 42,774
Income tax receivable............. 3,793 3,793 -- --
Inventories....................... 12,615 12,615 20,209 20,209
Prepaid expenses and other........ 1,236 1,236 2,498 2,498
Deferred tax asset................ 4,816 4,816 5,215 5,215
--------- --------- -------- --------
Total current assets............ 59,129 59,129 71,340 71,340
--------- --------- -------- --------
Property, plant and equipment, net.. 61,018 61,018 63,209 63,209
Debt issue costs, net............... 11,458 15,167 9,490 13,152
Goodwill and other intangibles,
net................................ 226,286 226,286 205,462 205,462
Other............................... 566 566 486 486
--------- --------- -------- --------
$ 358,457 $ 362,166 $349,987 $353,649
========= ========= ======== ========
<CAPTION>
LIABILITIES AND STOCKHOLDERS'
DEFICIT
-----------------------------

<S> <C> <C> <C> <C>
Current liabilities:
Current maturities of long-term
debt and capital lease
obligations...................... $ 4,390 $ 4,390 $ 7,035 $ 7,035
Current portion of deferred
interest rate swap income........ -- -- 1,458 1,458
Current maturities of deferred
notes payable.................... 2,788 2,788 2,514 2,514
Revolving credit facility......... 7,000 7,000 -- --
Accounts payable.................. 14,612 14,612 18,055 18,055
Accrued expenses.................. 17,158 17,158 22,263 22,263
Income tax payable................ -- -- 894 894
--------- --------- -------- --------
Total current liabilities....... 45,948 45,948 52,219 52,219
--------- --------- -------- --------
Long-term debt and capital lease
obligations........................ 358,150 426,955 351,227 428,944
Deferred interest rate swap income.. -- -- 3,881 3,881
Deferred notes payable.............. 3,743 3,743 1,448 1,448
Deferred tax liability.............. 27,878 22,804 20,496 13,420
Other............................... 686 686 731 731
--------- --------- -------- --------
Total liabilities............... 436,405 500,136 430,002 500,643
--------- --------- -------- --------
Commitments and contingencies (Note
13)

Stockholders' deficit:
Common stock...................... 1 1 1 1
Additional paid-in-capital........ 245,531 194,737 251,943 199,829
Accumulated deficit............... (323,480) (332,708) (331,959) (346,824)
--------- --------- -------- --------
Total stockholders' deficit..... (77,948) (137,970) (80,015) (146,994)
--------- --------- -------- --------
$ 358,457 $ 362,166 $349,987 $353,649
========= ========= ======== ========
</TABLE>

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

F-2
<PAGE>

DDi CAPITAL AND DDi

CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands)

<TABLE>
<CAPTION>
Year Ended December 31,
-----------------------------------------------------------------
1997 1997 1998 1998 1999 1999
-------- ----------- -------- ----------- -------- -----------
DDi DDi Capital DDi DDi Capital DDi DDi Capital
-------- ----------- -------- ----------- -------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net sales............... $ 78,756 $ 78,756 $174,853 $174,853 $292,493 $292,493
Cost of goods sold...... 38,675 38,675 119,288 119,288 201,368 201,368
-------- -------- -------- -------- -------- --------
Gross profit.......... 40,081 40,081 55,565 55,565 91,125 91,125
Operating expenses
Sales and marketing... 7,278 7,278 12,801 12,801 23,609 23,609
General and
administration....... 2,057 2,057 8,442 8,463 16,135 16,135
Amortization of
intangibles.......... -- -- 10,899 10,899 22,262 22,262
Restructuring and
other related
charges.............. -- -- -- -- 7,000 7,000
Stock compensation and
related bonuses...... 31,271 31,271 -- -- -- --
Compensation to former
CEO.................. 2,149 2,149 -- -- -- --
Write-off of acquired
in-process research
and development...... -- -- 39,000 39,000 -- --
-------- -------- -------- -------- -------- --------
Operating income
(loss)............... (2,674) (2,674) (15,577) (15,598) 22,119 22,119
Interest expense (net),
including interest paid
to former stockholder
of $756, $781 and $723
in 1997, 1998 and 1999,
respectively........... 17,852 25,196 27,483 35,320 32,482 41,450
-------- -------- -------- -------- -------- --------
Loss before income
taxes and
extraordinary loss... (20,526) (27,870) (43,060) (50,918) (10,363) (19,331)
Income tax benefit
(expense).............. 8,030 10,858 (471) 2,675 1,884 5,215
-------- -------- -------- -------- -------- --------
Loss before
extraordinary loss..... (12,496) (17,012) (43,531) (48,243) (8,479) (14,116)
Extraordinary loss--
early extinguishment of
debt, net of income tax
benefit of $1,104 and
$1,480 in 1997 and
1998, respectively..... (1,588) (1,588) (2,414) (2,414) -- --
-------- -------- -------- -------- -------- --------
Net loss................ $(14,084) $(18,600) $(45,945) $(50,657) $ (8,479) $(14,116)
======== ======== ======== ======== ======== ========
</TABLE>

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

F-3
<PAGE>

DDi

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT
(In thousands, except share amounts)

<TABLE>
<CAPTION>
Temporary Stockholders' Equity
-----------------------------------
Convertible
Preferred Stock Common Stock Additional Redeemable Common
---------------- --------------- Paid-In Accumulated Common Stock
Shares Amount Shares Amount Capital Deficit Total Stock Warrants Total
------ -------- ------ ------- ---------- ----------- --------- ------------ ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Balance, December
31, 1996.......... 6,601 $ 13,532 2,758 $ 5,301 $ -- $(133,612) $(114,779) $ 38,906 $ 3,200 $ 42,106
Accretion of
temporary equity
to fair value.... -- -- -- -- -- (41,244) (41,244) 38,094 3,150 41,244
Compensation
expense on
vesting of
options.......... -- -- -- -- 21,220 -- 21,220 -- -- --
Equity exchanges,
cancellations and
distributions to
stockholders..... (6,601) (13,532) (2,758) (5,301) (21,220) (86,353) (126,406) (77,000) (6,350) (83,350)
Issuance of
common stock and
contribution of
capital by
Holdings......... -- -- 1,000 1 138,744 -- 138,745 -- -- --
Net loss......... -- -- -- -- -- (14,084) (14,084) -- -- --
------ -------- ------ ------- -------- --------- --------- ---------- --------- ----------
Balance, December
31, 1997.......... -- -- 1,000 1 138,744 (275,293) (136,548) -- -- --
Capital
contribution from
parent, net...... -- -- -- -- 106,787 -- 106,787 -- -- --
Dividends paid... -- -- -- -- -- (2,242) (2,242) -- -- --
Net loss......... -- -- -- -- -- (45,945) (45,945) -- -- --
------ -------- ------ ------- -------- --------- --------- ---------- --------- ----------
Balance, December
31, 1998.......... -- -- 1,000 1 245,531 (323,480) (77,948) -- -- --
Capital
contribution from
parent, net...... -- -- -- -- 6,412 -- 6,412 -- -- --
Net loss......... -- -- -- -- -- (8,479) (8,479) -- -- --
------ -------- ------ ------- -------- --------- --------- ---------- --------- ----------
Balance, December
31, 1999.......... -- $ -- 1,000 $ 1 $251,943 $(331,959) $ (80,015) $ -- $ -- $ --
====== ======== ====== ======= ======== ========= ========= ========== ========= ==========
</TABLE>

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

F-4
<PAGE>

DDi CAPITAL

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT
(In thousands, except share amounts)

<TABLE>
<CAPTION>
Temporary Stockholders' Equity
-----------------------------------
Convertible
Preferred Stock Common Stock Additional Redeemable Common
---------------- --------------- Paid-In Accumulated Common Stock
Shares Amount Shares Amount Capital Deficit Total Stock Warrants Total
------ -------- ------ ------- ---------- ----------- --------- ------------ ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Balance, December
31, 1996.......... 6,601 $ 13,532 2,758 $ 5,301 $ -- $(133,612) $(114,779) $ 38,906 $ 3,200 $ 42,106
Accretion of
temporary equity
to fair value.... -- -- -- -- -- (41,244) (41,244) 38,094 3,150 41,244
Compensation
expense on
vesting of
options.......... -- -- -- -- 21,220 -- 21,220 -- -- --
Equity exchanges,
cancellations and
distributions to
stockholders..... (6,601) (13,532) (2,758) (5,301) (21,220) (86,353) (126,406) (77,000) (6,350) (83,350)
Issuance of
common stock and
contribution of
capital by
Holdings......... -- -- 1,000 1 88,583 -- 88,584 -- -- --
Net loss......... -- -- -- -- -- (18,600) (18,600) -- -- --
------ -------- ------ ------- -------- --------- --------- ---------- --------- ----------
Balance, December
31, 1997.......... -- -- 1,000 1 88,583 (279,809) (191,225) -- -- --
Capital
contribution from
parent, net...... -- -- -- -- 106,154 -- 106,154 -- -- --
Dividends paid... -- -- -- -- -- (2,242) (2,242) -- -- --
Net loss......... -- -- -- -- -- (50,657) (50,657) -- -- --
------ -------- ------ ------- -------- --------- --------- ---------- --------- ----------
Balance, December
31, 1998.......... -- -- 1,000 1 194,737 (332,708) (137,970) -- -- --
Capital
contribution from
parent, net...... -- -- -- -- 5,092 -- 5,092 -- -- --
Net loss......... -- -- -- -- -- (14,116) (14,116) -- -- --
------ -------- ------ ------- -------- --------- --------- ---------- --------- ----------
Balance, December
31, 1999.......... -- $ -- 1,000 $ 1 $199,829 $(346,824) $(146,994) $ -- $ -- $ --
====== ======== ====== ======= ======== ========= ========= ========== ========= ==========
</TABLE>

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

F-5
<PAGE>

DDi CAPITAL AND DDi

CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)

