DATA TRANSMISSION NETWORK CORP, 10-K, 1995-03-31

DATA TRANSMISSION NETWORK CORP
10-K, 1995-03-31
COMPUTER PROGRAMMING, DATA PROCESSING, ETC.

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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 Fiscal Year Ended December 31, 1994.

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

Commission file number 0-15405.

DATA TRANSMISSION NETWORK CORPORATION
-----------------------------------------------------
(Exact name of registrant as specified in its charter)

Delaware 47-0669375
----------------------- --------------------------
(State of Incorporation) (I.R.S. Employer ID Number)

9110 West Dodge Road, Suite 200, Omaha, Nebraska 68114
------------------------------------------------ ---------
(Address of principal executive office) (Zip Code)

Registrant's telephone number, including area code: (402) 390-2328

Securities Registered Pursuant to Section 12(b) of the Act: None

Securities Registered Pursuant to Section 12(g) of the Act:

Common Stock, $.001 Par Value
-----------------------------
(Title of Class)

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 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 registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K [ ].

The aggregate market value of voting stock (based upon the "bid" price as quoted
on NASDAQ) of the registrant held by non-affiliates on March 1, 1995 was
approximately $55,000,000.

At March 1, 1995, the registrant had outstanding 3,292,935 shares of its common
stock.

- Continued to Page 2 -

<PAGE>

DOCUMENTS INCORPORATED BY REFERENCE

1. Portions of the Registrant's Annual Report to Stockholders for the fiscal
year ended December 31, 1994 are incorporated by reference into Parts I,
II, and IV.

2. Portions of the Registrant's definitive Proxy Statement filed for the
Registrant's Annual Meeting of Stockholders to be held April 26, 1995, are
incorporated by reference into Part III.

PART I
ITEM 1. BUSINESS.

(a) General Development of Business:

Data Transmission Network Corporation (the "company", "DTN") was
incorporated on September 17, 1987 to change the name and state of incorporation
of its predecessor company, Dataline, Inc. from Nebraska to Delaware pursuant to
an Agreement and Plan of Merger dated October 8, 1987. The company was
originally incorporated in Nebraska on April 9, 1984, as Scoular Information
Services, Inc., a subsidiary of a regional grain company, later changing its
name to Dataline, Inc.

On December 19, 1985 and January 31, 1986, in related transactions,
certain employees of the company purchased all of the outstanding stock of the
company from the regional grain company.

In January, 1987, the company completed an initial public offering of
common stock selling 698,085 shares at $5.40 per share.

(b) Financial Information About Industry Segments:
Not Applicable
(c) Narrative Description of Business:

The company is in the electronic information and communications services
business. It has more than 82,000 subscribers to its primary services: DTN
AgDaily(R), DTN Wall Street(R), DTNergy(R), DTNstant(R), DTNautoSM and
DTNironSM. In addition, the company announced several new services in 1994, DTN
FirstRate(R), DTN Pro SeriesSM and DTN PROduceSM.

The company's subscription services are generally targeted at niche
markets, and are designed to be simple to use, convenient and provide time
sensitive information. The company's communications services are designed to
provide an efficient means of communicating data and information from point to
multi-point.

The development of a cost effective electronic satellite delivery
system, plus a strong commitment to customer service and information quality,
has enabled the company to become a significant player in the point to
multi-point communications industry. The company continues to invest in the
enhancement and development of its delivery technology, in order to take
advantage of the engineering and software advancements in an always changing
industry.

INFORMATION DISTRIBUTION TECHNOLOGY

2
<PAGE>

The company provides all of the equipment necessary for subscribers to
receive their service. A DTN receiver, specifically built for the company, along
with a video monitor is provided to the subscriber regardless of the receiving
technology utilized by the receiver. The company also provides the subscribers
with an FM antenna or a small 30" Ku-band satellite dish. The company does not
provide the large C-band satellite dish as part of its service. DTN is
responsible for the normal maintenance and repair of the equipment utilized by
the subscribers.

Prior to 1992, the company utilized a "page based" receiver and
monochrome video system. The monochrome system translates the company's data
stream into video text and has the capability, depending on the model, to
receive and display from 126 to 246 different pages (screens) of information.

During 1992, development was completed on a color graphics receiver
system by the company for its exclusive use. This new receiver, called an
Advanced Communications Engine (ACESM), has enhanced DTN's ability to provide
new information and communication services. This receiver has many additional
capabilities over the monochrome receiver, not the least of which is the ability
to display high resolution color pictures, graphics and text.

The ACE receiver has an internal hard drive providing much greater data
storage and retrieval capabilities. The ACE receiver enhances system performance
by allowing some data to be stored on the hard drive versus requiring frequent
rebroadcasting. The ACE receiver also can receive, store and playback digitized
sound files, such as weather forecasts and voice advertisements. In addition,
audio alarms can be set by a subscriber to trigger when a futures contract
reaches a pre-set price. Both monochrome and color receivers have the ability to
download data to a printer or computer.

One of the unique aspects of the company's information distribution
network is the computer software developed by the company specifically for use
with the DTN receiver. Computers utilizing this software manage a wide variety
of data and input sources, tasks and priorities and provide a source of
information transmissions uplinked to satellite. The software allows DTN to
individually address each receiver unit placed with a subscriber, permitting the
company to transmit different segments of information to different groups of
subscribers, including E-mail.

FM radio side-band technology is currently utilized in a variety of
ways, including background music systems and paging (beeper) systems. DTN leases
space on 50 FM radio side-band channels to transmit its data stream. The data
stream is uplinked from Omaha to satellite, downlinked from satellite to an FM
radio station and re-transmitted over the radio station's side-band channel
direct to the subscriber's FM antenna. The receiver then translates the data
into video text.

In the Ku-band and C-band satellite dish technologies, the subscriber's
dish is the direct downlink for the company's data stream.

Early in 1994, the company began using a new cable TV delivery
technology involving vertical blanking intervals (VBI). The company has
contracted with a major cable TV superstation to transmit DTN's data stream
along with the station's TV signal. Currently used only by DTN Wall Street, VBI
technology eliminates the need for a satellite dish or FM antenna, and is
available to businesses or residences that are wired for cable and receive the
superstation's service.

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<PAGE>
SERVICES OFFERED
The company's revenue is derived principally from five categories: (1)
monthly, quarterly or annual subscriptions, (2) "a la carte" additional
services, (3) communication services, (4) advertising and (5) service initiation
fees. The percentage of total revenue derived from each category for the last
three fiscal years was:
<TABLE>
<CAPTION>
1994 1993 1992
---- ---- ----
<S> <C> <C> <C>
Subscriptions 73% 72% 75%
Additional services 8% 7% 8%
Communication services 10% 9% 6%
Advertising 4% 5% 5%
Service initiation fees 5% 7% 6%
</TABLE>

Additional services are offered to subscribers on an "a la carte" basis,
similar to premium channels on cable TV. The information for these services is
primarily offered over DTN by a third party, for which DTN receives a share of
the subscription revenue paid by the subscriber.

The company also sells communication services which allow companies to
cost-effectively communicate a large amount of time-sensitive information or
data to their customers or field offices. Approximately 92% of communication
services revenue in 1994 was generated from DTNergy, and the remaining eight
percent was primarily from DTN AgDaily.

The company sells advertising space interspersed among the DTN pages,
similar to a newspaper or magazine. The advantage of an electronic advertisement
placed on DTN over the print media is the time-sensitive delivery of the ad as
well as the ability to change the advertising message frequently and quickly as
market conditions dictate.

Service initiation fees are one-time charges to new subscribers, and
range from $150 to $295, depending on the service and broadcast delivery method.
DTN also charges a switch-out fee of $50 to $100 for those subscribers who
change their primary DTN service (for example, from a monochrome to color
service).

DTN Ag Services

The DTN Ag related services are comprised of DTN AgDaily, DTNstant,
DTNiron, DTN Pro Series and DTN PROduce.
<TABLE>
<CAPTION>
1994 1993 1992
----------- ----------- ------------

<S> <C> <C> <C>
Revenues $33,700,000 $27,000,000 $20,600,000

Subscribers at year end 67,100 61,700 57,600
</TABLE>

DTN AgDaily Service

The company's first service, DTN AgDaily is an agricultural market
information and quotes service. The price of the monochrome FM service is $25.99
per month, $32.99 per month via monochrome Ku-band and $45.99 per month via
color Ku-band. The company offers a discount to subscribers who pay their
subscriptions annually in advance.

The information provided to monochrome DTN AgDaily subscribers consists of
delayed commodity futures and options quotes; local cash grain and livestock
prices; selected regional and world weather updates; and a variety of daily

4
<PAGE>
analyses, commentary and news that affects grain and livestock prices. DTN
AgDaily also provides information segments for specific crop and livestock
enterprises.

In addition to the information included in the monochrome version, the DTN
AgDaily color graphics version includes a greatly expanded weather segment
consisting of national and regional radar maps, updated every 15 minutes,
satellite cloud cover maps, color maps showing precipitation and temperatures
and much more. Also included are high resolution color graphic charts which can
be custom selected and designed by the subscriber from a selection base of over
1,000 charts. The subscribers can also custom program the futures quotes pages
to display only the quotes they desire.

DTN AgDaily subscribers can select from more than 80 different additional
services. The majority of these have information provided by third parties and
range from more sophisticated weather data information to price forecasts for
specific commodities.

Approximately 80% of DTN AgDaily's subscribers are farmers or livestock
producers with the balance consisting primarily of grain elevators,
agribusinesses, and financial institutions. Approximately 65% of DTN AgDaily's
subscribers are located in the eight Midwestern states of Kansas, Illinois,
Indiana, Iowa, Minnesota, Missouri, Nebraska, and Ohio.

DTN AgDaily has approximately 75% of the market for satellite-delivered
agricultural news and information services. The competition for DTN AgDaily
consists primarily of one company providing a somewhat similar but less
extensive service and several small satellite delivered services. DTN AgDaily
still considers its biggest competition to be the combination of print advisory
services, TV, radio, telephone and changing old habits.

New subscriptions to DTN AgDaily are sold by full-time employee sales
representatives as well as by independent, commission-only, sales
representatives. The independent sales representatives are generally farmers
selling DTN on a part-time basis. The company obtains leads for its sales force
through telemarketing, direct mail, print media advertising and subscriber
referrals.

DTNstant Service

DTNstant first became available to subscribers in February, 1993.
DTNstant is priced at $159.99 a month. This is a color service available by
satellite transmission. Its primary subscribers are commercial grain elevators,
grain companies, feedlots, commodity brokers and commodity speculators.

DTNstant subscribers receive real-time futures and options quotes of
their choice from the major commodity exchanges. They also receive headline
commodity news, market leading cash information, in-depth charting capabilities
plus all the news, weather, prices and information from the DTN AgDaily color
service. DTNstant subscribers also receive on-site service and installation from
professional service technicians.

DTNstant operates in a very competitive market where there are numerous
national and regional based providers of instant agricultural quotes. The
service obtains the majority of sales from the Ag services sales force,
supplemented by telemarketing and direct mail.

DTNiron Service

The initial target market for DTNiron is approximately 11,000 farm
implement dealers in the U.S. and Canada. The service is priced at $94.50 a
month. This is a color service available by satellite transmission.

5
<PAGE>
DTNiron was announced in October, 1993, and is a cost-effective
communication system for the nation's farm implement industry. The service
permits dealers of all brands of farm implements to work closely together to
manage their inventory and conduct daily business operations.

The information and unique capabilities that DTNiron provides include
detailed descriptions of agricultural implements listed for sale by dealers as
well as machinery needed by other dealers. This feature of the DTNiron service
enables dealers from diverse geographical locations to conduct business from
each other's inventories, increasing sales and profitability.

Subscribers also receive various industry news, financial information,
a full slate of economic indicators and information from the DTN AgDaily
service. DTNiron provides exceedingly valuable information on the outlook for
farm equipment sales nationally.

DTN Pro Series (New Service)

Weather Pro is an advanced weather package with over 70 additional
weather maps, detailed forecasts from across the nation and the ability to zoom
into maps and put satellite and radar maps "in motion". News Pro uses AP
Online(C) from the Associated Press, which continuously updates the latest
business, general, sports and entertainment news, as well as an audio summary of
the day's agricultural news. Chart Pro features additional technical studies and
40 additional pages of charts that subscribers can use to chart over 1,100
futures contracts. Intraday Pro is the first low-cost system with the ability to
chart market sessions minute-by-minute during the trading day.

DTN Pro Series services have been sold to over 10% of DTN AgDaily color
subscribers. An individual Pro Series service, along with the DTN AgDaily
service, is $58.99 per month. All four of the current Pro Series services are
packaged in one service, called DTN Premier, for just $73.99 per month. This is
a color service available by satellite transmission.

DTN PROduce (New Service)

There are four major components to DTN PROduce. First, the weather may
be the most important piece of information for anyone in the produce business.
Yet, only 1 in 5 produce growers subscribes to a weather service. Second, the
service has FOB and terminal prices, updated immediately and formatted by
commodity, growing area and terminal market.

Third, DTN PROduce has transportation information with shipments,
arrivals and truck rates by growing area and daily truck availability by state.
Finally, the service offers industry news as well as the AP Online service of
headline news such as business, sports and entertainment news.

Management believes that the success of DTN PROduce is due to the
company's increased emphasis on research and development. The service spent
almost three years in the R&D process before it was released to the industry.

6
<PAGE>

The initial target market for the service is the entire produce food
chain of 100,000 growers, shippers, packers, brokers, retailers and
institutions. The service costs $84.50 per month. This is a color service
available through satellite transmission.

DTN Financial Services

The DTN financial services are comprised of DTN Wall Street and a new
service, DTN FirstRate.

<TABLE>
<CAPTION>
1994 1993 1992
----------- ----------- ----------

<S> <C> <C> <C>
Revenues $5,100,000 $4,100,000 $3,300,000

Subscribers at year end 8,800 7,700 6,300
</TABLE>

DTN Wall Street Service

DTN Wall Street is five years old and was first offered to subscribers in
May, 1989. The current price for the service is $41.95 per month.

The information provided to subscribers consists of a minimum of 68 pages of
slightly delayed quotes on stocks, bonds, indices, futures, mutual and money
market funds and interest rates as well as business news and other
time-sensitive financial market information.

DTN Wall Street subscribers can also add "a la carte" additional services
including stock market timing and selection services and quotes on U.S.
Treasuries and Mortgage-backed Securities.

The majority of subscribers are individual investors, independent brokers,
financial planners and financial institutions. Approximately 15% of DTN Wall
Street subscribers also subscribe to DTN AgDaily. DTN Wall Street is a
monochrome service available by satellite transmission or cable television.

The primary competition for DTN Wall Street are satellite and cable TV
delivered delayed quote services in the $60 per month range, various dial-up
services priced on a pay-per-use basis and numerous high-end instant quote
services. New subscribers to DTN Wall Street are obtained through direct
response marketing, primarily print media and television advertising and
telemarketing.

DTN FirstRate (New Service)

Announced in the second quarter of 1994, this new service gives mortgage
brokers nearly instantaneous access to daily mortgage rates set by the nation's
leading mortgage wholesalers. Priced at $111.95 per month, DTN FirstRate relies
on the company's monochrome delivery system. Subscribers can receive the
information either by satellite or through cable television.

In addition to wholesale prices and interest rates, DTN FirstRate gives
subscribers economic and financial news and analysis most useful to a mortgage
broker, including interest rates, leading economic indicators, employment rates,
government economic reports, and trend analysis.

7
<PAGE>
DTNergy Services
<TABLE>
<CAPTION>
1994 1993 1992
----------- ----------- ----------
<S> <C> <C> <C>
Revenues $7,200,000 $4,900,000 $2,900,000

Subscribers at year end 6,700 5,800 5,000
</TABLE>

The DTNergy service was first introduced in January, 1991. The service
consists of several pages of delayed energy futures and options quotes plus
selected news and information from DTN Wall Street. The wholesaler/subscriber
also receives refined fuel prices from each refiner that has authorized the
wholesaler to receive information. The refiner also has the capability to send
terminal alerts, electronic funds transfer notifications, invoices, and other
messages to the wholesaler.

DTNergy subscribers can subscribe to additional services to give them even
more prices or news related to the energy industry. The service is faster, less
expensive and more reliable than its competition, which are phone-delivered,
printer-only and FAX systems. DTNergy combines Ku-band communication and other
quality control methodology to ensure that terminal pricing and other critical
information is accurately delivered within seconds after prices are set by the
refiner.

DTNergy generates revenue from two primary sources, the wholesaler and the
refiner. The wholesaler pays a monthly subscription fee of $34.99 for the
monochrome system. The refiner pays an additional fee based upon the number and
size of messages sent over the system and the number of wholesalers who receive
that message.

DTNergy developed a service expressly for the natural gas industry using the
color, Ku-band satellite technology. Subscribers receive comprehensive weather
information, instant or delayed NYMEX energy options and futures quotes, natural
gas flow data at distribution points along certain systems and other industry
information. The service is targeted at natural gas producers and distributors.
DTNergy color systems are priced at $129.95 a month for 30-minute delayed quotes
and $149.95 a month with real-time quotes.

DTNergy obtains the majority of new subscriptions through leads provided by
petroleum refiners.

DTNauto Services

Introduced in 1993, DTNauto is a communications service for the automobile
industry. DTNauto allows automobile dealers to efficiently manage their daily
operations. Automobile auction companies will also be able to communicate
directly with the dealers.

The service costs $98.00 per month, including a printer. Subscribers receive
information about auction listings of automobiles for sale, information on what
automobiles brought at last weeks auctions, industry news and economic
indicators, as well as weather and news. Subscribers also are able to perform
searches of the auction listings and auction results for specific automobiles.
The target market is approximately 75,000 automobile dealers in the U.S. This is
a color service available by satellite transmission.

EMPLOYEE DATA

At December 31, 1994 the company had approximately 450 full and part-time
employees.

(d) Financial Information about Foreign and Domestic Operations and Export
Sales:

Not applicable

8
<PAGE>
ITEM 2. PROPERTIES.

The company leases its executive and administrative offices in Omaha,
Nebraska and its regional sales offices in Ames, Iowa and Bluffton, Indiana.
Approximately 63,000 square feet of office space is leased for these offices for
various periods up through June, 2000.

In addition, the company added two new distribution center leases in 1994
for the purpose of storing and distributing the electronic equipment needed by
subscribers to receive the company's services. The main distribution center is
located in Omaha, Nebraska and occupies approximately 27,000 square feet. The
company also serves its Canadian subscribers with a 2,500 square foot
distribution center located in Winnipeg, Manitoba. The leases related to these
distribution centers are for various periods up through December, 1998.

The information set forth in Footnote 8 "Leases" on page 25 of the company's
1994 Annual Report to Stockholders is incorporated herein by reference.

ITEM 3. LEGAL PROCEEDINGS.

The company is not a party to nor is its property subject to any material
pending legal proceedings, other than ordinary routine litigation incidental to
its business.

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

No matter was submitted to a vote of the security holders of the company
during the fourth quarter of the fiscal year ended December 31, 1994.

* * *
<TABLE>
<CAPTION>

EXECUTIVE OFFICERS OF THE REGISTRANT
Information on the current executive officers of the company is as follows:
Year Joined
Name Title Age the Company
---------------------- ---------------------------- --- -----------
<S> <C> <C> <C>
Roger R. Brodersen President and Chief 49 1984
Executive Officer

Greg T. Sloma Executive Vice President 43 1993
and Chief Operating Officer

Robert S. Herman Senior Vice President 42 1984

Roger W. Wallace Senior Vice President 38 1984

Brian L. Larson Chief Financial Officer, 34 1993
Secretary and Treasurer

Keith A. Cook Vice President, 56 1986
DTNauto Services Manager

H. Wade German Vice President, 53 1992
Business Research Manager

Gordon R. Lundy Vice President, 56 1990
DTNergy Services Manager
</TABLE>

9
<PAGE>
<TABLE>
<CAPTION>
EXECUTIVE OFFICERS OF THE REGISTRANT (cont.)

<S> <C> <C> <C>
James J. Marquiss Vice President, 50 1986
DTN Ag Services Manager

James G. Payne Vice President, 39 1990
Administrative Operations and
Services Support Manager

Charles R. Wood Vice President, 54 1989
DTN Financial Services Manager
</TABLE>

The executive officers serve annual terms, and are elected by the board of
directors at their annual board of directors meeting in April of each year.

Prior to 1993, Mr. Larson was a Regional Operations Controller with
Twin-City Testing, an engineering and environmental company. Prior to 1992, Mr.
German was a Corporate Economist for the Fortune 500 Companies. Prior to 1990,
Mr. Payne was the Development Manager with Woodmen Accident and Life Company.

PART II

ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER
MATTERS.

Information concerning the market for the company's common stock, the number
of stockholders of record and the company's dividend history is on pages 26 and
27 of the company's 1994 Annual Report to Stockholders and is incorporated
herein by reference.

Over-the-counter market quotations reflect inter-dealer prices, without
retail mark-up, mark-down or commissions and may not necessarily represent
actual transactions.

The company's most restrictive loan covenant will not allow any cash
dividend payments.

ITEM 6. SELECTED FINANCIAL DATA.

Selected financial data for the company is on page 12 of the company's 1994
Annual Report to Stockholders and is incorporated herein by reference.

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

Management's discussion and analysis of financial condition and results of
operations is on pages 13 through 16 of the company's 1994 Annual Report to
Stockholders and is incorporated herein by reference.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

The financial statements of the company, together with the Independent
Auditors' Report, are on pages 17 through 25 of the company's 1994 Annual Report
to Stockholders and are incorporated herein by reference.

Supplementary quarterly financial information is on page 26 of the company's
1994 Annual Report to Stockholders and is incorporated herein by reference.

10
<PAGE>

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

None

PART III

ITEM 10. DIRECTORS OF THE REGISTRANT.

Information concerning the present directors of the company and all persons
nominated to become directors at the Annual Meeting of Stockholders of the
company to be held April 26, 1995, is contained in the section captioned
"Election of Directors" of the Proxy Statement for such annual meeting. Such
section is on pages 2 through 3 of such Proxy Statement, and is incorporated
herein by reference. Information concerning the registrant's executive officers
is furnished in a separate item captioned "Executive Officers of the
Registrant", included in Part I of this Form 10-K.

Compliance With Section 16(a) Of The Exchange Act

Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Company's directors, executive officers and
holders of more than 10% of the Company's common stock to file with the
Securities and Exchange Commission initial reports of ownership and reports of
changes in ownership of common stock and other equity securities of the Company.
The Company believes that during the fiscal year ended December 31, 1994, its
officers, directors and holders of more than 10% of the Company's common stock
complied with all Section 16(a) filing requirements. In making these statements,
the Company has relied solely upon a review of Forms 3 and 4 furnished to the
Company during its most recent fiscal year, Forms 5 furnished to the Company
with respect to its most recent fiscal year, and written representations from
reporting persons that no Form 5 was required.

ITEM 11. EXECUTIVE COMPENSATION.

Information concerning executive compensation paid by the company is
contained in the sections captioned "Executive Compensation" and "Compensation
Committee Report on Executive Compensation" on pages 6 through 9 of the Proxy
Statement for the Annual Meeting of Stockholders of the company to be held April
26, 1995, and is incorporated herein by reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

Information concerning the ownership of equity securities of the company by
certain beneficial owners and management is contained in the sections captioned
"Ownership By Certain Beneficial Owners" and "Election of Directors" on pages 2
through 6 of the Proxy Statement for the Annual Meeting of Stockholders of the
company to be held April 26, 1995, and is incorporated herein by reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

Information concerning transactions with management and others and
indebtedness of management is contained in the section captioned "Transactions
with Management" on page 11 of the Proxy Statement for the Annual Meeting of
Stockholders of the company to be held April 26, 1995 and is incorporated herein
by reference.

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<PAGE>
PART IV

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

(a) 1. Financial Statements:

The Registrant's financial statements, together with the Independent
Auditors' Report, are incorporated herein by reference to the 1994 Annual Report
to Stockholders, pages 17 through 25. With the exception of the aforementioned
information and the information incorporated by reference into Items 2,5,6,7 and
8 of this report, the Annual Report to Stockholders for the year ended December
31, 1994, is not to be deemed filed as a part of this report. The supplemental
financial information listed below should be read in conjunction with the
financial statements in the Annual Report to Stockholders for the year ended
December 31, 1994.

(a) 2. Financial Statement Schedules: Page
----
Independent Auditors' Report on Financial Statement Schedules 16

Schedule
Number Description of Schedule
-------- ---------------------------------
II Valuation and Qualifying Accounts 17

All other schedules are omitted because they are not applicable or not required,
or because the required information is included in the financial statements or
notes thereto.

(a) 3. Exhibits:

(3) (a) Certificate of Incorporation of Registrant.

(b) By-Laws of Registrant.
(These documents are filed as exhibits to the Registrant's
Registration Statement on Form S-1 as filed December 4, 1987.)

(4) (a) Specimen certificate representing shares of Common
Stock, $.001 par value, of Registrant.
(This document is filed as an exhibit to the Registrant's
Registration Statement on Form S-1 as filed November 4, 1988.)

(b) Certificate of Incorporation of Registrant.
(This document is filed as an exhibit to the Registrant's
Registration Statement on Form S-1 as filed December 4, 1987.)

(10) (a) Lease Agreement between the Registrant and Embassy
Plaza Limited Partnership.
(This document is filed as an exhibit to the Registrant's Annual
Report on Form 10-K for the fiscal year ended December 31, 1990.)

(b) Registrant's Stock Option Plan of 1989.
(This document is included as an exhibit to the Registrant's
Proxy Statement for the Annual Meeting of Shareholders held on
April 26, 1989.)

(c) Registrant's Non-employee Directors Stock Option
Plan.
(This document is included as an exhibit to the Registrant's
Proxy Statement for the Annual Meeting of Shareholders held on
April 26, 1989.)

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<PAGE>
(d) Form of indemnification agreement between the
Registrant and the Officers and Directors of the
Registrant.
(This document is filed as an exhibit to the Registrant's
Registration Statement on Form S-1 as filed May 22, 1989.)

(e) First Amendment to Registrant's Employee Stock
Option Plan of 1989 (amends Exhibit 10(b)).

(f) First Amendment to Registrant's Non-employee
Directors Stock Option Plan (amends Exhibit
10(c)).
(These documents are included as exhibits to the Registrant's
Proxy Statement for the Annual Meeting of Stockholders held on
April 25, 1990.)

(g) Second Amendment to Registrant's Employee Stock
Option Plan of 1989 (amends Exhibit 10(b)).

(h) Second Amendment to Registrant's Non-employee
Directors Stock Option Plan (amends Exhibit
10(c)).
(These documents are included as exhibits to the Registrant's
Proxy Statement for the Annual Meeting of Stockholders held on
April 24, 1991.)

(i) Loan Agreement dated October 9, 1992 among the
Registrant, First National Bank of Omaha, FirsTier
Bank Lincoln and First National Bank of Wahoo.

(j) First Amendment to Loan Agreement dated October 9,
1992 among the Registrant, First National Bank of
Omaha, FirsTier Bank of Lincoln and First National
Bank of Wahoo.

(k) Independent Sales Representative Agreement dated
March 28, 1990 between the Registrant and Phil
Huston.

(l) First Amendment dated March 1, 1991 to Independent
Sales Representative Agreement dated March 28,
1990 between Registrant and Phil Huston.

(m) Amendment to Independent Sales Representative
Agreement dated March 28, 1990 between Registrant
and Phil Huston.
(These documents are included as exhibits to the Registrant's
Annual Report on Form 10-K as filed March 24, 1993).

(n) Third Amendment to Registrant's Stock Option Plan
of 1989 (amends Exhibit 10(b)).

(o) Third Amendment to Registrant's Non-Employee
Directors Stock Option Plan (amends Exhibit
10(c)).

(p) Fourth Amendment to Employee Stock Option Plan of
1989 (amends Exhibit 10(b)).

(q) Fourth Amendment to Non-Employee Directors Stock
Option Plan (amends Exhibit 10(c)).
(These documents are included as exhibits to the Registrant's
Proxy Statement for the Annual Meeting of Stockholders to be held
April 27, 1994).

(r) Restated Loan Agreement dated November 8, 1993
among the Registrant, First National Bank of
Omaha, FirsTier Bank Lincoln, First National Bank
of Wahoo, National Bank of Detroit, Norwest Bank
Nebraska, NA and The Boatmen's Bank of St. Louis.

13
<PAGE>
(s) Restated Security Agreement dated November 8, 1993
among the Registrant, First National Bank of
Omaha, FirsTier Bank Lincoln, First National Bank
of Wahoo, National Bank of Detroit, Norwest Bank
Nebraska, NA and The Boatmen's Bank of St. Louis.
(These documents are included as exhibits to the Registrant's
Annual Report on Form 10-K as filed March 14, 1994).

(t) Restated and amended Non-Employee Directors Stock
Option Plan.
(This document is included as an exhibit to the Registrant's
Proxy Statement for the annual meeting of stockholders to be held
April 26, 1995.)

(u) First Amendment to the Restated Loan Agreement
dated November 8, 1993 among the Registrant, First
National Bank of Omaha, Firstier Bank Lincoln,
First National Bank of Wahoo, National Bank of
Detroit, Norwst Bank Nebraska, NA and The
Boatmen's Bank of St. Louis.

(v) Second Amendment to the Restated Loan Agreement
dated November 8, 1993 among the Registrant, First
National Bank of Omaha, Firstier Bank Lincoln,
First National Bank of Wahoo, National Bank of
Detroit, Norwst Bank Nebraska, NA and The
Boatmen's Bank of St. Louis.

(w) Third Amendment to the Restated Loan Agreement
dated November 8, 1993 among the Registrant, First
National Bank of Omaha, Firstier Bank Lincoln,
First National Bank of Wahoo, National Bank of
Detroit, Norwst Bank Nebraska, NA and The
Boatmen's Bank of St. Louis.

(x) Fourth Amendment to the Restated Loan Agreement
dated November 8, 1993 among the Registrant, First
National Bank of Omaha, Firstier Bank Lincoln,
First National Bank of Wahoo, National Bank of
Detroit, Norwst Bank Nebraska, NA and The
Boatmen's Bank of St. Louis.

(y) Lease agreement dated August 30, 1994 between
Registrant and The Prudential Insurance Company of
America.

(z) First Amendment to lease agreement dated August
30, 1994 among the Registrant and The Prudential
Insurance Company of America.

(aa) Senior Subordinated Note dated June 30, 1994
between the Registrant and Equitable Capital
Private Income and Equity Partnership II, L.P.

(11) Statement re computation of income per share.
(12) Not applicable.
(13) Registrant's 1994 Annual Report to Stockholders.
(This document is hereby incorporated by reference.)
(16) None.
(18) None.
(19) None.
(22) None.
(23) Consent of Deloitte and Touche LLP.
(24) None.
(25) None.
(27) Financial Data Schedule
(99) Proxy Statement for the Annual Meeting of Stockholders
of the Registrant to be held April 26, 1995.
(This document is hereby incorporated by reference.)

(b) No reports on Form 8-K were filed by the Registrant during the fourth
quarter of the year ended December 31, 1994.

14
<PAGE>

SIGNATURES

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

Data Transmission Network Corporation,
a Delaware Corporation

By: /s/ Roger R. Brodersen
-----------------------------
Roger R. Brodersen, President

Dated March 28, 1995.

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

By: /s/ Roger R. Broderson March 28, 1995
------------------------------
Roger R. Brodersen, Chairman of the
Board, President, Chief Executive
Officer and Director

By: /s/ Greg T. Sloma March 28, 1995
------------------------------
Greg T. Sloma, Executive Vice
President and Chief Operating
Officer and Director

By: /s/ Roger W. Wallace March 28, 1995
------------------------------
Roger W. Wallace, Senior Vice
President and Director

By: /s/ Robert S. Herman March 28, 1995
------------------------------
Robert S. Herman, Senior Vice
President and Director

By: /s/ Brian L. Larson March 28, 1995
------------------------------
Brian L. Larson, Chief Financial
Officer, Secretary and Treasurer

By: /s/ David L. Evans March 28, 1995
------------------------------
David L. Evans, Director

By: /s/ David K. Karnes March 28, 1995
------------------------------
David K. Karnes, Director

By: /s/ J. Michael Parks March 28, 1995
-----------------------------
J. Michael Parks, Director

15
<PAGE>

INDEPENDENT AUDITORS' REPORT

Board of Directors and Stockholders
Data Transmission Network Corporation
Omaha, Nebraska

We have audited the financial statements of Data Transmission Network
Corporation as of December 31, 1994 and 1993, and for each of the three years in
the period ended December 31, 1994, and have issued our report thereon dated
February 3, 1995; such financial statements and report are included in the 1994
Annual Report to Stockholders and are incorporated herein by reference. Our
audits also included the financial statement schedules of Data Transmission
Network Corporation, listed in Item 14(a)2. These financial statement schedules
are the responsibility of the Company's management. Our responsibility is to
express an opinion based on our audits. In our opinion, such financial statement
schedules, when considered in relation to the basic financial statements taken
as a whole, present fairly in all material respects the information set forth
therein.