<TABLE>
<CAPTION>
December 31,
-------------------------------------------------------------
1997 1997 1998 1998 1999 1999
--------- --------- --------- --------- ------- --------
DDi DDi DDi
DDi Capital DDi Capital DDi Capital
--------- --------- --------- --------- ------- --------
<S> <C> <C> <C> <C> <C> <C>
CASH FLOWS FROM
OPERATING ACTIVITIES:
Net loss.............. $ (14,084) $ (18,600) $ (45,945) $ (50,657) $(8,479) $(14,116)
Adjustments to
reconcile net loss
to net cash provided
by operating
activities:
Write-off of
acquired in-process
research and
development........ -- -- 39,000 39,000 -- --
Restructuring and
other related
charges............ -- -- -- -- 7,000 7,000
Expense allocation
from Parent........ -- -- 719 719 -- --
Depreciation........ 2,568 2,568 9,212 9,212 14,413 14,413
Amortization of debt
issuance costs and
discount........... 6,629 13,972 5,689 13,527 1,963 10,931
Amortization of
goodwill and
intangible assets.. -- -- 10,899 10,899 22,262 22,262
Amortization of
deferred interest
rate swap income... -- -- -- -- (724) (724)
Deferred income
taxes.............. (1,875) (3,834) (419) (3,565) (3,131) (6,462)
Stock compensation
expense............ 21,271 21,271 -- -- -- --
Change in operating
assets and
liabilities, net of
acquisitions:
(Increase) decrease
in accounts
receivable......... (2,249) (2,249) 196 196 (7,703) (7,703)
(Increase) decrease
in inventories..... (397) (397) 5 5 (9,813) (9,813)
(Increase) decrease
in prepaid expenses
and other.......... (905) (905) 3,622 3,642 (1,497) (1,497)
Increase (decrease)
in current income
taxes.............. (7,889) (8,757) 4,744 4,744 4,687 4,687
Increase (decrease)
in accounts
payable............ 1,106 1,106 (3,943) (3,943) 3,227 3,227
Increase (decrease)
in accrued
expenses........... 4,924 4,924 (4,880) (4,880) 2,607 2,607
--------- --------- --------- --------- ------- --------
Net cash provided
by operating
activities....... 9,099 9,099 18,899 18,899 24,812 24,812
--------- --------- --------- --------- ------- --------
CASH FLOWS FROM
INVESTING ACTIVITIES:
Purchases of
equipment............ (6,000) (6,000) (15,925) (15,925) (18,225) (18,225)
Acquisition of NTI,
less cash acquired... (38,948) (38,948) -- -- -- --
NTI acquisition-
related
expenditures......... -- -- (218) (218) -- --
Merger with DCI, less
cash acquired........ -- -- (178,670) (178,670) -- --
DCI merger-related
expenditures......... -- -- -- -- (323) (323)
--------- --------- --------- --------- ------- --------
Net cash used in
investing
activities....... (44,948) (44,948) (194,813) (194,813) (18,548) (18,548)
--------- --------- --------- --------- ------- --------
CASH FLOWS FROM
FINANCING ACTIVITIES:
Proceeds from the
issuance of Bridge
Loans................ 85,000 140,000 -- -- -- --
Repayment of Bridge
Loans................ (85,000) (140,000) -- -- -- --
Proceeds from
issuance of long-
term debt............ 216,400 276,455 255,000 255,000 -- --
Payments on long-term
debt................. (99,300) (99,300) (106,089) (106,089) (3,263) (3,263)
Net borrowings
(repayments) on the
revolving credit
facility............. -- -- 7,000 7,000 (7,000) (7,000)
Payments of debt
issuance and capital
costs................ (12,995) (19,469) (7,529) (7,529) -- --
Payments of deferred
note payable......... -- -- (1,611) (1,611) (2,569) (2,569)
Principal payments on
capital lease
obligations.......... (459) (459) (809) (809) (1,016) (1,016)
Cash dividends paid... (128) (128) (2,242) (2,242) -- --
Redemption of Old
Common Stock......... (188,143) (188,143) -- -- -- --
Capital contribution
from Parent, net..... 125,682 72,101 32,822 32,822 261 261
Payments of escrow
payable to redeemed
shareholders......... -- -- (4,100) (4,100) -- --
Proceeds from
interest rate
swaps................ -- -- -- -- 6,062 6,062
--------- --------- --------- --------- ------- --------
Net cash provided
by (used in)
financing
activities....... 41,057 41,057 172,442 172,442 (7,525) (7,525)
--------- --------- --------- --------- ------- --------
Net increase (decrease)
in cash and cash
equivalents........... 5,208 5,208 (3,472) (3,472) (1,261) (1,261)
Cash and cash
equivalents, beginning
of year............... 169 169 5,377 5,377 1,905 1,905
--------- --------- --------- --------- ------- --------
Cash and cash
equivalents, end of
year.................. $ 5,377 $ 5,377 $ 1,905 $ 1,905 $ 644 $ 644
========= ========= ========= ========= ======= ========
</TABLE>

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

F-6
<PAGE>

DDi CAPITAL AND DDi

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except share and per share amounts)

1. BASIS OF PRESENTATION AND DESCRIPTION OF BUSINESS

Basis of Presentation

The consolidated financial statements include the accounts of DDi Capital
Corp. ("DDi Capital") and its wholly-owned subsidiary Dynamic Details,
Incorporated and subsidiaries ("DDi"). As used herein, the "Company" means
DDi Capital and its wholly owned subsidiaries including DDi as the context
requires. DDi Capital became wholly owned by DDi Holdings Corp. ("Holdings")
by virtue of a series of transactions related to the financing of the
recapitalization (the "Recapitalization") which are described below. In
connection with the merger with DCI as described in Note 14, DDi Capital
became a wholly owned subsidiary of DDi Intermediate Holdings Corp.
("Intermediate"), a wholly owned subsidiary of Holdings.

In connection with the Recapitalization (as defined below), DDi Corp. (f/k/a
DDi Holdings Corp. or "Holdings") incorporated DDi as a wholly owned
subsidiary and contributed substantially all of its assets, subject to certain
liabilities, to DDi. In November 1997, Holdings organized DDi Capital as a
wholly-owned subsidiary, and in February 1998, contributed substantially all
its assets (including all of the shares of common stock of DDi), subject to
certain liabilities, including discount notes (as described in Note 6, the
"Capital Senior Discount Notes"), to DDi Capital. Other than the Capital
Senior Discount Notes, related debt issue costs and deferred tax balances, all
the assets and liabilities of DDi Capital are those of DDi. The transactions
above were between entities under common control, and accordingly, the
historical basis of the assets and liabilities of Holdings, DDi Capital and
DDi were not affected. In addition, the DDi Capital consolidated financial
statements have been prepared as if the contribution of Holdings' assets and
liabilities to DDi Capital in exchange for its common stock occurred in
connection with the Recapitalization.

The consolidated financial statements of DDi include the accounts of its
wholly owned subsidiaries Colorado Springs Circuits Inc. ("NTI") (d/b/a
Dynamic Details, Inc.--Colorado Springs) commencing on December 22, 1997 (date
of acquisition) and Dynamic Circuits, Inc. ("DCI") (d/b/a Dynamic Details,
Inc.--Silicon Valley) commencing on July 23, 1998 (date of merger). All
intercompany transactions have been eliminated in consolidation.

Recapitalization--On October 28, 1997, the Recapitalization of Holdings took
place as follows: (i) DI Acquisition Corp. ("DIA"), a transitory merger
corporation, was capitalized with a $62.4 million investment from (a)
investment funds associated with Bain Capital, Inc. ($46.3 million), (b) Chase
Manhattan Capital, L.P. and its affiliates ("CMC") ($11.2 million) and
(c) other investors ($4.9 million); (ii) DIA, which had no operations and was
formed solely for the purpose of effecting the Recapitalization, merged with
and into Holdings with Holdings surviving the merger; (iii) certain
stockholders and option holders of Holdings received an aggregate amount of
cash equal to approximately $184.3 million (plus future escrow payments of
approximately $8.6 million); (iv) CMC retained approximately 7.7% of the fully
diluted equity of Holdings, and certain other stockholders of Holdings
retained approximately 2.8%, of the fully-diluted equity of Holdings (in each
case after giving effect to the Recapitalization and related transactions);
(v) management retained approximately 17.1% (including certain options to
acquire shares of common stock of Holdings) of the fully-diluted equity of
Holdings and acquired additional shares and options to acquire additional
shares representing 10.4% of the fully-diluted equity of Holdings (in each
case after giving effect to the Recapitalization and related transactions);
(vi) the Company obtained $140 million of bridge loans and (vii) the Company
obtained borrowings under DDi's senior term facility (as described in Note 5,
the "Senior Term Facility") of $91.4 million. The existing shareholders prior
to the Recapitalization retained in excess of 20% of the fully diluted common
stock of Holdings after the Recapitalization and, accordingly, push-down
accounting was not reflected in the accompanying consolidated financial
statements as permitted by Staff Accounting Bulletin No. 54

F-7
<PAGE>

DDi CAPITAL AND DDi

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

(In thousands, except share and per share amounts)

of the Securities and Exchange Commission. The merger of DIA referred to above
was reflected in the accompanying consolidated financial statements as a
Recapitalization and, accordingly, the historical bases of the Company's
assets and liabilities were not affected.

Nature of Business

The Company is a leading provider of time-critical, technologically advanced
design, development and manufacturing services to original equipment
manufacturers and electronics manufacturing service providers, primarily
involving complex printed circuit boards. The Company serves over 1,400
customers, primarily in the United States, in the telecommunications, computer
and networking industries.

2. SIGNIFICANT ACCOUNTING POLICIES

Cash and cash equivalents--Management defines cash and cash equivalents as
highly liquid deposits with a remaining maturity of 90 days or less. The
Company maintains cash and cash equivalents balances at certain financial
institutions in excess of amounts insured by federal agencies. Management does
not believe that as a result of this concentration it is subject to any
unusual financial risk beyond the normal risk associated with commercial
banking relationships.

Inventories--Inventories include freight-in, materials, labor and
manufacturing overhead costs and are stated at the lower of cost or market.
Cost is determined using the first-in, first-out (FIFO) method.

Property, plant and equipment--Property, plant and equipment are stated at
cost or in the case of property, plant and equipment acquired through business
combinations, at fair value based upon allocated purchase price at the
acquisition date. Depreciation is provided over the estimated useful lives of
the assets using both the straight-line and accelerated methods. For leasehold
improvements, amortization is provided over the shorter of the estimated
useful lives of the assets or the lease term and included in the caption
depreciation expense. See Note 5 for additional information.

Debt issue costs and debt discounts--The Company deferred certain debt issue
costs relating to the establishment of its various debt facilities and the
issuance of its debt instruments (see Note 6). These costs are capitalized and
amortized over the expected term of the related indebtedness using the
effective interest method.

The Company issued the Capital Senior Discount Notes (as defined in Note 6)
at a discount. Discounts are reflected in the accompanying balance sheets as a
reduction of face value and are amortized over the expected term of the
related indebtedness using the effective interest method. Amortization
included as interest expense amounted to approximately $0.9 million, $7.8
million and $ 8.9 million for the years ended December 31, 1997, 1998 and
1999, respectively.

Goodwill and identifiable intangibles--The Company amortizes the goodwill
recorded as a result of the acquisition of NTI and the merger with DCI (see
Note 14) on a straight-line basis over 25 years and 20 years, respectively
from the date of each transaction. Management believes that the estimated
useful lives established at the dates of each transaction were reasonable
based on the economic factors applicable to each of the businesses.
Identifiable intangibles represent assets acquired through business
combinations, and are stated at their fair values based upon purchase price
allocations as of the transaction date. At December 31, 1998 and 1999, these
assets are primarily comprised of developed technologies, customer
relationships/ tradenames, and assembled workforce. The developed technology
assets are being charged to income over their estimated useful lives of 10
years, using an accelerated method of amortization, reflective of the relative
contribution of each

F-8
<PAGE>

DDi CAPITAL AND DDi

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

(In thousands, except share and per share amounts)

developed technology in periods following the acquisition date. The customer
relationships/tradenames and assembled workforce assets will be amortized on a
straight-line basis over their estimated useful lives of 18 years and 4 years,
respectively. As of December 31, 1998 and 1999, the accumulated amortization
related to goodwill and identifiable intangibles was approximately $10.9
million and $33.1 million, respectively.

Revenue recognition--The Company recognizes revenue from the sale of its
products upon shipment to its customers. The Company provides a normal
warranty on its products and accrues an estimated amount for this expense at
the time of the sale.

Concentration of credit risk--Financial instruments which potentially expose
the Company to concentration of credit risk consist principally of trade
accounts receivable. To minimize this risk, the Company performs ongoing
credit evaluations of customers' financial condition and maintains reserves;
the Company, however, generally does not require collateral. In 1999, no
individual customer accounted for 10% or more of the Company's net sales. As
of December 31, 1999, one individual customer accounted for 10% of the
Company's total receivables. On a pro forma basis (assuming the merger with
DCI occurred at the beginning of 1998) for the year ended December 31, 1998,
no individual customer accounted for 10% or more of the Company's net sales;
and as of December 31, 1998, no individual customer accounted for 10% or more
of the Company's total accounts receivable. In 1997, a significant portion of
the Company's sales were made to two customers. One of these customers
accounted for 13% of the Company's total sales in 1997, with the second
customer accounting for 10%.