DELOITTE & TOUCHE LLP

Omaha, Nebraska
February 3, 1995

16
<PAGE>
<TABLE>
<CAPTION>
Schedule II

DATA TRANSMISSION NETWORK CORPORATION

VALUATION AND QUALIFYING ACCOUNTS

YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992

Balance at Charged to Balance
Beginning Charged to Other at End
Description of Period Expenses Accounts Deductions of Period
------------------------------ ----------- ---------- ---------- ---------- ---------
Allowance for doubtful accounts:
<S> <C> <C> <C> <C> <C>
Year ended December 31, 1994: $180,000 $283,000 -- $243,000 $220,000

Year ended December 31, 1993: $120,000 $270,000 -- $210,000 $180,000

Year ended December 31, 1992: $120,000 $179,000 -- $179,000 $120,000

</TABLE>

17
<PAGE>
<TABLE>
<CAPTION>

EXHIBIT INDEX
Exhibit Page
Number Item Number
------- ---- ------
<S> <C> <C>
3.(a) Certificate of Incorporation of Registrant *
3.(b) By-Laws of Registrant *
4.(a) Specimen certificate representing shares of common stock, *
$.001 par value, of Registrant
4.(b) Certificate of Incorporation of Registrant *
10.(a) Lease Agreement between the Registrant and Embassy Plaza *
Limited Partnership
10.(b) Registrant's Stock Option Plan of 1989 *
10.(c) Registrant's Non-Employee Directors Stock Option Plan *
10.(d) Form of indemnification agreement between the Registrant *
and the Officers and Directors of the Registrant
10.(e) First Amendment to Registrant's Stock Option Plan of 1989 *
10.(f) First Amendment to Registrant's Non-Employee Directors *
Stock Option Plan
10.(g) Second Amendment to Registrant's Stock Option Plan of 1989 *
10.(h) Second Amendment to Registrant's Non-Employee Directors *
Stock Option Plan
10.(i) Loan Agreement dated October 9, 1992 *
10.(j) First Amendment to Loan Agreement dated October 9, 1992 *
10.(k) Independent Sales Representative Agreement with Phil *
Huston dated March 28, 1990
10.(l) First Amendment dated March 1, 1991 to Independent Sales *
Representative Agreement with Phil Huston
10.(m) Amendment to Independent Sales Representative Agreement *
with Phil Huston
10.(n) Third Amendment to Registrant's Stock Option Plan of 1989 *
10.(o) Third Amendment to Registrant's Non-Employee Directors *
Stock Option Plan
10.(p) Fourth Amendment to Registrant's Stock Option Plan of 1989 *
10.(q) Fourth Amendment to Registrant's Non-Employee Directors *
Stock Option Plan
10.(r) Restated Loan Agreement dated November 8, 1993 *
10.(s) Restated Security Agreement dated November 8, 1993 *
10.(t) Restated and amended Non-Employee Directors Stock Option Plan *
10.(u) First Amendment to Restated Loan Agreement dated November 8, 1993 19
10.(v) Second Amendment to Restated Loan Agreement dated November 8, 1993 25
10.(w) Third Amendment to Restated Loan Agreement dated November 8, 1993 37
10.(x) Fourth Amendment to Restated Loan Agreement dated November 8, 1993 44
10.(y) Lease agreement with The Prudential Insurance Company of America 51
dated August 30, 1994
10.(z) First amendment to Lease Agreement dated August 30, 1994 73
10.(aa) Senior Subordinated Note between Registrant and The Prudentiaal Insurance 74
Company of America dated June 30, 1994
11. Statement re computation of income per share 75
13. Registrant's 1994 Annual Report to Stockholders 77
23. Consent of Deloitte & Touche LLP 114
27. Financial Data Schedule for year ended 12/31/94 115
99. Proxy Statement for the Annual Meeting of Stockholders 116
of the Registrant to be held April 26, 1995

* - These documents have been incorporated by reference as indicated in Item
14(a) (3).
</TABLE>

EXHIBIT 10.(u)

FIRST AMENDMENT TO RESTATED LOAN AGREEMENT

THIS FIRST AMENDMENT TO RESTATED LOAN AGREEMENT is intended to amend the
terms of the Restated Loan Agreement (the "Agreement") dated as of November 8,
1993 among DATA TRANSMISSION NETWORK CORPORATION, FIRST NATIONAL BANK OF OMAHA,
FIRSTIER BANK, NATIONAL ASSOCIATION, LINCOLN, NEBRASKA, FIRST NATIONAL BANK,
WAHOO, NEBRASKA, NBD BANK, N.A., NORWEST BANK NEBRASKA, N.A. and THE BOATMEN'S
NATIONAL BANK OF ST. LOUIS. All terms and conditions of the Agreement shall
remain in full force and effect except as expressly amended herein. All
capitalized terms herein shall have the meanings prescribed in the Agreement.
The Agreement shall be amended as follows:

Effective as of the date hereof change the reference to the maximum amount
of revolving credit in Section 2.1 from $26,500,000 to $38,000,000 and increase
the references to each Bank's maximum advance limit as follows: (1) as to FNB-O,
$11,400,000; (ii) as to FirsTier, $6,840,000; (iii) as to FNB-W, $380,000; (iv)
as to NBD, $6,840,000; (v) as to Norwest, $6,460,000; and (vi) as to Boatmen's,
$6,080,000. In connection with this amendment the Borrower is contemporaneously
executing and delivering to the Banks six Secured Business Promissory Notes
dated as of the date hereof in the respective principal amounts of $11,400,000,
$6,840,000, $380,000, $6,840,000, $6,460,000 and $6,080,000 (the "Replacement
Notes"). These Replacement Notes are being delivered in substitution of the
Secured Business Promissory Notes dated as of November 8, 1993, in the
respective principal amounts of $6,890,000, $5,300,000, $265,000, $5,300,000,
$4,505,000 and $4,240,000. This amendment shall not affect and there shall
remain outstanding from the Borrower to the Banks, the Existing Term Notes and
the Related Bank Debt.

The parties hereby acknowledge that these Replacement Notes are secured by
the Collateral as specified in the Restated Security Agreement between the
parties dated as of November 8, 1993.

This Amendment may be executed in several counterparts and such
counterparts together shall constitute one and the same instrument.

IN WITNESS WHEREOF, the undersigned have executed this FIRST AMENDMENT TO
RESTATED LOAN AGREEMENT dated as of April 11, 1994.

DATA TRANSMISSION NETWORK
CORPORATION

By Steve Ball
----------------------------
Title: Chief Financial Officer
----------------------------

FIRST NATIONAL BANK OF OMAHA

By Jim Bonham
----------------------------
Title: Vice President
----------------------------

19
<PAGE>

FIRSTIER BANK, NATIONAL
ASSOCIATION, LINCOLN, NEBRASKA

By John Arrigo
----------------------------
Title: Senior Vice President
----------------------------

20
<PAGE>

FIRST NATIONAL BANK, WAHOO,
NEBRASKA

By Elizabeth E. Rezac
---------------------------
Title: Loan Officer
---------------------------

21
<PAGE>

NBD BANK, N.A.

By James R. Frye
--------------------------
Title: Vice President
--------------------------

22
<PAGE>

NORWEST BANK NEBRASKA, N.A.

By Leslie J. Volk
------------------------
Title: Vice President
------------------------

23
<PAGE>

THE BOATMEN'S NATIONAL BANK
OF ST. LOUIS

By Joseph L. Sooter
----------------------
Title: Vice President
----------------------

4429E/1-7

24
<PAGE>

EXHIBIT 10.(v)

SECOND AMENDMENT TO AND EXTENSION OF
1993 RESTATED LOAN AGREEMENT

THIS SECOND AMENDMENT TO AND EXTENSION OF 1993 RESTATED LOAN AGREEMENT (the
"Second Amendment") is intended to amend the terms of the Restated Loan
Agreement (the "Agreement") dated as of November 8, 1993 and as amended by the
First Amendment to Restated Loan Agreement (the "First Amendment") dated as of
April 11, 1994, among DATA TRANSMISSION NETWORK CORPORATION, FIRST NATIONAL BANK
OF OMAHA, FIRSTIER BANK, NATIONAL ASSOCIATION, LINCOLN, NEBRASKA, FIRST NATIONAL
BANK, WAHOO, NEBRASKA, NBD BANK, N.A., NORWEST BANK NEBRASKA, N.A. and THE
BOATMEN'S NATIONAL BANK OF ST. LOUIS. All terms and conditions of the Agreement
shall remain in full force and effect except as expressly amended herein. Except
as provided herein, all capitalized terms herein shall have the meanings
prescribed in the Agreement. The Agreement shall be amended as follows:

1. Effective as of the date hereof change the reference to the maximum
amount of revolving credit in Section 2.1 from $38,000,000 to $46,400,000
and increase the references to each Bank's maximum advance limit as
follows: (1) as to FNB-O, $14,400,000; (ii) as to FirsTier, $8,640,000;
(iii) as to FNB-W, $480,000; (iv) as to NBD, $8,640,000; (v) as to Norwest,
$8,160,000; and (vi) as to Boatmen's, $6,080,000. In connection with this
amendment the Borrower is contemporaneously executing and delivering to the
Banks six Secured Business Promissory Notes dated as of the date hereof in
the respective principal amounts of $14,400,000, $8,640,000, $480,000,
$8,640,000, $8,160,000 and $6,080,000 (the "Replacement Notes"). These
Replacement Notes are being delivered in substitution of the Secured
Business Promissory Notes dated as of April 11, 1994, in the respective
principal amounts of $11,400,000, $6,840,000, $380,000, $6,840,000,
$6,460,000 and $6,080,000. This amendment shall not affect and there shall
remain outstanding from the Borrower to the Banks, the Existing Term Notes
and the Related Bank Debt.

2. The parties hereto agree that the revolving credit facility shall be
extended to June 30, 1995. Accordingly, each reference in the Agreement to
June 30, 1994, is hereby amended to June 30, 1995 and the maturity date for
the Notes referenced in Section 2.3 of the Agreement shall be June 30,
1999.

3. The parties hereby acknowledge that these Replacement Notes are secured
by the Collateral as specified in the Restated Security Agreement between
the parties dated as of November 8, 1993.

25
<PAGE>

4. The following changes shall be made in the definitions in Article I of
the Agreement:

Change of Control. (a) at any time when any of the equity
securities of the Borrower shall be registered under Section 12 of the
Securities Exchange Act of 1934 as amended from time to time (the
"Exchange Act"), (i) any person, entity or "group" (within the meaning
of Section 13(d)(3) of the Exchange Act) (other than any person which
is a management employee, or any such "group" which consists entirely
of management employees, of the Borrower) being or becoming the
beneficial owner, directly or indirectly, of more than 50% of the
voting stock of the Borrower, or (ii) a majority of the members of the
Borrower's board of directors (the "Board") consisting of persons
other than Continuing Directors (as hereinafter defined); and (b) at
any other time, less than 50% of the voting stock of the Borrower
being owned beneficially, directly or indirectly, by employees of the
Borrower or its subsidiaries. As used herein, the term "Continuing
Director" means any member of the Board on the date hereof and any
other member of the Board who shall be recommended or elected to
succeed a Continuing Director by a majority of Continuing Directors
who are the members of the Board.

Consolidated Tangible Net Worth. The Net Worth of the Borrower
and its subsidiaries on a consolidated basis ("Consolidated Net
Worth"), after deducting therefrom (without duplication of
deductions):

(a) the net book amount of all assets, after deducting any
reserves applicable thereto, which would be treated as intangible
under generally accepted accounting principles, including,
without limitation, such items as good will, trademarks, trade
names, service marks, brand names, copyrights, patents and
licenses, and rights with respect to the foregoing, unamortized
debt discount and expense, organizational expenses and the excess
of cost of purchased subsidiaries over equity in the net assets
thereof at the date of acquisition;

(b) any write-up in the book value of any asset on the books
of the Borrower or any of its subsidiaries resulting from a
revaluation thereof subsequent to December 31, 1993 (other than
the write-up of the book value of an asset made in accordance
with generally accepted accounting principles in connection with
the purchase of such asset);

26
<PAGE>
(c) the amounts, if any, at which any shares of stock of the
Borrower or any of its subsidiaries appear on the asset side of
the balance sheet from which Consolidated Net Worth is determined
for the purposes of this definition;

(d) all deferred charges (other than prepaid expenses); and

(e) the amounts at which any investment in any person or
entity, other than Permitted Investments (as defined below),
appear on the asset side of such balance sheet. "Permitted
Investments" shall mean any of the following:

(i) marketable direct obligations issued or
unconditionally guaranteed by the United States of America
or issued by any agency thereof maturing within one year
from the date of acquisition thereof,

(ii) marketable direct obligations issued by any state
of the United States of America or any political subdivision
of any such state or any public instrumentality thereof
maturing within one year from the date of acquisition
thereof and having as at any date of determination the
highest rating obtainable from either Standard & Poor's
Corporation or Moody's Investors Service, Inc.,

(iii) commercial paper maturing no more than 270 days
from the date of creation thereof and having as at any date
of determination the highest rating obtainable from either
Standard & Poor's Corporation or Moody's Investors Service,
Inc.,

(iv) certificates of deposit maturing within one year
from the date of acquisition thereof issued by commercial
banks incorporated under the laws of the United States of
America or any state thereof or the District of Columbia,
each having as at any date of determination combined capital
and surplus of not less than $100,000,0000 ("Permitted
Banks") or a foreign branch thereof,

27
<PAGE>
(v) bankers' acceptances eligible for rediscount under
requirements of The Board of Governors of the Federal
Reserve System and accepted by Permitted Banks,

(vi) obligations of the type described in clauses (i)
through (iv) above purchased from a securities dealer
designated as a "primary dealer" by the Federal Reserve Bank
of New York or a Permitted Bank as counterparty pursuant to
a repurchase agreement obligating such counterparty to
repurchase such obligations not later than 14 days after the
purchase thereof and which provides that the obligations
which are the subject thereof are held for the benefit of
the Borrower and its subsidiaries by a custodian which is a
Permitted Bank and which is not the counterparty to the
repurchase agreement in question, and

(vi) the securities of any investment company
registered under the Investment Company Act of 1940 which is
a "money market fund" within the meaning of regulations of
the Securities and Exchange Commission, or an interest in a
pooled fund maintained by a Permitted Bank having comparable
investment restrictions.

Existing Term Notes. Those certain promissory notes from the
Borrower to FNB-O, FirsTier, FNB-W and NBD dated as of January 7,
1991, April\23,\1991, May\3,\1991, January\15,\1992, February\4,\1992,
March\3,\1992, May\6,\1992, July\7,\1992, October\1,\1992,
October\12,\1992, October\19,\1992, November\3,\1992, January\4,\1993,
February\9,\1993, April\16,\1993, and July\8,\1993, all as described
on Schedule A hereto.

Operating Cash Flow. The Borrower's average monthly earnings or
loss before interest, depreciation and taxes, less current tax expense
and plus or minus any non-ordinary non-cash charges or credits to
earnings, which average shall be based on the Borrower's actual
financial results in the two full calendar months preceding the date
of determination. For purposes of calculating Operating Cash Flow for
this Agreement, the Borrower shall not permit deferred commission
expenses to be capitalized for any period in excess of twelve months.

28
<PAGE>
5. The following sentences shall be added after the first sentence of
Section 4.2 of the Agreement:

The Banks shall be entitled to receive as a prepayment on the Notes
the proceeds of any sale of assets of the Borrower which are
prohibited by the preceding sentence. Notwithstanding the foregoing
prepayment requirements, any such prohibited sale shall remain a
violation of this Agreement.

6. Section 4.3 of the Agreement shall be amended to read as follows:

4.3 Net Worth. The Borrower shall maintain a minimum Net Worth as
follows: (i) from the date thereof through December 31, 1994, minimum
Net Worth shall be at least $11,000,000; and (ii) at all times after
December 31, 1994, minimum Net Worth shall be at least $11,500,000.;
provided, however, solely for purposes of determining compliance with
the provisions of this Section 4.3, "Net Worth" shall not include any
subordinated debt. In addition, the Borrower shall not at any time
permit Consolidated Tangible Net Worth to be less than $9,000,000.

7. The following Subsection (c) shall be added to Section 4.4:

(c) On the day the Borrower becomes liable with respect
to any debt and immediately after giving effect thereto and
to the concurrent retirement of any other debt, the sum of
Total Indebtedness, plus the amount of any outstanding
subordinated debt, plus the Borrower's contingent
obligations under any guaranty of the debt of any other
person or entity (other than unsecured debt of a subsidiary
incurred in the ordinary course of business for other than
borrowed money or to finance the purchase price of any
property or business) shall not exceed an amount equal to
sixty times Operating Cash Flow at such date.

8. The following new covenant shall be added as Section 4.15 to the
Agreement:

4.15. Interest Coverage. The ratio of Operating Cash Flow to
interest expense (as determined in accordance with generally
accepted accounting principles but excluding amortization of
deferred offering costs and any fees related to the Trigger
Event in Section 2.4 of this Agreement) at the end of each
quarter during the term of this Agreement, as shown on the
Quarterly Compliance Report, shall not be less than 2.0 to
1.0.

29
<PAGE>
9. The following new covenant shall be added as Section 4.16 to the
Agreement:

4.16 Subordinated Debt. The Borrower shall not incur any subordinated
debt or issue any preferred stock or warrants for preferred stock
except upon the prior written consent of the Banks. The Borrower shall
not make any voluntary or optional prepayment on any subordinated debt
without the prior written consent of the Banks. Similarly, the
Borrower shall not amend its articles of incorporation or any other
documents or agreements relating to the issuance of subordinated debt,
preferred stock or warrants for preferred stock without the prior
written consent of the Banks.

10. Subsections 6.1 (d), (f) and (j) of the Agreement shall be amended and
a new Subsection (l) shall be added as follows:

(d) A failure of the Borrower to comply with any requirement or
restriction contained in Sections 4.1, 4.2, 4.3, 4.4, 4.7, 4.11, 4.12,
4.13, 4.14, 4.15 or 4.16 of this Agreement.

(f) The occurrence of a default or a breach of any of the Borrower's
obligations under any note, loan agreement, preferred stock,
subordinated debt instrument or agreement, or any other agreement
evidencing an obligation to repay borrowed money.

(j) A change shall occur after November 8, 1993, directly or
indirectly, in the ownership or control of the Borrower; provided,
however, that changes in the ownership or control of, or new issuances
of, voting common stock which do not exceed, cumulatively, 50% of the
total issued and outstanding shares of the Borrower as of September
30, 1993 shall not be deemed an Event of Default under this Section
6.1(j); provided, further, that acquisitions of additional shares by
members of the existing executive management group of the Borrower
shall not be counted as changes in the ownership or control of the
Borrower under this Section 6.1(j). For purposes of computing the
total issued and outstanding shares as of September\30,\1993, warrants
and options for such shares shall be included.

(l) The Borrower shall be obligated to prepay all or any portion of
its subordinated debt as a result of a Change of Control.

30
<PAGE>
11. This Amendment may be executed in several counterparts and such
counterparts together shall constitute one and the same instrument.

12. This Amendment shall be effective as of June 29, 1994 and shall apply
to all Quarterly Compliance Reports and all obligations of the Borrower on
and after such date.

13. The Company, First National Bank of Omaha, FirsTier Bank, National
Association, Lincoln, and First National Bank, Wahoo, hereby agree that
whenever the term "Existing Loan Agreement" is used in the Related Loan
Agreement, such term shall include the 1993 Restated Loan Agreement, as
amended by the First Amendment, this Second Amendment, and subsequent
amendments, if any.

IN WITNESS WHEREOF, the undersigned have executed this SECOND
AMENDMENT TO AND EXTENSION OF RESTATED LOAN AGREEMENT dated as of June
29, 1994.

DATA TRANSMISSION NETWORK
CORPORATION

By Steve Ball
-------------------------------
Title: Secretary
-------------------------------

FIRST NATIONAL BANK OF OMAHA

By Jim Bonham
-------------------------------
Title: Vice President
-------------------------------

31
<PAGE>

FIRSTIER BANK, NATIONAL
ASSOCIATION, LINCOLN, NEBRASKA

By John Arrigo
--------------------------
Title: Commercial Banking Officer
--------------------------

32
<PAGE>

FIRST NATIONAL BANK, WAHOO,
NEBRASKA

By Elizabeth E. Rezac
-----------------------------
Title: Loan Officer
-----------------------------

33
<PAGE>

NBD BANK, N.A.

By James R. Frye
-----------------------------
Title: Vice President
-----------------------------

34
<PAGE>

NORWEST BANK NEBRASKA, N.A.

By Leslie J. Volk
----------------------------
Title:
----------------------------

35
<PAGE>

THE BOATMEN'S NATIONAL BANK
OF ST. LOUIS

By Joseph L. Sooter
-------------------------------
Title:
-------------------------------

4476E/1-8

36
<PAGE>

EXHIBIT 10. (w)

THIRD AMENDMENT TO 1993 RESTATED LOAN AGREEMENT

THIS THIRD AMENDMENT TO 1993 RESTATED LOAN AGREEMENT is intended to amend
the terms of the 1993 Restated Loan Agreement (the "Agreement") dated as of
November 8, 1993, as amended by the First Amendment to Restated Loan Agreement
(the "First Amendment") dated as of April 11, 1994 and as amended by the Second
Amendment to and Extension of 1993 Restated Loan Agreement (the "Second
Amendment") dated as of June 29, 1994 among DATA TRANSMISSION NETWORK
CORPORATION, FIRST NATIONAL BANK OF OMAHA, FIRSTIER BANK, NATIONAL ASSOCIATION,
LINCOLN, NEBRASKA, FIRST NATIONAL BANK, WAHOO, NEBRASKA, NBD BANK, N.A., NORWEST
BANK NEBRASKA, N.A. and THE BOATMEN'S NATIONAL BANK OF ST. LOUIS. All terms and
conditions of the Agreement shall remain in full force and effect except as
expressly amended herein. All capitalized terms herein shall have the meanings
prescribed in the Agreement. The Agreement shall be amended as follows:

The parties hereby acknowledge that, effective as of the date hereof,
$18,000,000 of the outstanding balance of the Borrower's loan shall be converted
to a term loan in accordance with Sections 2.3 and 2.4 of the Agreement. In
Section 2.1 of the Agreement, change the reference to the maximum amount of
revolving credit advanced from $46,400,000 to $28,400,000 and reduce the
references to each Bank's maximum advance limit accordingly on a pro rata basis.
In connection with this amendment the Borrower is contemporaneously executing
and delivering to the Banks six Secured Business Promissory Notes dated as of
the date hereof in the respective principal amounts of $5,598,000, $3,348,000,
$180,000, $3,348,000, $3,168,000 and $2,358,000. This amendment shall not affect
and there remain outstanding from the Borrower to the Banks, the Existing Term
Notes and the Related Bank Debt and those certain Secured Business Promissory
Notes dated as of June 29, 1994.

This Amendment may be executed in several counterparts and such
counterparts together shall constitute one and the same instrument.

IN WITNESS WHEREOF, the undersigned have executed this THIRD AMENDMENT TO
1993 RESTATED LOAN AGREEMENT dated as of August 30, 1994.

DATA TRANSMISSION NETWORK
CORPORATION

By Steve C. Ball
-----------------------------
Title: Chief Financial Officer
-----------------------------

37
<PAGE>

FIRST NATIONAL BANK OF OMAHA

By Jim Bonham
--------------------------
Title: Vice President
--------------------------

38
<PAGE>

FIRSTIER BANK, NATIONAL
ASSOCIATION, LINCOLN, NEBRASKA

By John Arrigo
-----------------------------
Title: Officer
-----------------------------

39
<PAGE>

FIRST NATIONAL BANK, WAHOO,
NEBRASKA

By Elizabeth E. Rezac
----------------------------
Title: Loan Officer
----------------------------

40
<PAGE>

NBD BANK, N.A.

By Thomas A. Levasseur
----------------------------
Title: Vice President
----------------------------

41
<PAGE>

NORWEST BANK NEBRASKA, N.A.

By Leslie J. Volk
--------------------------------
Title: Vice President
--------------------------------

42
<PAGE>

THE BOATMEN'S NATIONAL BANK
OF ST. LOUIS

By Joseph L. Sooter
-----------------------------
Title: Vice President
-----------------------------

4429E/8-14

43
<PAGE>

EXHIBIT 10. (x)

FOURTH AMENDMENT TO 1993 RESTATED LOAN AGREEMENT

THIS FOURTH AMENDMENT TO 1993 RESTATED LOAN AGREEMENT is intended to amend
the terms of the 1993 Restated Loan Agreement (the "Agreement") dated as of
November 8, 1993, as amended by the First Amendment to Restated Loan Agreement
(the "First Amendment") dated as of April 11, 1994, as amended by the Second
Amendment to and Extension of 1993 Restated Loan Agreement (the "Second
Amendment") dated as of June 29, 1994 and as amended by the Third Amendment to
1993 Restated Loan Agreement (the "Third Amendment") dated as of August 30, 1994
among DATA TRANSMISSION NETWORK CORPORATION, FIRST NATIONAL BANK OF OMAHA,
FIRSTIER BANK, NATIONAL ASSOCIATION, LINCOLN, NEBRASKA, FIRST NATIONAL BANK,
WAHOO, NEBRASKA, NBD BANK, N.A., NORWEST BANK NEBRASKA, N.A. and THE BOATMEN'S
NATIONAL BANK OF ST. LOUIS. All terms and conditions of the Agreement shall
remain in full force and effect except as expressly amended herein. All
capitalized terms herein shall have the meanings prescribed in the Agreement.
The Agreement shall be amended as follows:

The parties hereby acknowledge that, effective as of the date hereof,
$5,000,000 of the outstanding balance of the Borrower's loan shall be converted
to a term loan in accordance with Sections 2.3 and 2.4 of the Agreement. In
Section 2.1 of the Agreement, change the reference to the maximum amount of
revolving credit advanced from $28,400,000 to $23,400,000 and reduce the
references to each Bank's maximum advance limit accordingly on a pro rata basis.
In connection with this amendment the Borrower is contemporaneously executing
and delivering to the Banks six Secured Business Promissory Notes dated as of
the date hereof in the respective principal amounts of $1,555,000, $930,000,
$50,000, $930,000, $880,000 and $655,000. This amendment shall not affect and
there remain outstanding from the Borrower to the Banks, the Existing Term Notes
and the Related Bank Debt and those certain Secured Business Promissory Notes
dated as of June 29, 1994 and August 30, 1994.

This Amendment may be executed in several counterparts and such
counterparts together shall constitute one and the same instrument.

IN WITNESS WHEREOF, the undersigned have executed this FOURTH AMENDMENT TO
1993 RESTATED LOAN AGREEMENT dated as of November 29, 1994.

DATA TRANSMISSION NETWORK
CORPORATION

By Greg T. Sloma
------------------------------
Title: EVP & CFO
------------------------------

44
<PAGE>

FIRST NATIONAL BANK OF OMAHA

By Jim Bonham
-------------------------------
Title: Vice President
-------------------------------

45
<PAGE>

FIRSTIER BANK, NATIONAL
ASSOCIATION, LINCOLN, NEBRASKA

By John Arrigo
--------------------------------
Title: Officer
--------------------------------

46
<PAGE>

FIRST NATIONAL BANK, WAHOO,
NEBRASKA

By Elizabeth Rezac
-------------------------------
Title: Loan Officer
-------------------------------

47
<PAGE>

NBD BANK, N.A.

By Thomas A. Levasseur
-------------------------------
Title: Vice President
-------------------------------

48
<PAGE>

NORWEST BANK NEBRASKA, N.A.

By Leslie J. Volk
--------------------------
Title: Vice President
--------------------------

49
<PAGE>

THE BOATMEN'S NATIONAL BANK
OF ST. LOUIS

By Joseph L. Sooter
------------------------------
Title: Vice President
------------------------------

4429E/39-45

50
<PAGE>

EXHIBIT 10. (y)
EMBASSY PLAZA

STANDARD OFFICE LEASE

THIS LEASE is made this day of , 1994, between The Prudential Insurance Company
of America, having an office at One Prudential Plaza, Suite 1200, Chicago,
Illinois 60601 ("Landlord"), and Data Transmission Network Corporation, having
an office at 9110 West Dodge Road, Suite 200, Omaha, Nebraska, 68114 ("Tenant"),
for space in the building located at 9110 West Dodge Road, Omaha, Nebraska (such
building, the related parking areas, driveways and other improvement, together
with the land described in Exhibit "C" attached hereto upon which such building
and improvements are situated, being herein referred to as the "Building").

The following schedule sets forth certain basic terms of this Lease:

BASIC TERMS:

A. Premises: Approximately 14,987 rentable square feet (RSF) of space in the
Building described above, known as Suites #290 (5,435 RSF), #300 (2,268
RSF), #310 (5,970 RSF) and #362 (1,314 RSF) as shown on the floor plans
attached hereto, marked as Exhibits "A" & "B" and made a part hereof.

B. Base Rent: One Million, Two Hundred Sixty-Two Thousand, Seven Hundred
Fifty-Seven Dollars and Eighty-Five Cents ($1,262,757.85) for the Term,
payable monthly as follows:

September 1, 1994 - September 30, 1994 $16,934.61
October 1, 1994 - May 31, 2000 $18,320.93 Per Month

C. Term: That period of time commencing September 1, 1994, for Suites #290,
#310, and #362 and September 16, 1994, for Suite 300 (the "Commencement
Dates") and ending May 31, 2000, (the "Expiration Date") unless modified as
to Suite 300 as set forth below, or sooner terminated as set forth herein.
With respect to Suite 300, the Tenant will be allowed to occupy the
Premises and the Lease will commence with respect to the 2,268 RSF of space
contained in Suite 300 upon the relocation of the existing tenant
(Intracorp), which for purposes of this Lease is estimated to be September
16, 1994. Should Suite 300 become available other then on September 16,
1994, for Tenant's occupancy (either earlier or later), Tenant and Landlord
will execute a Commencement Date Agreement in the form of Exhibit "F"
setting forth the Commencement Date for the space contained in Suite 300.
Should the Commencement Date be revised as set forth above, the Base Rent
due under paragraph B of the Basic Terms of the Lease will be adjusted to
reflect such revision at the annual rate of $14.67 per RSF.

D. Tenant's Proportionate Share: 11.53% (Tenant's rentable square feet divided
by Building's total rentable square feet = 14,987 RSF / 129,948 RSF)

E. Base Expenses or Base Expense Year: 1994

F. Security Deposit: No Deposit Required

G. Broker(s): Pacific Realty Group, Inc. ("Broker")

H. Guarantor(s): None

I. Exhibits:
A. Third Floor Plan of Premises
B. Second Floor Plan of Premises
C. Legal Description of Building
D. Tenant Improvement Work Schedule
E. Rules and Regulations
F. Commencement Date Agreement
G. Antenna License Agreement

1. DEMISE AND TERM. Landlord leases to Tenant and Tenant leases from Landlord
the premises (the "Premises") described in Item "A" of the Basic Terms and shown
on the floor plans, attached hereto as Exhibits "A" and "B", subject to the
covenants and conditions set forth in this Lease, for a term (the "Term")
commencing on the Commencement Date and expiring on the Expiration Date
described in Item C of the Basic Terms, unless terminated earlier as otherwise
provided in this Lease. If Tenant shall occupy the Premises prior to the
beginning of the Term of this Lease with Landlord's consent, all the provisions
of this Lease shall be in full force and effect as soon as Tenant occupies the
Premises.

2. RENT.

A. Definitions. For purposes of this Lease, the following terms shall have the
following meanings:
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<PAGE>
(i) "Base Expenses" or "Base Expense Year" shall mean the amount or the
year set forth in Item E of the Basic Terms

(ii) "Expenses" shall mean all expenses, costs and disbursements (including
Taxes) paid or incurred by Landlord in connection with the ownership,
management, maintenance, operation, replacement and repair of the
Building. Expenses shall not include: (a) costs of tenant alterations;
(b) costs of capital improvements (except for costs of any capital
improvements made or installed for the purpose of reducing Expenses or
made or installed pursuant to governmental requirement or insurance
requirement, which costs shall be amortized by Landlord in accordance
with sound accounting and management principles); (c) interest and
principal payments on mortgages (except interest on the cost of any
capital improvements for which amortization may be included in the
definition of Expenses) or any rental payments on any ground leases
(except for rental payments which constitute reimbursement for Taxes
and Expenses); (d) advertising expenses and leasing commissions; (e)
any cost or expenditure for which Landlord is reimbursed, whether by
insurance proceeds or otherwise, except through Adjustment Rent
(hereinafter defined); (f) the cost of any kind of service furnished to
any other tenant in the Building which Landlord does not generally make
available to all tenants in the Building; (g) legal expenses of
negotiating leases; (h) salaries and fringe benefits of employees above
the grade of building manager. Expenses shall be determined on a cash
or accrual basis, as Landlord may elect.

(iii) "Rent" shall mean Base Rent, Adjustment Rent and any other sums or
charges due by Tenant hereunder.

(iv) "Taxes" shall mean all taxes, assessments and fees levied upon the
Building, the property of Landlord located therein or the rents
collected therefrom, by any governmental entity based upon the
ownership, leasing, renting or operation of the Building, including all
costs and expenses of protesting any such taxes, assessments or fees.
Taxes shall not include any net income, capital stock, succession,
transfer, franchise, gift, estate or inheritance taxes; provided,
however, if at any time during the Term, a tax or excise on income is
levied or assessed by any governmental entity, in lieu of or as a
substitute for, in whole or in part, real estate taxes or other AD
VALOREM taxes, such tax shall constitute and be included in Taxes. For
the purpose of determining Taxes for any given year, the amount to be
included for such year (a) from special assessments payable in
installments shall be the amount of the installments (and any interest)
due and payable during such year, and (b) from all other Taxes shall at
Landlord's election either be the amount accrued, assessed or otherwise
imposed for such year or the amount due and payable in such year.

(v) "Tenant's Proportionate Share" shall mean the percentage set forth in
Item D of the Basic Terms which has been determined by dividing the
rentable square feet in the Premises by the rentable square feet in the
Building.

B. Components of Rent. Tenant agrees to pay the following amounts to Landlord
at the office of the Building or at such other place as Landlord
designates:

(i) Base rent ("Base Rent") to be paid in monthly installments in the
amount set forth in Item B of the Basic Terms in advance on or before
the first day of each month of the Term, except that Tenant shall pay
the first month's Base Rent upon execution of this Lease.

(ii) Adjustment rent ("Adjustment Rent") in an amount equal to Tenant's
Proportionate Share of (a) the increase in Expenses for any calendar
year over the Base Expenses and (b) the increase in Taxes for any
calendar year over the Base Taxes. (If the Basic Terms set forth a Base
Expense Year and a Base Tax Year rather than Base Expenses and Base
Taxes, the Base Expenses and the Base Taxes shall equal the amount of
Expenses and Taxes, respectively, for the Base Expense Year and the
Base Tax Year.) Prior to each calendar year, Landlord shall estimate
the amount of Adjustment Rent due for such year, and Tenant shall pay
Landlord one-twelfth of such estimate on the first day of each month
during such year. Such estimate may be revised by Landlord whenever it
obtains information relevant to making such estimate more accurate.
After the end of each calendar year, Landlord shall deliver to Tenant a
report setting forth the actual Expenses and Taxes for such calendar
year and a statement of the amount of Adjustment Rent that Tenant has
paid and is payable for such year. Within thirty days after receipt of
such report, Tenant shall pay to Landlord the amount of Adjustment Rent
due for such calendar year, minus any payments of Adjustment Rent made
by Tenant for such year. If Tenant's estimated payments of Adjustment
Rent exceed the amount due Landlord for such calendar year, Landlord

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<PAGE>
shall apply such excess as a credit against Tenant's other obligations
under this Lease or promptly refund such excess to Tenant if the Term
has already expired, provided Tenant is not then in default hereunder,
in either case without interest to Tenant.