Environmental matters--The Company expenses environmental expenditures
related to existing conditions resulting from past or current operations and
from which no current or future benefit is discernible. Expenditures which
extend the life of the related property or mitigate or prevent future
environmental contamination are capitalized. The Company determines its
liability on a site by site basis and records a liability at the time when it
is probable and can be reasonably estimated. To date, such costs have not been
material (see Note 13).

Income taxes--The Company records on its balance sheet deferred tax assets
and liabilities for expected future tax consequences of events that have been
recognized in different periods for financial statement purposes versus tax
return purposes. Management provides a valuation allowance for net deferred
tax assets when it is more likely than not that a portion of such net deferred
tax assets will not be recovered through future operations (see Note 12).
Subsequent to the Recapitalization, the Company is included as part of the
consolidated tax return filed by Holdings. For financial statement purposes,
each of DDi and DDi Capital has provided for income taxes as if it were filing
separately throughout each year.

Long-lived assets--The Company follows Statement of Financial Accounting
Standards ("SFAS") No. 121, "Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to be Disposed of." SFAS No. 121 requires
that long-lived assets, including goodwill, be reviewed for impairment
whenever events or circumstances indicate that the carrying amount of an asset
may not be recoverable. The Company evaluates potential impairment by
comparing the carrying amount of the assets with the estimated undiscounted
cash flows associated with them. If an impairment exists, the Company measures
the impairment utilizing discounted cash flows.

Derivative financial instruments--The Company has only limited involvement
with derivative financial instruments. As of December 31, 1998, the Company
had entered into interest rate exchange agreements ("Swap Agreements") to
reduce the risk of fluctuations in interest rates applicable to its Senior
Term Facility (see Note 6). In January 1999, the Company elected to modify the
terms of its Swap Agreements, resulting in no gain or loss. In June 1999, the
Company elected to terminate and concurrently replace its Swap Agreements (as
modified). The gain recognized from the termination of the Swap Agreements,
along with the proceeds received from the execution of the new interest rate
exchange agreements ("New Swap Agreements") will be amortized over the term of
the respective Swap Agreements using the effective interest method. Amounts to
be paid to/(received from) counterparties under its interest rate exchange
agreements are reflected as increases/ (decreases) to periodic interest
expense (see Note 8).

F-9
<PAGE>

DDi CAPITAL AND DDi

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

(In thousands, except share and per share amounts)

Stock options--The Company has adopted SFAS No. 123, "Accounting for Stock-
Based Compensation," which establishes a fair value based method of accounting
for compensation cost related to stock option plans and other forms of stock-
based compensation plans. The Company has elected to provide the pro forma
disclosures as if the fair value based method had been applied. In accordance
with SFAS No. 123, the Company applies the intrinsic value based method of
accounting defined under Accounting Principles Board Opinion No. 25 ("APB
Opinion No. 25"), and accordingly, does not recognize compensation expense for
its plans to the extent employee options are issued at exercise prices equal
to or greater than the fair market value at the date of grant.

Use of estimates--The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and their reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

Reclassifications--Certain prior year amounts have been reclassified to
conform with the 1999 presentation.

Recently issued accounting standards--In June 1997, the Financial Accounting
Standards Board ("FASB") issued SFAS No. 130, "Reporting Comprehensive
Income". SFAS No. 130 establishes requirements for reporting and disclosure of
comprehensive income and its components. This statement became effective for
the Company's fiscal year ending December 31, 1998. For 1998 and 1999, the
Company has no elements which give rise to reporting comprehensive income.

In June 1997, the FASB also issued SFAS No. 131 "Disclosures about Segments
of an Enterprise and Related Information." SFAS No. 131 modifies the
disclosure requirements for reportable operating segments. This statement
became effective for the Company's fiscal year ending December 31, 1998. This
pronouncement currently has had no significant impact on the reporting
practices of the Company since its adoption. Until such time as the Company
diversifies its operations, management believes such pronouncement will not be
applicable.

In addition, in June 1998, the FASB issued SFAS No. 133, "Accounting for
Derivative Instruments and Hedging Activities". SFAS No. 133 establishes
accounting and reporting standards for derivative instruments and hedging
activities. It requires that an entity recognize all derivatives as either
assets or liabilities in the statement of financial position and measure those
instruments at fair value. SFAS No. 137, issued by the FASB in July 1999,
establishes a new effective date for SFAS No. 133. This statement, as amended
by SFAS No. 137, is effective for all fiscal quarters of fiscal years
beginning after June 15, 2000 and is therefore effective for the Company
beginning with its fiscal quarter ending March 31, 2001. Based upon the nature
of the financial instruments and hedging activities in effect as of the date
of this filing, this pronouncement would require the Company to reflect the
fair value of its derivative instruments (see Note 8) on the consolidated
balance sheet. Changes in fair value of these instruments will be reflected as
a component of comprehensive income. The Company will adopt SFAS No. 133
effective January 1, 2001.

3. ACCOUNTS RECEIVABLE

Accounts receivable, net consist of the following:

<TABLE>
<CAPTION>
December 31,
----------------
1998 1999
------- -------
<S> <C> <C>
Accounts receivable...................................... $36,192 $44,358
Less: Allowance for doubtful accounts.................... (1,428) (1,584)
------- -------
$34,764 $42,774
======= =======
</TABLE>

F-10
<PAGE>

DDi CAPITAL AND DDi

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

(In thousands, except share and per share amounts)

4. INVENTORIES

Inventories consist of the following:

<TABLE>
<CAPTION>
December 31,
---------------
1998 1999
------- -------
<S> <C> <C>
Raw materials.............................................. $ 6,628 $11,828
Work-in-process............................................ 4,406 5,601
Finished goods............................................. 1,581 2,780
------- -------
$12,615 $20,209
======= =======
</TABLE>

5. PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment consists of the following:

<TABLE>
<CAPTION>
December 31,
------------------
1998 1999
-------- --------
<S> <C> <C>
Buildings and leasehold improvements..................... $ 17,255 $ 18,245
Machinery and equipment.................................. 61,441 73,092
Office furniture and equipment........................... 8,352 11,538
Vehicles................................................. 240 250
Land..................................................... 2,235 2,235
Deposits on equipment.................................... 2,712 3,902
-------- --------
92,235 109,262
Less: accumulated depreciation........................... (31,217) (46,053)
-------- --------
$ 61,018 $ 63,209
======== ========
</TABLE>

The depreciable lives assigned to buildings are 30-40 years. Existing
leaseholds are depreciated over 7-15 years. Machinery, office furniture,
equipment and vehicles are each depreciated over 3-7 years. Deposits are not
depreciated as the related asset has not been placed into service.

Buildings and leasehold improvements include capital leases of approximately
$5.1 million with related accumulated depreciation of $1.5 million and $2.0
million at December 31, 1998 and 1999, respectively. Machinery and equipment
includes capital leases of approximately $4.2 million with related accumulated
depreciation of $1.1 million and $1.6 million at December 31, 1998 and 1999,
respectively.

F-11
<PAGE>

DDi CAPITAL AND DDi

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

(In thousands, except share and per share amounts)

6. LONG-TERM DEBT AND CAPITAL LEASE OBLIGATIONS

Long-term debt and capital lease obligations consist of the following:

<TABLE>
<CAPTION>
December 31, 1998 December 31, 1999
------------------ ------------------
DDi DDi
DDi Capital DDi Capital
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Senior Term Facility............... $255,000 $255,000 $251,738 $251,738
10.0% Senior Subordinated Notes.... 100,000 100,000 100,000 100,000
12.5% Capital Senior Discount
Notes, face amount $110,000 net of
unamortized discount of $41,195
and $32,283 at December 31, 1998
and 1999, respectively............ -- 68,805 -- 77,717
Capital lease obligations.......... 7,540 7,540 6,524 6,524
-------- -------- -------- --------
362,540 431,345 358,262 435,979
Less: current maturities........... (4,390) (4,390) (7,035) (7,035)
-------- -------- -------- --------
$358,150 $426,955 $351,227 $428,944
======== ======== ======== ========
</TABLE>

Senior Credit Facility

In connection with the merger with DCI (see Note 14), DDi entered into an
agreement with a co-syndication of banks, including Chase Manhattan Bank, N.A.
and Bankers Trust Company. Borrowings under this agreement consist of the
Senior Term Facility and the Revolving Credit Facility (collectively, the
"Senior Credit Facility"). Under the terms of this agreement, DDi must comply
with certain restrictive covenants, which include the requirement that DDi
meet certain financial tests. In addition, DDi is restricted from making
certain payments, including dividend payments to its stockholders. The Senior
Credit Facility is jointly and severally guaranteed by Intermediate and DDi
Capital, and is collateralized by a pledge of substantially all of the capital
stock of DDi and certain of its subsidiaries. The Senior Credit Facility
expires in April 2005.

Senior Term Facility

Under the Senior Term Facility, $255 million ($105 million under Tranche A
and $150 million under Tranche B) was advanced to DDi in connection with the
merger with DCI (see Note 14) on July 23, 1998. Scheduled principal and
interest payments are due quarterly beginning June 30, 1999 (other than with
respect to the last installment, which is due on July 22, 2004 and April 22,
2005 for Tranche A and Tranche B, respectively). Borrowings under the Senior
Term Facility bear interest at a floating rate at DDi's option at a rate equal
to either (1) 2.25%, for Tranche A, and 2.50%, for Tranche B, per annum plus
the applicable LIBOR rate or (2) 1.25%, for Tranche A, and 1.50%, for Tranche
B, per annum plus the higher of (a) the applicable prime lending rate of The
Chase Manhattan Bank (8.5% at December 31, 1999) or (b) the federal reserve
reported overnight funds rate plus 1/2 of 1% per annum (the "Index Rate"). The
applicable margin of 2.25% for Tranche A is subject to reduction in accordance
with an agreed upon pricing grid based on decreases in the Company's
consolidated leverage ratio, defined as consolidated total debt to
consolidated EBITDA (earnings before net interest expense, income taxes,
depreciation, amortization and extraordinary or non-recurring expenses). As of
December 31, 1999, the Company elected the LIBOR rate (6.5% at December 31,
1999), reset monthly.

Revolving Credit Facility

DDi also has a $45.0 million Revolving Credit Facility for revolving credit
loans, letters of credit and swing line loans which expires on July 22, 2004.
Advances under the Revolving Credit Facility bear interest at DDi's

F-12
<PAGE>

DDi CAPITAL AND DDi

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

(In thousands, except share and per share amounts)

option at a rate equal to either (1) 2.25% per annum plus the applicable LIBOR
rate or (2) 1.25% per annum plus the Index Rate. In addition, DDi is required
to pay a fee of 1/2 of 1% per annum on the average unused commitment under the
Revolving Credit Facility. At December 31, 1998, DDi had borrowings
outstanding of $7.0 million on this Revolving Credit Facility. At December 31,
1999, DDi had no borrowings outstanding on this Revolving Credit Facility and
had $0.7 million reserved against the Revolving Credit Facility for a letter
of credit. The Company intends to paydown the balance from time-to-time,
therefore it is classified as current in the accompanying consolidated balance
sheet. As of December 31, 1999, the Company elected the LIBOR rate (6.5% at
December 31, 1999), reset monthly.

Senior Subordinated Notes

Subsequent to the Recapitalization, on November 18, 1997, DDi issued $100
million of Senior Subordinated Notes. The Senior Subordinated Notes bear
interest at 10% per annum, payable semi-annually in arrears on each May 15 and
November 15 of each year, through the maturity date on November 15, 2005.