C. Payment of Rent. The following provisions shall govern the payment of Rent:
(i) if this Lease commences or ends on a day other than the first day or last
day of a calendar month, the Rent for the month in which this Lease so begins or
ends shall be prorated and adjusted accordingly; (ii) all Rent shall be paid to
Landlord without offset or deduction, and the covenant to pay Rent shall be
independent of every other covenant in this Lease; (iii) if during all or any
portion of any year the Building is not fully rented and occupied, Landlord may
elect to make an appropriate adjustment of Expenses and/or Taxes for such year
to determine the Expenses that would have been paid or incurred by Landlord had
the Building been fully rented and occupied for the entire year and the amount
so determined shall be deemed to have been the Expenses and/or Taxes for such
year; (iv) any sum due from Tenant to Landlord which is not paid when due shall
bear interest from the date due until the date paid at the annual rate of
eighteen percent (18%) or the maximum rate permitted by law, whichever is less
(the "Default Rate"); and, in addition, Tenant shall pay Landlord a late charge
for any Rent payment which is paid more than five days after its due date equal
to five percent of such payment; (v) if changes are made to this Lease or the
Building changing the number of square feet contained in the Premises or in the
Building, Landlord shall make an appropriate adjustment to Tenant's
Proportionate Share; (vi) Tenant shall have the right to inspect Landlord's
accounting records relative to Expenses and Taxes during normal business hours
at any time within thirty days following the furnishing to Tenant of the annual
statement of Rent Adjustment; and, unless Tenant shall take written exception to
any item in any such statement within such thirty day period, such statement
shall be considered as final and accepted by Tenant; (vii) in the event of the
termination of this Lease prior to the determination of any Adjustment Rent,
Tenant's agreement to pay any such sums and Landlord's obligation to refund any
such sums (provided Tenant is not in default hereunder) shall survive the
termination of this Lease; (viii) no adjustment to the Rent by virtue of the
operation of the rent adjustment provisions in this Lease shall result in the
payment by Tenant in any year of less than the Base Rent set forth in Item B of
the Basic Terms; (ix) Landlord may at any time change the fiscal year of the
Building; (x) each amount owed to Landlord under this Lease for which the date
of payment is not expressly fixed shall be due on the same date as the Rent
listed on the statement showing such amount is due; and (xi) if Landlord fails
to give Tenant an estimate of Adjustment Rent prior to the beginning of any
calendar year, Tenant shall continue to pay Adjustment Rent, as the case may be,
at the rate for the previous calendar year until Landlord delivers such
estimate.

D. Allocation of Rent. (INTENTIONALLY DELETED)

3. USE. Tenant agrees that it shall occupy and use the Premises only as business
offices and for no other purposes. Tenant shall comply with all federal, state
and municipal laws, ordinances and regulations and all covenants, conditions and
restrictions of record applicable to Tenant's use or occupancy of the Premises.
Without limiting the foregoing, Tenant shall not cause, nor permit, any
hazardous or toxic substances to be brought upon, produced, stored, used,
discharged or disposed of in, on or about the Premises without the prior written
consent of Landlord and then only in compliance with all applicable
environmental laws. If as a result of Tenant's use of the Premises (a) the
amount of insurance premiums payable by Landlord for insurance maintained by
Landlord for or in respect to the Building is increased, (b) any such insurance
coverage is decreased, or (c) cancellation or refusal to renew any such
insurance policy is threatened, Landlord shall so notify Tenant, whereupon
Tenant shall immediately pay any such increased premium or cease any such use,
failing which (or in the event of a threatened cancellation or refusal to renew
any such insurance policy which may not be cured by the payment of an additional
premium) Landlord shall have the right and option, in addition to Landlord's
other rights and remedies hereunder, to terminate this Lease upon written notice
to Tenant effective on the date set forth in such notice.

4. CONDITION OF PREMISES. Tenant's taking possession of the Premises shall be
conclusive evidence that the Premises were in good order and satisfactory
condition when Tenant took possession. No agreement of Landlord to alter,
remodel, decorate, clean or improve the Premises or the Building (or to provide
Tenant with any credit or allowance for the same), and no representation
regarding the condition of the Premises or the Building, have been made by or on
behalf of Landlord or relied upon by Tenant, except as stated herein or in the
Tenant Improvement Work Schedule executed by Landlord and Tenant and attached
hereto as Exhibit "D".

5. BUILDING SERVICES.

A. Basic Services. Landlord shall furnish the following services: (i) heating
and air conditioning to provide a temperature condition required, in Landlord's
judgment, for comfortable occupancy of the Premises under normal business

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operations, daily from 8:00 A.M. to 6:00 P.M. (Saturday from 8:00 A.M. to 1:00
P.M.), Sundays and holidays excepted; (ii) water for drinking, and, subject to
Landlord's approval, water at Tenant's expense for any private restrooms and
office kitchen requested by Tenant; (iii) men's and women's restrooms at
locations designated by Landlord, in common with other tenants of the Building;
(iv) daily janitor service in the Premises and common areas of the Building,
weekends and holidays excepted and (v) passenger elevator service in common with
Landlord and other tenants of the Building, 24 hours a day, 7 days a week; and
freight elevator service daily, weekends and holidays excepted, upon request of
Tenant and subject to scheduling and charges by Landlord. Notwithstanding the
above, Tenant will not be required to meter and pay for water used within the
Premises (except through the provisions of paragraph 2B(ii) as an Expense),
unless Tenant installs special equipment that specifically utilizes water for
processing or cooling, such as but not limited to air conditioning or computers,
excluding drinking fountains.

B. Electricity. Electricity shall be distributed to the Premises either by the
electric utility company serving the Building or, at Landlord's option, by
Landlord, and Landlord shall permit Landlord's wire and conduits, to the extent
available, suitable and safely capable, to be used for such distribution. If and
so long as Landlord is distributing electricity to the Premises, Tenant shall
obtain all of its electricity from Landlord and shall pay all of Landlord's
charges, which charges shall be based, at Landlord's option, either on meter
readings or on a survey of Tenant's electrical usage made by Landlord or on
Tenant's prorata share of all space, including the Premises, which is commonly
metered with the Premises. If the electric utility company is distributing
electricity to the Premises, Tenant at its cost shall make all necessary
arrangements with the electric utility company for metering and paying for
electric current furnished to the Premises.

C. Telephones. Tenant shall arrange for telephone service directly with one or
more of the public telephone companies servicing the Building and shall be
solely responsible for paying for such telephone service. If Landlord acquires
ownership of the telephone cables in the Building at any time, Landlord shall
permit Tenant to connect to such cables on such terms and conditions as Landlord
may prescribe. In no event does Landlord make any representation or warranty
with respect to telephone service in the Building, and Landlord shall have no
liability with respect thereto.

D. Additional Services. Landlord shall not be obligated to furnish any services
other than those stated above. If Landlord elects to furnish services requested
by Tenant in addition to those stated above (including services at times other
than those stated above), Tenant shall pay Landlord's then prevailing charges
for such services as Additional Rent within ten (10) days of Landlord's invoice
therefor. If Tenant shall fail to make any such payment, Landlord may, without
notice to Tenant and in addition to all other remedies available to Landlord,
discontinue any additional services. No discontinuance of any such service shall
result in any liability of Landlord to Tenant or be considered as an eviction or
a disturbance of Tenant's use of the Premises. In addition, if Tenant's
concentration of personnel or equipment adversely affects the temperature or
humidity in the Premises or the Building, Landlord may install supplementary air
conditioning units in the Premises; and Tenant shall pay for the cost of
installation, utility charges, and maintenance thereof.

E. Failure or Delay in Furnishing Services. Tenant agrees that Landlord shall
not be liable for damages for failure or delay in furnishing any service stated
above if such failure or delay is caused, in whole or in part, by any one or
more of the events stated in Section 25(j) below, nor shall any such failure or
delay be considered to be an eviction or disturbance of Tenant's use of the
Premises, or relieve Tenant from its obligation to pay any Rent when due or from
any other obligations of Tenant under this Lease.

6. RULES AND REGULATIONS. Tenant shall observe and comply, and shall cause its
subtenants, assignees, invitees, employees, contractors and agents to observe
and comply, with the rules and regulations listed on Exhibit "E" attached hereto
and with such reasonable modifications and additions thereto as Landlord may
make from time to time. Landlord shall not be liable for failure of any person
to obey such rules and regulations. Landlord shall not be obligated to enforce
such rules and regulations against any person, and the failure of Landlord to
enforce any such rules and regulations shall not constitute a waiver thereof or
relieve Tenant from compliance therewith.

7. CERTAIN RIGHTS RESERVED TO LANDLORD. Landlord reserves the following rights,
each of which Landlord may exercise without notice to Tenant and without
liability to Tenant, and the exercise of any such rights shall not be deemed to
constitute an eviction or disturbance of Tenant's use or possession of the
Premises and shall not give rise to any claim for set-off or abatement of rent
or any other claim: (a) to change the name or street address of the Building or
the suite number of the Premises; (b) to install, affix and maintain any and all
signs on the exterior or interior of the Building; (c) to make repairs,
decorations, alterations, additions, or improvements, whether structural or
otherwise, in and about the Building, and for such purposes to enter upon the

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<PAGE>
Premises, temporarily close doors, corridors and other areas in the Building and
interrupt or temporarily suspend services or use of common areas, and Tenant
agrees to pay Landlord for overtime and similar expenses incurred if such work
is done other than during ordinary business hours at Tenant's request; (d) to
retain at all times, and to use in appropriate instances, keys to all doors
within and into the Premises; (e) to grant to any person or to reserve unto
itself the exclusive right to conduct any business or render any service in the
Building; (f) to show or inspect the Premises at reasonable times and, if
vacated or abandoned, to prepare the Premises for reoccupancy; (g) to install,
use and maintain in and through the Premises pipes, conduits, wires and ducts
serving the Building, provided that such installation, use and maintenance does
not unreasonably interfere with Tenant's use of the Premises; and (h) to take
any other action which Landlord deems reasonable in connection with the
operation, maintenance or preservation of the Building.

8. MAINTENANCE AND REPAIRS. Tenant, at its expense, shall maintain and keep the
Premises in good order and repair at all times during the Term. In addition,
Tenant shall reimburse Landlord for the cost of any repairs to the Building
necessitated by the acts or omissions of Tenant, its subtenants, assignees,
invitees, employees, contractors and agents, to the extent Landlord is not
reimbursed for such costs under its insurance policies. Subject to the preceding
sentence, Landlord shall perform any maintenance or make any repairs to the
Building as Landlord shall desire or deem necessary for the safety, operation or
preservation of the Building, or as Landlord may be required or requested to do
by the City of Omaha, Nebraska or by the order or decree of any court or by any
other proper authority.

9. ALTERATIONS.

A. Requirements. Tenant shall not make any replacement, alteration, improvement
or addition to or removal from the Premises (collectively an "alteration")
without the prior written consent of Landlord. In the event Tenant proposes to
make any alteration, Tenant shall, prior to commencing such alteration, submit
to Landlord for prior written approval: (i) detailed plans and specifications;
(ii) sworn statements, including the names, addresses and copies of contracts
for all contractors; (iii) all necessary permits evidencing compliance with all
applicable governmental rules, regulations and requirements; (iv) certificates
of insurance in form and amounts required by Landlord, naming Landlord and any
other parties designated by Landlord as additional insureds; and (v) all other
documents and information as Landlord may reasonably request in connection with
such alteration. Tenant agrees to pay Landlord's standard charges for review of
all such items and supervision of the alteration. Neither approval of the plans
and specifications nor supervision of the alteration by Landlord shall
constitute a representation or warranty by Landlord as to the accuracy,
adequacy, sufficiency or propriety of such plans and specifications or the
quality of workmanship or the compliance of such alteration with applicable law.
Tenant shall pay the entire cost of the alteration and, if requested by
Landlord, shall deposit with Landlord, prior to the commencement of the
alteration, security for the payment and completion of the alteration in form
and amount required by Landlord. Each alteration shall be performed in a good
and workmanlike manner, in accordance with the plans and specifications approved
by Landlord, and shall meet or exceed the standards for construction and quality
of materials established by Landlord for the Building. In addition, each
alteration shall be performed in compliance with all applicable governmental and
insurance company laws, regulations and requirements, including, without
limitation, all requirements of The Americans with Disabilities Act. Each
alteration shall be performed in harmony with Landlord's employees, contractors
and other tenants. Each alteration, whether temporary or permanent in character,
made by Landlord or Tenant in or upon the Premises (excepting only Tenant's
furniture, equipment and trade fixtures) shall become Landlord's property and
shall remain upon the Premises at the expiration or termination of this Lease
without compensation to Tenant; provided, however, that Landlord shall have the
right to require Tenant to remove such alteration at Tenant's sole cost and
expense in accordance with the provisions of Section 15 of this Lease.
Notwithstanding the above, Landlord recognizes Tenant will arrange for and
supervise its own construction. Landlord's charges for review of plans and
construction will be limited to the actual cost of any third party consultants
reasonably required by Landlord (such as, but not limited to, Structural
Engineers, Mechanical/Electrical Engineers, or Architects). In addition,
Landlord recognizes that Tenant may relocate its existing self contained package
air conditioning units (with no network of above ceiling ductwork) to supplement
the Building's system in the Premises. If such is the case or if Tenant
purchases with its own funds and installs similar type units, upon expiration or
termination of this Lease, Tenant will be allowed to or Landlord, at its sole
discretion, may require Tenant to remove such units at Tenant's sole cost and
expense in accordance with the provisions of Section 15 of this Lease.

B. Liens. Upon completion of any alteration, Tenant shall promptly furnish
Landlord with sworn owner's and contractors' statements and full and final
waivers of lien covering all labor and materials included in such alteration.
Tenant shall not permit any mechanic's lien to be filed against the Building, or

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any part thereof, arising out of any alteration performed, or alleged to have
been performed, by or on behalf of Tenant. If any such lien is filed, Tenant
shall within ten days thereafter have such lien released of record or deliver to
Landlord a bond in form, amount, and issued by a surety satisfactory to
Landlord, indemnifying Landlord against all costs and liabilities resulting from
such lien and the foreclosure or attempted foreclosure thereof. If Tenant fails
to have such lien so released or to deliver such bond to Landlord, Landlord,
without investigating the validity of such lien, may pay or discharge the same;
and Tenant shall reimburse Landlord upon demand for the amount so paid by
Landlord, including Landlord's expenses and attorneys' fees.

10. INSURANCE. Tenant, at its expense, shall maintain at all times during the
Term the following insurance policies: (a) fire insurance, including extended
coverage, vandalism, malicious mischief, sprinkler leakage and water damage
coverage and demolition and debris removal, insuring the full replacement cost
of all improvements, alterations or additions to the Premises made at Tenant's
expense, and all other property owned or used by Tenant and located in the
Premises; (b) commercial general liability insurance, contractual liability
insurance and property damage insurance with respect to the Building and the
Premises, with limits to be set by Landlord from time to time but in any event
not less than $3,000,000 combined single limit for personal injury, sickness or
death or for damage to or destruction of property for any one occurrence; and
(c) insurance against such other risks and in such other amounts as Landlord may
from time to time require. The form of all such policies and deductibles
thereunder shall be subject to Landlord's prior approval. All such policies
shall be issued by insurers acceptable to Landlord and licensed to do business
in the State of Nebraska and shall contain a waiver of any rights of subrogation
thereunder. In addition, the policies shall name Landlord and any other parties
designated by Landlord as additional insureds, shall require at least thirty
days' prior written notice to Landlord of termination or modification and shall
be primary and not contributory. Tenant shall, at least ten days prior to the
Commencement Date, and within ten days prior to the expiration of each such
policy, deliver to Landlord certificates evidencing the foregoing insurance or
renewal thereof, as the case may be.

11. WAIVER AND INDEMNITY.

A. Waiver. Tenant releases Landlord, Landlord's beneficiaries and their
respective agents and employees from, and waives all claims for, damage or
injury to person or property and loss of business sustained by Tenant and
resulting from the Building or the Premises or any part thereof or any equipment
therein becoming in disrepair, or resulting from any accident in or about the
Building. This paragraph shall apply particularly, but not exclusively, to
flooding, damage caused by Building equipment and apparatus, water, snow, frost,
steam, excessive heat or cold, broken glass, sewage, gas, odors, excessive noise
or vibration or the bursting or leaking of pipes, plumbing fixtures or sprinkler
devices. Without limiting the generality of the foregoing, Tenant waives all
claims and rights of recovery against Landlord, Landlord's beneficiaries and
their respective agents and employees for any loss or damage to any property of
Tenant, which loss or damage is insured against, or required to be insured
against, by Tenant pursuant to Section 10 above, whether or not such loss or
damage is due to the fault or negligence of Landlord or such beneficiaries,
agents or employees, and regardless of the amount of insurance proceeds
collected or collectible under any insurance policies in effect.

B. Indemnity. Tenant agrees to indemnify, defend and hold harmless Landlord,
Landlord's beneficiaries and their respective agents and employees, from and
against any and all claims, demands, actions, liabilities, damages, costs and
expenses (including attorneys' fees), for injuries to any persons and damage to
or theft or misappropriation or loss of property occurring in or about the
Building and arising from the use and occupancy of the Premises or from any
activity, work, or thing done, permitted or suffered by Tenant in or about the
Premises (including, without limitation, any alteration by Tenant) or from any
breach or default on the part of Tenant in the performance of any covenant or
agreement on the part of Tenant to be performed under this Lease or due to any
other act or omission of Tenant, its subtenants, assignees, invitees, employees,
contractors and agents. Without limiting the foregoing, Tenant shall indemnify,
defend and hold Landlord harmless from any claims, liabilities, damages, costs
and expenses arising out of the use or storage of hazardous or toxic materials
in the Building by Tenant. If any such proceeding is filed against Landlord or
any such indemnified party, Tenant agrees to defend Landlord or such party in
such proceeding at Tenant's sole cost by legal counsel reasonably satisfactory
to Landlord, if requested by Landlord.

12. FIRE AND CASUALTY. If all or a substantial part of the Premises or the
Building is rendered untenantable by reason of fire or other casualty, Landlord
may, at its option, either restore the Premises and the Building, or terminate
this Lease effective as of the date of such fire or other casualty. Landlord
agrees to give Tenant written notice within sixty days after the occurrence of
any such fire or other casualty designating whether Landlord elects to so

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restore or terminate this Lease. If Landlord elects to terminate this Lease,
Rent shall be paid through and apportioned as of the date of such fire or other
casualty. If Landlord elects to restore, Landlord's obligation to restore the
Premises shall be limited to restoring those improvements in the Premises
existing as of the date of such fire or other casualty which were made at
Landlord's expense and shall exclude any furniture, equipment, fixtures,
additions, alterations or improvements in or to the Premises which were made at
Tenant's expense. If Landlord elects to restore, Rent shall abate for that part
of the Premises which is untenantable on a per diem basis from the date of such
fire or other casualty until Landlord has substantially completed its repair and
restoration work, provided that Tenant does not occupy such part of the Premises
during said period.

13. CONDEMNATION. If the Premises or the Building is rendered untenantable by
reason of a condemnation (or by a deed given in lieu thereof), then either party
may terminate this Lease by giving written notice of termination to the other
party within thirty days after such condemnation, in which event this Lease
shall terminate effective as of the date of such condemnation. If this Lease so
terminates, Rent shall be paid through and apportioned as of the date of such
condemnation. If such condemnation does not render the Premises or the Building
untenantable, this Lease shall continue in effect and Landlord shall promptly
restore the portion not condemned to the extent reasonably possible to the
condition existing prior to the condemnation. In such event, however, Landlord
shall not be required to expend an amount in excess of the proceeds received by
Landlord from the condemning authority. Landlord reserves all rights to
compensation for any condemnation. Tenant hereby assigns to Landlord any right
Tenant may have to such compensation, and Tenant shall make no claim against
Landlord or the condemning authority for compensation for termination of
Tenant's leasehold interest under this Lease or interference with Tenant's
business, unless Tenant is entitled by applicable law to separate award which
does not diminish or reduce award otherwise made to Landlord.

14. ASSIGNMENT AND SUBLETTING.

A. Landlord's Consent. Tenant shall not, without the prior written consent of
Landlord: (i) assign, convey or otherwise transfer this Lease or any interest
hereunder, or sublease the Premises, or any part thereof, whether voluntarily or
by operation of law; or (ii) permit the use of the Premises by any person other
than Tenant and its employees. Any such transfer, sublease or use described in
the preceding sentence (a "Transfer") occurring without the prior written
consent of Landlord shall be void and of no effect. Landlord's consent to any
Transfer shall not constitute a waiver of Landlord's right to withhold its
consent to any future Transfer. Landlord's consent to any Transfer or acceptance
of rent from any party other than Tenant shall not release Tenant from any
covenant or obligation under this Lease. Landlord may require as a condition to
its consent to any assignment of this Lease that the assignee execute an
instrument in which such assignee assumes the obligations of Tenant hereunder.
For the purposes of this paragraph, the transfer (whether direct or indirect) of
all or a majority of the capital stock in a corporate Tenant (other than the
shares of the capital stock of a corporate Tenant whose stock is publicly
traded) or the merger, consolidation or reorganization of such Tenant and the
transfer of all or any general partnership interest in any partnership Tenant
shall be considered a Transfer.

B. Standards for Consent. If Tenant desires the consent of Landlord to a
Transfer, Tenant shall submit to Landlord, at least sixty days prior to the
proposed effective date of the Transfer, a written notice which includes such
information as Landlord may require about the proposed Transfer and the
transferee. If Landlord does not terminate this Lease, in whole or in part,
pursuant to Section 14C, Landlord shall not unreasonably withhold its consent to
any assignment or sublease. Landlord shall not be deemed to have unreasonably
withheld its consent if, in the judgment of Landlord: (i) the transferee is of a
character or engaged in a business which is not in keeping with the standards or
criteria used by Landlord in leasing the Building; (ii) the financial condition
of the transferee is such that it may not be able to perform its obligations in
connection with this Lease; (iii) the purpose for which the transferee intends
to use the Premises or portion thereof is in violation of the terms of this
Lease or the lease of any other tenant in the Building; (iv) the transferee is a
tenant of the Building; or (v) any other bases which Landlord reasonably deems
appropriate. If Landlord wrongfully withholds its consent to any Transfer,
Tenant's sole and exclusive remedy therefor shall be to seek specific
performance of Landlord's obligation to consent to such Transfer.

C. Recapture. Landlord shall have the right to terminate this Lease as to that
portion of the Premises covered by a Transfer. Landlord may exercise such right
to terminate by giving notice to Tenant at any time within thirty days after the
date on which Tenant has furnished to Landlord all of the items required under
Section 14B above. If Landlord exercises such right to terminate, Landlord shall
be entitled to recover possession of, and Tenant shall surrender such portion
of, the Premises (with appropriate demising partitions erected at the expense of
Tenant) on the later of (i) the effective date of the proposed Transfer, or (ii)
sixty days after the date of Landlord's notice of termination. In the event
Landlord exercises such right to terminate, Landlord shall have the right to

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enter into a lease with the proposed transferee without incurring any liability
to Tenant on account thereof. If Landlord consents to any Transfer, Tenant shall
pay to Landlord one-half of all rent and other consideration received by Tenant
in excess of the Rent paid by Tenant hereunder for the portion of the Premises
so transferred. Such rent shall be paid as and when received by Tenant. In
addition, Tenant shall pay to Landlord any attorneys' fees and expenses incurred
by Landlord in connection with any proposed Transfer, whether or not Landlord
consents to such Transfer. Notwithstanding the above, in the event Landlord
notifies Tenant of its intent to exercise its right of Recapture per the
provisions of this paragraph 14C, Tenant, within ten (10) days of Landlord's
notification, may withdraw its request to Transfer by providing Landlord written
notice of its withdrawal. In which case, Landlord will then not have the right
to Recapture relative to that specific request. By doing so in no event does
Landlord relinquish its right to Recapture relative to any future requests.

15. SURRENDER. Upon termination of the Term or Tenant's right to possession of
the Premises, Tenant shall return the Premises to Landlord in good order and
condition, ordinary wear and damage by fire or other casualty excepted. If
Landlord requires Tenant to remove any alterations pursuant to Section 9, then
such removal shall be done in a good and workmanlike manner; and upon such
removal Tenant shall restore the Premises to its condition prior to the
installation of such alterations. If Tenant does not remove such alterations
after request to do so by Landlord, Landlord may remove the same and restore the
Premises; and Tenant shall pay the cost of such removal and restoration to
Landlord, plus a fee equal to twenty percent (20%) of Landlord's cost, as
Additional Rent upon demand. Tenant shall also remove its furniture, equipment,
trade fixtures and all other items of personal property from the Premises prior
to termination of the Term or Tenant's right to possession of the Premises. If
Tenant does not remove such items, Tenant shall be conclusively presumed to have
conveyed the same to Landlord without further payment or credit by Landlord to
Tenant; or at Landlord's sole option such items shall be deemed abandoned, in
which event Landlord may cause such items to be removed and disposed of at
Tenant's expense without notice to Tenant and without obligation to compensate
Tenant.

16. DEFAULTS AND REMEDIES.

A. Default. The occurrence of any of the following shall constitute a default (a
"Default") by Tenant under this Lease: (i) Tenant fails to pay any Rent when due
and such failure is not cured within five days after notice from Landlord (which
notice may be in the form of a landlord statutory five-day notice); (ii) Tenant
fails to perform any other provision of this Lease and such failure is not cured
within thirty days (or immediately if the failure involves a hazardous
condition) after notice from Landlord; (iii) the leasehold interest of Tenant is
levied upon or attached under process of law; (iv) Tenant or any guarantor of
this Lease dies or dissolves; (v) Tenant vacates the Premises; or (vi) any
voluntary or involuntary proceedings are filed by or against Tenant or any
guarantor of this Lease under any bankruptcy, insolvency or similar laws and, in
the case of any involuntary proceedings, are not dismissed within thirty days
after filing.

B. Right of Re-Entry. Upon the occurrence of a Default, Landlord may elect to
terminate this Lease or, without terminating this Lease, terminate Tenant's
right to possession of the Premises. Upon any such termination, Tenant shall
immediately surrender and vacate the Premises and deliver possession thereof to
Landlord. Tenant grants to Landlord the right to enter and repossess the
Premises and to expel Tenant and any others who may be occupying the Premises
and to remove any and all property therefrom, without being deemed in any manner
guilty of trespass and without relinquishing Landlord's rights to Rent or any
other right given to Landlord hereunder or by operation of law.

C. Reletting. If Landlord terminates Tenant's right to possession of the
Premises without terminating this Lease, Landlord may relet the Premises or any
part thereof. In such case, Landlord shall use reasonable efforts to relet the
Premises on such terms as Landlord shall reasonably deem appropriate; provided,
however, Landlord may first lease Landlord's other available space and shall not
be required to accept any tenant offered by Tenant or to observe any
instructions given by Tenant about such reletting. Tenant shall reimburse
Landlord for the costs and expenses of reletting the Premises including, but not
limited to, all brokerage, advertising, legal, alteration, and other expenses
incurred to secure a new tenant for the Premises. In addition, if the
consideration collected by Landlord upon any such reletting, after payment of
the expenses of reletting the Premises which have not been reimbursed by Tenant,
is insufficient to pay monthly the full amount of the Rent, Tenant shall pay to
Landlord the amount of each monthly deficiency as it becomes due. If such
consideration is greater than the amount necessary to pay the full amount of the
Rent, the full amount of such excess shall be retained by Landlord and shall in
no event be payable to Tenant.

D. Termination of Lease. If Landlord terminates this Lease, Landlord may recover
from Tenant and Tenant shall pay to Landlord, on demand, as and for liquidated
and final damages, an accelerated lump sum amount equal to the amount by which

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Landlord's estimate of the aggregate amount of Rent owing from the date of such
termination through the Expiration Date plus Landlord's estimate of the
aggregate expenses of reletting the Premises, exceeds Landlord's estimate of the
fair rental value of the Premises for the same period (after deducting from such
fair rental value the time needed to relet the Premises and the amount of
concessions which would normally be given to a new tenant) both discounted to
present value at the rate of five percent per annum.

E. Other Remedies. Landlord may but shall not be obligated to perform any
obligation of Tenant under this Lease; and, if Landlord so elects, all costs and
expenses paid by Landlord in performing such obligation, together with interest
at the Default Rate, shall be reimbursed by Tenant to Landlord on demand. Any
and all remedies set forth in this Lease: (i) shall be in addition to any and
all other remedies Landlord may have at law or in equity, (ii) shall be
cumulative, and (iii) may be pursued successively or concurrently as Landlord
may elect. The exercise of any remedy by Landlord shall not be deemed an
election of remedies or preclude Landlord from exercising any other remedies in
the future.

F. Bankruptcy. If Tenant becomes bankrupt, the bankruptcy trustee shall not have
the right to assume or assign this Lease unless the trustee complies with all
requirements of the United States Bankruptcy Code; and Landlord expressly
reserves all of its rights, claims, and remedies thereunder.

G. Waiver of Trial by Jury. Landlord and Tenant waive trial by jury in the event
of any action, proceeding or counterclaim brought by either Landlord or Tenant
against the other in connection with this Lease.

H. Venue. If either Landlord or Tenant desires to bring an action against the
other in connection with this Lease, such action shall be brought in the federal
or state courts located in Omaha, Nebraska. Landlord and Tenant consent to the
jurisdiction of such courts and waive any right to have such action transferred
from such courts on the grounds of improper venue or inconvenient forum.

17. HOLDING OVER. If Tenant retains possession of the Premises after the
expiration or termination of the Term or Tenant's right to possession of the
Premises, Tenant shall pay Rent during such holding over at double the rate in
effect immediately preceding such holding over computed on a monthly basis for
each month or partial month that Tenant remains in possession. Tenant shall also
pay, indemnify and defend Landlord from and against all claims and damages,
consequential as well as direct, sustained by reason of Tenant's holding over.
In addition, at any time while Tenant remains in possession, Landlord may elect
instead, by written notice to Tenant and not otherwise, to have such retention
of possession constitute a renewal of this Lease for one year for the fair
market rental value of the Premises as reasonably determined by Landlord but in
no event less than the Rent payable immediately prior to such holding over. The
provisions of this Section do not waive Landlord's right of re- entry or right
to regain possession by actions at law or in equity or any other rights
hereunder, and any receipt of payment by Landlord shall not be deemed a consent
by Landlord to Tenant's remaining in possession or be construed as creating or
renewing any lease or right of tenancy between Landlord and Tenant.

18. SECURITY DEPOSIT. Upon execution of this Lease, Tenant shall deposit the
security deposit set forth in Item "F" of the Basic Terms (the "Security
Deposit") with Landlord as security for the performance of Tenant's obligations
under this Lease. Upon the occurrence of a Default, Landlord may use all or any
part of the Security Deposit for the payment of any Rent or for the payment of
any amount which Landlord may pay or become obligated to pay by reason of such
Default, or to compensate Landlord for any loss or damage which Landlord may
suffer by reason of such Default. If any portion of the Security Deposit is
used, Tenant shall within five days after written demand therefor deposit cash
with Landlord in an amount sufficient to restore the Security Deposit to its
original amount. Landlord shall not be required to keep the Security Deposit
separate from its general funds, and Tenant shall not be entitled to interest on
the Security Deposit. In no event shall the Security Deposit be considered an
advanced payment of Rent, and in no event shall Tenant be entitled to use the
Security Deposit for the payment of Rent. If no default by Tenant exists
hereunder, the Security Deposit or any balance thereof shall be returned to
Tenant within thirty days after the expiration of the Term and vacation of the
Premises by Tenant. Landlord shall have the right to transfer the Security
Deposit to any purchaser of the Building. Upon such transfer, Tenant shall look
solely to such purchaser for return of the Security Deposit; and Landlord shall
be relieved of any liability with respect to the Security Deposit.

19. SUBSTITUTION OF OTHER PREMISES. At any time hereafter, Landlord may upon
thirty days' prior notice to Tenant substitute for the Premises other premises
in the Building (the "New Premises"), provided that the New Premises shall be
reasonably usable for Tenant's business hereunder; and, if Tenant is already in
occupancy of the Premises, then in addition Landlord shall pay the expenses of
moving Tenant from the Premises to the New Premises and for improving the New
Premises so that they are substantially similar to the Premises.

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20. ESTOPPEL CERTIFICATE. Tenant agrees that, from time to time upon not less
than ten days' prior request by Landlord, Tenant shall execute and deliver to
Landlord a written certificate certifying: (i) that this Lease is unmodified and
in full force and effect (or if there have been modifications, a description of
such modifications and that this Lease as modified is in full force and effect);
(ii) the dates to which Rent has been paid; (iii) that Tenant is in possession
of the Premises, if that is the case; (iv) that Landlord is not in default under
this Lease, or, if Tenant believes Landlord is in default, the nature thereof in
detail; (v) that Tenant has no off-sets or defenses to the performance of its
obligations under this Lease (or if Tenant believes there are any off-sets or
defenses, a full and complete explanation thereof); and (vi) such additional
matters as may be requested by Landlord, it being agreed that such certificate
may be relied upon by any prospective purchaser, mortgagee, or other person
having or acquiring an interest in the Building. If Tenant fails to execute and
deliver any such certificate within ten days after request, Tenant shall be
deemed to have irrevocably appointed Landlord and Landlord's beneficiaries as
Tenant's attorneys-in-fact to execute and deliver such certificate in Tenant's
name.

21. SUBORDINATION. This Lease is and shall be expressly subject and subordinate
at all times to (i) any ground or underlying lease of the Building, now or
hereafter existing, and all amendments, renewals and modifications to any such
lease; and (ii) the lien of any mortgage or trust deed now or hereafter
encumbering fee title to the Building and/or the leasehold estate under any such
lease. If any such mortgage or trust deed is foreclosed, or if any such lease is
terminated, upon request of the mortgagee, holder or lessor, as the case may be,
Tenant will attorn to the purchaser at the foreclosure sale or to the lessor
under such lease, as the case may be. The foregoing provisions are declared to
be self-operative and no further instruments shall be required to effect such
subordination and/or attornment; provided, however, that Tenant agrees upon
request by any such mortgagee, holder, lessor or purchaser at foreclosure, to
execute and deliver such subordination and/or attornment instruments as may be
required by such person to confirm such subordination and/or attornment. If
Tenant fails to execute and deliver any such instrument within ten days after
request, Tenant shall be deemed to have irrevocably appointed Landlord and
Landlord's beneficiaries as Tenant's attorneys-in-fact to execute and deliver
such instrument in Tenant's name.

22. QUIET ENJOYMENT. As long as no Default exists, Tenant shall peacefully and
quietly have and enjoy the Premises for the Term, free from interference by
Landlord, subject, however, to the provisions of this Lease. The loss or
reduction of Tenant's light, air or view will not be deemed a disturbance of
Tenant's occupancy of the Premises nor will it affect Tenant's obligations under
this Lease or create any liability of Landlord to Tenant.

23. BROKER. Tenant represents to Landlord that Tenant has dealt only with the
broker(s) set forth in Item "G" of the Basic Terms (the "Broker") in connection
with this Lease and that, insofar as Tenant knows, no other broker negotiated
this Lease or is entitled to any commission in connection herewith. Tenant
agrees to indemnify, defend and hold Landlord and Landlord's beneficiaries and
agents harmless from and against any claims for a fee or commission made by any
broker, other than the Broker, claiming to have acted by or on behalf of Tenant
in connection with this Lease. Landlord agrees to pay the Broker a commission in
accordance with a separate agreement between Landlord and the Broker.

24. NOTICES. All notices and demands to be given by one party to the other party
under this Lease shall be given in writing, mailed or delivered, if to Tenant,
at Suite 200 in the Building, and if to Landlord at the address set forth below
or at such other address as either party may hereafter designate.

If to Landlord: The Prudential Insurance Company of America
One Prudential Plaza; Suite 1200
130 East Randolph Street
Chicago, Illinois 60601
Attn: Vice President - Equity Investments

and

The Prudential Insurance Company of America
One Prudential Plaza; Suite 1300
130 East Randolph Street
Chicago, Illinois 60601
Attn: Regional Counsel

with a copy to: Pacific Realty Group, Inc.
1905 Harney Street, Suite 403
Omaha, Nebraska 68102
Attn: Senior Vice President-
Management Operations

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Notices shall be delivered by United States certified or registered mail,
postage prepaid, return receipt requested, or by a nationally recognized
overnight courier service. Notices shall be considered to have been given upon
the earlier to occur of actual receipt or two business days after posting in the
United States mail.

25. MISCELLANEOUS.

A. Successors and Assigns. Subject to Section 14 of this Lease, each provision
of this Lease shall extend to, bind and inure to the benefit of Landlord and
Tenant and their respective legal representatives, successors and assigns; and
all references herein to Landlord and Tenant shall be deemed to include all such
parties.

B. Entire Agreement. This Lease, and the riders and exhibits, if any, attached
hereto which are hereby made a part of this Lease, represent the complete
agreement between Landlord and Tenant; and Landlord has made no representations
or warranties except as expressly set forth in this Lease. No modification or
amendment of or waiver under this Lease shall be binding upon Landlord or Tenant
unless in writing signed by Landlord and Tenant.

C. Time of Essence. Time is of the essence of this Lease and each and all of its
provisions.

D. Execution and Delivery. Submission of this instrument for examination or
signature by Tenant does not constitute a reservation of space or an option for
lease, and it is not effective until execution and delivery by both Landlord and
Tenant. Execution and delivery of this Lease by Tenant to Landlord shall
constitute an irrevocable offer by Tenant to lease the Premises on the terms and
conditions set forth herein, which offer may not be revoked for fifteen days
after such delivery.

E. Severability. The invalidity or unenforceability of any provision of this
Lease shall not affect or impair any other provisions.

F. Governing Law. This Lease shall be governed by and construed in accordance
with the laws of the State of Nebraska.

G. Attorneys' Fees. Tenant shall pay to Landlord all costs and expenses,
including reasonable attorneys' fees, incurred by Landlord in enforcing this
Lease or incurred by Landlord as a result of any litigation to which Landlord
becomes a party as a result of this Lease.

H. Delay in Possession. In no event shall Landlord be liable to Tenant if
Landlord is unable to deliver possession of the Premises to Tenant on the
Commencement Date for causes outside Landlord's reasonable control. If Landlord
is unable to deliver possession of the Premises to Tenant by the Commencement
Date, the Commencement Date shall be deferred until Landlord can deliver
possession to Tenant, and the Expiration Date shall be deferred for an equal
number of days.

I. Joint and Several Liability. If Tenant is comprised of more than one party,
each such party shall be jointly and severally liable for Tenant's obligations
under this Lease.

J. Force Majeure. Landlord shall not be in default hereunder and Tenant shall
not be excused from performing any of its obligations hereunder if Landlord is
prevented from performing any of its obligations hereunder due to any accident,
breakage, strike, shortage of materials, acts of God or other causes beyond
Landlord's reasonable control.

K. Demolition or Renovation. Landlord shall have the right to terminate this
Lease without compensation to Tenant upon ninety (90) days' prior notice to
Tenant if Landlord intends to renovate or demolish the Building or a substantial
part thereof. However, if such renovation or demolition is discretionary on
behalf of the Landlord, Landlord will pay the Tenant the fair market value of
Tenant's remaining leasehold interest.

L. Captions. The headings and titles in this Lease are for convenience only and
shall have no effect upon the construction or interpretation of this Lease.

M. No Waiver. No receipt of money by Landlord from Tenant after termination of
this Lease or after the service of any notice or after the commencing of any
suit or after final judgment for possession of the Premises shall renew,
reinstate, continue or extend the Term or affect any such notice or suit. No
waiver of any default of Tenant shall be implied from any omission by Landlord
to take any action on account of such default if such default persists or be
repeated, and no express waiver shall affect any default other than the default
specified in the express waiver and then only for the time and to the extent
therein stated.

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N. No Recording. Tenant shall not record this Lease or a memorandum of this
Lease in any official records.

O. Limitation of Liability. Any liability of Landlord under this Lease shall be
limited solely to its interest in the Building, and in no event shall any
personal liability be asserted against Landlord in connection with this Lease
nor shall any recourse be had to any other property or assets of Landlord.

P. Hazardous Materials. In the event any Hazardous Material (hereinafter
defined) is brought into or onto the Premises by Tenant, its employees or
agents, Tenant shall handle any such material in compliance with all applicable
federal, state and/or local regulations. For purposes of this Section,
"Hazardous Materials" means and includes any hazardous, toxic or dangerous
waste, substance or material defined as such in (or for purposes of) the
Comprehensive Environmental Response, Compensation and Liability Act, any
so-called "Superfund" or "Superlien" law, or any federal, state or local
statute, law, ordinance, code, rule, regulation, order or decree regulating,
relating to, or imposing liability or standards of conduct concerning, any
hazardous, toxic or dangerous waste, substance or material, as now or at any
time hereafter in effect. Tenant shall submit to Landlord on an annual basis
copies of any approved hazardous materials communication plan, OSHA monitoring
plan and permits required by the Resource Recovery and Conversation Act of 1976,
which Tenant is required to prepare, file or obtain. Tenant will indemnify and
hold harmless Landlord from any losses, liabilities, damages, costs or expenses
(including reasonable attorneys' fees) which Landlord may suffer or incur as a
result of Tenant's introduction into or unto the Premises of any Hazardous
Material. This Section shall survive the expiration or sooner termination of
this Lease.

Q. Modification for Mortgage. Should any mortgage, leasehold or similar
arrangement require a modification or modifications of this Lease, which
modification or modifications will not bring about any increased cost or expense
to Tenant or in any other way substantially change the rights and obligations of
Tenant hereunder, then and in such event, Tenant agrees that this Lease may be
so modified. Tenant further agrees to execute and deliver any documents
requested to evidence such modification within ten (10) days following such
request.

R. RIDER. A Rider consisting of one (1) page, and containing paragraphs 26
through 31 is attached hereto and made a part of this Lease.

IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease as of the day
and year first above written.

TENANT: LANDLORD:

Data Transmission Network Corporation, The Prudential Insurance Company of
a Delaware corporation America, a New Jersey corporation

By: Pacific Realty Group, Inc.,
its Managing Agent

By: By:

Its: Its:

62
<PAGE>
EXHIBIT "C" - to be made a part of a Lease between THE PRUDENTIAL INSURANCE
COMPANY OF AMERICA (Landlord) and DATA TRANSMISSION NETWORK CORPORATION
(Tenant), dated , 1994.
---------------

LEGAL DESCRIPTION OF BUILDING

That part of the Southeast Quarter of the Southwest Quarter of Section 15,
Township 15 North, Range 12 East of the 6th P.M., in the City of Omaha, in
Douglas County, Nebraska, more particularly described as follows:

Beginning at a point on the Westerly right-of-way line of 90th Street which is
50.00 feet West of the East line and 92.59 feet North of the South line of said
Southeast Quarter of the Southwest Quarter; thence North 00 00'00" East (assumed
bearing) along said Westerly right-of-way line of 90th Street a distance of
718.41 feet to a point on the Southerly right-of-way line of Embassy Row; thence
North 90 00'00" West along said Southerly right-of-way line of Embassy Row a
distance of 190.00 feet to a point of curve; thence Southwesterly on a curve to
the left, along said Southerly right-of-way line of Embassy Row, said curve
having a radius of 595.24 feet, a long chord of 420.72 feet bearing South 69
18'22" West and an arc length of 430.09 feet; thence South 44 41'22" East a
distance of 182.60 feet; thence South 00 18'38" West a distance of 460.04 feet
to a point on the Northerly right-of-way line of West Dodge Road; thence South
89 41'22" East along said Northerly right-of-way line of West Dodge Road a
distance of 173.30 feet; thence North 00 18'32" East along said Northerly
right-of-way line of West Dodge Road a distance of 11.00 feet; thence South 89
41'22" East along said Northerly right-of-way line of West Dodge Road, a
distance of 270.00 feet; thence North 51 10'21" East along said Northerly
right-of-way line of West Dodge Road a distance of 18.36 feet to the Point of
Beginning.

63
<PAGE>
EXHIBIT "D" to be made a part of a Lease between THE PRUDENTIAL INSURANCE
COMPANY OF AMERICA (Landlord), and DATA TRANSMISSION NETWORK CORPORATION
(Tenant), dated , 1994. (Page 1 of 2)

TENANT IMPROVEMENTS WORK SCHEDULE

ARTICLE I
Landlord's Construction Obligations

Landlord shall have no construction obligations under this Lease. Tenant
accepts the Premises in an "as is" condition, with all faults and with the
understanding that it shall be responsible for any and all improvements required
for its occupancy and use in accordance with Article II of this Exhibit "D".

ARTICLE II
Construction of Tenant Improvements

Tenant shall have the right to place partitions and fixtures and make
improvements or other alterations in the Premises in accordance with the
provisions of Paragraph 9 of this Lease. Landlord shall provide Tenant a tenant
finish allowance of up to One Hundred Thousand Dollars and No Cents
($180,988.00) to be applied toward the cost of any such tenant-provided
improvements as follows:

1. The tenant finish allowance shall be paid in periodic installments, not
more frequently than once per month, equal to the total of the contractor's or
consultant's invoice amounts for improvements made to the Premises, excluding
any furnishings or business equipment (such as computers, satellite/microwave
dish, office equipment, etc.), as submitted by Tenant and verified to Landlord's
reasonable satisfaction; provided, however, that such payments will be made only
if Tenant is not then in Default under the terms of this Lease and invoices are
accompanied by lien waivers in the amount equal to that of the invoices. Tenant
shall be allowed to apply up to $10,000.00 of the tenant finish allowance toward
the design and construction of Tenant's monument sign as defined in Paragraph 28
of the Rider to this Lease.

2. Upon the earlier of January 1, 1995, or the satisfaction of all
obligations associated with the tenant improvements covered under this Article
II and receipt of the associated lien waivers for the work, the Tenant shall
forfeit any unused portion of the allowance. Any requests for payment received
by the Landlord after December 31, 1994, will be returned to the Tenant and will
be the obligation and sole responsibility of the Tenant.

3. In addition to the provisions set forth in Paragraph 9 of this Lease,
Tenant's contractor shall (and its contract shall so provide):

(a) conduct its work in such a manner so as not to unreasonably
interfere with other tenants in the Building, Building operations,
or any other construction occurring on or in the Building or the
Premises;

(b) execute a set of and comply with all rules and regulati ons
relating to the construction activities in or on the Building as
may be reasonably promulgated from time to time by Landlord or its
agents;

(c) maintain such insurance (such as general liability and workman's
compensation) and bonds (such as performance and completion) in
force and effect as may be reasonably requested by Landlord or as
required by applicable law (but in any event said bonds shall be
in amounts equal to the full value or cost of the work being done
by the Tenant contractor);

(d) be responsible for reaching an agreement with Landlord and its
agents as to the terms and conditions for all contractor items
relating to the conducting of its work, including but not limited
to, those matters relating to hoisting, systems interfacing, use
of temporary utilities, storage of materials, placement of
dumpsters, access to the Premises and the Building, and the
purchase and return of Building standard materials.

64
<PAGE>
EXHIBIT "D" to be made a part of a Lease between THE PRUDENTIAL INSURANCE
COMPANY OF AMERICA (Landlord), and DATA TRANSMISSION NETWORK CORPORATION
(Tenant), dated , 1994. (Page 2 of 2)

(e) Upon completion of any tenant improvements, Tenant shall promptly
furnish Landlord with sworn owner's and contractors' statements
and full and final waivers of lien covering all labor and
materials included in such improvements. Tenant shall not permit
any mechanic's lien to be filed against the Building, or any part
thereof, arising out of any improvement performed, or alleged to
have been performed, by or on behalf of Tenant. If any such lien
is filed, Tenant shall within ten (10) days thereafter have such
lien released of record or deliver to Landlord a bond in form,
amount, and issued by a surety satisfactory to Landlord,
indemnifying Landlord against all costs and liabilities resulting
from such lien and the foreclosure or attempted foreclosure
thereof. If Tenant fails to have such lien so released or to
deliver such bond to Landlord, Landlord, without investigating the
validity of such lien, may pay or discharge the same; and Tenant
shall reimburse Landlord upon demand for the amount so paid by
Landlord, including Landlord's expenses and attorney's fees.

4. Landlord shall have the right to approve all subcontractors to be used
by the Tenant's contractor, which approval shall not be unreasonably withheld as
long as such subcontractors satisfy the requirements of this Article II.

5. Tenant shall indemnify and hold harmless Landlord, its agents,
contractors (including Building Contractor), and any mortgagee of Landlord, from
and against any and all losses, damages, costs (including costs of suit and
attorneys' fees), liabilities, or causes of action for injury to or death of any
person, for damage to any property, and for mechanic's materialmen's or other
liens or claims arising out of or in connection with the work done by the
Tenant's contractor (and Tenant's contractor's subcontractors and
sub-subcontractors) under its contract with Tenant.

6. The failure by Tenant, after receiving written notice, to materially
comply with any of the provisions of Article II of this Exhibit shall constitute
a Default by Tenant under the terms of the Lease and Landlord shall have the
benefit of all remedies provided for in the Lease, except Tenant shall have a
thirty (30) day right to cure Default upon receipt of written notice .

7. Upon completion of the Tenant Improvements, Tenant shall deliver to
Landlord two (2) copies of the "as built" plans and specifications for the
Tenant Improvements completed under Article II of this Exhibit within thirty
(30) days of completing the same.

65
<PAGE>
EXHIBIT "E" to be made a part of a Lease between THE PRUDENTIAL INSURANCE
COMPANY OF AMERICA (Landlord), and DATA TRANSMISSION NETWORK CORPORATION
(Tenant), dated , 1994. (Page 1 of 3)

RULES & REGULATIONS

1. Sidewalks, doorways, vestibules, halls, stairways, elevator lobbies and
other similar areas in the common areas of the Building shall not be used for
the storage of materials or disposal of trash, be obstructed by tenants or
Landlord, or be used by tenants or Landlord for any purpose other than entrance
to and from the tenant's leased areas and the Building and for going from one
part of the Building to another part of the Building.

2. Plumbing fixtures shall be used only for the purposes for which they are
designed, and no sweepings, rubbish, rags or other unsuitable materials shall be
disposed into them. Damage resulting to any such fixtures proven to result from
misuse by a tenant, and not by Landlord's cleaning contractors responsible for
cleaning the tenant's leased area and the Building, shall be the liability of
said tenant.

3. Signs, advertisements, graphics or notices visible in or from public
corridors, any common area or public areas of the Building or from outside the
Building shall be subject to Landlord's (or Landlord's property manager's) prior
written approval, which approval shall not be unreasonably withheld. No part of
the Complex may be defaced by Tenants .

4. Significant movement in or out of the Building of furniture, office
equipment, or any other bulky or heavy materials shall be restricted to such
hours as Landlord (or Landlord's property manager) shall reasonably designate.
Landlord (or Landlord's property manager) will determine the method and routing
of the movement of said items so as to ensure the safety of all persons and
property concerned and Tenant shall be responsible for all costs and expenses
associated therewith. Advance written notice of intent to move such items must
be made to the Landlord (or Landlord's property manager) at least twenty-four
(24) hours before the time of such move. For non significant movement in or out
of the Building of portable items which do not require use of dollies or other
moving equipment, notice to Landlord (or Landlord's property manager) shall not
be required.

5. All deliveries to a tenant's leased premises, requiring dedicated
elevator service for multiple trips that potentially will disrupt service for
visitors and other tenants of the Building during normal business operations as
defined in paragraph 5.A., shall be made through special arrangements with the
Landlord. In general, passenger elevators are to be used only for the movement
of persons and small deliveries during these normal business hours. Tenants may
obtain the prior written consent of Landlord (or Landlord's property manager)
for any exception to the provisions of this Paragraph 5.

6. Landlord (or Landlord's property manager) shall have the authority to
approve the proposed weight and location of any safes and heavy furniture and
equipment, which shall in all cases stand on supporting devices approved by
Landlord in order to distribute the weight.

7. Corridor doors which lead to common areas of the Building (other than
doors opening into the elevator lobby on floors leased entirely to a tenant)
shall be kept closed at all times.

8. Each tenant shall cooperate with Landlord (and Landlord's property
manager) in keeping its leased area neat and clean. No tenant shall employ any
person for the purpose of such cleaning other than the Building's cleaning and
maintenance personnel without prior approval of Landlord (or Landlord's property
manager).

9. All elevator lobbies are to be kept neat and clean. The disposal of
trash or storage of materials in these areas is prohibited.

10. No birds, fish or other animals shall be brought into or kept in, on or
about the Building (except for Seeing Eye dogs).

11. Tenants shall not tamper with or attempt to adjust temperature control
thermostats in their leased premises. Landlord shall promptly respond to each
tenant's notices as to, and Landlord (or Landlord's property manager) shall
adjust thermostats as required to maintain, the Building standard temperature.
Each tenant shall use reasonable efforts to keep all window blinds down and
tilted at a 45 degree angle toward the street to help maintain comfortable room
temperatures and conserve energy.

66
<PAGE>
EXHIBIT "E" to be made a part of a Lease between THE PRUDENTIAL INSURANCE
COMPANY OF AMERICA (Landlord), and DATA TRANSMISSION NETWORK CORPORATION
(Tenant), dated , 1994. (Page 2 of 3)

12. Each tenant will comply with all security procedures necessary both
during business hours and after hours and on weekends. Landlord will provide
each tenant with prior notice of such security procedures and any changes
thereto promptly.

13. Tenants are requested to lock all office doors leading to corridors and
to turn out all lights at the close of their working day; provided, however,
that no tenant shall be responsible to ensure that Landlord's cleaning
contractor locks doors and turns out lights after cleaning the tenant's leased
premises.

14. All requests for overtime air conditioning or heating must be submitted
in writing to Landlord (or Landlord's property manager) by an authorized
representative of the tenant. A list of persons authorized to request such
overtime services (and any amendments thereto) will be furnished by the tenant
to Landlord and Landlord shall be entitled to rely thereon. Any such request
must be made by 2:00 p.m. on the day desired for weekday requests, by 2:00 p.m.
Friday for weekend requests and by 2:00 p.m. on the preceding business day for
holiday requests. Requests made after that time may result in an additional
charge (not to exceed Landlord's cost) to such Tenant, if acted upon by
Landlord. Landlord will make reasonable efforts to accommodate untimely requests
by Tenant for overtime air conditioning or heating. Charges for overtime
operation of air conditioning or heating shall be at the then current cost of
operating the required system components. Charges will be billed on Tenant's
monthly statement and are due within thirty (30) days of receipt of by Tenant of
the statement.

15. No flammable or explosive fluids or materials shall be kept or used
within the Building except in areas approved by Landlord, and each tenant shall
comply with all applicable building and fire codes relating thereto.

16. Tenants may not make any modifications, alterations, additions or
repairs to their leased premises and may not install any furniture, fixture or
equipment in their leased premises which is in violation of any applicable
building and/or fire code governing their lease premises or the Project. The
tenant must obtain prior approval from Landlord (or) Landlord's property
manager) of any such alterations, modifications and additions and shall deliver
"as built" plans therefor to Landlord (or Landlord's property manager), upon
completion, except as otherwise permitted in the tenant's lease. Such
alterations include, but are not limited to, any communication equipment and
associated wiring which must meet fire code. The contractor conducting the
modifications and additions must be a licensed contractor, is subject to all
rules and regulations of Landlord (and Landlord's property manager) while
performing work in the Building and must obtain all necessary permits and
approvals prior to commencing the modifications and additions.

17. No vending machines of any type shall be allowed in tenant space
without the prior written consent of Landlord (or Landlord's property manager),
which will not be unreasonably withheld. Landlord acknowledges that Tenant has
advised that it will have vending machines in their Premises.

18. All locks for doors in each tenant's leased areas shall be Building
Standard except as otherwise permitted by Landlord and no tenant shall place any
additional lock or locks on any door in its leased area without Landlord's (or
Landlord's property manager's) written consent except as otherwise permitted in
such tenant's lease. All requests for duplicate keys shall be made to Landlord
(or Landlord's property manager).

19. No tenant (or their visitors) shall interfere in any way with other
tenants' (or their visitors') quiet enjoyment of their leased premises.

20. Except in cases of gross negligence on behalf of the Landlord, Landlord
will not be liable or responsible for lost or stolen money, jewelry or other
personal property from any tenant's leased area or public areas of the Building
or Project.

21. No machinery of any kind other than normal office equipment shall be
operated by any tenant in its leased area without the prior written consent of
Landlord (or Landlord's property manager).

67
<PAGE>
EXHIBIT "E" to be made a part of a Lease between THE PRUDENTIAL INSURANCE
COMPANY OF AMERICA (Landlord), and DATA TRANSMISSION NETWORK CORPORATION
(Tenant), dated , 1994. (Page 3 of 3)

22. Canvassing, peddling, soliciting and distribution of hand bills in the
Building (except for activities within a tenant's leased premises which involve
only such tenant's employees) is prohibited. Each tenant is requested to notify
Landlord (or Landlord's property manager) if such activities occur.

23. All tenants will refer all contractors, contractors' representatives
and installation technicians tendering any service to them to Landlord for
Landlord's supervision, approval and control before the performance of any
contractual services. This provision shall apply to all work performed in the
Building (other than work under contract for installation or maintenance of
security equipment or banking equipment), including, but not limited to,
installations of telephones, telegraph equipment, electrical devices and
attachments, and any and all installations of every nature affecting floors,
walls, woodwork, trim, windows, ceilings, equipment and any other physical
portion of the Building.

24. Smoking is not permitted in the restrooms, stairwells, elevators,
public lobbies or public corridors.

25. Each tenant and their contractors are responsible for removal of trash
resulting from large deliveries or move-ins. Such trash must be removed from the
Building and Building facilities may not be used for dumping. If such trash is
not promptly removed, Landlord (or Landlord's property manager) may cause such
trash to be removed at the tenant's sole cost and expense plus a reasonable
additional charge to be determined by Landlord to cover Landlord's
administrative costs in connection with such removal.

26. Tenants may not install, leave or store equipment, supplies, furniture
or trash in the common areas of the Building (i.e., outside their leased
premises).

27. Each tenant shall provide Landlord's property manager with names and
telephone numbers of individuals who should be contacted in an emergency.

28. Tenants shall comply with the Building life safety program established
by Landlord (or by Landlord's property manager), including without limitation
fire drills, training programs and fire warden staffing procedures, and shall
exercise all reasonable efforts to cause all tenant employees, invitees and
guests to comply with such program.

29. To insure orderly operation of the Building, no ice, mineral or other
water, towels, newspapers, etc., shall be delivered to any leased area except by
persons appointed or approved by Landlord in writing.

30. Should a tenant require telegraphic, telephonic, annunciator or other
communication service, Landlord will direct the electricians where and how wires
are to be introduced and placed and none shall be introduced or placed except as
Landlord shall approve. Electric current shall not be used for space heaters,
cooking or heating devices or similar appliances without Landlord's prior
written permission.

31. Nothing shall be swept or thrown into the corridors, halls, elevator
shafts or stairways.

32. No portion of any tenant's leased area shall at any time be used or
occupied as sleeping or lodging quarters, nor shall personnel occupancy loads
exceed limits reasonably established by Landlord for the Building.

68
<PAGE>

EXHIBIT "F" TO A LEASE
BETWEEN
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA, (LANDLORD)
AND
DATA TRANSMISSION NETWORK CORPORATION, (TENANT)
DATED AUGUST 30, 1994 1994

COMMENCEMENT DATE AGREEMENT

This Commencement Date Agreement is entered into by Landlord and Tenant
pursuant to Paragraph C under the Basic Terms section of the Lease.

1. DEFINITIONS. In this Agreement the following terms have the meanings given
to them:

(a) Landlord: The Prudential Insurance Company of America

(b) Tenant: Data Transmission Network Corporation

2. CONFIRMATION OF THE COMMENCEMENT DATES WITH REGARD TO THE OCCUPANCY, BY
TENANT, OF SUITES 310 AND 300. Landlord and Tenant confirm that the
Commencement Date of the Lease with regard to Suite 310 is September 13,
1994. In addition, Landlord and Tenant confirm that the Commencement Date
of the Lease with regard to Suite 300 is October 1, 1994.

Landlord and Tenant have executed this Commencement Date Agreement as of
the dates set forth below.

Tenant: Landlord:

DATA TRANSMISSION NETWORK THE PRUDENTIAL INSURANCE COMPANY
CORPORATION, a Delaware corporation OF AMERICA, a New Jersey corporation

By: Pacific Realty Group, Inc.
By: its Managing Agent
-----------------------------

Its: By:
-----------------------------

Its:

69
<PAGE>
EXHIBIT "G" - to be made a part of a Lease between THE PRUDENTIAL INSURANCE
COMPANY OF AMERICA (Landlord) and DATA TRANSMISSION NETWORK CORPORATION (Tenant)
dated , 1994. (Page 1 of 3)

Property #: 21139
ANTENNA LICENSE AGREEMENT

BETWEEN

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
AND
DATA TRANSMISSION NETWORK CORPORATION

This Agreement made as of the day of , 1994, by and between The Prudential
Insurance Company Of America, a New Jersey corporation, (hereinafter called
"Licenser") and Data Transmission Network Corporation, a Delaware corporation,
(hereinafter called "Licensee").

WITNESSETH:

I. Licenser, for and in consideration of the payments hereinafter set forth
and of the covenants and agreements made by Licensee herein contained, does
hereby grant unto the Licensee a non-exclusive license to utilize space in the
building located at 9110 West Dodge Road, Omaha, Nebraska, (hereinafter called
the "Building") for the purpose of installing and using various satellite dishes
(herein referred to as "Antenna") to be attached to the roof of the Building
during the Term of the Lease unless extended or sooner terminated as provided
herein.

II. Licensee shall make payments to Licenser, at the office of the Building,
or elsewhere as designated from time to time by notice in writing to Licensee,
in monthly installments as follows:

"Except for the Rent required under the Lease and as otherwise provided
herein, Licensee shall not be required to pay any monthly rental for
this Antenna License Agreement."

III. The size, location and placement as well as the manner and method of
installation and removal of the Antenna and related equipment shall be subject
to the prior written approval of Licenser. If Licenser elects to hire
structural, mechanical, roofing and/or other engineers or consultants to review
such plans and specifications, Licensee shall reimburse Licenser for the
reasonable costs thereof, whether or not Licenser grants such approval.
Notwithstanding the above, all Antenna installed as of the date of this
agreement do not need written approval.

IV. In addition to the monthly rental, Licensee shall pay for all utilities
consumed to install, maintain, operate and remove its Antenna and equipment, as
well as the reasonable costs of any engineers or consultants employed by
Licenser to review or monitor same.

V. Prior to the installation of said Antenna and equipment, Licensee shall
secure and shall at all time thereafter maintain all required approvals and
permits of the Federal Communications Commission and all other governmental
bodies having jurisdiction over its business, including its communications,
operations and facilities. Licensee shall at all times comply with all laws and
ordinances and all rules and regulations of municipal, state and federal
governmental authorities relating to the installation, maintenance, height,
location, use, operation, and removal of said Antenna and equipment and shall
fully indemnify Licenser against any loss, cost, or expense which may be
sustained or incurred by it as a result of the installation, maintenance,
operation, or removal of said Antenna and equipment. Licenser makes no
representation that applicable laws, ordinances or regulations permit the
installation or operation of antennas on the subject real estate.

VI. Licenser hereby grants unto Licensee the right, to be exercised as herein
set forth, to enter upon the roof of the Building for the sole purpose of
gaining access to the Licensee's installation. In addition thereto, Licenser
grants unto Licensee the right, to be exercised as herein set forth, to install
such equipment, conduits, cables and materials (hereinafter called "the
connecting equipment") in shafts, ducts, conduits, chases, utility closets and
other facilities of the Building as designated by Licenser as is reasonably
necessary to connect Licensee's Antenna to Licensee's other machinery and
equipment in other parts of the Building, subject to the requirements of any
permits and the codes, regulations and rules of any governmental body, agency or
authority. Licenser further grants to Licensee the right of access to the areas
where such connecting equipment is located for the purposes of maintaining,
repairing, testing and replacing the connecting equipment; provided, that such
access and installations do not cause damage to or interfere with the operation
or maintenance of any part of the Building or with any other tenant's operation.

70
<PAGE>
EXHIBIT "G" - to be made a part of a Lease between THE PRUDENTIAL INSURANCE
COMPANY OF AMERICA (Landlord) and DATA TRANSMISSION NETWORK CORPORATION (Tenant)
dated , 1994. (Page 2 of 3)

VII. Licensee shall promptly reimburse Licenser for the costs of repairs of
any damage to the Building directly or indirectly caused by Licensee's
installations or the operation, maintenance or removal thereof.

VIII. Licensee, at its expense, shall be solely responsible for and shall
maintain its Antenna and related equipment in a safe, structural, sound, clean
and sightly condition and shall indemnify and save harmless Licenser against all
liens and claims of mechanics and material men furnishing labor and materials in
the construction and maintenance of same.

IX. Licensee agrees to defend, indemnify and save harmless Licenser and to
assume all liability for death or injury to any persons and all liability for
loss, damage or injury to any property incurred or sustained by Licensee arising
from, growing out of or resulting from Licensee's installation or its use of the
roof of the Building or any other areas in the Building where Licensee's related
equipment is located, including costs, attorney's fees and other expenses
incurred by Licenser in defending any such claim unless such loss, damage or
injury is due to the negligence of Licenser, its employees, agents, or invitees.

X. The license hereby granted to Licensee shall not be deemed to give to
Licensee the exclusive right to use the roof or tower of the Building and shall
not preclude Licenser from granting a license or licenses to others. The rights
of other licensees shall be exercised without causing unreasonable interference
with the activities being carried on by Licensee in accordance with this
license. Similarly, the rights of Licensee hereunder shall be exercised without
causing interference with the activities being carried on by other licensees in
accordance with their respective licenses. Licensee shall not change or
materially alter the Antenna or related equipment agreed to herein without the
prior written consent of Licenser.

XI. Licensee hereby waives and releases all claims arising out of this
agreement, or in any way whatsoever connected with the subject matter of this
agreement, against licenser its officers, directors, agents, employees and
servants, and agrees that they shall not be liable for injury to person or
damage to property sustained by Licensee or by any occupancy of the Building or
any other person occurring in or about the Building resulting directly or
indirectly from any existing or future condition, defect, matter of thing in the
Building or any part of it or from equipment or appurtenance becoming out of
repair, or from any occurrence, act, or from the negligence or omission of any
tenant or occupant of the Building or of any other person; except for the
negligence or omission by Licenser, its officers, directors, agents, employees
and servants.

XII. No notice or demand related to or required by this Agreement shall be
effective unless same is in writing and is delivered as provided in paragraph 24
of the Lease.

XIII. Licenser shall have the right to terminate this License upon written
notice to Licensee, in the event that: (a) Licensee shall default in the
performance of any of the obligations imposed upon it hereunder and shall not,
after being notified by Licenser of the existence of such default, immediately
take all reasonable steps to cure the same; or (b) it shall be determined that
such installation or use materially interferes with the operation of machinery
and apparatus of the Building, such as the elevators; or (c) it is found by
public authority having jurisdiction over the Building that such installation
and use constitute a nuisance or hazard to the public or to the occupants of the
Building; or (d) the use of such antenna interferes with the use of any tenant's
equipment or data processing machines in the Building; or (e) Licensee's lease
or right to possession of space in the Building shall expire or be terminated.

XIV. At the termination of this license by lapse of time or otherwise, the
Antenna and the related equipment installed under the terms of this license
shall be removed by Licensee and the area of the Building where they were
installed shall be restored by Licensee to as good condition as existed
immediately prior to installation of such Antenna and related equipment.

XV. This Agreement shall be binding upon the successors and assigns of the
parties hereto, provided that Licensee shall not assign or transfer this License
to anyone else without Licenser's prior written consent which may be withheld at
its sole discretion.

71
<PAGE>
EXHIBIT "G" - to be made a part of a Lease between THE PRUDENTIAL INSURANCE
COMPANY OF AMERICA (Landlord) and DATA TRANSMISSION NETWORK CORPORATION (Tenant)
dated , 1994. (Page 3 of 3)

LICENSEE: LICENSER:

Data Transmission Network Corporation, The Prudential Insurance Company Of
Delaware corporation America, a New Jersey corporation

By: Pacific Realty Group, Inc.
its Managing Agent

By: By:

Its: Its:

72
<PAGE>

EXHIBIT 10. (z)

FIRST AMENDMENT TO LEASE

THIS FIRST AMENDMENT TO LEASE (the "Amendment") is made and entered into this
______ day of , 1994, by and between THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
("Landlord"), having an address at One Prudential Plaza, Suite 1200, Chicago,
Illinois, 60601, and DATA TRANSMISSION NETWORK CORPORATION ("Tenant"), having an
office at 9110 West Dodge Road, Suite 200, Omaha, Nebraska 68114.