Except as described below, DDi may not redeem the Senior Subordinated Notes
prior to November 15, 2001. Prior to November 15, 2000, however, up to 40% of
the Senior Subordinated Notes, at a redemption price of 110% of the principal
amount thereof, plus accrued and unpaid interest, may be redeemed at DDi's
option with the net proceeds of the sale in public offerings of common stock
of Holdings (provided that at least 60% of the original principal amount of
the Subordinated Notes remains outstanding immediately after such redemption).
On or after November 15, 2001, the Senior Subordinated Notes may be redeemed
at the option of DDi, in whole or in part from time to time, at redemption
prices ranging from 105% of principal amount in the year ended November 15,
2001 to 100% of principal amount subsequent to November 15, 2004, plus accrued
and unpaid interest.

The Senior Subordinated Notes are guaranteed, on a senior subordinated
basis, jointly and severally, by DDi Capital and its wholly-owned subsidiaries
(the "Guarantors"). The Senior Subordinated Note indenture also contains
covenants that restrict the Guarantors from incurring additional indebtedness
and from making certain payments, including dividend payments to its
stockholders.

Capital Senior Discount Notes

In 1997, subsequent to the Recapitalization, DDi Capital issued $110 million
face amount at maturity (net proceeds of $60.1 million) of senior discount
notes ("Capital Senior Discount Notes"), and DDi Capital later succeeded to
Holdings obligations under the Capital Senior Discount Notes. The Capital
Senior Discount Notes are unsecured, senior obligations and will be
effectively subordinated to all future indebtedness and liabilities of DDi
Capital's subsidiaries. The Capital Senior Discount Notes begin bearing cash
interest of 12.5% at November 15, 2002, payable each May 15 and November 15 in
arrears, through the maturity date of November 15, 2007.

Except as described below, DDi Capital may not redeem the Capital Senior
Discount Notes prior to November 15, 2002. Prior to November 15, 2000,
however, up to 40% of the Capital Senior Discount Notes, at a redemption price
of 112.5% of the accreted principal amount thereof, plus accrued and unpaid
interest, may be redeemed at DDi Capital's option with the net proceeds of the
sale in public offerings of common stock of Holdings (provided that at least
60% of the original principal amount of the Capital Senior Discount Notes
remains outstanding immediately after such redemption). On or after November
15, 2002, the Capital Senior Discount Notes may be redeemed at the option of
DDi Capital, in whole or in part from time to time, at redemption prices
ranging from 106.25% of accreted principal amount in the year ended November
15, 2002 to 100% of accreted principal amount subsequent to November 15, 2005,
plus accrued and unpaid interest.

F-13
<PAGE>

DDi CAPITAL AND DDi

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

(In thousands, except share and per share amounts)

The Capital Senior Discount Note indenture also contains covenants that
restrict the Company from incurring additional indebtedness and from making
certain payments, including dividend payments to its stockholders.

Intermediate Senior Discount Notes

In July 1998, Intermediate issued senior discount notes ("Intermediate
Senior Discount Notes") in conjunction with the merger to DCI (see Note 14),
the proceeds of which amounted to approximately $33 million and were
contributed through DDi Capital to DDi. The Intermediate Senior Discount Notes
are unsecured, senior obligations and will be effectively subordinated to all
future indebtedness and liabilities of Intermediate's subsidiaries. These
notes accrete in value at a rate of 13.5%, compounded semi-annually and have a
stated maturity of June 30, 2008. These notes have a stated principal at
maturity of approximately $67 million, although approximately 43% of the
stated principal amount of the debt is due December 2003. Cash interest begins
accruing as of June 30, 2003 and will be payable each June 30 and December 31,
in arrears, commencing December 31, 2003 through the maturity date. This debt
is redeemable at Intermediate's option, in whole or in part, at any time, at
redemption prices which decrease throughout the life of the debt. Prior to
June 30, 2003, the redemption price is an amount sufficient to generate, to
the holders of this debt, an internal rate of return per annum on the initial
offering price ranging from 18% to 20%. Subsequent to June 30, 2003, the
redemption prices range from 106.75% of accreted principal, decreasing 2.25%
per annum to 100% of accreted principal subsequent to June 30, 2006, plus
accrued but unpaid interest.

The Intermediate Senior Discount Notes also provide that the holders of such
notes may require Intermediate to repurchase the notes upon a qualifying
public offering or a change of control (each as defined in such Note Purchase
Agreement) at the specified prices. As the repayment of the Intermediate
Senior Discount Notes is the obligation of Intermediate, the carrying amount
of the associated liability is reflected in the books and records of
Intermediate and, therefore, not included in the consolidated financial
statements of the Company. Although the Intermediate Senior Discount Notes do
not require principal or interest payments until December 2003, Intermediate
does not have, and may not in the future have, any assets other than the
common stock of DDi Capital. The net cash flows from the Company are currently
the only source of cash to repay the obligations under the Intermediate Senior
Discount Notes.

The Intermediate Senior Discount Note indenture also contains covenants
limiting, among other things, dividends, asset sales, and transactions with
affiliates. These restrictions apply both to Intermediate and its
subsidiaries.

Debt Issue Costs

In connection with obtaining the Senior Subordinated Notes and Senior Credit
Facility, DDi incurred approximately $12.8 million in fees which have been
capitalized as debt issue costs. Additionally, in connection with the issuance
of the Capital Senior Discount Notes, DDi Capital incurred approximately $3.5
million in debt issue costs. Accumulated amortization as of December 31, 1998
and 1999 for DDi was approximately $1.4 million and $3.3 million, respectively
and for DDi Capital was approximately $1.5 million and $3.4 million,
respectively. During 1997, certain debt was retired and the net carrying
amount of the related debt issue costs was written off, resulting in an
extraordinary loss of $1.6 million, net of related income taxes of $1.1
million. During 1998, certain debt was retired and the net carrying amount of
the related debt issue costs was written off, resulting in an extraordinary
loss of $2.4 million, net of related income taxes of $1.5 million.

F-14
<PAGE>

DDi CAPITAL AND DDi

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

(In thousands, except share and per share amounts)

Change of Control

Upon a change in control, as defined in the Senior Subordinated Note and the
Capital Senior Discount Note indentures, DDi or DDi Capital may redeem the
Senior Subordinated Notes or the Capital Senior Discount Notes, respectively,
in whole, but not in part, before November 15, 2002 at 100% of principal in
the case of the Senior Subordinated Notes, or 100% of the accreted value in
the case of the Capital Senior Discount Notes, plus the applicable premium, as
defined in the Senior Subordinated Note and the Capital Senior Discount Note
indentures, and accrued and unpaid interest as of the date of redemption. In
the event the Company does not elect to redeem the notes prior to such date,
each holder of the Subordinated Notes and Capital Senior Discount Notes may
require DDi or DDi Capital, respectively, to repurchase all or a portion of
such holder's notes at a cash purchase price equal to 101% of the principal
amount or the accreted value, plus accrued and unpaid interest if any, to the
date of repurchase. The Senior Credit Facility provides that the occurrence of
such a change in control constitutes an event of default, which could require
the immediate repayment of Senior Credit Facility.

Exchange Offer

On March 24, 1998, DDi Capital and DDi consummated exchange offers of
previously unregistered Capital Senior Discount Notes and Senior Subordinated
Notes for registered notes (with terms identical in all material respects) on
Form S-4 under the Securities Act of 1933, as amended.

Related Party Transactions

In connection with the Recapitalization and related transactions subsequent
thereto, CMC, a shareholder of Holdings, and its affiliates The Chase
Manhattan Bank, N.A. ("Chase") and Chase Securities Inc. were paid fees and
expenses aggregating approximately $16 million and CMC and Chase received
common stock warrants valued at approximately $3.4 million (see Note 11).

In conjunction with the merger with DCI in 1998 (see Note 14), Chase acted
as collateral, co-syndication, and administrative agent with regard to the
establishment of the Senior Credit Facility. In this capacity, Chase received
$2.4 million in fees. Chase also participates as a lender in the syndication,
and is a counterparty to one of the Company's interest rate exchange
agreements, under terms similar to those of the other participants and
counterparties.

The Company has a management agreement with Bain Capital Partners V, L.P.
("Bain"), an affiliate of Bain Capital Funds, the controlling shareholders of
Holdings, under which Bain is entitled to management fees (see Note 13).

Future Payments

As of December 31, 1999, the scheduled future annual principal payments of
long-term debt are as follows:

<TABLE>
<CAPTION>
DDi
DDi Capital
-------- --------
<S> <C> <C>
Year Ending December 31,
2000................................................... $ 5,925 $ 5,925
2001................................................... 19,838 19,838
2002................................................... 25,875 25,875
2003................................................... 32,175 32,175
2004................................................... 72,225 72,225
Thereafter............................................. 195,700 305,700
-------- --------
$351,738 $461,738
======== ========
</TABLE>

F-15
<PAGE>

DDi CAPITAL AND DDi

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

(In thousands, except share and per share amounts)

7. ACCRUED EXPENSES

Accrued expenses consist of the following:

<TABLE>
<CAPTION>
December 31,
---------------
1998 1999
------- -------
<S> <C> <C>
Accrued salaries and related benefits..................... $ 4,253 $ 7,347
Accrued interest payable.................................. 1,438 1,307
Accrued restructuring charges............................. -- 2,600
Other accrued expenses.................................... 7,567 7,109
Escrow payable to redeemed stockholders................... 3,900 3,900
------- -------
$17,158 $22,263
======= =======
</TABLE>

8. DERIVATIVES

Pursuant to its interest rate risk management strategy and to certain
requirements imposed by the Company's Senior Credit Facility (see Note 6), the
Company entered into two interest rate exchange agreements ("Swap
Agreements"), effective October 1, 1998. Together these agreements represented
an effective cash flow hedge of the variable rate of interest (1-month LIBOR)
paid under the Senior Term Facility, minimizing exposure to increases in
interest rates related to this debt over its scheduled term. Under the Swap
Agreements, the Company received a variable rate of interest (1-month LIBOR)
and paid a fixed rate of interest (blended annual rate of 5.27%). These rates
were applied to a notional amount ($255 million from October 1 through
December 31, 1998) which decreases at such times, and in such amounts, as to
conform with the principal outstanding under the Senior Term Facility through
its scheduled maturity in 2005. In January 1999, the Company and each
counterparty agreed to modify certain features of the Swap Agreements. In
return for a reduction in the blended fixed rate of interest paid by the
Company (to 4.96% per annum), the counterparties were granted the option to
terminate their respective agreements on January 31, 2002.

In June 1999, the Company elected to terminate and concurrently replace the
Swap Agreements. The Company received cash proceeds of approximately $6.1
million from these transactions which will be recognized as a reduction to
interest expense. Of this amount, approximately $5.6 million represents the
gain from the termination of the Swap Agreements and will therefore be
amortized through January 2002, the original scheduled maturity of the Swap
Agreements. The remaining $0.5 million represents proceeds from the execution
of the new interest rate exchange agreements ("New Swap Agreements") and will
be amortized into interest expense using the effective interest method through
April 2005, over the term of the New Swap Agreements. It is anticipated that
the impact of this amortization will not materially affect interest expense in
any period.

The New Swap Agreements represent an effective cash flow hedge, consistent
with the nature of the Swap Agreements. Under the terms of the New Swap
Agreements, the Company pays a maximum annual rate of interest applied to a
notional amount equal to the principal balance of the Senior Term Facility for
the period June 30, 1999 through August 31, 2001. During this period, the
Company's maximum annual rate is 5.65% for a given month, unless 1-month LIBOR
for that month equals or exceeds 7.00%, in which case the Company pays 7.00%
for that month. From September 1, 2001 through the scheduled maturity of the
Senior Term Facility in 2005, the Company pays a fixed annual rate of 7.35%
applied to a notional amount equal to 50% of the principal balance of the
Senior Term Facility during that period.