RECITALS

A. The Prudential Insurance Company of America and Data Transmission Network
Corporation entered into that certain Lease dated as of August 30, 1994
(the "Lease"), for Suites 362, 310, 300, and 290 containing 14,987 rentable
square feet in the Building known as Embassy Plaza, located at 9110 West
Dodge Road, Omaha, Nebraska ("the Premises"). B. All capitalized terms not
defined herein shall have the meanings ascribed to them in the Lease.

NOW, THEREFORE, in consideration of the foregoing promises and other good and
valuable considerations, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto covenant and agree as follows:

1. Premises. Effective with the Commencement Date of the Lease with respect to
Suite 290 (September 1, 1994), the measurement of the space identified as
Suite 290 in the Lease shall be revised to 5,250 rentable square feet
(R.S.F.). In addition, as a part of this Amendment, the Premises shall be
expanded to include an additional 273 R.S.F. of space adjacent to Suite 290
(the "Additional Space") as further defined in Exhibit "A", attached hereto
and by this reference incorporated herein. As of October 1, 1994, the
Premises shall consist of 15,075 R.S.F. (the "Revised Premises") and
Tenant's Proportionate Share shall be revised to 11.58% (Tenant's R.S.F.
divided by Building's total rentable square feet = 15,075 R.S.F. / 130,173
R.S.F.).

2. Term. The term of the Lease with respect to the Revised Premises shall be
that period of time commencing of September 1, 1994, (the "Commencement
Date") and ending on May 31, 2001, (the "Expiration Date") except, the
Commencement Date with respect to Suite 310 (5,970 R.S.F.) shall be
September 13, 1994, the Commencement Date with respect to Suite 300 (2,268
R.S.F.) and the Additional Space shall be October 10, 1994.

3. Base Rent. Unless modified as set forth in Exhibit "C", effective November
1, 1994, Tenant shall pay as Base Rent for the Term the sum of One Million,
Two Hundred Sixty-Four Thousand, Eight Hundred Nine Dollars and
Seventy-Nine Cents ($1,264,809.79) payable monthly as follows:

September 1, 1994 - September 30, 1994 $12,403.49 / Month
October 1, 1994 - October 31, 2001 $17,528.63 / Month
November 1, 1994 - May 31, 2001 $18,431.01 / Month

4. Tenant Improvements. The tenant improvement allowance provided by the
Landlord under Exhibit "D" of the Lease shall be revised to One Hundred
Eighty-Two Thousand, Eighty-Two Dollars and Twenty-Two Cents ($182,082.22)
to reflect the above floor space modifications

5. Effect of Agreement. Except as herein specifically provided, the terms and
conditions of the Lease shall continue in full force and effect.

6. This Amendment shall be binding upon and inure to the benefit of the
parties hereto, their successors and assigns.

7. The parties hereto hereby reaffirm and ratify all covenants,
representations and warranties in the Lease as amended by this Amendment.

IN WITNESS WHEREOF, Landlord and Tenant have executed this Amendment as of the
day and year first above written.

Tenant: Landlord:

Data Transmission Network Corporation, The Prudential Insurance Company of
a Delaware corporation America, a New Jersey corporation

By: By: Pacific Realty Group, Inc.,
its Managing Agent

Its:

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<PAGE>
EXHIBIT 10. (aa)

DATA TRANSMISSION NETWORK CORPORATION

11.25% SENIOR SUBORDINATED NOTE DUE JUNE 30, 2004

PPN# 238017 A* 8
R-1 New York, New York
$15,000,000 June 30, 1994

DATA TRANSMISSION NETWORK CORPORATION, a Delaware corporation (the
"Company"), for value received, hereby promises to pay to EQUITABLE CAPITAL
PRIVATE INCOME AND EQUITY PARTNERSHIP II, L.P., or registered assigns, the
principal amount of FIFTEEN MILLION DOLLARS ($15,000,000) on June 30, 2004, with
interest (computed on the basis of twelve 30-day months) on the unpaid balance
of such principal amount at the rate of 11.25% per annum from the date hereof,
payable quarterly on each September 30, December 30, March 30 and June 30 after
the date hereof, commencing September 30, 1994, until such unpaid balance shall
become due and payable (whether at maturity or at a date fixed for prepayment or
by declaration or otherwise), and with interest on any overdue principal
(including any overdue prepayment of principal) and (to the extent permitted by
applicable law) on any overdue interest, at the rate of 13.25% per annum until
paid, payable quarterly as aforesaid or, at the option of the holder hereof, on
demand. Payments of principal and interest on this Note shall be made in lawful
money of the United States of America at the principal office of Chase Manhattan
Bank, N.A., in the Borough of Manhattan, the City and State of New York, or at
such other office or agency in such Borough as the Company shall have designated
by written notice to the holder of this Note as provided in the Note and Warrant
Purchase Agreement referred to below.

This Note is one of the Company's 11.25% Senior Subordinated Notes due
June 30, 2004 (the "Notes"), originally issued in the aggregate amount of
$15,000,000 pursuant to Note and Warrant Purchase Agreement, dated as of June
30, 1994, as from time to time amended, among the Company and the institutional
investor named therein. The holder of this Note is entitled to the benefits of
such Note and Warrant Purchase Agreement, as from time to time amended, and may
enforce the agreements of the Company contained therein and exercise the
remedies provided for thereby or otherwise available in respect thereof.

Payments of principal and interest in respect of the Notes are
subordinate, to the extent specified in such Note and Warrant Purchase
Agreement, to all Superior Debt of the Company as such term is defined in such
Note and Warrant Purchase Agreement.

This Note is a registered Note and is transferable only upon surrender
of this Note for registration of transfer, duly endorsed, or accompanied by a
written instrument of transfer duly executed, by the holder hereof or such
holder's attorney duly authorized in writing. Reference in this Note to a
"holder" shall mean the person in whose name this Note is at the time registered
on the Warrant Purchase Agreement and the Company may treat such person as the
owner of this Note for the purpose of receiving payment and for all other
purposes, and the Company shall not be affected by any notice to the contrary.

The Notes are under certain circumstances subject to prepayment at the
option of the company or at the option of the holders, in whole or in part, as
specified in such Note and Warrant Purchase Agreement.

In case an Event of Default, as defined in such Note and Warrant
Purchase Agreement, shall occur and be continuing, the unpaid balance of the
principal of this Note may become due and payable in the manner and with the
effect provided in such Note and Warrant Purchase Agreement.

This Note is made and delivered in New York, New York, and shall be
governed by the laws of the State of New York.

DATA TRANSMISSION NETWORK CORPORATION

By:
--------------------------------------

Title: Secretary/Treasurer and
Chief Financial Officer

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<PAGE>

EXHIBIT 11

DATA TRANSMISSION NETWORK CORPORATION

COMPUTATION OF INCOME (LOSS) PER SHARE

Years Ended December 31,
-----------------------------------------
1994 1993 1992
------------ ----------- ------------
Primary

Computation of income per common
and common equivalent share:
<S> <C> <C> <C>
Net income (loss) $(1,602,738) $ 663,831 $ 1,351,352
=========== =========== ===========

Average shares outstanding 3,253,400 3,195,534 3,299,450

Add shares applicable to stock
options and warrants (1) -- 91,040 30,109

Add shares applicable to stock
options & warrants prior to
conversion, using average market
price prior to conversion (1) -- 276 5,218
----------- ----------- -----------

Total shares 3,253,400 3,286,850 3,334,777
=========== =========== ===========

Per common share:
Net income (loss) (1) $ (0.49) $ 0.20 $ 0.41
=========== =========== ===========
<FN>

(1) Shares applicable to warrants and stock options are antidilutive for the
period ended December 31, 1994, and thus, are excluded from the
calculation of net loss per common share.
</FN>
</TABLE>

75
<PAGE>
EXHIBIT 11 - Pg 2

DATA TRANSMISSION NETWORK CORPORATION

COMPUTATION OF INCOME (LOSS) PER SHARE

<TABLE>
<CAPTION>
Years Ended December 31,
----------------------------------------
1994 1993 1992
------------ ----------- -----------
Fully Dilutive

Computation of income per common
and common equivalent share:
<S> <C> <C> <C>
Net income (loss) $(1,602,738) $ 663,831 $ 1,351,352
=========== =========== ===========

Average shares outstanding 3,253,400 3,195,534 3,299,450

Add share applicable to stock
options & warrants (1) -- 185,515 44,177

Add shares applicable to stock options
and warrants prior to conversion, using
market price prior to conversion (1) -- 1,048 5,324
----------- ----------- -----------

Total shares 3,253,400 3,382,097 3,348,951
=========== =========== ===========

Per common share:
Net income/(loss) $ (0.49) $ 0.20 $ 0.40
=========== =========== ===========
<FN>

(1) Shares applicable to warrants and stock options are antidilutive for the
period ended December 31, 1994, and thus, are excluded from the
calculation of net loss per common share.

</FN>

</TABLE>

76
<PAGE>

-------------------------------------------------------------------------------
CORPORATE PROFILE
-------------------------------------------------------------------------------

Data Transmission Network Corporation (DTN(R)), an electronic
information and communication services company headquartered in Omaha, NE, is a
leader in the satellite delivery of time-sensitive information. DTN is committed
to providing our customers with the best information and analysis available, as
timely as possible, at an affordable cost. Tailored to meet our subscriber's
needs, DTN's services are valuable tools in managing business and personal
affairs.

The company went public in January, 1987, and has evolved into a
full-service communication network. DTN delivers information via small dish
Ku-band satellite, FM radio side-band channel, large dish C-band satellite or
cable TV. The DTN receiver captures information around the clock and converts it
into text, graphics and audio ready to "view" at the subscriber's convenience.

Prior to 1992, DTN supported only a monochrome system. In 1992, the
company introduced the Advanced Communications Engine (ACESM) receiver that
captures, manipulates and displays high resolution color pictures, graphics and
text, as well as sound. The ACE receiver has an internal hard drive, internal
phone modem and can use a keyboard or mouse. The ACE receiver has enhanced DTN's
ability to provide information and communication services.

DTN's services reach 82,000 subscribers in the U.S. and Canada. The
company has services for the agriculture, automotive, energy, farm implement,
finance, mortgage and produce industries. The services include DTN AgDaily(R),
the company's first product, targeted for agribusinesses; DTN Wall Street(R) for
the financial industry; DTNergy(R) for the oil and natural gas industries;
DTNstant(R), a real-time agriculture ticker service; DTNautoSM linking auto
auctions and auto dealers; DTNironSM for the farm implement dealer; DTN
FirstRate(R) for the mortgage industry; DTN Pro SeriesSM, an advanced
information service for producers and agribusiness; and DTN PROduceSM for the
produce industry.

77
<PAGE>
-------------------------------------------------------------------------------
TABLE OF CONTENTS
-------------------------------------------------------------------------------

Financial Highlights ...................................................... 2

Letter to Stockholders .................................................... 3

Business Review ........................................................... 5

Selected Financial Data ................................................... 12

Management's Discussion and Analysis ...................................... 13

Management's Responsibilities ............................................. 17

Independent Auditor's Report .............................................. 17

Financial Statements ...................................................... 18

Notes to Financial Statements ............................................. 22

Quarterly Data ............................................................ 26

Trading Information ....................................................... 26

Investor Information ...................................................... 27

Directors and Officers .................................................... 27

Mission Statement ......................................................... 29

78
<PAGE>
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
-------------------------------------------------------------------------------

1994 1993 % Change
------------ ----------- --------
<S> <C> <C> <C>
For the Year:
Revenues ........................ $ 46,109,789 $ 35,992,754 28 %
Operating cash flow(1) .......... 15,750,727 12,939,707 22 %
Income (loss) before income taxes (2,422,738) 1,020,831 --
Net income (loss) ............... (1,602,738) 663,831 --
Net income (loss) per share ..... $ (.49) $ .20 --
At Year End:
Total assets .................... $ 71,459,356 $ 57,242,313 25 %
Long-term debt and subordinated
notes .......................... 33,982,814 25,375,000 34 %
Stockholders' equity ............ 12,706,978 12,780,477 (1) %
Book value per share ............ $ 3.99 $ 3.86 (3) %
Key Indicators:
Total subscribers at year-end ... 82,000 74,100 11 %
Subscriber annualized
retention rate ................. 89.8 % 88.8 % 1 %
Net development costs(2) ........ $ 4,335.000 $ 2,711,000 60 %
As a percent of revenue:
Operating cash flow(1) .......... 34.2 % 36.0 %
Net development costs (NDC)(2) .. 9.4 % 7.5 %
Operating cash flow before NDC .. 43.6 % 43.5 %
Depreciation .................... 32.7 % 29.3 %
Interest ........................ 6.8 % 3.9 %
Net income (loss) before
income taxes ................... (5.3)% 2.8 %
<FN>
(1) Operating income before depreciation expense.

(2) Net Development Costs (NDC) are defined as the sum of 1) market research
activities, 2) hardware and software engineering, research and development
and 3) the negative operating cash flow (after interest but prior to
corporate allocations) of new services.

</FN>
</TABLE>
<TABLE>
<CAPTION>
GRAPHS IN TABULAR FORM:

'90 '91 '92 '93 '94
----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C>
Subscribers at Year-end
(thousands) 53.3 63.3 67.6 74.1 82.0

Revenues
(million) $18.0 $21.5 $26.8 $36.0 $46.1

Operating Cash Flow
(millions) $ 6.7 $ 8.2 $ 9.9 $12.9 $15.8

</TABLE>

79
<PAGE>
-------------------------------------------------------------------------------
LETTER TO STOCKHOLDERS
-------------------------------------------------------------------------------

Once again I have the pleasure to communicate to our stockholders,
employees and friends that 1994 was a year filled with positive results. Let's
begin with reviewing the key financial components used by our management team to
monitor the company.

Revenues rose 28% to $46,110,000.

Operating cash flow (operating income before depreciation expense)
increased 22% to $15,751,000. Total subscribers increased 11% to
82,000.

Subscriber retention increased from 88.8% in 1993 to 89.8% in 1994.

Net development costs increased 60% to $4,335,000 in 1994 compared to
$2,711,000 in 1993.

Operating cash flow before net development costs remained level at
43.6% of revenue in 1994 compared to 43.5% in 1993.

Depreciation and interest combined increased to 39.5% of revenue, up
from 33.2% in 1993.

1994 was a positive year highlighted by growth in revenues, operating
cash flow and subscribers along with improvement in the retention of our
subscribers. The growth in operating cash flow was less than the growth from
1992 to 1993 but was in line with our compounded operating cash flow growth rate
of 24% for the years 1990 to 1994. We achieved these positive results while
making important investments in the future of the company.

During the first half of 1994, DTN began use of its new distribution
center. The new distribution center is more than a warehouse in that it contains
improved equipment testing facilities and back-up transmitting/broadcasting
facilities should an emergency occur at our main site.

A new training facility for our employees was completed in 1994. Our
new administrative computer system is moving forward and our target is to begin
conversion to this system in the latter part of 1995. These investments are
important to our corporate infrastructure and will ensure that we can support
the growth of our company.

During 1994, the company released three new services; DTN Pro Series,
DTN PROduce and DTN FirstRate. As a review and to bring our new readers up to
date, the following is a chronological list of current DTN services.

Year/Month Services Developed
-------------- -----------------------
1984 Dataline/DTN AgDaily
1989 DTN Wall Street
1991 DTNergy
1993 DTNstant
1993/August DTNauto
1993/October DTNiron
1994/May DTN FirstRate
1994/June DTN Pro Series
1994/October DTN PROduce

Since 1991, the company has grown Net Development Costs from
approximately $400,000 to $4,335,000 in 1994. As you may recall, Net Development
Costs as defined by our management team are 1) market research activities 2)
hardware and software engineering, research and development and 3) the negative
operating cash flow of our new services. We believe the growth of development
expenditures was necessary to aggressively pursue and bring to market the
services outlined above. For 1995, we plan to stabilize development expenditures
because the current level is sufficient to identify new services at a pace equal
to our ability to implement, manage and market these services efficiently.

I feel that although the increase in net development costs put pressure
on net income (a net loss of $1,603,000 in 1994 vs. net income of $664,000), it
is important to point out that our core services (DTN AgDaily, DTNstant, DTN
Wall Street and DTNergy) had excellent performances in 1994. Revenue in our core
services increased 30%. Operating cash flow in our core services increased 28%.
Finally, operating cash flow from our core services as a percentage of revenue
was 43.6% in 1994 compared to 43.5% in 1993. I believe this comparison reflects
the strength of our core products.

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<PAGE>
While our DTN management team remained focused on growing cash flow and
developing new services, the bottom line was pressured by more than net
development costs during 1994. Depreciation rose to 32.7% of revenue in 1994
from 29.3% in 1993. Interest rose to 6.8% of revenue in 1994 compared to 3.9% in
1993.

Our internal projections lead us to believe that depreciation as a
percentage of revenue should have peaked in 1994. At our 1993 annual meeting we
projected the 1994 level at approximately 32% and we believe 1995 will be
slightly lower. The primary reasons supporting this projection are that our
oldest units purchased are now becoming fully depreciated and the addition of
new higher revenue services will help reduce this percentage.

The growth in interest expense is both a result of conditions we can
control and conditions we cannot control. During 1994, we placed $15 million of
subordinated debt through a sale of 11.25% subordinated notes, this being our
controllable event. This placement was necessary to increase our borrowing
ability to continue the growth of the company. The other interest factor was the
increase in the prime rate from 6% to 8.5%, this being the uncontrollable event.

Regarding what to focus on, a rural pundit friend of mine opined that
the "main thing is to keep the main thing the main thing." The main thing at DTN
has been and still is our commitment to growth.

Once again we wish to extend our sincere thanks to our customers,
stockholders, employees, financiers and suppliers for their continued loyalty,
confidence and support.

Very sincerely yours,

Roger R. Brodersen
Chairman and Chief Executive Officer

81
<PAGE>
-------------------------------------------------------------------------------
BUSINESS REVIEW
-------------------------------------------------------------------------------

Data Transmission Network Corporation (DTN) began operations in April,
1984. In January, 1987, DTN completed an initial public offering of common stock
at $5.40 per share.
The company's business is electronic delivery (primarily satellite) of
time sensitive information and communications. DTN has 82,000 subscribers to its
primary services. The company announced three new services in 1994; DTN
FirstRate, DTN Pro Series, and DTN PROduce.
The company's subscription services are targeted at niche business
markets and are designed to be timely, simple to use, convenient and affordably
priced. The company's communication services provide an efficient means of
sending data and information from point to multi-point.
The development of a cost-effective electronic satellite delivery
system, plus a total commitment to customer service and information quality, has
enabled the company to become a major player in the communication industry. The
company continues to make a large investment to enhance and develop its delivery
technologies.

INFORMATION DISTRIBUTION TECHNOLOGY

Since DTN's inception, the company has invested considerable time and
money to research and develop technologies to efficiently deliver the timely
information that the company's subscribers demand. DTN supports two primary
transmitting and receiving technologies: FM radio side-band channel and small
dish Ku-band satellite. FM side-band was the first technology used by the
company and Ku-band satellite was added in 1989. On December 31, 1994, 23,000
subscribers were receiving the company's services via FM and 57,400 via Ku-band.
The company also can deliver some of its services via large dish C-band
satellite or cable television and has approximately 1,600 subscribers receiving
their services using these technologies. In addition, the company is sending
messages directly to fax, printers or E-mail accounts for approximately 7,000
customers.
The company provides all of the equipment necessary for subscribers to
receive their service. A DTN receiver, specifically built for the company, along
with a video monitor is provided to the subscriber regardless of the receiving
technology utilized by the receiver. The company also provides the subscribers
with an FM antenna or a small 30" Ku-band satellite dish. The company does not
provide the large C-band satellite dish as part of its service. DTN is
responsible for the normal maintenance and repair of the equipment utilized by
the subscribers.
Prior to 1992, the company utilized a "page based" receiver and
monochrome video system. The monochrome system translates the company's data
stream into video text and has the capability, depending on the model, to
receive and display from 126 to 246 different pages (screens) of information.
During 1992, development was completed on a color graphics receiver
system by the company for its exclusive use. This new receiver, called an
Advanced Communications Engine (ACESM), has enhanced DTN's ability to provide
new information and communication services. This receiver has many additional
capabilities over the monochrome receiver, not the least of which is the ability
to display high resolution color pictures, graphics and text.
The ACE receiver has an internal hard drive providing much greater data
storage and retrieval capabilities. The ACE receiver enhances system performance
by allowing some data to be stored on the hard drive versus requiring frequent
rebroadcasting. The ACE receiver also can receive, store and playback digitized
sound files, such as weather forecasts and voice advertisements. In addition,
audio alarms can be set by a subscriber to trigger when a futures contract
reaches a pre-set price. Both monochrome and color receivers have the ability to
download data to a printer or computer.
One of the unique aspects of the company's information distribution
network is the computer software developed by the company specifically for use
with the DTN receiver. Computers utilizing this software manage a wide variety
of data and input sources, tasks and priorities and provide a source of
information transmissions uplinked to satellite. The software allows DTN to
individually address each receiver unit placed with a subscriber, permitting the
company to transmit different segments of information to different groups of
subscribers, including E-mail.
FM radio side-band technology is currently utilized in a variety of
ways, including background music systems and paging (beeper) systems. DTN leases
space on 50 FM radio side-band channels to transmit its data stream. The data
stream is uplinked from Omaha to satellite, downlinked from satellite to an FM
radio station and re-transmitted over the radio station's side-band channel
direct to the subscriber's FM antenna. The receiver then translates the data
into video text.
In the Ku-band and C-band satellite dish technologies, the subscriber's
dish is the direct downlink for the company's data stream.

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<PAGE>
Early in 1994, the company began using a new cable TV delivery
technology involving vertical blanking intervals (VBI). The company has
contracted with a major cable TV superstation to transmit DTN's data stream
along with the station's TV signal. Currently used only by DTN Wall Street, VBI
technology eliminates the need for a satellite dish or FM antenna, and is
available to businesses or residences that are wired for cable and receive the
superstation's service.

SERVICES OFFERED

The company's revenue is derived principally from five categories: (1)
monthly, quarterly or annual subscriptions, (2) "a la carte" additional
services, (3) communication services, (4) advertising and (5) service initiation
fees. The percentage of total revenue derived from each category for the last
three fiscal years was:

1994 1993 1992
------ ------ ------
Subscriptions 73% 72% 75%
Additional services 8% 7% 8%
Communication services 10% 9% 6%
Advertising 4% 5% 5%
Service initiation fees 5% 7% 6%

The subscription revenue is monthly, quarterly or annual subscription
fees for one of the company's primary services, such as DTN AgDaily. A more
detailed description of each service is found later in this section.
Additional services are offered to subscribers on an "a la carte"
basis, similar to premium channels on cable TV. The information for these
services is primarily offered over DTN by a third party, for which DTN receives
a share of the subscription revenue paid by the subscriber.
The company also sells communication services which allow companies to
cost-effectively communicate a large amount of time-sensitive information or
data to their customers or field offices. Approximately 92% of communication
services revenue in 1994 was generated from DTNergy, and the remaining eight
percent was primarily from DTN AgDaily.
The company sells advertising space interspersed among the DTN pages,
similar to a newspaper or magazine. The advantage of an electronic advertisement
placed on DTN over the print media is the time-sensitive delivery of the ad as
well as the ability to change the advertising message frequently and quickly as
market conditions dictate.
Service initiation fees are one-time charges to new subscribers, and
range from $150 to $295, depending on the service and broadcast delivery method.
DTN also charges a switch-out fee of $50 to $100 for those subscribers who
change their primary DTN service (for example, from a monochrome to color
service).

DTN AG SERVICES

The DTN Ag related services are comprised of DTN AgDaily, DTNstant,
DTNiron, DTN Pro Series and DTN PROduce.

GRAPH IN TABULAR FORM:

'90 '91 '92 '93 '94
----- ----- ----- ----- -----
DTN Ag Services Revenues
(millions) $16.9 $18.8 $20.6 $27.0 $33.7

DTN AGDAILY SERVICE

SERVICE REVIEW
The company's first service, DTN AgDaily is an agricultural market
information and quotes service. The price of the monochrome FM service is $25.99
per month, $32.99 per month via monochrome Ku-band and $45.99 per month via
color Ku-band. The company offers a discount to subscribers who pay their
subscriptions annually in advance.
The information provided to monochrome DTN AgDaily subscribers consists
of delayed commodity futures and options quotes; local cash grain and livestock
prices; selected regional and world weather updates; and a variety of daily
analyses, commentary and news that affects grain and livestock prices. DTN
AgDaily also provides information segments for specific crop and livestock
enterprises.
In addition to the information included in the monochrome version, the
DTN AgDaily color graphics version includes a greatly expanded weather segment
consisting of national and regional radar maps, updated every 15 minutes,
satellite cloud cover maps, color maps showing precipitation and temperatures
and much more. Also included are high resolution color graphic charts which can
be custom selected and designed by the subscriber from a selection base of over

83
<PAGE>
1,000 charts. The subscribers can also custom program the futures quotes pages
to display only the quotes they desire.
DTN AgDaily subscribers can select from more than 80 different
additional services. The majority of these have information provided by third
parties and range from more sophisticated weather data information to price
forecasts for specific commodities.
Approximately 80% of DTN AgDaily's subscribers are farmers or livestock
producers with the balance consisting primarily of grain elevators,
agribusinesses, and financial institutions. Approximately 65% of DTN AgDaily's
subscribers are located in the eight Midwestern states of Kansas, Illinois,
Indiana, Iowa, Minnesota, Missouri, Nebraska, and Ohio.
DTN AgDaily has approximately 75% of the market for satellite-delivered
agricultural news and information services. The competition for DTN AgDaily
consists primarily of one company providing a somewhat similar but less
extensive service and several small satellite delivered services. DTN AgDaily
still considers its biggest competition to be the combination of print advisory
services, TV, radio, telephone and changing old habits.
New subscriptions to DTN AgDaily are sold by full-time employee sales
representatives as well as by independent, commission-only, sales
representatives. The independent sales representatives are generally farmers
selling DTN on a part-time basis. The company obtains leads for its sales force
through telemarketing, direct mail, print media advertising and subscriber
referrals.

1994 HIGHLIGHTS
DTN AgDaily remains the company's largest service, and the performance
in 1994 exceeded management's expectations. Twenty percent operating revenue
growth (total revenue less service initiation fees) and over six percent net
subscriber growth demonstrated a continued acceptance of higher-priced products
and increased use of additional services.
The trend of current subscribers converting to the color system
continued at a strong pace during 1994 and total color subscribers are 50% of
our total DTN AgDaily subscriber base. Marketing continues for the original
monochrome system, contributing 15% of the total 1994 subscription sales.
Monthly sales rates for both the monochrome and color products remained steady
throughout the year, as we continued to rely heavily on our full-time sales
force and increased telemarketing efforts.
Another sales highlight was the expansion into Canada. The
establishment of a distribution center in Winnipeg, as well as the development
of a full-time sales force, enabled DTN AgDaily to double Canadian sales from
the previous year. DTN AgDaily introduced a number of product enhancements
during 1994. Among them are zone-specific weather forecasts and in-motion radar
maps that give the subscriber added production-oriented weather information.
Also, DTN AgDaily increased user programmability, introduced new information
segments such as Daybreak News, increased development of vertical information
segments that address specialized producer needs, and expanded the use of audio
throughout the service.
In 1994, the advertising sales department of the combined DTN Ag
related services sold over $1.6 million in advertising space on the DTN system.
Companies advertising on DTN read like a "Who's Who" in agriculture, from ag
chemicals and seeds to equipment and financing. The color system's recently
introduced interactive and animation capabilities continue to attract new
advertisers. Advertising research in 1994 confirmed that DTN has become a major
player in the farm media field.
DTN AgDaily management believes that recent changes in the agriculture
industry will be positive for the service. With the trend toward consolidation
into larger farms, the market for agricultural information services is growing.
At the same time, management expects to see growth from the other agriculture
services: DTNstant, DTNiron, DTN Pro Series, DTN PROduce.

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<PAGE>
DTNSTANT SERVICE

SERVICE REVIEW
DTNstant first became available to subscribers in February, 1993.
DTNstant is priced at $159.99 a month. This is a color service available by
satellite transmission. Its primary subscribers are commercial grain elevators,
grain companies, feedlots, commodity brokers and commodity speculators.
DTNstant subscribers receive real-time futures and options quotes of
their choice from the major commodity exchanges. They also receive headline
commodity news, market leading cash information, in-depth charting capabilities
plus all the news, weather, prices and information from the DTN AgDaily color
service. DTNstant subscribers also receive on-site service and installation from
professional service technicians.
DTNstant operates in a very competitive market where there are numerous
national and regional based providers of instant agricultural quotes. The
service obtains the majority of sales from the Ag services sales force,
supplemented by telemarketing and direct mail.

1994 HIGHLIGHTS
Since its introduction, DTNstant has grown from zero market share to
the number two service in the instant commodity information industry. In 1994,
its subscriber base increased more than 50% and total revenue grew nearly
three-fold. DTNstant revolutionized the instant quote market by providing
information never seen before on instant services and by shifting from a
monochrome to color platform, while cutting the historical industry price in
half.
Subscribers received several major enhancements during 1994. The
service added AP Online News from The Associated Press(R), the world's largest
news service. Charting capabilities were expanded with the addition of intraday
charts, letting subscribers chart market movement minute by minute, tick by
tick. At the end of 1994, DTNstant signed contracts to supply its signal to the
Chicago Board of Trade and the Chicago Mercantile Exchange buildings, providing
convenient access for traders.

DTNIRON SERVICE

SERVICE REVIEW
The initial target market for DTNiron is approximately 11,000 farm
implement dealers in the U.S. and Canada. The service is priced at $94.50 a
month. This is a color service available by satellite transmission.
DTNiron was announced in October, 1993, and is a cost-effective
communication system for the nation's farm implement industry. The service
permits dealers of all brands of farm implements to work closely together to
manage their inventory and conduct daily business operations.
The information and unique capabilities that DTNiron provides include
detailed descriptions of agricultural implements listed for sale by dealers as
well as machinery needed by other dealers. This feature of the DTNiron service
enables dealers from diverse geographical locations to conduct business from
each other's inventories, increasing sales and profitability.
Subscribers also receive various industry news, financial information,
a full slate of economic indicators and information from the DTN AgDaily
service. DTNiron provides exceedingly valuable information on the outlook for
farm equipment sales nationally.

1994 HIGHLIGHTS
1994 was DTNiron's first full year of marketing and the service
established a solid subscriber base. A cost-effective communication system for
the nation's farm implement industry, DTNiron is a "virtual" farm implement lot.
Each dealer/member of the DTNiron network can list equipment for sale, or
equipment wanted, complete with many details about each item. This includes
everything from operating condition and number of hours used to a wholesale
asking price.
DTNiron is more than just an equipment locator service. Used
effectively, it is an inventory management and communication tool for the farm
implement dealer. As a dealer-to-dealer network, the service encourages greater
dealer interaction and communication to sell and trade farm equipment across the
country, increasing dealer sales and profitability.

DTN PRO SERIES (NEW SERVICE)

Extensively marketed beginning in the third quarter of 1994, the DTN
Pro Series is an extension of DTN AgDaily. The Pro Series is targeted for
agriculture subscribers who require comprehensive information that can be
customized for the specific needs of their operation. There are four Pro Series
services: Weather Pro, News Pro, Chart Pro and Intraday Pro.
Weather Pro is an advanced weather package with over 70 additional
weather maps, detailed forecasts from across the nation and the ability to zoom
into maps and put satellite and radar maps "in motion". News Pro uses AP
Online(C) from the Associated Press, which continuously updates the latest

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business, general, sports and entertainment news, as well as an audio summary of
the day's agricultural news. Chart Pro features additional technical studies and
40 additional pages of charts that subscribers can use to chart over 1,100
futures contracts. Intraday Pro is the first low-cost system with the ability to
chart market sessions minute-by-minute during the trading day.
DTN Pro Series services have been sold to over 10% of DTN AgDaily color
subscribers. An individual Pro Series service, along with the DTN AgDaily
service, is $58.99 per month. All four of the current Pro Series services are
packaged in one service, called DTN Premier, for just $73.99 per month. This is
a color service available by satellite transmission.

DTN PRODUCE (NEW SERVICE)

Introduced in the fourth quarter of 1994, DTN PROduce offers the entire
produce industry, from growers to retailers, the most comprehensive price
discovery, weather, freight and industry information available at a low price.
DTN PROduce debuted at one of the industry's largest annual trade shows last
October and since then has enjoyed one of DTN's fastest expansions.
There are four major components to DTN PROduce. First, the weather may
be the most important piece of information for anyone in the produce business.
Yet, only 1 in 5 produce growers subscribes to a weather service. Second, the
service has FOB and terminal prices, updated immediately and formatted by
commodity, growing area and terminal market.
Third, DTN PROduce has transportation information with shipments,
arrivals and truck rates by growing area and daily truck availability by state.
Finally, the service offers industry news as well as the AP Online(C) service of
headline news such as business, sports and entertainment news.
Management believes that the success of DTN PROduce is due to the
company's increased emphasis on research and development. The service spent
almost three years in the R&D process before it was released to the industry.
The initial target market for the service is the entire produce food
chain of 100,000 growers, shippers, packers, brokers, retailers and
institutions. The service costs $84.50 per month. This is a color service
available through satellite transmission.

ADDITIONAL SERVICES

SERVICE REVIEW
Additional services include advisory, educational and informational
programming offered to DTN subscribers on an "a la carte" basis. Additional
services are marketed by on-screen promotion, direct mail, invoice stuffers and
free trials. Regularly, one additional service is offered system-wide on a
three-day free trial or a subscriber can request a two-week free trial of any
additional service.
New additional services are developed to match subscriber requests.
Additional services range in price from $9 to $300 per quarter, per service.

1994 HIGHLIGHTS
1994 was a positive year for the additional services area of the
combined DTN Ag related services. In fact, the DTN Ag related services combined
additional services revenue increased more than 48%. In 1993, DTN offered a
total of 55 additional services, a number that increased to over 80 in 1994.
Sales, revenue and the number of services offered all increased to make 1994 an
outstanding year.

DTN FINANCIAL SERVICES

The DTN financial services are comprised of DTN Wall Street and a new
service, DTN FirstRate.

GRAPH IN TABULAR FORM:

'90 '91 '92 '93 '94
---- ---- ---- ---- ----
DTN Financial Services Revenues
(millions) $1.1 $1.9 $3.3 $4.1 $5.1

DTN WALL STREET SERVICE

SERVICE REVIEW
DTN Wall Street is five years old and was first offered to subscribers
in May, 1989. The current price for the service is $41.95 per month.
The information provided to subscribers consists of a minimum of 68

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<PAGE>
pages of slightly delayed quotes on stocks, bonds, indices, futures, mutual and
money market funds and interest rates as well as business news and other
time-sensitive financial market information.
DTN Wall Street subscribers can also add "a la carte" additional
services including stock market timing and selection services and quotes on U.S.
Treasuries and Mortgage-backed Securities.
The majority of subscribers are individual investors, independent
brokers, financial planners and financial institutions. Approximately 15% of DTN
Wall Street subscribers also subscribe to DTN AgDaily. DTN Wall Street is a
monochrome service available by satellite transmission or cable television.
The primary competition for DTN Wall Street are satellite and cable TV
delivered delayed quote services in the $60 per month range, various dial-up
services priced on a pay-per-use basis and numerous high-end instant quote
services. New subscribers to DTN Wall Street are obtained through direct
response marketing, primarily print media and television advertising and
telemarketing.

1994 HIGHLIGHTS
Competition in the quotes industry remains intense and in 1994, DTN
Wall Street retained its advantages: low cost, unlimited access and more
comprehensive information.
DTN Wall Street subscription sales increased 10% in 1994, very
impressive results at a time when poor stock market conditions discouraged the
individual investor. Forty-five percent of all new subscribers in 1994 received
their service via cable television and 25% of all new 1994 subscribers were
referred from other satisfied subscribers.
Additional highlights of 1994 included the successful introduction of
Canadian market information. DTN Wall Street also added new computer network
subscribers by tying a single DTN Wall Street receiver unit into a local or wide
area network. Additional service sales increased on a per subscriber basis,
contributing to a 25% jump in total revenue that contributed to a 40% increase
in cash flow.

DTN FIRSTRATE (NEW SERVICE)

Announced in the second quarter of 1994, this new service gives
mortgage brokers nearly instantaneous access to daily mortgage rates set by the
nation's leading mortgage wholesalers. Priced at $111.95 per month, DTN
FirstRate relies on the company's monochrome delivery system. Subscribers can
receive the information either by satellite or through cable television.

There are several specific advantages to DTN FirstRate. First,
wholesaler information is delivered in a standardized format. Second, intraday
interest rates indicate the direction of wholesale prices at any time during the
day, allowing mortgage brokers to make more profitable decisions. Finally, the
low cost saves wholesalers on their rate distribution costs while brokers will
find this service far more economical than any other electronic mortgage rates
and information service.
In addition to wholesale prices and interest rates, DTN FirstRate gives
subscribers economic and financial news and analysis most useful to a mortgage
broker, including interest rates, leading economic indicators, employment rates,
government economic reports, and trend analysis.

DTNERGY SERVICES

GRAPH IN TABULAR FORM:

'90 '91 '92 '93 '94
---- ---- ---- ---- ----
DTN Energy Services Revenues
(millions) $0 $.8 $2.9 $4.9 $7.2

SERVICE REVIEW
The DTNergy service was first introduced in January, 1991. The service
consists of several pages of delayed energy futures and options quotes plus
selected news and information from DTN Wall Street. The wholesaler/subscriber
also receives refined fuel prices from each refiner that has authorized the
wholesaler to receive information. The refiner also has the capability to send
terminal alerts, electronic funds transfer notifications, invoices, and other
messages to the wholesaler.
DTNergy subscribers can subscribe to additional services to give them
even more prices or news related to the energy industry. The service is faster,
less expensive and more reliable than its competition, which are
phone-delivered, printer-only and FAX systems. DTNergy combines Ku-band
communication and other quality control methodology to ensure that terminal
pricing and other critical information is accurately delivered within seconds
after prices are set by the refiner.

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<PAGE>
DTNergy generates revenue from two primary sources, the wholesaler and
the refiner. The wholesaler pays a monthly subscription fee of $34.99 for the
monochrome system. The refiner pays an additional fee based upon the number and
size of messages sent over the system and the number of wholesalers who receive
that message.
DTNergy developed a service expressly for the natural gas industry
using the color, Ku-band satellite technology. Subscribers receive comprehensive
weather information, instant or delayed NYMEX energy options and futures quotes,
natural gas flow data at distribution points along certain systems and other
industry information. The service is targeted at natural gas producers and
distributors. DTNergy color systems are priced at $129.95 a month for 30-minute
delayed quotes and $149.95 a month with real-time quotes.
DTNergy obtains the majority of new subscriptions through leads
provided by petroleum refiners.

1994 HIGHLIGHTS
By nearly all growth measures, 1994 was a strong year for DTNergy.
Introduced only three years ago, DTNergy enjoys high market penetration,
reaching over 80% of the major U.S. petroleum industry wholesalers (jobbers).
These jobbers also receive direct communication from more than 100 refiners,
including nearly all the major U.S. oil refiners.
Monthly communication traffic increased over 50%. To support this
growth, DTNergy expanded its messaging capacity. New compression equipment and a
new, higher speed satellite channel have quadrupled capacity, providing more
than enough communication capacity for the near future.
Total revenue enjoyed strong growth, increasing 45% for 1994 and
continued growth is expected in 1995.
DTNergy continued to develop the services targeted at the natural gas
and electric power industries, which are dependent on current information to
make daily operating decisions. The DTNergy components can also be networked to
form customized communication systems for groups of users, providing the
capability for everything from the delivery of E-mail to the completion of
commodity transactions. Based on this, negotiations are currently underway with
some major firms to develop such internal communication systems.

DTNAUTO SERVICES

SERVICE REVIEW
Introduced in 1993, DTNauto is a communications service for the
automobile industry. DTNauto allows automobile dealers to efficiently manage
their daily operations. Automobile auction companies will also be able to
communicate directly with the dealers.
The service costs $98.00 per month, including a printer. Subscribers
receive information about auction listings of automobiles for sale, information
on what automobiles brought at last weeks auctions, industry news and economic
indicators, as well as weather and news. Subscribers also are able to perform
searches of the auction listings and auction results for specific automobiles.
The target market is approximately 75,000 automobile dealers in the U.S. This is
a color service available by satellite transmission.

1994 HIGHLIGHTS
The heart of the service is pre-auction listings of used cars at more
than 100 auctions across the country. In 1994, DTNauto added the comprehensive
list of national auction results from the AuctionNet wholesale pricing service
of the National Automobile Auction Association.
DTNauto added the Carfax vehicle history service as an option so
dealers can track a specific vehicle's title history, and Credco credit
services, an additional service that allows dealers to run credit reports on
customers from their DTNauto unit. These additional services make DTNauto a tool
that helps dealers not only manage their inventories but also run their daily
business operations.

88
<PAGE>
<TABLE>
<CAPTION>
SELECTED FINANCIAL DATA

PIE GRAPHS IN TABULAR FORM:

1994 1993 1992
---- ---- ----
<S> <C> <C> <C>
REVENUES
DTN Ag Services 73% 75% 77%
DTN Financial Services 11% 11% 12%
DTNergy Services 16% 14% 11%
Other Services - - -
SUBSCRIBERS AT YEAR-END
DTN Ag Services 81% 82% 84%
DTN Financial Services 10% 10% 9%
DTNergy Services 8% 8% 7%
Other Services 1% - -
</TABLE>

1994 1993 1992 1991 1990
------------------------------------------------------------------------------------------------
For the Year:
<S> <C> <C> <C> <C> <C>
Revenues ........... $ 46,109,789 $ 35,992,754 $ 26,816,254 $ 21,464,580 $ 17,952,908
Operating income ... 694,560 2,408,868 2,995,319 2,658,280 2,497,817
Income (loss) before
income taxes ...... (2,422,738) 1,020,831 2,051,352 1,476,398 1,401,354
Net income (loss) .. (1,602,738) 663,831 1,351,352 1,426,398 1,401,354

Net income (loss)
per share ......... (.49) .20 .41 .43 .42
Dividends
per share ......... -- -- -- -- --

At Year End:

Total assets ....... $ 71,459,356 $ 57,242,313 $ 38,260,351 $ 30,549,390 $ 26,958,141
Long-term debt
and subordinated
notes ............. 33,982,814 25,375,000 13,677,083 9,719,490 8,227,272
Stockholders'
equity ............ 12,706,978 12,780,477 12,167,584 12,007,741 10,683,140

</TABLE>

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<PAGE>
-------------------------------------------------------------------------------
MANAGEMENT'S DISCUSSION AND ANALYSIS
-------------------------------------------------------------------------------

RESULTS OF OPERATIONS

In many respects, the financial dynamics of DTN are similar to the
cable TV industry. The company's electronic subscription business requires an
initial investment of variable marketing costs and capital expenditures to
obtain new subscribers and provide them with necessary equipment to receive the
company's services. In addition, DTN has a certain level of fixed costs, such as
FM and satellite lease expenses, news and quote costs and administrative
expenses, which are not directly affected by the number of subscribers the
company has receiving its services. DTN's operating cash flow (operating income
before depreciation expense) has increased at a compounded growth rate of 24%
from 1990 to 1994. This trend is primarily the result of a growing base of
subscribers covering the company's fixed expenses.

<TABLE>
<CAPTION>
GRAPH IN TABULAR FORM:

'90 '91 '92 '93 '94
----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C>
Operating Cash Flow
(millions) $6.7 $8.2 $9.9 $12.9 $15.8
</TABLE>

The company has operating leverage due to low variable costs per
subscriber. This leverage is apparent in that a growth in subscribers has a
direct impact on operating cash flow. Operating cash flow as a percentage of
revenue was down in 1993 and 1994, as reflected in the following graph,
primarily due to expenses connected with the company's research and development
activities. DTN defines "Net Development Costs" as 1) market research
activities, 2) hardware and software engineering, research and development, and
3) the negative operating cash flow (after interest but prior to corporate
allocations) of new services. Operating cash flow before net development costs
as a percentage of revenue remained level at 43.6% compared to 43.5% in 1993.
The company believes these expenditures are necessary to continue to grow at
historical levels.
<TABLE>
<CAPTION>
GRAPH IN TABULAR FORM:

'90 '91 '92 '93 '94
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Operating Cash Flow
(percent of revenue) 37% 38% 37% 36% 34%
</TABLE>

1994 COMPARED TO 1993

Growth in revenue, operating cash flows (operating income before
depreciation expense), and total subscribers, which are three major indicators
used to monitor the financial performance of DTN, highlighted a year of good
performance. Due to the continued investment in new service development,
enhancements in transmitting technology, administrative computer information
systems, equipment used by our subscribers and higher interest expense, the
company's operating and net taxable income were lower.
<TABLE>
<CAPTION>
(In thousands)

1994 1993 % Change
------------ ----------- --------
<S> <C> <C> <C>
Revenues $ 46,110 $ 35,993 28 %
Operating cash flow 15,751 12,940 22 %
Operating income 695 2,409 (71)%
Net income (loss) (1,603) 664 (342)%
Total subscribers 82.0 74.1 11 %
</TABLE>

Total revenue increased 28% in 1994 over 1993 due to continued growth
in all operating revenue categories. Operating revenues which consist of
subscription, additional services, communications services and advertising,
increased to $46.74 per subscriber per month in 1994 up from $39.06 in 1993.

90
<PAGE>
The 11% growth in total subscribers and subscribers upgrading to higher
priced services resulted in a 31% growth in subscription revenue. At December
31, 1994, 72% of total subscribers were receiving service via satellite
transmission compared to 61% in 1993. Subscription revenue on a per subscriber
per month basis increased to $36.14, up from $30.39 in 1993.

The price of the satellite-delivered services ranged from $30.99 for
monochrome DTN AgDaily to $159.99 for the color DTNstant service during 1994 and
1993. The price of the monochrome FM-delivered DTN AgDaily service was $23.99
during 1994 and 1993. The subscribers switching to higher-priced services
primarily switched from the monochrome FM or monochrome satellite DTN AgDaily
service to the color satellite DTN AgDaily, which was priced at $45.99 in 1994
($43.99 prior to August 15, 1994) and $43.99 in 1993.

The company continued to increase the offering of information services
through "a la carte" additional services (80 in 1994 vs. 55 in 1993). The growth
of services combined with the growth of total subscribers helped provide a 42%
growth in additional services revenue to $3,526,000 in 1994, up from $2,485,000
in 1993. The Ag, Wall Street and Energy services all contributed solid gains to
achieve this outstanding growth. On a per subscriber per month basis, this
revenue increased to $3.76, up from $2.91 in 1993.

The 45% increase in communication services revenue was primarily due to
the DTNergy service. DTNergy transmits refiner's prices and other communications
messages to wholesalers. The refiner's message volume continued to rise and
provided on a company wide basis a revenue increase to $4.99 per subscriber per
month in 1994, up from $3.78 in 1993. Advertising revenue showed a marginal
increase in 1994 over 1993. The company believes that competition from other
communication companies affected the growth in advertising. The company also
believes advertising revenues will grow as subscriptions to the color products
increases.

Service initiation fees, the company's up-front one-time charges to new
subscribers and to subscribers who change their primary service or delivery
technology (ie; FM to Ku), declined in 1994 compared to 1993. The decline was
primarily due to an increase in sales promotions reducing the fees to attract
new subscribers. This strategy was used to keep new sales strong during the
seasonally slower months of summer and to address competitive pressures.

Total operating expenses increased 35% over 1993. This increase was due
to a 30% increase in selling, general and administrative costs, a 49% increase
in sales commissions and a 43% increase in depreciation. On a per subscriber per
month basis, these expenses (excluding the sales commission costs) increased to
$44.49, up from $36.51 in 1993.

Selling, general and administrative expenses on a per subscriber per
month basis increased to $28.45, up from $24.16 in 1993. This increase was
primarily due to the expenses related to new product development, internal
administrative enhancements, fixed costs related to enhancing current services
and variable costs to support the 11% increase in subscribers. These
expenditures are important for the company to remain a leader in providing new
communication and information services.

Sales commissions are a direct result of increased subscribers and
revenues in the DTNergy service. DTNergy sales commissions are based on a mix of
total subscribers and revenues. Total sales commissions rose 49% during 1994
from 1993. This increase is due to increased subscription sales along with
incentive programs to the sales force to keep sales strong during the seasonally
slower summer months and significant increases in DTNergy revenues.

Depreciation expense increased due to the purchase of over $27,000,000
of new subscriber equipment and the depreciation on monochrome receiver units
not currently being utilized due to subscribers continuing to upgrade to higher
priced color receiver services. The company began using a six year life for
depreciation purposes in July of 1992 compared to an eight year life prior to
the change.

Operating income declined by 71%, primarily due to the investments in
new services, internal operations improvements and increased depreciation
expense. Operating cash flow grew 22% over 1993.

Interest expense rose 122% in 1994 over 1993. This significant increase
was due to borrowings needed to finance the purchase of new subscriber
equipment, a 42% increase in the prime rate during 1994 and the addition of
$15,000,000 of 11.25% subordinated debt.

The company federal and state effective tax rate for 1994 and 1993 was
35%.
91
<PAGE>
1993 COMPARED TO 1992

Continued growth in revenues, operating cash flows (operating income
before depreciation expense), which are two of the major indicators used to
gauge the financial performance of DTN, highlighted a year of steady performance
in most areas. However, due to start-up costs of the company's new information
services and enhancements in transmitting technology, customer service areas and
administrative computer information systems, the company's operating and net
income were lower.

<TABLE>
<CAPTION>
(In thousands)
1993 1992 % Change
------------ ----------- --------
<S> <C> <C> <C>
Revenues $35,993 $26,816 34 %
Operating cash flow 12,940 9,911 31 %
Operating income 2,409 2,995 (20)%
Net income 664 1,351 (51)%
Total subscribers 74.1 67.6 10 %
</TABLE>

Total revenues increased 34% in 1993 over 1992 due to consistent growth
in subscription, additional services and advertising revenue, in addition to
very strong growth in communications services revenue, primarily DTNergy.
Operating revenues which consist of subscription, additional services,

92
<PAGE>
advertising and communications services increased to $39.06 on a per subscriber
per month basis in 1993, up from $31.63 in 1992.

The 10% growth in total subscribers and a larger percentage of
subscribers utilizing higher priced services contributed to a 28% growth in
subscription revenues. At December 31, 1993, 61% of total subscribers were
receiving service via satellite transmission compared to 46% in 1992.
Subscription revenue per subscriber per month increased to $30.39, up from
$25.34 in 1992.

The price of satellite-delivered services ranged from $30.99 for
monochrome DTN AgDaily service to $159.99 for the color DTNstant service during
1993. The price of the satellite-delivered services ranged from $30.99 for
monochrome DTN AgDaily to $43.99 for the color DTN AgDaily service during 1992.
The price of the monochrome FM-delivered DTN AgDaily service was $23.99 during
1993 and 1992.

The subscribers switching to higher-priced services primarily switched
from the monochrome FM or monochrome satellite DTN AgDaily service to the color
satellite-delivered DTN AgDaily, which was priced at $43.99 in 1993 and 1992.
The color DTN AgDaily service became available in the second half of 1992.

The company's continued emphasis on providing a wide variety of
information through "a la carte" additional services and the steady growth of
total subscribers helped provide a 19% growth in additional services revenue to
$2,485,000 in 1993 from $2,097,000 in 1992. On a per subscriber per month basis,
this revenue increased to $2.91, up from $2.64 in 1992.

The significant increase in communications services revenue was once
again due to the DTNergy service. This service transmits refiner's prices and
other messages to wholesalers. The refiner's increased utilization of this
messaging provided an increase to $3.78 per subscriber per month in 1993, up
from $1.90 in 1992.

Advertising revenue continued to show steady growth. The increase in
the number of subscribers utilizing the color receiver and a more consistent
agricultural advertising environment enabled the company to generate a 25%
increase in these revenues in 1993 compared to 1992.

Service initiation fees, the onetime charges to new subscribers and
also to subscribers who change their primary service or delivery technology (ie;
FM to Ku), improved in 1993 over 1992. This was due to an increase in gross new
subscribers in 1993 over 1992, and also due to customers upgrading to the color
receiver services.

Due to the previously mentioned start-up costs and investments in
transmitting technology, customer service and administrative systems, total
operating expenses rose 41% in 1993 over the same period in 1992. On a per
subscriber per month basis, these expenses increased to $36.51, from $27.31 in
1992.

Selling, general and administrative expenses on a per subscriber per
month basis increased to $24.16, up from $18.63 in 1992. This increase was
mainly the result of the increased subscriber base and the company's previously
mentioned commitment to customer service, market research activities and
start-up costs for new services. These investments should enable DTN to stay a
leader in providing communications information services.

Sales commissions, which mainly are a direct result of increased
subscribers, rose 17% in 1993 from 1992. In addition, the DTNergy commissions,
which are generally based on DTNergy revenues and not new subscribers, added to
the increase.

Depreciation expense increased due to the purchase of over $24,000,000
of new subscriber equipment and the depreciation on monochrome receiver units
not currently being utilized due to some subscribers upgrading to higher priced
color receiver services. The company began using a six year life for
depreciation purposes in July of 1992 compared to an eight year life prior to
the change.

Operating income declined by 20%, primarily due to the increased
depreciation expense. However, operating cash flows grew 31% on continued
efficiencies obtained through a larger subscriber base plus the increase of
higher margin services.

Interest expense rose 43% in 1993 over 1992. This was due to borrowings
needed to finance the purchase of subscriber equipment. In addition, in late
1992 the company borrowed $2,000,000 to specifically purchase treasury stock for
future stock option commitments, costs generally not reflected in 1992 interest
expense.

The company's effective tax rate for 1993 was 35%, up from 34% in 1992,
the result of higher state taxes.

93
<PAGE>
FINANCIAL CONDITION

DTN's business remains capital intensive. The majority of the company's
assets are invested in equipment used to provide services to DTN subscribers. As
a result, the company does not have a large amount of liquid assets when
compared with fixed assets.
During 1994, net cash provided by operating activities was $14,376,000
compared to $13,269,000 in 1993. The increase was primarily due to an increase
in operating cash flow.
Net cash used by investing activities, principally related to capital
expenditures for equipment utilized by subscribers, totaled $29,961,000 in 1994
compared to $26,216,000 in 1993. These expenditures were primarily for color
receivers and were used for DTN AgDaily, DTNstant, DTNiron, DTN PROduce and
DTNauto services. In addition, approximately 6,000 monochrome system subscribers
upgraded to the color system. These conversions were primarily from the DTN
AgDaily subscriber base.
DTN continued to build an inventory of finished color receivers and
components to build color receivers. At December 31, 1994, the company had
approximately $10,000,000 of inventory compared to $6,000,000 in 1993. This

94
<PAGE>
build-up occurred due to advance commitments on inventory purchases. The company
adjusted production schedules during the fourth quarter and will reduce this
inventory to a level adequate to supply forecasted sales activity. The reduced
production of color units should reduce borrowing requirements in the first
quarter of 1995.
The company anticipates that the monochrome receiver equipment coming
in from conversions to the higher priced color services will be shipped to DTN
AgDaily, DTN Wall Street or DTNergy subscribers. DTN continues to research new
markets for monochrome-delivered services.
Primarily as a result of the capital expenditures on subscriber
equipment, the company had negative working capital of $10,237,000 at December
31, 1994 compared to a negative $6,702,000 one year earlier. Accounts payable at
December 31, 1994 included $1,106,000 of payables to vendors for equipment used
by subscribers, compared to $3,455,000 at December 31, 1993, decreasing the
working capital deficiency from prior year by $2,349,000.
The leading contributor during 1994 for the decrease in working
capital was an increase of $5,714,000 in the current portion of long-term debt.
This increase is primarily the result of converting $23,000,000 of debt from
revolving to term during 1994. At year-end, the company had $21,150,000 of
unused bank credit lines available to fund working capital requirements as
necessary.
Net cash provided by financing activities of $15,657,000 was primarily
the result of a net increase in total debt outstanding (short and long-term) of
$14,321,000. The increase in debt, combined with operating cash flow, was used
to fund capital expenditures. During 1994, the company made principal payments
of $5,833,334 on term bank debt.
DTN anticipates that the unused bank credit lines, together with
internally generated cash flow in 1995, will be sufficient to fund capital
expenditures, operating expenses and debt repayments.
The company believes that inflationary trends have only a limited
effect on its business. However, since the majority of the company's current
subscribers are engaged in the production of agricultural commodities, the
general state of the agricultural economy may have an impact on the company's
business.

95
<PAGE>
RESPONSIBILITIES

Management's Responsibility for Financial Statements

To Our Stockholders:

The management of Data Transmission Network Corporation is responsible
for the preparation, integrity and objectivity of the accompanying financial
statements and related notes. To meet these responsibilities, we maintain a
system of internal controls to provide reasonable assurance that assets are
safeguarded and transactions are properly authorized and recorded.
The financial statements have been prepared in conformity with
generally accepted accounting principles and include amounts based upon our
estimates and judgments, as required. The financial statements have been audited
by Deloitte & Touche LLP who have expressed their opinion, presented below, with
respect to the fairness of the statements. Their audit included a review of the
system of internal control and tests of transactions to the extent they
considered necessary to render their opinion.
The Audit Committee of the Board of Directors is composed solely of
outside directors. The Audit Committee meets periodically with our independent
auditors and management to review accounting, auditing, internal control and
financial reporting matters.

Roger R. Brodersen Brian L. Larson
Chairman of the Board Chief Financial Officer,
Chief Executive Officer Secretary and Treasurer

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

Independent Auditors' Report

Board of Directors and Stockholders
Data Transmission Network Corporation

We have audited the accompanying balance sheets of Data Transmission
Network Corporation as of December 31, 1994 and 1993, and the related statements
of operations, stockholders' equity and cash flows for each of the three years
in the period ended December 31, 1994. 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 in accordance with generally accepted auditing
standards. Those standards 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. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Data Transmission
Network Corporation as of December 31, 1994 and 1993, and the results of its
operations and its cash flows for each of the three years in the period ended
December 31, 1994, in conformity with generally accepted accounting principles.

February 3, 1995 Deloitte and Touche LLP
Omaha, Nebraska

96
<PAGE>
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------
FINANCIAL STATEMENTS
-------------------------------------------------------------------------------------------------------

Balance Sheets

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

As of December 31, 1994 1993
-------------------------------------------------------------------------------------------------------

ASSETS

<S> <C> <C>
Current Assets:
Cash .............................................................. $ 720,343 $ 648,391
Accounts receivable, net of allowance for
doubtful accounts of $220,000 and $180,000 ....................... 3,297,773 2,294,510
Prepaid expenses .................................................. 189,332 131,070
Deferred commission expense ....................................... 629,925 607,710
-------------- --------------
Total Current Assets ............................................. 4,837,373 3,681,681

Equipment Used By Subscribers, net of accumulated
depreciation of $43,710,079 and $29,582,827 ....................... 61,449,931 50,120,074

Equipment and Leasehold Improvements, net of accumulated
depreciation of $4,729,831 and $2,808,644 ......................... 4,666,742 3,440,558

Other Assets ....................................................... 505,310 --
-------------- --------------
$ 71,459,356 $ 57,242,313
============== ==============
</TABLE>
<TABLE>
<CAPTION>

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:
<S> <C> <C>
Accounts payable.................................................. $ 4,493,796 $ 5,659,360
Accrued expenses .................................................. 1,117,206 973,957
Current portion of long-term debt ................................. 9,463,541 3,750,000
-------------- --------------
Total Current Liabilities ........................................ 15,074,543 10,383,317

Long-Term Debt ..................................................... 19,578,124 25,375,000
Subordinated Long-Term Notes, net of unamortized
discount of $595,310 .............................................. 14,404,690 --
Deferred Income Taxes .............................................. -- 821,000
Equipment Deposits ................................................. 542,102 579,371
Unearned Revenue ................................................... 9,152,919 7,303,148

Stockholders' Equity:
Common stock, par value $.001, authorized
20,000,000 shares, issued 3,375,408 .............................. 3,375 3,375
Paid-in capital ................................................... 14,302,689 13,525,884
Retained earnings (deficit) ....................................... (217,501) 1,519,466
Treasury stock, at cost, 83,723 and 173,140 shares ................ (1,381,585) (2,268,248)
-------------- --------------
Total Stockholders' Equity ....................................... 12,706,978 12,780,477
-------------- --------------
$ 71,459,356 $ 57,242,313
============== ==============
</TABLE>
The accompanying notes are an integral part of these financial statements.

97
<PAGE>
<TABLE>
<CAPTION>
Statements of Operations
------------------------------------------------------------------------------------------------------
Years Ended December 31, 1994 1993 1992
------------------------------------------------------------------------------------------------------

REVENUES:
<S> <C> <C> <C>
Subscriptions...................................$ 33,936,160 $ 25,924,520 $ 20,207,952

Additional services ............................. 3,526,295 2,484,675 2,097,464

Communication services .......................... 4,680,987 3,227,881 1,515,469

Advertising ..................................... 1,738,830 1,673,075 1,343,624

Service initiation fees ......................... 2,227,517 2,682,603 1,651,745
-------------- -------------- --------------

46,109,789 35,992,754 26,816,254

EXPENSES:

Selling, general and administrative ............. 26,715,251 20,602,329 14,818,339

Sales commissions ............................... 3,643,811 2,450,718 2,087,221

Depreciation .................................... 15,056,167 10,530,839 6,915,375
-------------- -------------- --------------

45,415,229 33,583,886 23,820,935
-------------- -------------- --------------

OPERATING INCOME ................................. 694,560 2,408,868 2,995,319

Interest expense ................................ 3,158,106 1,421,299 992,850

Other income, net ............................... 40,808 33,262 48,883
-------------- -------------- --------------

INCOME (LOSS) BEFORE INCOME TAXES ................ (2,422,738) 1,020,831 2,051,352

Income tax (benefit) provision .................. (820,000) 357,000 700,000
-------------- -------------- --------------

NET INCOME (LOSS) ................................ $ (1,602,738) $ 663,831 1,351,352
============== ============== =========

EARNINGS (LOSS) PER SHARE ........................ $ (0.49) $ 0.20 $ 0.41
============== ============== ==============

Weighted Average Number of Shares
Outstanding ..................................... 3,253,400 3,286,850 3,334,777
========= ========= =========

</TABLE>

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

98
<PAGE>

Statements of Stockholders' Equity
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------
Years Ended December 31, 1994, 1993 and 1992
-----------------------------------------------------------------------------------------------------
Total
Retained Stock-
Common Paid-in Earnings Treasury holders'
Stock Capital (Deficit) Stock Equity
------ ----------- ------------ ----------- ------------
<S> <C> <C> <C> <C> <C>
Balance,January 1,1992......... $3,298 $12,952,566 $ (495,717) $ (452,406) $12,007,741

Common stock issued on
exercise of warrants.......... 77 352,123 - - 352,200

Tax benefit related to
exercise of employee
stock options and
warrants...................... - 189,000 - - 189,000

Purchase of treasury
stock......................... - - - (1,732,709) (1,732,709)

Net income..................... - - 1,351,352 - 1,351,352
------ ------------ ----------- ----------- ------------

Balance,December 31,1992 3,375 13,493,689 855,635 (2,185,115) 12,167,584

Treasury stock issued on
exercise of employee stock
options and warrants........ - 12,195 - 147,621 159,816

Tax benefit related to
exercise of employee
stock options and
warrants.................... - 20,000 - - 20,000

Purchase of treasury
stock....................... - - - (230,754) (230,754)

Net income................... - - 663,831 - 663,831

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

Balance,December 31,1993 3,375 13,525,884 1,519,466 (2,268,248) 12,780,477

Treasury stock issued on
exercise of employee stock
options and warrants........ - (12,195) (134,229) 1,420,663 1,274,239

Tax benefit related to
exercise of employee stock
options and warrants........ - 154,000 - - 154,000

Purchase of treasury
stock....................... - - - (534,000) (534,000)

Issuance of warrants in
connection with
subordinated debt........... - 635,000 - - 635,000

Net loss..................... - - (1,602,738) - (1,602,738)

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

Balance,December 31,1994 $3,375 $14,302,689 $ (217,501) $(1,381,585) $12,706,978

</TABLE>

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

99
<PAGE>
Statements of Cash Flows
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------
Years Ended December 31, 1994 1993 1992
------------------------------------------------------------------------------------------------

Cash Flows From Operating Activities:

<S> <C> <C> <C>
Net income(loss)................................ $(1,602,738) $ 663,831 $1,351,352
Adjustments to reconcile net income
(loss) to net cash provided by
operating activities:
Depreciation................................... 15,056,167 10,530,839 6,915,375
Amortization of debt issue costs
and discount................................... 64,380 - 74,216
Deferred income taxes.......................... (802,000) 332,000 698,000
Change in assets and liabilities:
Accounts receivable........................... (1,003,263) (731,281) (306,434)
Prepaid expenses.............................. (58,262) (311,418) (46,312)
Deferred commission expense................... (22,215) (119,593) 173,533
Deferred debt issuance costs.................. (395,000) - -
Accounts payable.............................. 1,183,434 668,794 588,788
Accrued expenses.............................. 143,249 247,994 9,765
Equipment deposits............................ (37,269) (60,618) (48,773)
Unearned revenue.............................. 1,849,771 2,047,982 847,289
------------ ------------- ------------

Net Cash Provided By Operating
Activities.................................... 14,376,254 13,268,530 10,256,799
---------- ---------- ----------

Cash Flows From Investing Activities:

Capital expenditures for equipment
used by subscribers............................ (27,354,107) (24,175,363) (12,184,649)
Capital expenditures for equipment
and leasehold improvements..................... (2,607,100) (2,040,607) (1,415,292)

------------ ------------- -------------
Net Cash Used By Investing Activities.......... (29,961,207) (26,215,970) (13,599,941)
----------- ----------- -----------

Cash Flows From Financing Activities:

Proceeds from long-term debt.................... 20,250,000 16,000,000 9,200,000
Principal payments on long-term debt............ (20,333,334) (3,052,083) (4,140,951)
Proceeds from subordinated long-term
notes.......................................... 15,000,000 - -
Proceeds from the exercise of stock
options and warrants........................... 1,274,239 159,816 352,200
Purchase of treasury stock...................... (534,000) (230,754) (1,732,709)
------------ ------------- -------------

Net Cash Provided By Financing
Activities.................................... 15,656,905 12,876,979 3,678,540
------------ ------------- ------------

Net Increase (Decrease) in Cash.................. 71,952 (70,461) 335,398

Cash at Beginning of Period...................... 648,391 718,852 383,454
------------ ------------- ------------

Cash at End of Period............................ $ 720,343 $ 648,391 $ 718,852
=========== ============ ==========

</TABLE>

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

100
<PAGE>
-------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
-------------------------------------------------------------------------------

Years Ended December 31, 1994, 1993 and 1992

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Revenue Recognition - The company provides its subscribers with equipment to
receive information and communications services. DTN charges a recurring
subscription fee and in most instances a one-time service initiation fee. The
subscriptions are contracted for an initial period of one year and are generally
billed quarterly in advance. Accounts receivable consists primarily of these
advance billings. Payments received in advance for subscriptions, additional
services and advertising are deferred and recognized as the services are
provided to the subscribers. Service initiation fees in excess of the related
marketing and set-up costs, excluding sales commissions, are deferred and
recognized into income over the initial twelve-month subscription period.
Communication services are generally billed monthly in arrears based on the
number of messages and the amount of data communicated to subscribers.

Deferred Commission Expense - Commissions which are paid at the time of the
initial subscription to sales representatives or to subscribers for successful
customer referrals, are deferred and expensed over the initial twelve-month
subscription period.

Equipment Used By Subscribers - Equipment used by subscribers to receive the
company's electronically transmitted information service is stated at cost less
accumulated depreciation. Depreciation is calculated using the straight-line
method over a useful life of three to eight years for assets placed in service
prior to July 1, 1992, and three to six years for assets placed in service
subsequent to July 1, 1992.

Equipment and Leasehold Improvements - Equipment and leasehold improvements are
stated at cost less accumulated depreciation. Depreciation is calculated using
the straight-line method over the estimated useful lives of the assets, which
range from two to seven years, or the related lease, which range from five to
ten years.

Income Taxes - Income taxes are computed in accordance with the provisions of
Statement of Financial Accounting Standard 109, "Accounting for Income Taxes"
(SFAS 109). The objective of the statement is to recognize the amount of taxes
payable or refundable in the current year and to recognize deferred tax
liabilities and assets for the future tax consequences of events that have been
recognized in the financial statements or tax returns.

Earnings Per Share - Earnings per share is calculated on the basis of the
weighted average outstanding common shares and, when applicable, those
outstanding options and warrants that are dilutive.