F-16
<PAGE>

DDi CAPITAL AND DDi

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

(In thousands, except share and per share amounts)

Term Facility in 2005, since the New Swap Agreements do not contain an option,
which was available to the counterparties of the Swap Agreements, to terminate
the agreements on January 31, 2002. Counterparty risk is limited to amounts to
be reflected in the Company's consolidated balance sheet. This risk is
minimized and is expected to be immaterial to the Company's consolidated
results of operations as the New Swap Agreements provide for monthly
settlement of the net interest owing. Further, each counterparty to the New
Swap Agreements carries at least a "single-A" credit rating. The impact of the
interest rate exchange agreements on the Company's interest expense was not
material.

9. FAIR VALUE OF FINANCIAL INSTRUMENTS

The fair value of financial instruments including cash, accounts receivable,
accounts payable, accrued liabilities and variable rate debt approximate book
value as of December 31, 1998 and 1999. As of December 31, 1998 and 1999, the
fair value of the Company's Senior Subordinated Notes, Capital Senior Discount
Notes and Swap Agreements were different from their carrying values. The fair
values of the Company's Senior Subordinated Notes and Capital Senior Discount
Notes are estimated based on their quoted market prices. The fair value of the
Company's Swap Agreements as December 31, 1998 and 1999 is based on the
difference between the Company's interest rate as determined by the Swap
Agreements and the market interest rate for swaps with the same contractual
terms as of December 31, 1998 and 1999, respectively.

The estimated fair values of the Company's financial instruments are as
follows:

<TABLE>
<CAPTION>
December 31, 1998 December 31, 1999
----------------- -------------------
Carrying Fair Carrying
Amount Value Amount Fair Value
-------- -------- -------- ----------
<S> <C> <C> <C> <C>
Variable rate debt:
Revolving Credit Facility.............. $ 7,000 $ 7,000 $ -- $ --
Senior Term Facility................... $255,000 $255,000 $251,738 $251,738
Fixed rate debt:
10% Senior Subordinated Notes.......... $100,000 $ 96,000 $100,000 $ 92,500
Capital Senior Discount Notes.......... $ 68,805 $ 61,600 $ 77,717 $ 57,200
Swap Agreements........................ $ -- $ (1,081) $ -- $ 1,346
</TABLE>

10. CAPITAL LEASE OBLIGATIONS

The Company leases certain facilities and equipment under capital lease
obligations bearing implicit interest rates ranging from 8% to 12%. The terms
of the lease require monthly payments of approximately $152 including interest
at December 31, 1999. Certain leases contain an option for the Company to
renew for an additional term at the end of the initial term and an option to
purchase the facilities and equipment at their fair values at the end of the
initial term and at the end of the second term.

F-17
<PAGE>

DDi CAPITAL AND DDi

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

(In thousands, except share and per share amounts)

Future Payments

Aggregate annual maturities of capital lease obligations (for periods
subsequent to December 31, 1999) are as follows:

<TABLE>
<CAPTION>
Total Less Amounts Present Value
Minimum Representing of Net Minimum
Lease Payments Interest Lease Payments
-------------- ------------ --------------
<S> <C> <C> <C>
Year ending December 31,
2000............................ $ 1,835 $ 725 $1,110
2001............................ 1,831 607 1,224
2002............................ 1,522 481 1,041
2003............................ 1,298 371 927
2004............................ 1,298 253 1,045
Thereafter...................... 1,298 121 1,177
------- ------ ------
$ 9,082 $2,558 $6,524
======= ====== ======
</TABLE>

11. STOCKHOLDERS' EQUITY

Old Common Stock, Preferred Stock and Additional Paid-in Capital

At December 31, 1996 and immediately prior to the Recapitalization, the
Company's stockholders' equity consisted of the following: (i) 100,000
authorized shares of no par value common stock ("Old Common") with
approximately 9,717 shares outstanding; (ii) 100,000 authorized shares of no
par value convertible preferred stock with approximately 6,601 shares
outstanding. Due to the existence of a put option for 6,959 common shares, the
estimated fair value of these shares was accreted to estimated fair value and
was classified as temporary stockholders' equity. The estimated fair value of
the Old Common at December 31, 1996 was approximately $5,590 per share and at
the date of the Recapitalization was approximately $11,308. The Old Common,
preferred stock and common stock purchase warrants were canceled as part of
the Recapitalization.

Recapitalization

In connection with the Recapitalization, the Company accelerated the vesting
of all outstanding options to purchase shares of its Old Common and made such
options immediately exercisable. Certain members of management then exercised
approximately 1,374 options granted under the Company's 1996 Performance Stock
Option Plan (the "1996 Stock Option Plan"), to purchase an equal number of
shares of Old Common. In addition, the convertible preferred stock and the Old
Common purchase warrants were converted into 565 shares of Old Common.
Holdings then: (i) redeemed and canceled approximately 16,232 shares of Old
Common and options to purchase 64 shares of Old Common options granted under
the Company's 1996 Employee Stock Option Plan (the "1996 Employee Plan") at a
redemption price of approximately $11,308 per share, plus future escrow
payments estimated at $508 per share or $8.6 million in the aggregate at
December 31, 1997, payable by March 31, 1999; (ii) canceled all remaining
options authorized but ungranted under the 1996 option plans; (iii) converted
the remaining approximately 1,938 shares of Old Common into approximately
438,326 shares and approximately 54,175 shares of Class A common stock and
Class L common stock, respectively, of Holdings and (iv) converted the
remaining approximately 513 unexercised options to purchase shares of Old
Common into options to purchase approximately 116,158 shares and approximately
14,357 shares of Class A common stock and Class L common stock, respectively,
of Holdings. The escrow payment described above represents the distribution by
the Company to all shareholders of record as of the Recapitalization date, of
the income tax benefit received by the Company as a result of the compensation
expense recorded for the accelerated vesting of options to purchase shares of
Old Common. At December 31, 1999, approximately 41,817 options to purchase

F-18
<PAGE>

DDi CAPITAL AND DDi

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

(In thousands, except share and per share amounts)

shares of Class A common stock at $0.96 per share and approximately 14,537
options to purchase shares of Class L common stock at $70.19 per share remain
outstanding and fully vested.

Common Stock Warrants

As part of the financing associated with the Recapitalization, warrants were
granted to affiliates of The Chase Manhattan Bank (Note 6) to purchase 70,211
shares of Class A common stock of Holdings and 8,678 shares of Class L common
stock of Holdings. Each warrant entitled the holder thereof to purchase a
unit, at $.09 per unit, consisting of 8.09 shares of Class A common stock of
Holdings and one share of Class L common stock of Holdings. Such warrants are
exercisable through October 2007. A fair value of $3,420 was ascribed to the
warrants and recorded as a debt discount.

In connection with the DCI Merger (see Note 14), warrants were granted to
purchase 69,599 shares of Class A common stock at $61.17 per share. Such
warrants are exercisable through July 22, 2008.

Common Stock

Subsequent to the above shareholder transactions, Holdings incorporated DDi
with 100 shares and contributed capital of $138.7 million, consisting
primarily of the assets of Holdings, subject to certain liabilities, excluding
the Discount Notes and related financing fees. In addition, subsequent to the
Recapitalization, Holdings incorporated DDi Capital with 1,000 shares of
common stock and contributed capital of $88.6 million, consisting primarily of
all of the shares of capital stock of DDi subject to certain liabilities,
including the Discount Notes and related financing fees of Holdings. At
December 31, 1998 and 1999, DDi and DDi Capital had 100 and 1,000 shares,
respectively, of $0.01 par value common stock, authorized, issued and
outstanding.

Stock Options

Prior to the Recapitalization, the Company had two stock option plans, the
1996 Stock Option Plan and the 1996 Employee Plan together the "1996 Option
Plans." The term of the options under these plans is ten years from the date
of grant. Under the 1996 Option Plans, the Board granted options to acquire
approximately 1,950 shares of Old Common, at an exercise price of
approximately $2,179 per share. Immediately prior to the Recapitalization, the
Company accelerated the vesting of all outstanding options (totaling
approximately 1,950 shares) to purchase shares of its Old Common making all
such options immediately exercisable. In connection therewith, the Company
recorded $21.3 million of compensation expense in 1997 based on the difference
between the estimated fair value of underlying Old Common and the option
exercise price and $10 million of compensation expense for bonuses payable
to employees to cover the employees' taxes upon the exercise of these options
in conjunction with the Recapitalization.

During 1997, 1998 and 1999 there were no grants, exercises, forfeitures, or
expirations of options under either the 1996 Stock Option Plan or the 1996
Employee Plan. As of December 31, 1999, the options outstanding under both of
these plans had remaining weighted-average contractual terms of approximately
seven years.

In 1997, Holdings adopted its 1997 Details, Inc. Equity Incentive Plan (the
"1997 Employee Stock Option Plan"), authorizing the grant of options to
certain management of the Company to purchase 235,000 shares of Class A common
stock. The term of the options under this plan is ten years from the date of
grant. Options granted under this plan vest in equal monthly amounts over four
years, with immediate vesting upon a change in control or sale of all of the
assets of the Company. Of the total shares authorized under the plan, options
to purchase half of the shares (117,500) have an exercise price of $5.00 ("$5
Options"), with the other half having an exercise price of $61.17 ("$61
Options"). For all options granted under this plan, the exercise prices
approximated the estimated fair value at the date of grant, resulting in no
compensation expense. As of December 31, 1999, the options outstanding under
this plan had a remaining weighted-average contractual term of approximately
eight years.

F-19
<PAGE>

DDi CAPITAL AND DDi

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

(In thousands, except share and per share amounts)

Stock option activity under the 1997 Employee Stock Option Plan is:

<TABLE>
<CAPTION>
$5 Options $61 Options
----------------- ----------------
Number Number
Exercise of Exercise of
Price Shares Price Shares
-------- -------- -------- -------
<S> <C> <C> <C> <C>
Granted............................... $5.00 116,145 $61.17 116,145
Exercised............................. $5.00 (116,145) -- --
Forfeited............................. -- -- -- --
-------- -------
Balance at December 31, 1997.......... -- -- $61.17 116,145
Granted............................... -- -- -- --
Exercised............................. -- -- -- --
Forfeited............................. -- -- -- --
-------- -------
Balance at December 31, 1998.......... -- -- $61.17 116,145
Granted............................... $5.00 9,775 $61.17 12,031
Exercised............................. -- -- -- --
Forfeited............................. $5.00 (6,767) $61.17 (9,023)
-------- -------
Balance at December 31, 1999.......... $5.00 3,008 $61.17 119,153
======== =======
Options exercisable at December 31,
1999................................. 1,625 58,547
======== =======
</TABLE>

Had compensation costs for the stock options issued under the 1996 Stock
Option Plan, 1996 Employee Plan and the 1997 Employee Stock Option Plan been
determined based on the grant date fair values as required by SFAS No. 123,
there would have been no significant effect on the Company's reported net loss
for the periods presented. Fair value was estimated using the minimum-value
method, a risk-free interest rate of 6.5% and 6.0% for 1997 and 1999,
respectively, and an expected life of five years for the grants in 1997 and
3 months for the grants in 1999. No dividends were assumed to be declared. The
weighted average fair value per option (computed using the minimum-value
method as the Company was a non-public entity when the options were granted)
of the stock options granted in 1997 and 1999 was nil.

In connection with the DCI merger (see Note 14), the Board of Directors
adopted, and the stockholders of Holdings approved, the Details Holdings
Corp.-Dynamic Circuits 1996 Stock Option Plan ("DCI 1996 Plan") and the
Details Holdings Corp.-Dynamic Circuits 1997 Stock Option Plan ("DCI 1997
Plan"), together the "DCI Stock Option Plans", which authorized the granting
of stock options and the sale of Class A common stock and Class L common stock
in connection with the merger with DCI. The terms applicable to options issued
under the DCI Stock Option Plans are substantially similar to the terms
applicable to the options to purchase shares of DCI outstanding immediately
prior to the merger with DCI. These terms include vesting from the date of
merger through 2002 for those options outstanding as of the date of the merger
with DCI. Options granted under these plans subsequent to the merger will
typically vest in equal monthly amounts over four years. An optionholder's
scheduled vesting is dependent upon continued employment with the Company.
Upon termination of employment, any unvested options as of the termination
date are forfeited.

In connection with the DCI merger, Holdings converted each DCI stock option
award into the right to receive a cash payment and an option to purchase
shares of Class A common stock and shares of Class L common stock. The options
granted in 1998 bear exercise prices of either $1.58 ("$1.58 Options") or
$61.17 ("$61 Options") for the purchase of Class A shares, and $364.09 for
Class L Shares ("Class L Options"). During 1999, options to purchase shares of
Class A common stock were also granted with an exercise price of $5.00 ("$5
Options"). The Board is authorized to sell or otherwise issue Class A common
stock and Class L common stock at any time prior to the termination of the
applicable DCI Stock Option Plan in such quantity, at

F-20
<PAGE>

DDi CAPITAL AND DDi

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

(In thousands, except share and per share amounts)

such price, on such terms and subject to such conditions as established by the
Board up to an aggregate of 222,600 shares of Class A common stock and 28,300
shares of Class L common stock, in the case of the DCI 1996 Plan, and 46,000
shares of Class A common stock and 5,850 shares of Class L common stock in the
case of the DCI 1997 Plan (in each case, subject to adjustment upon the
occurrence of certain events to prevent any dilution or expansion of the
rights of participants that might otherwise result from the occurrence of such
events). As of December 31, 1999, there are options to purchase 3,458 shares
of Class A common stock and 3,340 shares of Class L common stock available for
grant under the DCI Stock Option Plans. The maximum term of the options under
the DCI 1996 Plan is August 2006 and under the DCI 1997 Plan is March 2008. As
of December 31, 1999, all options outstanding under the DCI Stock Option Plans
had weighted average remaining contractual lives of approximately seven years.

Stock option activity since July 23, 1998 (date of DCI merger) is as
follows:

<TABLE>
<CAPTION>
$1.58 Options $61 Options $5 Options Class L Options
------------------ ------------------ ------------------ ------------------
Exercise Number of Exercise Number of Exercise Number of Exercise Number of
Price Shares Price Shares Price Shares Price Shares
-------- --------- -------- --------- -------- --------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance at July 23,
1998................... $1.58 255,778 $61.17 13,948 -- -- $364.09 32,479
Granted................. -- -- -- -- -- -- -- --
Exercised............... $1.58 (116,953) -- -- -- -- -- --
Forfeited............... $1.58 (3,318) $61.17 (190) -- -- $364.09 (442)
-------- ------ ----- ------
Balance at December 31,
1998................... $1.58 135,507 $61.17 13,758 -- -- $364.09 32,037
Granted................. $1.58 1,621 $61.17 88 $5.00 9,000 $364.09 206
Exercised............... $1.58 (39,455) -- -- -- -- -- --
Forfeited............... $1.58 (11,168) $61.17 (615) -- -- $364.09 (1,433)
-------- ------ ----- ------
Balance at December 31,
1999................... $1.58 86,505 $61.17 13,231 $5.00 9,000 $364.09 30,810
======== ====== ===== ======
Options exercisable as
of December 31, 1999... 24,379 9,851 563 22,938
======== ====== ===== ======
</TABLE>

For all options granted under the DCI Stock Option Plans in 1998 and 1999,
the exercise prices approximated the estimated fair value at the date of
grant, resulting in no compensation expense. Pro forma information regarding
net loss has been determined for the Company as if compensation costs for the
stock options issued under the DCI Stock Option Plans had been determined
based upon the grant date fair values. Fair value was estimated using the
minimum-value method as the Company was a non-public entity when the options
were granted, a risk-free interest rate of 5.6% for 1998 and 6.0% for 1999 and
an expected life of 3 months for both $1.58 Options and $5 Options or two
years for both $61 Options and Class L Options. No dividends were assumed to
be declared. The weighted-average fair value per option of the stock options
granted under the DCI Stock Option Plans in 1998 and 1999 were as follows:

<TABLE>
<CAPTION>
Value per
Option
----------
Option category 1998 1999
--------------- ---- -----
<S> <C> <C>
$1.58 Options................................................. Nil Nil
$5 Options.................................................... -- $0.10
$61 Options................................................... Nil Nil
Class L Options............................................... $39 $ 41
</TABLE>

F-21
<PAGE>

DDi CAPITAL AND DDi

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

(In thousands, except share and per share amounts)

The Company's 1998 and 1999 pro forma loss before extraordinary items is as
follows (amounts in millions):

<TABLE>
<CAPTION>
1998 1999
--------------- --------------
DDi DDi
DDi Capital DDi Capital
------ ------- ----- -------
<S> <C> <C> <C> <C>
As reported.............................. $(43.5) $(48.2) $(8.5) $(14.1)
Pro forma................................ $(43.9) $(48.6) $(8.6) $(14.2)
</TABLE>

Class L Common Stock

The Class L common stock is identical to the Class A common stock, except
that each share of Class L common stock is entitled to a preferential payment
upon any distribution by Holdings or its subsidiaries equal to the original
cost of such share ($349.09) plus an amount which accrues from the original
issuance date on a daily basis at 12% per annum, compounded quarterly. After
payment of this preference amount, each share of Class A common stock and
Class L common stock shares equally in all distributions. The aggregate amount
of the Class L liquidation preference was $179,996 at December 31, 1999.

Capital contributions

Concurrent with Holdings' merger with DCI (see Note 14), Holdings
contributed the capital stock of DCI to DDi. Accordingly, DDi recorded a
capital contribution of approximately $106 million in 1998 representing the
$73 million in equity consideration provided by Holdings in the acquisition,
plus the $33 million generated by Intermediate's issuance of senior discount
notes.

12. INCOME TAX MATTERS

The provision (benefit) for income taxes in 1997, 1998 and 1999 consists of
the following:

<TABLE>
<CAPTION>
December 31, December 31,
December 31, 1997 1998 1999
------------------ -------------- ----------------
DDi DDi DDi
DDi Capital DDi Capital DDi Capital
-------- -------- ----- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Current:
Federal............. $ (4,397) $ (5,224) $ -- $ -- $ 5,548 $ 4,210
State............... -- -- 666 666 349 358
Foreign............. 150 150 -- -- -- --
-------- -------- ----- ------- ------- -------
(4,247) (5,074) 666 666 5,897 4,568
-------- -------- ----- ------- ------- -------
Deferred:
Federal............. (2,226) (3,657) (76) (2,509) (6,627) (8,355)
State............... (1,557) (2,127) (119) (832) (1,154) (1,428)
Foreign............. -- -- -- -- -- --
-------- -------- ----- ------- ------- -------
(3,783) (5,784) (195) (3,341) (7,781) (9,783)
-------- -------- ----- ------- ------- -------
$(8,030) $(10,858) $ 471 $(2,675) $(1,884) $(5,215)
======== ======== ===== ======= ======= =======
</TABLE>

In connection with the acquisitions of NTI and DCI, the Company acquired
certain net deferred tax assets of approximately $1.2 and $1.3 million,
respectively.

F-22
<PAGE>

DDi CAPITAL AND DDi

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

(In thousands, except share and per share amounts)

Deferred income tax assets and liabilities consist of the following:

<TABLE>
<CAPTION>
December 31, 1998 December 31, 1999
------------------ ---------------------
DDi DDi
DDi Capital DDi Capital
-------- -------- --------- ----------
<S> <C> <C> <C> <C>
Deferred tax assets:
Net operating loss
carryforwards.................. $ 2,784 $ 4,354 $ 746 $ 941
Trade receivables............... 1,930 1,930 1,858 1,858
Deferred compensation........... 5,485 5,485 4,867 4,867
Tax credits..................... 327 327 956 956
Accrued liabilities............. 2,843 6,347 2,812 9,629
Amortization.................... 27 27 1,726 1,726
Other........................... 172 172 194 258
-------- -------- --------- --------
13,568 18,642 13,159 20,235
Deferred tax liabilities--
Property, plant and equipment... (2,289) (2,289) (1,027) (1,027)
Intangible assets............... (34,341) (34,341) (26,639) (26,639)
-------- -------- --------- --------
(36,630) (36,630) (27,666) (27,666)
Valuation allowance............... -- -- (774) (774)
-------- -------- --------- --------
Net deferred tax liabilities.. $(23,062) $(17,988) $ (15,281) $ (8,205)
======== ======== ========= ========
</TABLE>

The tax effect related to the extraordinary item (see Notes 6 and 14) is
deferred U.S. and state taxes.

The income tax provision (benefit) differs from the amount of income tax
determined by applying the U.S. Federal statutory income tax rate to loss
before income taxes due to the following:

<TABLE>
<CAPTION>
December 31, 1997 December 31, 1998 December 31, 1999
-------------------- ------------------ --------------------
DDi DDi DDi
DDi Capital DDi Capital DDi Capital
-------- ---------- -------- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
Computed "expected" tax
expense (benefit)...... $(6,979) $ (9,476) $(15,071) $(17,821) $ (3,627) $ (6,766)
Increase (decrease) in
income taxes resulting
from:
State taxes, net of
credits and federal
tax benefit.......... (1,135) (1,591) 356 (108) (805) (1,070)
Goodwill
amortization......... -- -- 1,320 1,320 2,456 2,456
In-process research
and development
write-off............ -- -- 13,650 13,650 -- --
Other................. 84 209 216 284 92 165
-------- --------- -------- -------- -------- --------
$(8,030) $ (10,858) $ 471 $ (2,675) $ (1,884) $ (5,215)
======== ========= ======== ======== ======== ========
</TABLE>

The Company has Federal, California and Colorado net operating loss ("NOL")
carryforwards of approximately $0.2 million, $6 million and $12 million,
respectively, at December 31, 1999. The Federal NOL carryforwards begin to
expire in 2012, the California NOL carryforwards begin to expire in 2002, and
the Colorado NOL carryforwards begin to expire in 2012. A valuation allowance
has been established for deferred income tax benefits related to the Colorado
NOL carryforwards. Management believes it is more likely than not that these
NOL carryforwards may not be realized as a result of the closure of Colorado
facility in December 1999 (see Note 15).

F-23
<PAGE>

DDi CAPITAL AND DDi

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

(In thousands, except share and per share amounts)

If certain substantial changes in the Company's ownership should occur,
there would be an annual limitation on the amount of the carryforwards which
can be utilized.

13. COMMITMENTS AND CONTINGENCIES

Environmental matters--The Company's operations are regulated under a number
of federal, state, and local environmental laws and regulations, which govern,
among other things, the discharge of hazardous materials into the air and
water as well as the handling, storage and disposal of such materials.
Compliance with these environmental laws are major considerations for all
printed circuit board manufacturers because metals and other hazardous
materials are used in the manufacturing process. In addition, because the
Company is a generator of hazardous wastes, the Company, along with any other
person who arranges for the disposal of such wastes, may be subject to
potential financial exposure for costs associated with an investigation and
remediation of sites at which it has arranged for the disposal of hazardous
wastes, if such sites become contaminated. This is true even if the Company
fully complies with applicable environmental laws. In addition, it is possible
that in the future new or more stringent requirements could be imposed.
Management believes it has complied with all applicable environmental laws and
regulations. There have been no claims asserted nor is management aware of any
unasserted claims for environmental matters.