Statement of Cash Flows - For purposes of the statement of cash flows, the
company considers all highly liquid investments purchased with a maturity of
three months or less to be cash equivalents. During the periods ended December
31, 1994, 1993 and 1992, the company made interest payments of $3,165,000,
$1,493,000 and $870,000, respectively. Capital expenditures for subscriber
equipment included in accounts payable at year end totalled $1,106,000,
$3,455,000 and $1,257,000 at December 31, 1994, 1993 and 1992, respectively. The
company paid no federal income taxes during 1994, 1993 or 1992.

Research and Development - Research and development costs are charged to
earnings as incurred and approximated $1,493,000, $899,000 and $903,000 for the
periods ended December 31, 1994, 1993, and 1992.

101
<PAGE>
2. LONG-TERM DEBT AND LOAN AGREEMENTS
<TABLE>
<CAPTION>
December 31,
-----------------------------
1994 1993
<S> <C> <C>
Bank operating line agreement $ 2,250,000 $ 19,500,000

Term notes, due in monthly installments
thru October 1998 at 6.75% to 10.0% 25,291,665 7,625,000

Stock repurchase term notes, due in
quarterly installments from January
1994 thru December 1997, 7.5% to 8.14% 1,500,000 2,000,000
------------ ------------
29,041,665 29,125,000
Less current portion 9,463,541 3,750,000
------------ ------------
Total Long-Term Debt $ 19,578,124 $ 25,375,000
============ ============

</TABLE>

The company has a senior loan agreement with a group of six regional banks (the
"senior loan agreement"). The senior loan agreement, which expires June 30, 1995
unless extended, provides for a total commitment of up to $46,400,000 in new
borrowings. As of December 31, 1994, $25,250,000 of the total commitment had
been borrowed, with the remaining $21,150,000 available to the company subject
to certain restrictions as discussed below.

102
<PAGE>
Additional borrowings under the senior loan agreement are available to the
company, as long as at the time of the advance, no default exists under the
senior loan agreement or under the subordinated notes agreement (see Note 3),
and total debt outstanding (including term notes outstanding but excluding
long-term subordinated debt) does not exceed thirty-six times monthly operating
cash flow as defined. As of December 31, 1994 based on current operating cash
flow, the company would be able to borrow all of the $21,150,000 remaining
commitment available.

Substantially all of the company's assets are pledged as collateral under the
senior loan agreement. In addition to the restrictions mentioned above with
respect to advances, total debt outstanding (excluding long-term subordinated
debt) is limited to forty-eight times monthly operating cash flow or three and
one-half times stockholders' equity (defined to include long-term subordinated
debt), whichever is less. Additionally, total debt outstanding (including
subordinated debt) is limited to sixty times monthly operating cash flow. The
company is also required to maintain total stockholders' equity of at least
$11,000,000 through December 31, 1994 and at least $11,500,000 thereafter, a
ratio of quarterly operating cash flow to interest expense (as defined) of at
least 2.0 to 1, and is restricted to paying no cash dividends in excess of 25%
of the prior years net operating income after taxes.

Interest on the outstanding borrowings (prior to when the borrowings might be
converted to term loans, as discussed below) is at a variable rate, depending on
the ratio of the company's total borrowings (excluding long-term subordinated
debt) to stockholders equity (including long-term subordinated debt) (the
"Ratio"). So long as the Ratio is below 2.0 to 1, interest is at prime. When the
Ratio is between 2.0 to 1 and 2.49 to 1, the interest rate is at prime plus
1/4%. When the Ratio is between 2.50 to 1 and 2.99 to 1, the interest rate is at
prime plus 3/4%. When the Ratio is at or above 3.0 to 1, the interest rate is at
prime plus 1 1/4%. The prime rate is adjusted monthly, with the interest rate
adjustment (as defined above) changed quarterly. As of December 31, 1994, the
variable rate borrowings outstanding are accruing interest at the prime rate of
8 1/2%.

The company has the option to convert the outstanding borrowings to term loans
at any time, payable in forty-eight equal principal installments, plus interest.
Interest on the converted term loans is at a variable interest rate of 1/4% over
the base rate (as determined in the preceding paragraph) or, at the company's
option, may be at a fixed rate of 3/4% over the base rate. As of December 31,
1994, $2,250,000 of the total borrowings outstanding had not been converted to
term loans, although it is the company's intent to do so in the first quarter of
1995. The remainder of the borrowings were term loans with interest rates
ranging from 6.75% to 10.0%.

The company pays a commitment fee of 1/4% on the unused portion of the total
commitment. Additionally, once the Ratio (as described previously) reaches 2.50
to 1, the company will be required to pay a closing fee of 1/2% on all new
borrowings made after that point in time.

During 1992, the company entered into a loan agreement to be used solely for the
repurchase of the company's outstanding common stock (the "Stock Repurchase"
line). The company borrowed $2,000,000 of this Stock Repurchase commitment
during 1992.

For the first year after each Stock Repurchase advance, the company pays
interest only. After the first year, each advance will be repaid in sixteen
equal quarterly principal payments plus interest. Interest will accrue for the
first three years of each advance at a fixed rate equal to the quoted Five-Year
Treasury Note Rate on the date of the advance, plus 2%. For the last two years
interest will accrue at either a floating rate of national prime plus 3/4% or a
fixed rate of the then current Five-Year Treasury Note Rate plus 2%. The company
has the option of determining which rate will apply. The $2,000,000 borrowed
under this Stock Repurchase line, is accruing interest at 7.5% and 8.14%.

The minimum principal maturities of long-term debt are as follows: 1995 -
$9,464,000; 1996 - $8,292,000; 1997 - $7,010,000; 1998 - $4,229,000; 1999 -
$47,000.

3. SUBORDINATED LONG-TERM NOTES

On June 30, 1994, the company sold to one investor $15,000,000 of its 11.25%
subordinated long-term notes in a private placement transaction (the
"subordinated debt"). The subordinated debt is subordinated in right of payment
to all current and future senior debt. Interest on the subordinated debt is to
be paid quarterly, with principal due in five equal annual installments
beginning on June 30, 2000.

103
<PAGE>
The company has the option to prepay the subordinated debt on any date after
June 30, 1997 at a premium beginning at 7.5% of the principal prepaid, and
decreasing by 1.5% per year until June 30, 2002 when no premium is required.
There are also provisions for mandatory prepayment upon a change in ownership
control (as defined), at a premium beginning at 12.0% of the principal prepaid
during the period ended June 30, 1995 and decreasing by 1.5% per year until June
30, 2002 when no premium is required.

104
<PAGE>
The subordinated debt agreement contains a cross-acceleration clause, whereby
the subordinated debt will become immediately due and payable upon a payment
default on the senior debt outstanding Other subordinated debt financial
covenants and restrictions are generally less restrictive than those of the
senior loan agreement.

The company also issued a warrant to the investor to purchase 25,000 shares of
the company's $.001 par value common stock at $22.17 per share on or before June
30, 2004. In connection with the issuance of the warrant to purchase common
stock, the company recorded a $635,000 credit to additional paid in capital and
a related debt discount, which represents an estimate of the fair value of the
warrant issued. Expenses of the subordinated debt offering have been capitalized
as deferred debt issuance costs, and will be amortized, along with the debt
discount, over the life of the subordinated debt using a level-yield method.

4. INCOME TAXES

Components of the income tax (benefit) provision are as follows:

<TABLE>
<CAPTION>
1994 1993 1992
---------- --------- ---------
<S> <C> <C> <C>
Current tax expense (benefit) $ (18,000) $ 25,000 $ 2,000

Deferred tax expense (benefit) (802,000) 332,000 698,000
--------- --------- ---------

$(820,000) $ 357,000 $ 700,000
========= ========= =========

</TABLE>
The income tax (benefit) provision differs from the (benefit) provision at
federal statutory rates for the following reasons:
<TABLE>
<CAPTION>
1994 1993 1992
---------- ---------- ---------
<S> <C> <C> <C>
Tax at federal statutory rate $(824,000) $ 347,000 $ 698,000

State taxes (24,000) 10,000 2,000

Other 8,000 -- --
--------- --------- ---------

$(820,000) $ 357,000 $ 700,000
========= ========= =========
</TABLE>
The tax effects of the temporary differences and carryforwards are as follows:

<TABLE>
<CAPTION>
1994 1993
------------ -----------
<S> <C> <C>
Depreciation $ 2,958,000 $ 2,364,000

Net operating loss carryforwards (3,093,000) (1,543,000)
----------- -----------

Net Deferred Liability (Asset) $ (135,000) $ 821,000
=========== ===========
</TABLE>

The unutilized Net Operating Loss (NOL) carryforwards were approximately
$8,840,000 at December 31, 1994. NOL carryforwards that have not been utilized
will expire in the years 2002 through 2010.

5. CAPITAL STOCK

The company's articles of incorporation provide for the authorization of
1,000,000 shares of $.50 par value per share preferred stock. The preferred
stock, none of which has been issued, presently has no voting rights or other
features, although the articles of incorporation contain provisions to adopt
various features or privileges at the discretion of the Board of Directors.

105
<PAGE>
In September 1992, the company's Board of Directors authorized the repurchase of
up to 350,000 shares of the company's outstanding common stock. The purchases
are to be made from time to time in the open market or in arranged transactions
at such price or prices as company officers may deem advisable. The common stock
repurchased may be used to provide shares for the company's existing stock
options and warrants outstanding. During 1994 and 1993, the company repurchased
24,000 and 16,000 shares, respectively, of its common stock.

6. COMMON STOCK WARRANTS

In 1986, the company granted warrants to purchase 75,000 shares of common stock
at a price of $.40 per share to two employees. Warrants to purchase 30,000
shares were exercised in 1991 and prior. During 1992 the 45,000 warrants then
outstanding were exercised.

In conjunction with a private placement offering in July, 1987, the Placement
Agent in the offering was granted warrants to purchase 32,500 shares of common
stock at a price of $10.80 per share. These warrants were exercisable for a
period of five years. During 1992, the 24,000 warrants still outstanding were
exercised.

In conjunction with a private placement offering of Subordinated Long-Term Notes
in 1988, the company granted warrants to purchase 80,325 shares of common stock
at a price of $10.00 per share. These warrants were exercisable through
September 30, 1994. During 1992, 7,500 of these warrants were exercised. During
1994, all of these remaining warrants granted were either exercised or expired.

In conjunction with a private placement offering of subordinated Long-Term Notes
in June 1994, the company granted warrants, to the single investor, to purchase
25,000 shares of common stock at a price of $22.17 per share. These warrants are
exercisable through June 30, 2004.

106
<PAGE>
7. STOCK OPTION PLANS

The company has employee and director stock option plans with aggregate limits
of 700,000 shares for the employee plan and 30,000 shares for the non-employee
director plan. The exercise price of the stock options is equal to the market
value of the company's common stock on the date of grant. The options are
exercisable for a period of up to ten years from the date of grant and vest
equally over a period of up to four years.

The following table summarizes the stock options as of December 31, 1994, 1993
and 1992:
<TABLE>
<CAPTION>
Option Price
Shares Per Share
------- -------------
<S> <C> <C>
Balance at Jan. 1, 1992 167,217 11.75 - 18.00

Granted 69,100 12.00 - 13.20
Exercised --
Cancelled (22,811) 11.75 - 18.00
-------------

Balance at Dec. 31, 1992 213,506 11.75 - 18.00

Granted 114,950 13.50 - 15.50
Exercised (11,818) 11.75 - 14.50
Cancelled (24,561) 11.75 - 18.00
-------------

Balance at Dec. 31, 1993 292,077 11.75 - 18.00

Granted 91,250 22.00 - 29.15
Exercised (43,142) 11.75 - 18.00
Cancelled (10,790) 12.00 - 26.50
-------------

Balance at Dec. 31, 1994 329,395 11.75 - 29.15
=============

Exercisable at Dec. 31, 1994 158,384 11.75 - 18.00
=============
</TABLE>

At December 31, 1994, shares of the Company's authorized but unissued common
stock were reserved for issuance as follows:

Shares
--------
Employee stock option plan 333,102
Non-employee director plan 11,501
--------
Total 344,603
========
8. LEASES

The company leases the right to subsidiary channel authorizations from FM radio
stations and satellite network transmission capacity to broadcast the company's
information service to its subscribers. These leases are accounted for as
operating leases and are for varying periods of one to ten years and contain
annual renewal options for periods of up to five years.

The company also has various operating leases for office space, warehouse
facilities and equipment. These leases expire on various dates through 2000 and
generally provide for renewal options at the end of the lease. The company is
generally obligated to pay the cost of property taxes, insurance, utilities and
maintenance on the leases.

Future minimum lease payments under all non-cancelable operating leases at
December 31, 1994 are as follows:

Year Ending December 31, Amount
------------------------ ----------
1995 $2,370,000
1996 2,074,000
1997 1,819,000
1998 1,205,000
1999 958,000
2000 and after 410,000
----------
Total future minimum lease payments $8,836,000
==========

107
<PAGE>
Total rent expense on all operating leases was $2,369,000, $1,856,000 and
$1,497,000 for the years ended December 31, 1994, 1993 and 1992, respectively.

9. BENEFIT PLAN

The company has a defined contribution plan under provisions of Internal Revenue
Code Section 401(k). All employees with at least one year of service may
participate in the plan. The company matches the employee's contribution up to
4% of the employee's compensation, and may make additional discretionary
contributions. During 1994, 1993 and 1992, the company contributed $344,000,
$236,000 and $160,000, respectively, to the plan as matching contributions.

108
<PAGE>
QUARTERLY DATA (UNAUDITED)

Net Income(loss)
------------------ Total
Operating Pre-Tax Per Share Sub-
Revenues Cash Flow(1) Income(loss) Amount (2) scribers
---------------------------------------------------------------------------------------------------

<S> <C> <C> <C> <C> <C> <C>
Fiscal 1994
First.......... $10,548,771 $ 3,951,157 $ 56,485 $ 36,485 $ .01 76,500
Second......... 11,396,005 3,865,963 (430,472) (279,472) (.09) 78,300
Third.......... 11,684,670 3,516,059 (1,295,675) (842,675) (.26) 80,200
Fourth......... 12,480,343 4,417,548 (753,076) (517,076) (.16) 82,000
---------- --------- -------- -------- ---- ------

Year............ $46,109,789 $15,750,727 $(2,422,738) $(1,602,738) $(.49) 82,000

Fiscal 1993
First.......... $ 7,854,927 $ 2,869,597 $ 373,650 $ 243,650 $ .08 69,600
Second......... 8,831,765 3,042,683 218,325 137,325 .04 71,300
Third.......... 9,303,324 3,317,575 204,187 128,187 .04 72,700
Fourth......... 10,002,738 3,709,852 224,669 154,669 .05 74,100
---------- --------- ------- ------- --- ------

Year............ $35,992,754 $12,939,707 $ 1,020,831 $ 663,831 $ .20 74,100
<FN>
(1) Operating income before depreciation expense.

(2) Net income per share for each of the four quarters may not agree to net
income per share for the year due to rounding.
</FN>
</TABLE>
<TABLE>
<CAPTION>
TRADING INFORMATION

Market Price 1994 Market Price 1993
--------------------------------- ------------------------------------
Quarter Ended High Low Last High Low Last
-------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
March 31.......... 27 1/2 21 21 14 3/4 13 13 3/4

June 30........... 24 1/2 20 22 1/2 15 1/2 13 1/4 15 1/2

September 30...... 22 1/2 18 1/2 18 1/2 20 3/4 15 20 3/4

December 31....... 18 3/4 16 1/8 17 27 1/4 20 1/4 26 1/4

</TABLE>
The company's Common Stock trades on the Nasdaq Stock Market under the symbol:
DTLN. On December 31, 1994, there were approximately 550 stockholders of record,
not including beneficial holders whose shares are held in names other than their
own.
26

109
<PAGE>
INVESTOR INFORMATION

Corporate Headquarters: Form 10-K:
9110 West Dodge Road, Suite 200 A COPY OF THE COMPANY'S FORM 10-K
Omaha, NE 68114 FILED WITH THE SECURITIES AND
(402) 390-2328 EXCHANGE COMMISSION IS AVAILABLE
WITHOUT CHARGE UPON WRITTEN
Independent Auditors: REQUEST TO:
Deloitte & Touche LLP
Secretary
Stock Transfer Agent: Data Transmission Network Corp.
First National Bank of Omaha 9110 West Dodge Road, Suite 200
Attn: Corporate Trust Services Omaha, Nebraska 68114
One First National Center
Omaha, Nebraska 68102 DIVIDENDS:
The Company has never paid any
Annual Stockholders Meeting: dividends and has no present
The annual stockholders meeting intention of so doing. Payment
will be held on Wednesday, of cash dividends in the future,
April 26, 1995 at 10:00 A.M., if any, will be determined by the
at the Holiday Inn-Old Mill, Board of Directors in light of
655 N. 108th Avenue, Omaha, the company's earnings, financial
Nebraska. condition and other relevant
considerations.

DIRECTORS AND OFFICERS

Board of Directors: Corporate Officers:
-------------------------------------------- --------------------------------
Roger R. Brodersen, Roger R. Brodersen,
Chairman, President and CEO, Data Chairman, President and
Transmission Network Corporation Chief Executive Officer

David L. Evans, Greg T. Sloma,
President and CEO, Evanwood Corporation Executive Vice President and
(Management Consultant) Chief Operating Officer

Robert S. Herman, Robert Herman
Senior Vice President, Data Senior Vice President
Transmission Network Corporation
Roger W. Wallace,
David K. Karnes, Senior Vice President
President and CEO, The Fairmont Group,
Inc. (Financial Services and Consulting); Brian L. Larson,
Of Counsel, Kutak Rock law firm Chief Financial Officer,
Secretary and Treasurer
J. Michael Parks,
Former President and COO, First Data Keith A. Cook,
Resources, Inc. (Credit Card Processing Vice President,
and Financial Services) DTNauto Services Manager

Greg T. Sloma, H. Wade German
Executive Vice President and Chief Vice President,
Operating Officer, Data Transmission Business Research Manager
Network Corporation
Gordon R. Lundy,
Roger W. Wallace, Vice President,
Senior Vice President, Data DTNergy Services Manager
Transmission Network Corporation
James J. Marquiss,
Vice President,
DTN Ag Services Manager

James G. Payne
Vice President, Administrative
Operations and Services
Support Manager

Charles R. Wood,
Vice President, DTN
Financial Services Manager

110
<PAGE>

NOTES

111
<PAGE>

MISSION STATEMENT

Led by customers and their suggestions and demands, Data Transmission
Network Corporation has engineered growth and evolution from what we were--the
first low-cost, electronically delivered agricultural commodities information
service--to what we are today--a full-service communication technology system
delivering many varieties of that most valuable of all commodities, information.

We are committed to providing the best information and analysis available,
as quickly as possible, at an affordable cost to our customers. Of the many
things that are critical to successfully meeting those commitments, the three
most important are customer service, customer service, and customer service!

As fellow shareholders of the company, DTN employees have as their number
one goal the long-term enhancement of the value of our company.

112
<PAGE>

Data Transmission Network Corporation
9110 West Dodge Road, Suite 200
Omaha, NE 68114

113
<PAGE>

Exhibit 23

INDEPENDENT AUDITORS' CONSENT

We consent to the incorporation by reference in Registration Statements No.
33-50406 and No. 33-50412 of Data Transmission Network Corporation on Forms S-8
of our report dated February 3, 1995, appearing in the 1994 Annual Report to the
Stockholders of Data Transmission Network Corporation which is incorporated by
reference in this Form 10-K of Data Transmission Network Corporation for the
year ended December 31, 1994.

DELOITTE & TOUCHE LLP

Omaha, Nebraska
February 3, 1995

114
<PAGE>

<ARTICLE> 5
<MULTIPLIER> 1

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-01-1994
<PERIOD-END> DEC-31-1994
<CASH> 720,343
<SECURITIES> 0
<RECEIVABLES> 3,517,773
<ALLOWANCES> 220,000
<INVENTORY> 0
<CURRENT-ASSETS> 4,837,373
<PP&E> 114,556,583
<DEPRECIATION> 48,439,910
<TOTAL-ASSETS> 71,459,356
<CURRENT-LIABILITIES> 15,074,543
<BONDS> 33,982,814
<COMMON> 3,375
0
0
<OTHER-SE> 12,703,603
<TOTAL-LIABILITY-AND-EQUITY> 71,459,356
<SALES> 46,150,597
<TOTAL-REVENUES> 46,150,597
<CGS> 0
<TOTAL-COSTS> 45,415,229
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3,158,106
<INCOME-PRETAX> (2,422,738)
<INCOME-TAX> (820,000)
<INCOME-CONTINUING> (1,602,738)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,602,738)
<EPS-PRIMARY> (0.490)
<EPS-DILUTED> (0.490)

</TABLE>

SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934

Filed by the Registrant [ x ]

Filed by a Party other than the Registrant [ ]

Check the appropriate box:

[ ] Preliminary Proxy Statement
[ x ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss.240.14a-11(c) or ss.240.14a-12
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))

DATA TRANSMISSION NETWORK CORPORATION
(Name of Registrant as Specified in its Charter)
-----------------------------------------------
(Name of Person(s) Filing Proxy Statement
if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

[ x ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.

[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).

[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.

1) Title of each class of securities to which transaction applies:

----------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:

----------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):

----------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:

----------------------------------------------------------------
5) Total fee paid:

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

[ ] Fee paid previously with preliminary materials.

[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
---------------------------------
2) Form, Schedule or Registration Statement No.:
-----------
3) Filing Party:
------------------------------------------
4) Date Filed:
------------------------------------------

116
<PAGE>

DATA TRANSMISSION NETWORK CORPORATION
9110 West Dodge Road, Suite 200
Omaha, Nebraska 68114
(402) 390-2328

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON APRIL 26, 1995

NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of Data
Transmission Network Corporation, a Delaware corporation (the "Company"), will
be held at the Holiday Inn - Old Mill, 655 North 108th Avenue, Omaha, Nebraska
on Wednesday, April 26, 1995 at 10:00 A.M. Omaha time for the following
purposes, as more fully described in the accompanying Proxy Statement:

1. To elect seven directors to the Board of Directors.

2. To consider and vote upon a proposal to approve amendments to the
Company's Non-Employee Directors Stock Option Plan.

3. To consider and vote upon a proposal to ratify the appointment of
Deloitte & Touche LLP as independent auditors for the Company for the
1995 fiscal year.

4. To transact such other business as may properly come before the
meeting or any adjournments thereof.

Any action may be taken on any one of the foregoing proposals at the
meeting on the date specified above, or on any date or dates to which the
meeting may be adjourned. The Board of Directors of the Company has fixed the
close of business on March 1, 1995, as the record date for determination of the
stockholders of the Company entitled to notice of and to vote at the meeting.

All stockholders are cordially invited to attend the meeting in person.
However, to assure your representation at the meeting, please complete, date and
sign the enclosed proxy card and mail it promptly in the self-addressed envelope
provided. The giving of such proxy does not affect your right to vote in person
in the event you attend the meeting.

BY ORDER OF THE BOARD OF DIRECTORS

Omaha, Nebraska Brian L. Larson
March 10, 1995 Secretary

IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE YOUR COMPANY THE EXPENSE OF
FURTHER REQUESTS FOR PROXIES IN ORDER TO INSURE A QUORUM. AN ADDRESSED ENVELOPE
IS ENCLOSED FOR YOUR CONVENIENCE. NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED
STATES.

117
<PAGE>
DATA TRANSMISSION NETWORK CORPORATION
Proxy Statement

Index Page
--------------------------------------------------------------------------------

Proxy Statement ........................................................... 1

Proxies ................................................................... 1

Voting Securities ......................................................... 1

Election of Directors ..................................................... 2

Ownership By Certain Beneficial Owners .................................... 4

Executive Compensation .................................................... 6

Compensation Committee Report on Executive Compensation ................... 9

Proposed Amendments To Non-Emplyee Directors Stock Option Plan ............ 10

Transactions With Management .............................................. 11

Compensation Committee Interlocks and Insider Participation ............... 11

Approval of Appointment of Auditors ....................................... 12

Stockholder Proposals for 1996 Annual Meeting ............................. 12

Compliance With Section 16(a) of the Exchange Act ......................... 12

Other Matters ............................................................. 12

Miscellaneous ............................................................. 13

Exhibit A - Fourth Amendment to Non-Employee Directors Stock Option Plan .. 14

118
<PAGE>

PROXY STATEMENT

ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD APRIL 26, 1995

This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Data Transmission Network Corporation, a
Delaware corporation (the "Company"), to be used at the Annual Meeting of
Stockholders (the "Meeting") to be held at the Holiday Inn - Old Mill, 655 North
108th Avenue, Omaha, Nebraska on Wednesday, April 26, 1995, at 10:00 A.M. Omaha
time. Stockholders of record at the close of business on March 1, 1995 are
entitled to notice of and to vote at the Meeting. The Company's principal
executive offices are located at 9110 West Dodge Road, Suite 200, Omaha,
Nebraska 68114.

PROXIES

Proxies are being solicited by the Board of Directors of the Company with
all costs of the solicitation to be paid by the Company. If the accompanying
proxy is executed and returned, the shares represented by the proxy will be
voted as specified therein. A stockholder may revoke any proxy given pursuant to
this solicitation by delivering to the Company prior to the Annual Meeting a
written notice of revocation or by attending the Meeting and voting in person.
This notice of Annual Meeting of Stockholders, proxy statement and accompanying
proxy card are first being mailed to stockholders on or about March 15, 1995.

VOTING SECURITIES

At March 1, 1995, the Company had issued and outstanding 3,292,935 shares
of the Company's $.001 par value common stock. The Company has no other class of
voting securities outstanding. Each stockholder voting in the election of
directors may cumulate such stockholder's votes and give one candidate a number
of votes equal to the number of directors to be elected multiplied by the number
of votes to which such stockholder's shares are entitled, or may distribute such
votes on the same principle among as many candidates as the stockholder chooses,
provided that votes cannot be cast for more than the total number of directors
to be elected at the Meeting. The seven nominees receiving the most votes at the
Meeting will be elected as directors. Each share has one vote on all other
matters. An affirmative vote of a majority of the shares present in person or by
proxy at the meeting is required for approval of all items being submitted to
the stockholders for their consideration.

In accordance with Delaware law, a shareholder entitled to vote for the
election of directors can withhold authority to vote for all nominees or for
certain nominees for directors. Abstentions from either or both of the proposals
to amend the Company's Non-Employee Directors Stock Option Plan or to ratify the
appointment of auditors are treated as votes against the particular proposal.
Broker non-votes on either or both of the proposals to amend the Non-Employee
Directors Stock Option Plan, or to ratify the appointment of auditors are
treated as shares as to which voting power has been withheld by the beneficial
holders of those shares and, therefore, as shares not entitled to vote on the
proposal as to which there is the broker non-vote.

119
<PAGE>
ELECTION OF DIRECTORS

At the Meeting, the stockholders will elect a board of seven directors for
a term extending until the 1996 annual meeting of stockholders of the Company
and until their respective successors have been elected and qualify. The Board
of Directors has nominated for election or re-election as directors: Roger R.
Brodersen, Robert S. Herman, David K. Karnes, J. Michael Parks, Jay E. Ricks,
Greg T. Sloma and Roger W. Wallace. All of the nominees (except Jay E. Ricks)
presently are serving as directors of the Company. Proxies may be voted for
seven directors.

If any nominee is unable to serve, the shares represented by all valid
proxies will be voted for the election of such substitute as the Board of
Directors may recommend or the Board of Directors may amend the By-Laws and
reduce the size of the Board. At this time, the Board knows of no reason why any
nominee might be unavailable to serve.

Set forth below is certain information as of March 1, 1995, with respect to
the nominees for election as directors of the Company. The information relating
to their respective business experience was furnished to the Company by such
persons.

<TABLE>
<CAPTION>
Nominee Age Positions and Offices with the Company Director Since
------------------- --- -------------------------------------- --------------
<S> <C> <C> <C>
Roger R. Brodersen 49 Chairman of the Board, President,
Chief Executive Officer and Director 1984

Robert S. Herman 42 Senior Vice President and Director 1984

David K. Karnes 46 Director 1989

J. Michael Parks 44 Director 1990

Jay E. Ricks 62 Nominee --

Greg T. Sloma 43 Chief Operating Officer, Executive
Vice President and Director 1993

Roger W. Wallace 38 Senior Vice President and Director 1984
</TABLE>

Mr. Brodersen has served as Chairman of the Board, President, and Chief
Executive Officer of the Company since 1984.

Mr. Herman has served as Senior Vice President of the Company since 1989.
He served as Vice President of the Company from 1984 to 1989.

Mr. Karnes has served as President and Chief Executive Officer of The
Fairmont Group, Inc., a Financial Services and Consulting Firm, since 1989. He
also has served as Chairman of the Federal Home Loan Bank of Topeka since 1989.
Mr. Karnes served as a United States Senator from 1987 to 1988.

Mr. Parks served as President and Chief Operating Officer of First Data
Resources Inc. from November 1993 to December 1994 and President of the Merchant
Services Group of First Data Resources Inc. from December 1991 to November 1993.
He also served as President and Chief Executive Officer of Call Interactive, an
affiliate of First Data Resources Inc., from 1989 to 1991. From 1976 to 1989,
Mr. Parks served as President or Senior Vice President of various American
Express Information Services Companies or their subsidiaries.

120
<PAGE>
Mr. Ricks has served as Chairman of Douglas Communications Corporation, an
operator of cable television systems, since 1990. He was a partner in the law
firm of Hogan & Hartson in Washington, D.C., from 1970 to 1990. Mr. Ricks is a
director of Intelcom Group, Inc., a competitive access provider and operator of
several satellite teleports, since 1992.

Mr. Sloma has served as Chief Operating Officer and Executive Vice
President of the Company since January 1994. He served as Executive Vice
President and Chief Financial Officer of the Company from April 1993 to December
1993. From 1983 to 1993, Mr. Sloma was a Tax Partner at Deloitte & Touche.

Mr. Wallace has served as Senior Vice President of the Company since 1989.
He served as Vice President of the Company from 1984 to 1989.

Board Meetings and Committees

The Board of Directors met four times during the fiscal year ended December
31, 1994. During fiscal 1994, all directors attended all of the meetings of the
Board of Directors and related committees on which they served. The Company does
not have a Standing Nominating Committee.

The Audit Committee recommends the selection of the independent auditors,
reviews the scope of the audits performed by them and reviews their audit report
and any recommendations made by them relating to internal financial controls and
procedures. Members of the Audit Committee, which met twice during fiscal 1994,
are David Evans, David Karnes, J. Michael Parks and Greg T. Sloma.

The Compensation Committee reviews and makes recommendations to the Board
of Directors regarding officers' compensation and the Company's employee benefit
plans; provided, however, the Compensation Committee administers the Company's
Stock Option Plan of 1989 through its Stock Option Plan Subcommittee, consisting
of all members of the Compensation Committee other than Greg Sloma. Members of
the Compensation Committee, which met once during fiscal 1994, are David Evans,
David Karnes, J. Michael Parks and Greg Sloma.

Directors Compensation

During fiscal 1994, each member of the Board of Directors who was not an
employee of the Company received an annual retainer fee of $8,000 plus $700 for
each Board of Directors meeting attended and $400 for each Board committee
meeting attended. In 1994, each director who was not an employee of the company,
received options under the Non-Employee Directors Stock Option Plan to purchase
1,000 shares of the Company's common stock at an exercise price of $26.50 per
share.

121
<PAGE>
OWNERSHIP BY CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth information as to the beneficial ownership
of the Company's common stock by each person or group who, as of March 1, 1995,
to the knowledge of the Company, beneficially owned more than 5% of the
Company's common stock:

<TABLE>
<CAPTION>
Name and Address of Amount and Nature Percent of
Beneficial Owner of Ownership Class
-------------------------- ----------------- ----------
<S> <C> <C>
Roger R. Brodersen 569,978 (1) 17.3%
16705 Ontario Plaza
Omaha, NE 68130

Furman Selz Incorporated 321,800 (2) 9.8%
230 Park Avenue
New York, NY 10169

Peter H. Kamin and Peak Investment 223,500 (3) 6.8%
Limited Partnership as a group
One Financial Center, Suite 1600
Boston, MA 02111

Wellington Management Company 173,200 (4) 5.3%
75 State Street
Boston, MA 02109

<FN>
(1) This includes 13,050 shares held in a trust for the benefit of Mr.
Brodersen's children, 9,100 shares beneficially owned by Mr. Brodersen's
spouse, 23,435 shares subject to options that may be exercised within 60
days of March 1, 1995, and 5,139 shares allocated to Mr. Brodersen through
his participation in the Company's 401(k) Savings Plan.

(2) According to a Schedule 13G, amended through February 21, 1995, Furman Selz
Incorporated has sole voting and sole dispositive power over such shares.

(3) According to a Schedule 13D, amended through December 30, 1994, Peak
Investment Limited Partnership ("Peak") is the beneficial owner of 213,500
of these shares for which it has sole voting and sole dispositive power.
Peter H. Kamin is the sole general partner of Peak with sole voting and
sole dispositive power over the shares owned by Peak and therefore also may
be deemed to be the beneficial owner of such 213,500 shares. According to
the Schedule 13D, Mr. Kamin also is the beneficial owner of an additional
10,000 shares for which he has sole voting and sole dispositive power.

(4) According to a Schedule 13G, amended through February 3, 1995, Wellington
Management Company is the beneficial owner of 173,200 shares which are
owned by its investment advisory clients. In its capacity as investment
advisor to such clients, Wellington Management Company has shared voting
power over 52,200 shares and shared dispositive power over 173,200 shares.
</FN>
</TABLE>

122
<PAGE>
The following table sets forth information as to the shares of common stock
of the Company beneficially owned as of March 1, 1995, by each director of the
Company, by each nominee for election as a director of the Company, by each of
the executive officers named in the Summary Compensation Table beginning on page
6, and by all directors and executive officers of the Company as a group:

<TABLE>
<CAPTION>
Amount and Nature Percent of
Beneficial Owner of Ownership (1) Class (2)
------------------------ ----------------- -----------
<S> <C> <C>
Roger R. Brodersen 569,978 (3) 17.3%

David L. Evans 6,733 (4) *

Robert S. Herman 141,274 (5) 4.3%

David K. Karnes 16,145 (6) *

James J. Marquiss 43,776 (7) 1.3%

J. Michael Parks 8,833 (8) *

Jay E. Ricks 1,000 *

Greg T. Sloma 24,228 (9) *

Roger W. Wallace 83,523 (10) 2.5%

All directors and executive officers
as a group (15 persons) 925,575 (11) 28.1%

<FN>
* Less than 1.0%

(1) The number of shares in the table include interests of the named persons,
or of members of the direc- tors and executive officers as a group, in
shares held by the trustee of the Company's 401(k) Savings Plan. The
beneficial owners have sole investment power over these shares but do not
have sole voting power.