Employment agreements--Pursuant to certain employment agreements dated
September 1, 1995, as amended, effective until October 28, 2000, certain
members of senior management received base salaries in the aggregate amount of
$1.3 million in 1999. The base salaries on or after January 1, 2000 will be
established by DDi at a level that equals or exceeds base salaries for 1999.
These employees are eligible for annual bonuses based upon the achievement of
EBITDA targets. These employees also received an aggregate of 10,367 shares of
Class A common stock of Holdings on the Recapitalization closing date. In
connection with this stock bonus, the Company recorded compensation expense of
approximately $52 based upon a fair market value per share of Class A common
stock of Holdings of $5 per share. In addition, these employees will be
entitled to receive an additional bonus in the aggregate amounts of $2.4
million in consideration of prior services which will be payable in October
2000 whether or not such employee is still employed by the Company. The
Company accrued these bonuses at their present value and the charge was
included in the results of operations during the year ended December 31, 1997.

In addition, pursuant to an employment agreement dated July 23, 1998, a
certain key employee received a base salary of approximately $445 in 1999. In
addition, this key employee is eligible to receive an annual bonus based upon
achievement of EBITDA targets. During 1998, this key employee received an
award, pursuant to the agreement, of 39,008 Class A Cash Bonus units valued at
$1.5725 per unit and 4,953.3 Class L Cash Bonus units valued at $363.2381 per
unit. As this award was made to an employee of DCI for services rendered prior
to the merger with DCI (see Note 14), the obligation existed as of the merger
date and was treated as an acquired liability in accordance with purchase
accounting. Post-merger salary and other compensation are recorded as period
costs.

Management agreement--Pursuant to a management agreement among Bain Capital
Partners V, L.P. ("Bain"), Holdings and DDi (the "Management Agreement"), Bain
is entitled to a management fee when, and if, it provides advisory services to
Holdings or the Company in connection with potential business acquisitions.
Beginning on the first anniversary of the Recapitalization, Bain may, upon the
request of Holdings or the Company, perform certain management consulting
services at Bain's customary rates plus reimbursement for reasonable out-of-
pocket expenditures. In addition, Bain is entitled to receive a fee equal to
approximately 1% of the gross purchase price of any senior financing
transaction in connection with an acquisition, recapitalization

F-24
<PAGE>

DDi CAPITAL AND DDi

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

(In thousands, except share and per share amounts)

or refinancing transaction (including assumed debt). In connection with the
Recapitalization, NTI acquisition and DCI merger, Bain was paid fees of
approximately $3.1 million, approximately $0.4 million, and approximately $2.7
million, respectively. In 1999, Bain was paid fees of approximately $1.1
million for advisory services. The Management Agreement continues until
terminated by mutual consent of the parties, or until terminated as a result
of a breach of the Management Agreement. The Management Agreement includes
customary indemnification provisions in favor of Bain.

Operating leases--The Company has entered into various operating leases
principally for office space and equipment that expire at various dates
through 2006. Future annual minimum lease payments under all non-cancelable
operating leases with initial or remaining terms of one year or more consist
of the following at December 31, 1999):

<TABLE>
<S> <C>
Year Ending December 31,
2000............................................................. $2,109
2001............................................................. 1,808
2002............................................................. 1,084
2003............................................................. 452
2004............................................................. 321
Thereafter....................................................... 389
------
Future minimum lease payments...................................... $6,163
======
</TABLE>

Rent expense for 1998 and 1999 was approximately $1.5 million and $3.0
million, respectively, and was not significant in 1997.

Litigation--The Company is a party to various legal actions arising in the
ordinary course of its business. The Company believes that the resolution of
these legal actions will not have a material adverse effect on the Company's
financial position, results of operations or cash flows.

Retirement plans--The Company has adopted a 401(k) plan which became
effective January 1997. All employees of the Company over the age of 21 and
having at least one year of service, are eligible to participate in the plan.
The eligible employees may contribute 1% to 15% of their annual compensation.
In 1997, no employer matching contributions were required to be made by the
Company. In 1998, the Company amended the plan to match employee contributions
at $0.25 per $1.00 contributed, subject to a maximum of $750 per employee
participant. For plan year ended December 31, 1998 and 1999, employer
contributions totaled $145 and $394, respectively.

14. MERGERS AND ACQUISITIONS

On December 22, 1997, the Company acquired all of the outstanding shares of
common stock of NTI and on July 23, 1998, pursuant to a Stock Contribution and
Merger Agreement, the Company consummated the merger with DCI ("DCI Merger").
Both transactions were accounted for as purchases in accordance with
Accounting Principles Board Opinion No. 16 and accordingly, the results of
operations since the dates of acquisition are included in the accompanying
consolidated financial statements.

NTI

NTI was purchased for approximately $38.9 million including the assumption
of approximately $7.4 million of NTI's debt. The acquisition was funded, in
part, through the issuance of additional equity interests in Holdings in the
aggregate amount of $10.2 million to certain existing investors in Holdings as
well as three new investors,

F-25
<PAGE>

DDi CAPITAL AND DDi

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

(In thousands, except share and per share amounts)

including an existing investor in NTI. The remainder of the purchase price was
funded with cash from Holdings and the $25 million Senior Acquisition Facility
borrowing under the Senior Term Facility in place at that time. The
outstanding borrowing under this facility was retired in connection with the
DCI merger. The NTI purchase price was allocated to assets acquired and
liabilities assumed and the excess purchase price of approximately $27 million
was allocated to goodwill. Accumulated amortization as of December 31, 1998
and 1999 was $1.1 million and $2.2 million, respectively.

DCI

The DCI Merger was completed for aggregate consideration of approximately
$250 million, including the assumption of approximately $72.3 million of DCI's
debt, and consisted of a partial redemption, by way of a merger, of DCI's
outstanding capital stock for cash with the remaining capital stock being
contributed to Holdings in exchange for shares, options, and warrants to
purchase shares of the voting common stock of Holdings (estimated value of
approximately $73 million). The capital stock of DCI received by Holdings was
concurrently contributed through Intermediate and through DDi Capital to DDi.
The DCI Merger was financed with a new $300 million senior bank facility
(Senior Credit Facility) and by $33 million of newly issued Intermediate
Senior Discount Notes. In connection with the new financing, DDi used $106
million of the proceeds to retire all of its existing senior term debt, which
resulted in an extraordinary loss of $2.4 million, net of related income taxes
of $1.5 million.

The DCI merger consideration was allocated to tangible assets (aggregating
approximately $65 million) acquired and liabilities assumed (aggregating
approximately $30 million), with the remaining merger consideration consisting
primarily of goodwill, identifiable intangible assets, and acquired in-process
research and development ("in-process R&D").

Significant portions of the DCI merger consideration were identified as
intangible assets. Valuation techniques were employed which reflect recent
guidance from the Securities and Exchange Commission on approaches and
procedures to be followed in developing allocations to in-process R&D. At the
date of the merger, technological feasibility of the in-process R&D projects
had not been reached and the technology had no alternative future uses.
Accordingly, the Company expensed the portion of the merger consideration
allocated to in-process R&D of $39 million, in accordance with generally
accepted accounting principles, in the year ended December 31, 1998.

The in-process R&D is comprised of a number individual technological
development efforts, focusing on the discovery of new, technologically
advanced knowledge and more complete solutions to customer needs, the
conceptual formulation and design of possible alternatives, as well as the
testing of process and product cost improvements. Specifically, these
technologies include efforts to: increase maximum printed circuit board layer
count, reduce line and space tolerances, develop specialty surface finishes
and materials, use new and innovative applications of micro blind vias,
embedded circuitry, and flexible circuit applications, develop "intelligent"
(active) backpanels, and develop automation to integrate and automate the
entire workflow process.

The amount of the merger consideration allocated to in-process R&D was
determined by estimating the stage of completion of each in-process R&D
project at the date of the merger, estimating cash flows resulting from the
future release of products employing these technologies, and discounting the
net cash flows back to their present values.

The weighted average stage of completion for all projects, in aggregate, was
approximately 75% as of the merger date. As of that date, the estimated
remaining costs to bring the projects under development to technological
feasibility were over $2 million. The cash flow estimates from sales of
products incorporating those

F-26
<PAGE>

DDi CAPITAL AND DDi

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

(In thousands, except share and per share amounts)

technologies commence in the year 1999, with revenues increasing for several
years following the acquisition, followed by declines in subsequent periods as
other new products are expected to be introduced and represent a larger
proportion of the total product offering. Revenues forecasted in each period
are reduced by related expenses, capital expenditures, the cost of working
capital, and an assigned contribution to the core technologies serving as a
foundation for the research and development. The discount rates applied to the
individual technology's net cash flows ranged from 18% to 24%, depending on
the level of risk associated with a particular technology and the current
return on investment requirements of the market. These discount rates reflect
"risk premiums" of 20% to 60% over the estimated weighted average cost of
capital of 15% computed for DCI.

As discussed above, a portion of the DCI merger premium was allocated to
identifiable intangibles and goodwill. The identifiable intangibles consist
primarily of developed technologies, customer relationships/ tradenames, and
assembled workforce. The fair value of the developed technology assets at the
date of merger was $60 million and represents the aggregate fair value of
individually identified technologies that were fully developed at the time of
acquisition. As with the in-process R&D, the developed technologies were
valued using a future income approach, in context of the business enterprise
value of DCI. The customer relationships/tradenames and assembled workforce
assets were assigned values as of the merger date of approximately $21 million
and $4 million, respectively.

Goodwill generated in the merger with DCI has an assigned value of
approximately $120 million. As of December 31, 1998 and 1999, the accumulated
amortization related to this goodwill and identifiable intangibles acquired in
the merger with DCI was approximately $9.8 million and $32.9 million,
respectively.

Certain investment funds associated with Bain Capital, Inc. (the "Bain
Capital Funds"), the controlling shareholders of Holdings, were shareholders
of DCI prior to the Company's July 1998 merger with DCI. In conjunction with
the merger, the Bain Capital Funds received $22.9 million for the redemption
of the DCI common stock it held prior to consummation of the merger.

In connection with the DCI merger and related transactions, Celerity
Partners, L.L.C. and its affiliates were paid fees and expenses aggregating
approximately $1.7 million. Celerity Partners, L.L.C. is the general partner
of Celerity Partners I, L.P., which is the managing member of Celerity
Details, L.L.C., Celerity Liquids, L.L.C. and Celerity Circuits, L.L.C., which
are each stockholders of Holdings.

The accompanying unaudited condensed consolidated statements of operations
include: (a) the accounts of NTI which was acquired in December 1997, and the
effects of the Recapitalization for the year ended December 31, 1997 and (b)
the accounts of DCI for the period July 24, 1998 through December 31, 1998.
The following unaudited pro forma information for the years ended December 31,
1998 and 1997 presents net sales and net loss before extraordinary item for
each of these periods as if these transactions were consummated at the
beginning of each period. In addition, the actual results of operations for
the year ended December 31, 1998 include a $39 million write-off of acquired
in-process research and development related to the merger with DCI. This one-
time charge has been excluded from the unaudited pro forma results.

<TABLE>
<CAPTION>
Pro Forma Pro Forma
December 31, December 31,
1998 1997
------------ ------------
<S> <C> <C>
Net Sales:
--DDi............................................ $261,000 $254,000
--DDi Capital.................................... $261,000 $254,000
Net Loss Before Extraordinary Item:
--DDi............................................ $ (7,000) $ (6,000)
--DDi Capital ................................... $(12,000) $(10,000)
</TABLE>

F-27
<PAGE>

DDi CAPITAL AND DDi

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

(In thousands, except share and per share amounts)

The unaudited pro forma results are not necessarily indicative of the actual
results which have been realized had the transactions actually occurred at the
beginning of each respective periods.

15. RESTRUCTURING AND OTHER RELATED CHARGES

In December 1999, management and the Company's Board of Directors approved a
plan to consolidate its Colorado operations into its Texas facility, resulting
in the closure of the Colorado facility. By combining its Colorado and Texas
operations, the Company anticipates eliminating its lower-margin product lines
and decreasing its overhead costs, gaining efficiency through better capital
utilization and streamlining management. Accordingly, such decision is not
anticipated to adversely impact the Company's results of operations in future
periods. The Company anticipates substantial completion of this consolidation
plan by March 2000. Revenues and EBITDA (earnings before income taxes,
depreciation, amortization and net interest expense) for the Colorado facility
were approximately $30 million and $(1.7) million, respectively, for the year
ended December 31, 1999. Net income/(loss) for this facility is not readily
determinable.

In conjunction with the planned closure of the Colorado facility, the
Company recorded charges in the fourth quarter of 1999 totaling $7.0 million,
consisting of $4.5 million for severance and other exit costs and $2.5 million
related to the impairment of net property, plant and equipment. Both the exit
costs and asset impairment costs are classified as "Restructuring and other
related charges" in the 1999 consolidated statement of operations.

Of the $4.5 million recorded as restructuring costs, approximately $2.0
million relates to severance and related expenses associated with the
involuntary termination of the 275 staff and management employees of this
plant. The remaining charges are comprised of $1.9 million of inventory-
related losses and $0.6 million in expenses principally related to minimum
lease payments through the scheduled maturities of the real property operating
leases. No amounts related to the accrual for either the $2.0 million in
severance and related expenses or the $0.6 million related to the operating
leases were expended as of December 31, 1999.

The inventory losses are due entirely to the plan to consolidate the
Colorado facility into the Texas facility. Such losses arose from management's
decision to cease all production operations in Colorado immediately following
the notification to employees of the plant closure in late December 1999. This
decision was primarily made to ensure that the Company's quality standards
were met with respect to work in-process at the Colorado facility. To expedite
the transfer of production from the Colorado facility to the Company's other
facilities, nearly all work in-process was scrapped, as were certain
production materials that could not be utilized in the Company's other
operations. All inventory to be retained and utilized by the Company is
reflected at its lower of cost or market, in accordance with the Company's
accounting policies (See Note 2).

The calculated impairment of net property, plant and equipment was
determined in accordance with SFAS No. 121, based upon a detailed review of
the individual long-lived assets in the Colorado facility. Management
determined that most of these assets would be utilized by the Company's other
operations and are not impaired. Other assets, however, are anticipated to be
transferred to the Company's other operations, from where they will be sold or
otherwise disposed, as in the case of obsolete or redundant equipment. The
carrying amount of such assets was reduced to estimated fair value, less
estimated selling costs. Some assets are neither to be utilized in the
Company's other operations, nor are they saleable. Accordingly, these assets
were written-down to zero value. The impairment to assets to be sold or
otherwise disposed comprises approximately $1.7 million of the total write-
down of net property, plant and equipment. The remaining $0.8 million charge
represents the loss on assets possessing no remaining value. Management
anticipates that the sale or other disposition of impaired assets will have
occurred by June 2000. The impact of suspending depreciation on the assets to
be sold or otherwise disposed through their expected disposition dates is not
anticipated to be significant to the Company's results of operations.

F-28
<PAGE>

DDi CAPITAL AND DDi

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

(In thousands, except share and per share amounts)

16. SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

<TABLE>
<CAPTION>
December 31, December 31, December 31,
1997 1998 1999
--------------- --------------- ---------------
DDi DDi DDi
DDi Capital DDi Capital DDi Capital
------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
CASH PAYMENTS FOR:
Income taxes................. $ -- $ -- $ 1,743 $ 1,743 $ 1,141 $ 1,141
======= ======= ======= ======= ======= =======
Interest..................... $11,552 $11,552 $25,773 $25,773 $30,603 $30,603
======= ======= ======= ======= ======= =======
SUPPLEMENTAL SCHEDULE OF
INVESTING AND FINANCING
ACTIVITIES:
Capital lease obligations
incurred for acquisition of
property and equipment...... $ 646 $ 646 $ 1,864 $ 1,864 $ -- $ --
------- ------- ------- ------- ------- -------
Value of warrants issued in
consideration of debt
financing................... $ -- $ 3,420 $ -- $ -- $ -- $ --
------- ------- ------- ------- ------- -------
Equity contribution from
parent...................... $10,200 $10,200 $73,246 $73,246 $ -- $ --
------- ------- ------- ------- ------- -------
</TABLE>

Recapitalization--As part of the Recapitalization (see Notes 1, 6 and 11):
(i) the existing shareholders of the Pre-Recapitalization Company exchanged
their shares of Old Common (recorded value of $8.0 million) for Class A and L
common stock of Holdings (aggregate fair value of $21.9 million), and (ii)
certain executives of the Pre-Recapitalization Company exchanged their options
to purchase shares of Old Common (recorded value of $5.0 million) for
replacement options to purchase Class A and L common stock of Holdings
(aggregate fair value of $5.0 million).

17. SUPPLEMENTAL GUARANTOR CONDENSED CONSOLIDATED FINANCIAL DATA

Subsequent to the Recapitalization, on November 15, 1997, Dynamic Details,
Incorporated, issued $100 million aggregate principal amount of 10% Senior
Subordinated Notes due in 2005 (see Note 6). The Senior Subordinated Notes are
fully and unconditionally guaranteed on a senior subordinated basis, jointly
and severally, by Dynamic Details, Incorporated (the "Issuer") and all of its
wholly-owned subsidiaries (the "Subsidiary Guarantors").

The condensed financial data of the Issuer is presented below and should be
read in conjunction with the consolidated financial statements of DDi.
Separate financial data of the Subsidiary Guarantors are not presented because
(i) the Guarantors are wholly-owned and have fully and unconditionally
guaranteed the Notes on a joint and several basis and (ii) the Company's
management has determined such separate financial data are not material to
investors and believes the condensed financial data of the Issuer presented is
more meaningful in understanding the financial position of the Company.

F-29
<PAGE>

DDi CAPITAL AND DDi

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

(In thousands, except share and per share amounts)

SUPPLEMENTAL DYNAMIC DETAILS, INCORPORATED CONDENSED FINANCIAL DATA

CONDENSED BALANCE SHEETS

<TABLE>
<CAPTION>
December 31,
-------------------
1998 1999
--------- --------
<S> <C> <C>
Current assets............................................ $ 20,755 $ 22,472
Non-current assets........................................ 287,619 329,490
--------- --------
Total assets............................................ $ 308,374 $351,962
========= ========
Current liabilities....................................... $ 37,372 $ 29,089
Non-current liabilities................................... 348,950 354,397
--------- --------
Total liabilities....................................... $ 386,322 $383,486
--------- --------
Total stockholders' deficit............................. $ (77,948) $(31,524)
--------- --------
Total liabilities and stockholder's deficit........... $ 308,374 $351,962
========= ========
</TABLE>

CONDENSED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
Year Ended December 31,
---------------------------
1997 1998 1999
-------- -------- -------
<S> <C> <C> <C>
Net sales........................................ $ 77,988 $ 83,560 $96,441
Cost of sales.................................... 37,929 43,759 50,879
-------- -------- -------
Gross profit..................................... 40,059 39,801 45,562
Operating expenses............................... 42,770 9,682 16,250
-------- -------- -------
Income (loss) from operations.................... (2,711) 30,119 29,312
Interest expense, net............................ 17,738 27,216 32,414
-------- -------- -------
Income (loss) before taxes and extraordinary
loss............................................ (20,449) 2,903 (3,102)
Income tax benefit............................... 8,030 280 1,260
-------- -------- -------
Income (loss) before extraordinary loss.......... (12,419) 3,183 (1,842)
Extraordinary loss, net of income tax benefit.... (1,588) (2,414) --
Equity in loss of subsidiaries................... (77) (46,714) (6,637)
-------- -------- -------
Net loss....................................... $(14,084) $(45,945) $(8,479)
======== ======== =======
</TABLE>

18. Subsequent Events (Unaudited)

On March 22, 2000 Holdings signed a Share Purchase Agreement to purchase
100% of the outstanding stock of MCM Electronics Limited ("MCM") for total
consideration of approximately $86 million payable in a combination of cash,
common stock, and assumption of outstanding indebtedness of MCM. This
transaction will be accounted for as a purchase by Holdings and no adjustments
have been made to the accompanying historical consolidated financial
statements for this transaction. MCM focuses on the technologically advanced,
time-critical segment of the electronics manufacturing industry and will be
managed by the DDi management team.

On January 28, 2000, Holdings filed a Form S-1 Registration Statement with
the Securities Exchange Commission and is currently in the process of
executing its planned proposed initial public offering of its common stock.

F-30

<PAGE>

Exhibit 24.1

POWER OF ATTORNEY

We, the undersigned Officers and Directors of DDi Corp. ("Parent"), DDi
Capital Corp. ("DDi Capital") and Dynamic Details, Incorporated ("DDi"), as the
case may be, hereby severally constitute and appoint Joseph P. Gisch, Bruce D.
McMaster, and each of them singly, our true and lawful attorneys, with full
power to them and each of them, to sign for us, and in our names and in the
capacities indicated below, the Form 10-K of the companies listed above and any
and all amendments to said Form 10-K, and to file the same with all exhibits
thereto, and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto our said attorneys, and each of them acting
alone, full power and authority to do and perform each and every act and thing
requisite or necessary to be done in the premises, as fully to all intents and
purposes as he or she might or could do in person, and hereby ratify and confirm
all that said attorneys or any of them may lawfully do or cause to be done by
virtue thereof.

WITNESS our hands and common seal on the date set forth below.

<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/S/ BRUCE D. MCMASTER President and Chief Executive
- -------------------------- Officer of Parent, DDi Capital and March 28, 2000
Bruce D. McMaster DDi, Director of Parent

/S/ JOSEPH P. GISCH Chief Financial Officer and
- -------------------------- principal accounting officer of March 28, 2000
Joseph P. Gisch Parent, DDi Capital and DDi,
Director of DDi Capital and DDi

/S/ CHARLES D. DIMICK Chairman of Parent, Director of March 28, 2000
- -------------------------- Parent, DDi Capital and DDi
Charles D. Dimick

/S/ PRESCOTT ASHE Director of Parent, DDi Capital March 30, 2000
- -------------------------- and DDi
Prescott Ashe

/S/CHRISTOPHER BEHRENS Director of Parent March 30, 2000
- --------------------------
Christopher Behrens

/S/ MARK R. BENHAM Director of Parent March 30, 2000
- --------------------------
Mark R. Benham
Director of Parent March , 2000
- --------------------------
Edward W. Conard
</TABLE>
<PAGE>

<S> <C> <C>
/S/ DAVID DOMINIK Director of Parent, DDi Capital March 30, 2000
- -------------------------- and DDi
David Dominik

/S/ STEPHEN G. PAGLIUCA Director of Parent March 30, 2000
- --------------------------
Stephen G. Pagliuca

Director of Parent March , 2000
- --------------------------
Stephen M. Zide
</TABLE>

<PAGE>

<ARTICLE> 5
<CIK> 0001050117
<NAME> DYNAMIC DETAILS INC.
<MULTIPLIER> 1,000

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> DEC-31-1999
<CASH> 644
<SECURITIES> 0
<RECEIVABLES> 44,358
<ALLOWANCES> (1,584)
<INVENTORY> 20,209
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0
0
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</TABLE>

<PAGE>

<ARTICLE> 5
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<NAME> DDI CAPITAL CORP.
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<S> <C>
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</TABLE>