(2) Shares subject to options exercisable within 60 days of March 1, 1995 are
deemed to be outstanding for the purpose of computing the percentage
ownership of persons beneficially owning such options but have not been
deemed to be outstanding for the purpose of computing the percentage
ownership of any other person.

(3) Includes 13,050 shares which are held in trust for Mr. Brodersen's
children, 9,100 shares beneficially owned by Mr. Brodersen's spouse, 23,435
shares subject to options exercisable within 60 days of March 1, 1995, and
5,139 shares allocated to Mr. Brodersen through his participation in the
Company's 401(k) Savings Plan.

(4) Includes 6,333 shares subject to options exercisable within 60 days of
March 1, 1995.

(5) Includes 21,683 shares subject to options exercisable within 60 days of
March 1, 1995, 9,600 shares beneficially owned by Mr. Herman's spouse, and
4,097 shares allocated to Mr. Herman through his participation in the
Company's 401(k) Savings Plan.

123
<PAGE>
(6) Includes 6,333 shares subject to options exercisable within 60 days of
March 1, 1995.

(7) Includes 14,958 shares subject to options exercisable within 60 days of
March 1, 1995 and 3,818 shares allocated to Mr. Marquiss through his
participation in the Company's 401(k) Savings Plan.

(8) Includes 5,833 shares subject to options exercisable within 60 days of
March 1, 1995.

(9) Includes 17,000 shares subject to options exercisable within 60 days of
March 1, 1995 and 5,128 shares allocated to Mr. Sloma through his
participation in the Company's 401(k) Savings Plan.

(10) Includes 21,683 shares subject to options exercisable within 60 days of
March 1, 1995, 1,500 shares beneficially owned by Mr. Wallace's spouse, and
4,088 shares allocated to Mr. Wallace through his participation in the
Company's 401(k) Savings Plan.

(11) Includes 144,865 shares subject to options exercisable within 60 days of
March 1, 1995, 13,050 shares held in trust for the children of executive
officers and directors, 20,200 shares owned beneficially by spouses of
executive officers and directors, and 24,315 shares allocated to executive
officers through their participation in the Company's 401(k) Savings Plan.
</FN>
</TABLE>
EXECUTIVE COMPENSATION

The following table sets forth information with respect to the Chief
Executive Officer and the four remaining most highly compensated executive
officers of the Company for the fiscal year ended December 31, 1994.
<TABLE>
<CAPTION>
Summary Compensation Table
------------------------------------------------------------------------------------------------------------------------------
Annual Compensation Long Term
---------------------------------------- Compensation
----------------
(a) (b) (c) (d) (e) (f) (g)
--------------------------------- ---- ------------ -------- ----------- ---------------- ---------------
Securities
Name and Principal Other Annual Underlying All Other
Position Year Salary Bonus Compensation (1) Option (shares) Compensation(2)
--------------------------------- ---- ------------ -------- ----------- ---------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Roger R. Brodersen 1994 $165,000 $ 80,217 $0 10,000 $9,240
Chairman, President 1993 157,000 79,497 0 6,000 8,994
& Chief Executive Officer 1992 152,500 71,734 0 6,000 8,728

Greg T. Sloma 1994 135,000 65,712 0 6,000 2,464
Chief Operating Officer & 1993 93,462 35,360 0 30,000 0
Executive Vice President 1992 -- -- - -- --

Robert S. Herman 1994 110,000 71,304 0 5,000 6,160
Senior Vice President 1993 104,000 70,922 0 4,500 6,165
1992 100,000 64,560 0 4,500 6,530

Roger W. Wallace 1994 110,000 70,108 0 5,000 7,204
Senior Vice President 1993 104,000 70,970 0 4,500 6,998
1992 100,000 64,560 0 4,500 6,530

James J. Marquiss 1994 110,000 62,540 0 3,000 6,902
Vice President 1993 80,000 87,889 0 3,000 7,027
1992 69,000 79,112 0 2,250 5,900

124
<PAGE>
<FN>
(1) Excludes perquisites and other benefits because the aggregate of such
compensation was less than either $50,000 or 10% of the total of annual
salary and bonus reported for the named executive officer.

(2) The amounts included in the All Other Compensation column represent 401(k)
matching contributions made by the Company.
</FN>
</TABLE>

The following table shows, as to the Chief Executive Officer and the four
remaining most highly compensated executive officers of the Company,
information about stock option grants in fiscal 1994. The Company does not
grant any Stock Appreciation Rights.

<TABLE>
<CAPTION>
Option Grants In Last Fiscal Year
-------------------------------------------------------------------------------------------------------
Individual Grants
-------------------------------------------------------------------------------------------------------
(a) (b) (c) (d) (e) (f)
----------------------- ------------ ------------ ----------- -------- ---------------
Number of
Securities Percent of
Underlying Total Options
Options Granted to Exercise Grant Date
Granted Employees In Price Expiration Present
Name (shares) (1) Fiscal 1994 (Per share) Date Value (2)
----------------------- ------------ ------------ ----------- -------- --------------
<S> <C> <C> <C> <C> <C>
Roger R. Brodersen 10,000 11.3% $ 29.15 1-03-99 $35,500
Greg T. Sloma 6,000 6.8% 26.50 1-03-04 49,300
Robert S. Herman 5,000 5.7% 26.50 1-03-04 41,100
Roger W. Wallace 5,000 5.7% 26.50 1-03-04 41,100
James J. Marquiss 3,000 3.4% 26.50 1-03-04 24,700
<FN>
(1) The options listed above were granted on January 3, 1994 under the
Company's Stock Option Plan of 1989.

(2) As suggested by the Securities & Exchange Commission's rules on executive
compensation, the Company used the Black-Scholes model of option valuation
to determine grant date present value. The Company does not necessarily
agree that the Black-Scholes model can properly determine the value of an
option. The actual value, if any, an executive may realize will depend on
the excess of the stock price over the exercise price on the date the
option is exercised, so that there is no assurance that the value realized
will be at or near the value estimated by the Black-Scholes model.
</FN>
</TABLE>

125
<PAGE>

The following table provides information on option exercises in fiscal
1994 and the value of unexercised options at December 31, 1994 for the Chief
Executive Officer and the four remaining most highly compensated executive
officers.
<TABLE>
<CAPTION>
Aggregated Option Exercises In Last Fiscal Year
and Fiscal Year End Option Values
--------------------------------------------------------------------------------------------------------------

Number of Securities
Underlying Unexercised Value of Unexercised
Shares Options at Fiscal In-the-Money Options
Acquired Year End (shares) At Fiscal Year End(1)
On Value --------------------------- ----------------------------
Name Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
------------------- -------- -------- ------------ ------------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
Roger R. Brodersen 4,000 $48,680 16,102 16,000 $43,500 $11,000
Greg T. Sloma -- 0 7,500 28,500 18,800 56,300
Robert S. Herman -- 0 17,016 9,500 60,900 14,300
Roger W. Wallace -- 0 17,016 9,500 60,900 14,300
James J. Marquiss -- 0 12,208 5,750 42,600 8,400

<FN>
(1) The closing "bid" price of the Company's common stock as quoted by NASDAQ
on December 31, 1994 was $16.50. The values shown are computed based upon
the difference between this price and the exercise price of the underlying
options.
</FN>
</TABLE>

Performance Graph

The following performance graph compares the performance of the Company's
common stock to the Center for Research in Securities Prices (CRSP) Total Return
Index for the NASDAQ Stock Market (U.S. Companies) and to the CRSP Total Return
Industry Index for NASDAQ Telecommunications Stocks. The graph assumes that the
value of the investment in the Company's Common Stock and each index was $100 at
December 31, 1989.

Performance Graph in Tabular Form:
<TABLE>
<CAPTION>

COMPARISON OF FIVE YEAR CUMULATIVE RETURN
-----------------------------------------
1989 1990 1991 1992 1993 1994
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
DTN Common Stock 100 77 77 91 169 110

NASAQ Total Return Index 100 85 136 159 181 177

NASDAQ Telecommunications
Industry Index 100 67 93 114 176 146
</TABLE>

126
<PAGE>
COMPENSATION COMMITTEE REPORT
ON EXECUTIVE COMPENSATION

Compensation Philosophy

The Company strives to apply a consistent philosophy on compensation for
all employees, including senior management. The goals of the compensation
program are to directly link compensation with corporate profitability and the
enhancement of the underlying value of the Company's business. The following
objectives are used by the Company and the Compensation Committee as guidelines
for compensation decisions:

o Provide a competitive total compensation package that allows the Company
to attract and retain the best people possible.

o The Company pays for performance. Employees are rewarded based upon
corporate performance, business unit performance and individual
performance.

o Provide variable compensation programs that are linked with the
performance of the Company and that align executive compensation with the
interests of shareholders.

Compensation Program Components

The Committee annually reviews the Company's compensation program to ensure
that pay levels and incentive opportunities are competitive and reflect the
performance of the Company. The components of the compensation program for
executive officers, which are comparable to those used for all employees, are
outlined below.

Base Salary - Base pay levels are determined by reviewing competitive
positions in the market, including comparisons with companies of similar size,
complexity and growth rates. Modest increases in base salary were recommended by
senior management for fiscal 1994 for the Chief Executive Officer and the other
named executives in the compensation table, and the Committee acted in
accordance with this recommendation.

Annual Incentive Compensation - The large majority of the Company's
employees, including the executive officers, participate in an annual bonus
plan. For fiscal 1994, the bonus pool amounted to eight percent of the Company's
income before income taxes and depreciation expense. The five executive officers
named in the Summary Compensation Table received approximately thirty-five
percent of this bonus pool.

Stock Option Program - The purpose of this program, which is available to
the large majority of employees, is to provide additional incentives to
employees to work to maximize long-term shareholder value. It also uses vesting
periods to encourage key employees to continue in the employ of the Company. The
number of stock options granted to executive officers is based on competitive
practices.

Compensation Committee
of the Board of Directors
David L. Evans
David K. Karnes
J. Michael Parks
Greg T. Sloma

127
<PAGE>
PROPOSED AMENDMENTS TO NON-EMPLOYEE DIRECTORS STOCK OPTION PLAN

The Company's Non-Employee Directors Stock Option Plan (the "Plan")
provides for the grant of options to purchase shares of the Company's common
stock to members of the Board of Directors who are not employed by the Company.
The Plan is administered by the Non-Employee Directors Stock Option Committee of
the Board of Directors, consisting of employee directors (the "Committee").

Options granted under the Plan are exercisable after one year from the date
of their grant and they terminate no later than ten years from the date of their
grant. No options shall be granted at an exercise price less than 100% of the
fair market value of the shares on the date of the grant. No cash consideration
is to be received by the Company for the granting of options pursuant to the
Plan.

The Plan currently provides for a total of 30,000 shares of the Company's
common stock, either newly issued or treasury shares, for which options may be
granted under the Plan. The Board of Directors proposes the adoption of the
Fifth Amendment to the Plan which accompanies this Proxy Statement as Exhibit
"A" (the "Fifth Amendment"). If approved by the stockholders, the Fifth
Amendment will amend the Plan by increasing from 30,000 to 70,000 the total
number of shares for which options may be granted under the Plan.

Subject to the express provisions of the Plan, the Committee has complete
authority, in its discretion, to interpret the Plan. The Plan provides a formula
for determining the award of stock options to non-employee directors of the
Company. The current formula provides for an initial option for 1,000 shares to
be awarded upon a non-employee first becoming a director of the Company. In
addition, in the month of January of each year each non-employee director who is
willing to continue as a director and who is to be nominated by the Board of
Directors for election as a director at the next annual meeting of stockholders,
shall be awarded an option for 1,000 shares. If approved by the stockholders,
the Fifth Amendment will amend the Plan, retroactive to January 4, 1995, by
changing the formula to provide for an option for 2,500 shares to be awarded
upon a non-employee being elected or re-elected as a director of the Company at
a meeting of stockholders of the Company and upon such person being appointed a
director of the Company to fill a vacancy on the Board of Directors of the
Company. In addition, upon approval of the Fifth Amendment by the stockholders,
the Board of Directors of the Company will terminate the annual retainer fee of
$8,000 currently paid to each non-employee director of the Company.

In the event of any change in the number of issued shares of common stock
of the Company through stock splits, dividends, or other change in
capitalization, the total number of shares for which options may be granted
under the Plan is to be adjusted so that the aggregate consideration due the
Company and the value of each benefit shall not change.

The Plan provides for the issuance of non-qualified options. There
generally are not federal income tax consequences either to the participant or
the Company upon the grant of an option under the Plan. Upon the exercise of a
stock option pursuant to the Plan, the amount by which the fair market value of
the common stock of the Company on the date of exercise exceeds the option
exercise price generally will be taxable to the participant as compensation
income and generally will be deductible for income tax purposes by the Company.
The disposition of shares of common stock of the Company acquired upon the
exercise of a stock option pursuant to the Plan generally will result in a
capital gain or loss for the participant but will have no tax consequences for
the Company.
10

128
<PAGE>
Of the persons nominated by the Board of Directors to serve as directors of
the Company, three are not employed by the Company. If such persons are elected
or re-elected as directors at the Meeting and the Fifth Amendment is approved by
the stockholders, then each of them would receive during fiscal year 1995 an
option for 2,500 shares of common stock on the Company. The value a participant
may realize from an option will depend on the excess of the stock price over the
exercise price on the date the option is exercised, if any. Since the number of
directors not employed by the Company may be increased or decreased, the number
of participants in the Plan is not presently determinable. The closing "bid"
price of the common stock of the Company on March 1, 1995, as reported in The
Wall Street Journal, was $ 21.75.

The Board of Directors has unanimously approved, and recommends to the
stockholders for their approval and adoption, the Fifth Amendment which will
increase from 30,000 to 70,000 the total number of shares for which options may
be granted under the Plan. In addition, the Fifth Amendment will increase from
1,000 to 2,500 the number of shares for which options are to be awarded to a
non- employee upon being elected, re-elected or appointed a director of the
Company and change the timing of the award of such options as described above.
The approval of the Fifth Amendment will cause the termination of the annual
retained fee of $8,000 currently paid to each non-employee director of the
Company.

The Board of Directors has determined that the ability of the Company to
continue to attract and retain highly qualified directors will be enhanced by
the continued grant of options under the Plan and, accordingly, recommends a
vote FOR adoption of the Fifth Amendment. The affirmative vote of a majority of
the shares of the Company's common stock present in person or by proxy at the
Meeting is required for the adoption of the Fifth Amendment.

The full text of the Plan, which is incorporated herein by reference, is
available without charge by oral or written request to the Company Secretary,
Data Transmission Network Corporation, 9110 West Dodge Road, Suite 200, Omaha,
Nebraska 68114, telephone (402) 390-2328. A copy of the Plan document will be
sent by first class mail to the requesting party promptly upon receipt of the
request by the Company Secretary.

TRANSACTIONS WITH MANAGEMENT

No reportable transactions occurred during fiscal 1994 between the Company
and its officers and directors.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

The following directors served on the Compensation Committee of the
Company's Board of Directors: David Evans, David Karnes, J. Michael Parks and
Greg Sloma. Mr. Sloma, because he is an officer and employee of the Company,
abstains from all votes dealing with officer compensation. Also, only Mr. Evans,
Mr. Karnes and Mr. Parks are members of the Stock Option Plan Subcommittee of
the Compensation Committee which administers the Company's Stock Option Plan of
1989.

129
<PAGE>
APPROVAL OF APPOINTMENT OF AUDITORS

The Board of Directors has, upon the recommendation of the Audit Committee,
appointed the firm of Deloitte & Touche LLP to audit the Company's financial
statements for the fiscal year ending December 31, 1995, subject to ratification
by the stockholders of the Company. Deloitte & Touche LLP served as the
Company's auditors for the 1994 fiscal year.

Ratification of the appointment of the independent auditors requires the
affirmative vote of a majority of the shares of Common Stock present, in person
or by proxy, and voting at the Meeting. If the stockholders should not ratify
the appointment of Deloitte & Touche LLP, the Board of Directors will reconsider
the appointment.

A representative of Deloitte & Touche LLP is expected to be present at the
meeting, will have an opportunity to make a statement if desired, and will be
available to respond to appropriate stockholder questions.

The Board of Directors recommends a vote FOR the approval of the
appointment of Deloitte & Touche LLP as independent auditors for the Company.

STOCKHOLDER PROPOSALS FOR 1996 ANNUAL MEETING

Proposals of stockholders for which consideration is desired at the 1996
Annual Meeting of Stockholders must be received by the Company no later than
December 31, 1995, in order to be considered for inclusion in the Company's
proxy statement and form of proxy relating to such meeting. Any such proposals
shall be subject to the requirements of the proxy rules adopted under the
Securities Exchange Act of 1934, as amended.

COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT

OTHER MATTERS

The Board of Directors is not aware of any business to come before the
Meeting other than those matters described above in the Proxy Statement.
However, if any other matters should properly come before the meeting, the
persons named in the accompanying form of proxy will have discretionary
authority to vote all proxies with respect thereto in accordance with their
judgement.

130
<PAGE>
MISCELLANEOUS

The cost of solicitation of proxies will be borne by the Company. The
Company will, upon request, reimburse brokerage firms and other custodians,
nominees and fiduciaries for reasonable expenses incurred by them in sending
proxy material to the beneficial owners of Common Stock. In addition to
solicitations by mail, directors, officers, and regular employees of the Company
may solicit proxies personally or by telegram or telephone without additional
compensation. The Company has retained First National Bank of Omaha, the
Company's stock transfer agent, to assist in the distribution and solicitation
of proxies at a cost of approximately $2,500, including the reimbursement of
certain expenses.

As stated in this proxy, the Company's amended Non-Employee Directors Stock
Option Plan is incorporated by reference into this proxy statement.

The Company's Annual Report to Stockholders, including financial
statements, has been mailed to all stockholders of record as of the close of
business on March 1, 1995. Any stockholder who has not received a copy of such
Annual Report may obtain a copy by writing the Company. Such Annual Report is
not to be treated as a part of this proxy solicitation material nor as having
been incorporated herein by reference.

Notwithstanding anything to the contrary set forth in any of the Company's
previous filings under the Securities Act of 1933, as amended, or the Exchange
Act that might incorporate future filings, including this Proxy Statement, in
whole or in part, the Compensation Committee Report on page 9 and the
Performance Graph on page 8 shall not be incorporated by reference into any such
filings.

THE BOARD OF DIRECTORS

Omaha, Nebraska
March 10, 1995

A COPY OF THE FORM 10-K AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION,
EXCLUDING EXHIBITS, WILL BE FURNISHED WITHOUT CHARGE TO STOCKHOLDERS AS OF THE
RECORD DATE UPON WRITTEN REQUEST TO THE SECRETARY, DATA TRANSMISSION NETWORK
CORPORATION, 9110 WEST DODGE ROAD, SUITE 200, OMAHA, NEBRASKA 68114.

131
<PAGE>
Exhibit A

FIFTH AMENDMENT TO
DATA TRANSMISSION NETWORK CORPORATION
NON-EMPLOYEE DIRECTORS STOCK OPTION PLAN

PREAMBLE

Data Transmission Network Corporation, a Delaware corporation (the
"Company"), adopted the Data Transmission Network Corporation Stock Option Plan
of 1989 (the "Plan") effective as of February 15, 1989. The Plan was previously
amended by a First Amendment effective as of January 15, 1990, a Second
Amendment effective as of January 2, 1991, a Third Amendment effective as of May
1, 1991, and a Fourth Amendment effective as of January 3, 1994. Section 1 of
Article III of the Plan permits the Board of Directors of the Company or any
authorized committee of the Board of Directors to amend the Plan from time to
time without shareholder approval being required under certain circumstances.
Except as modified by or specifically defined in this Fifth Amendment,
capitalized terms used in this Fifth Amendment shall have the meanings given to
such terms in the Plan.

AMENDMENT

Subject to ratification and approval by the shareholders of the Company at
their annual meeting to be held on April 26, 1995, the Plan is hereby amended,
effective as of January 4, 1995, as follows:

1. Subsection 4 of Article I and subsections (a) and (b) of Section 1 of
Article II of the Plan shall be amended by increasing from 30,000
Shares to 70,000 Shares the total number of Shares for which Options
may be granted under the Plan.

2. That portion of Section 3 of Article II of the Plan preceding
Subsection (a) thereof shall be amended in its entirety to read as
follows:

"Awards and Conditions of Options. An Option for 2,500 Shares shall be
awarded to each Non-Employee Director each time such person is elected or
re-elected a Director of the Company at a meeting of the shareholders of
the Company and upon such person being appointed a Director of the Company
to fill a vacancy on the Board of Directors of the Company. The Options to
be award ed shall be subject to the following terms and conditions:".

3. Except as specifically amended by this Fifth Amendment, the Plan, as
previously amended, shall remain in full force and effect and is
hereby ratified and confirmed.

132
<PAGE>

(Intentionally Left Blank)

133
<PAGE>

DATA TRANSMISSION NETWORK CORPORATION PROXY
Annual Meeting of Stockholders To Be Held April 26, 1995

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

The undersigned hereby appoints Roger R. Brodersen and Brian L. Larson, or
either of them, as proxies of the undersigned, with full power of substitution
to either of them, and hereby authorizes them to vote as designated below all
shares of common stock of Data Transmission Network Corporation held of record
by the undersigned on March 1, 1995 at the Annual Meeting of Stockholders to be
held on April 26, 1995 and at any adjournments thereof (a) on the following
matters and (b) on any other matters that properly may come before the meeting
or any adjournments thereof:

1. ELECTION OF DIRECTORS

FOR all nominees listed below (except as marked)
-----

WITHHOLD AUTHORITY to vote for all nominees listed below
-----

(INSTRUCTIONS: To withhold authority to vote for any individual nominee(s), draw
a line through the nominee's name below.)

Roger R. Brodersen Robert S. Herman David K. Karnes J. Michael Parks
Jay E. Ricks Greg T. Sloma Roger W. Wallace

2. PROPOSAL TO AMEND NON-EMPLOYEE DIRECTORS STOCK OPTION PLAN

AGAINST ABSTAIN
---- ----
3. RATIFICATION OF APPOINTMENT OF DELOITTE & TOUCHE LLP as independent
auditors of the Corporation for fiscal year ending December 31, 1995

AGAINST ABSTAIN
---- ----

This proxy will be voted as specified. IF NO SPECIFICATION IS GIVEN, THIS PROXY
WILL BE VOTED FOR THE PROPOSALS SET FORTH ABOVE. The undersigned hereby
acknowledges receipt of the Notice of Annual Meeting of Stockholders of Data
Transmission Network Corporation to be held on April 26, 1995 and the Proxy
Statement for such meeting.

Dated , 1995
--------------------------- -----------------------------------

-----------------------------------
(Signature of Stockholder)

Note: Please sign exactly as name appears on stock certificate (as Indicated on
reverse side). All joint owners should sign. When signing as personal
representative, executor, administrator, attorney, trustee or guardian, please
give full title as such. If a corporation, please sign in full corporation name
by president or other authorized person. If a partnership, please sign in
partnership name by a partner.

134
<PAGE>

APPENDIX TO
PROXY STATEMENT

A copy of the restated and amended Non-Employee Directors Stock Option Plan
of Data Transmission Network Corporation accompanies this appendix.

A-1

135
<PAGE>

[Restated to incorporate changes from first,
second, third, fourth, and fifth amendments]

DATA TRANSMISSION NETWORK CORPORATION
NON-EMPLOYEE DIRECTORS STOCK OPTION PLAN

ARTICLE I. GENERAL PROVISIONS

Section 1. Purpose. The Data Transmission Network Corporation Non-Employee
Directors Stock Option Plan (the "Plan") is designed to attract and retain
Non-Employee Directors of exceptional ability and to solidify the common
interest of Directors and stockholders in enhancing the value of the Company's
shares.

Section 2. Definitions. Except where the context otherwise indicates, the
following definitions apply:
"Board" means Board of Directors of the Company.
"Committee" means the Non-Employee Directors Stock Option Committee of the
Board, which Committee shall consist of three or more members of the Board as
may be appointed by the Board to administer this Plan.
"Company" means Data Transmission Network Corporation, a Delaware
corporation.
"Director" means a member of the Board.
"Effective Date" means February 15, 1989.
"Fair Market Value" means, with respect to any given day, the closing "bid"
price of the Company's Shares as reported by the NASDAQ System for such day, or
if no quotation shall have been made for that day, for the next preceding day
for which there was a quotation, if within seven days thereof, or otherwise as
determined in good faith by the Committee.
"Non-Employee Director" means a member of the Board who is not employed by
the Company or any Subsidiary thereof.
"Participant" means a Non-Employee Director to whom a Stock Option has been
granted.
"Shares" means shares of $.001 par value common stock of the Company, and
any shares of stock or other securities received as a result of a Share
adjustment as set forth in Section 4 of this Article I.
"Stock Option" or "Option" means a stock option granted pursuant to this
Plan.
"Subsidiary" means any corporation (or partnership, joint venture, or other
enterprise) (i) of which the Company owns or controls, directly or indirectly,
50% or more of the outstanding shares of stock normally entitled to vote for the
election of directors (or comparable equity participation and voting power) or
(ii) which the Company otherwise controls (by contract or any other means).
"Control" means the power to direct or cause the direction of the management and
policies of a corporation, partnership, joint venture, or other enterprise.
"Termination of Service" means the discontinuance of the service of any
Non-Employee Director as a member of the Board for any reason.

A-2

136
<PAGE>
Section 3. Administration.
(a) This Plan shall be administered by the Committee. No member of the
Board who has previously been or is eligible to receive a Stock Option shall be
a member of the Committee.

(b) The Committee shall have the exclusive right to interpret this Plan.
All acts and decisions of the Committee with respect to any questions arising in
connection with the administration and interpretation of this Plan, including
the severability of any and all of the provisions hereof, shall be conclusive,
final and binding upon all Participants.

(c) The Committee may adopt and amend, from time to time, rules and
regulations of general application for the administration of this Plan,
including terms and conditions related to the receipt and exercise of Options.
Such rules and regulations may include, at the Committee's discretion, the
provision by the Company of loans for the purpose of financing the exercise of
Options, and the amount of taxes payable in connection therewith.

(d) Without limiting the foregoing Sections 3(a), (b) and (c) of this
Article I (and notwithstanding any other provisions of this Plan), the Committee
is authorized to take such action as it reasonably determines to be necessary or
advisable, and fair and equitable to Participants, with respect to Options in
the event of a merger of the Company with, consolidation of the Company into, or
the acquisition of the Company by another corporation, a sale or transfer of all
or substantially all of the assets of the Company to another corporation or any
other person or entity, a tender or exchange offer for Shares made by any
corporation, person or entity (other than the Company), or other reorganization
in which the Company will not survive as an independent, publicly owned
corporation. The Committee may take such actions pursuant to this Section 3(d)
by adopting rules and regulations of general applicability to all Participants.
The Committee may take such actions as part of the grants or before or after the
public announcement of any such merger, consolidation, acquisition, sale or
transfer of assets, tender or exchange offer or other reorganization.

Section 4. Share Adjustments. In the event that at any time or from time to
time a stock dividend, stock split, recapitalization, merger, consolidation, or
other change in capitalization, or a sale by the Company of all or part of its
assets, or any distribution to stockholders other than a cash dividend results
in (a) the outstanding Shares, or any securities exchanged therefor or received
in their place, being exchanged for a different number or class of shares of
stock or other securities of the Company, or for shares of stock or other
securities of any other corporation, or (b) new, different or additional shares
or other securities of the Company or of any other corporation being received by
the holders of outstanding Shares, then:

(i) the limitation of 70,000 Shares set forth in Section l(a) of Article
II of this Plan;

(ii) the number and class of Shares that may be subject to Stock Options
and which have not been issued or transferred under Stock Options; and

(iii) The purchase price to be paid per Share under unexercised Stock
Options; shall in each case be equitably adjusted as determined by the
Committee in its sole discretion.

A-3

137
<PAGE>
ARTICLE II. PLAN
Section 1. Option Shares.

(a) The total number of Shares for which Options may be granted under this
Plan shall not exceed 70,000 Shares, subject to: (A) the adjustments provided
for in Section 4 of Article I of this Plan and (B) the provisions of Section 1
(b) of this Article II. Such Shares may be authorized but unissued Shares, or
treasury Shares, or both.

(b) In the event that any unexercised Stock Option granted hereunder lapses
or ceases to be exercisable for any reason other than a surrender of the Option
pursuant to Section I (c) of this Article II, the Shares subject to such Option
shall again be available for Option grants under this Plan without again being
charged against the limitation of 70,000 Shares set forth in Section l(a) of
this Article II. Any amendment of any Option by the Committee pursuant to
Section 3 of Article I of this Plan shall not be considered the grant of a new
Option.

(c) In the event of Termination of Service for death, disability, hardship
or unusual circumstances as determined by the Committee, the Committee may, with
the consent of the Participant or his or her legal representative, authorize
payment, in cash or in Shares, or partly in cash and partly in Shares, as the
Committee may direct, of an amount equal to the difference at the time between
the Fair Market Value of the Shares subject to an Option and the Option exercise
price in consideration of the surrender of the Option. In such an event the
Shares subject to the Option so surrendered shall be charged against the
limitations set forth in Section l(a) of this Article II.

Section 2. Incidents of Options.

(a) Each Stock Option shall be granted subject to such terms and
conditions, if any, not inconsistent with this Plan, as shall be determined by
the Committee, including any provisions as to continued service as a member of
the Board as consideration for the grant or exercise of such Option and any
provisions which may be advisable to comply with applicable laws, regulations or
rulings of any governmental authority. Unless otherwise provided at the time of
any Option grant and except as otherwise specifically provided in this Plan,
Options shall only be exercisable by a Participant as follows:

Percentage of Total
Shares Per Option
Grant Exercisable
-------------------

On and after twelve (12) months from
the Option grant date .... 100%

If the application of the foregoing vesting schedule would result in a
fractional Share being issuable upon the exercise of an Option, the number of
shares vested shall be rounded up to the next full Share, but not to exceed in
the aggregate the original grant total. Notwithstanding the foregoing, in the
event of a disposition of the majority of common stock of the Company, or all or
a substantial part of its assets, in one or a series of transactions involving
merger, consolidation, recapitalization, liquidation or dissolution, conveyance,
sale, transfer, assignment, or other method of disposition, the Options shall
then be immediately exercisable by a Participant.

A-4

138
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(b) A Stock Option shall not be transferable by the Participant otherwise
than by will or by the laws of descent and distribution or pursuant to a
"qualified domestic relations order" (as defined by Title I of the Employee
Retirement Income Security Act), and shall be exercisable during the lifetime of
the Participant only by him or her or by his or her guardian or legal
representative.

Section 3. Awards and Conditions of Options. An Option for 2,500 Shares
shall be awarded to each Non-Employee Director each time such person is elected
or re-elected a Director of the Company at a meeting of the shareholders of the
Company and upon such person being appointed a Director of the Company to fill a
vacancy on the Board of Directors of the Company. The Options to be awarded
shall be subject to the following terms and conditions:

(a) The Option exercise price per Share shall be one hundred percent (100%)
of the Fair Market Value at the time of the grant of the Option. Notwithstanding
any contrary provision contained in this Plan, neither the Option nor the Shares
issued to a Participant upon the exercise of such Option may be sold or
transferred until at least six (6) months elapse from the date of the grant of
the Option.

(b) The Option may be exercised in full or in part from time to time
within the specified exercise period of the Option; provided, however, that upon
the Termination of Service of the Participant the Option may only be exercised
prior to the later of (i) the date six (6) months after the Termination of
Service or the date twelve (12) months after the Termination of Service if
service terminated as a result of the death or total and permanent disability of
the Participant as determined by the Committee or (ii) the date five (5) years
after the date of the grant; and, provided, further, that no such period
following the Termination of Service shall extend the specified exercise period
of the Option. The specified exercise period of the Option shall be ten (10)
years from the date of the grant or such shorter period as may be specified by
the Committee in the grant.

(c) In the event of Termination of Service due to death or total and
permanent disability (as determined by the Committee), all Options granted more
than twelve (12) months prior to such event shall, notwithstanding Section 2 of
this Article II, become immediately exercisable.

(d) The Option grant may include any other terms and conditions not
inconsistent with this Plan as determined by the Committee.

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ARTICLE III. AMENDMENTS

Section 1. Amendment or Termination of Plan. The Board, the Committee or
any other duly authorized committee of the Board may from time to time amend
this Plan, or discontinue this Plan or any provision thereof, provided that no
amendments to or modifications of this Plan shall, without the prior approval of
the stockholders normally entitled to vote for the election of directors of the
Company:

(a) change the number of Shares for which Stock Options may be granted, or
the percentage thereof which may be made subject to Options granted to any one
Non-Employee Director, as set forth in Section l(a) of Article II of this Plan;

(b) make any member of the Committee eligible for the grant
of a Stock Option;

(c) limit or restrict the powers of the Committee with respect to the
administration of this Plan except as may be required by any law, regulation or
governmental order;

(d) materially increase the benefits accruing to Participants under this
Plan;

(e) materially modify the requirements as to eligibility for participation
under this Plan; or

(f) change any of the provisions of this Article III. Notwithstanding the
foregoing provisions of this Section 1, the provisions of Section 3 of Article
II of this Plan shall not be amended more than once every six (6) months, unless
such amendment is required because of changes in the Internal Revenue Code or
the Employee Retirement Income Security Act.

Section 2. Effect on Options. No amendment or discontinuance of this Plan
or any provision thereof shall, without the written consent of the Participant,
adversely affect any Stock Option theretofore granted to such Participant under
this Plan.

ARTICLE IV. MISCELLANEOUS

Section 1. Transfer. No Stock Option shall be transferable except as
provided for herein in the case of death. If any Participant makes such a
transfer in violation hereof, any obligation of the Company with respect to such
Option shall forthwith terminate.

Section 2. Segregated Fund. Nothing contained herein shall require the
Company to segregate any monies from its general funds, or to create any trusts,
or to make any special deposits for any immediate or deferred amounts payable to
any Participant, nor require the Company to segregate any treasury Shares.

Section 3. Governing Law. This Plan and all actions taken hereunder shall
be governed by the laws of the State of Delaware.

Section 4. Withholding. The Company may make such provisions and take such
steps as it may deem necessary or appropriate for the withholding of any taxes
which the Company is required by any law or regulation of any governmental
authority, whether federal, state or local, domestic or foreign, to withhold in
connection with any Stock Option or the exercise thereof.

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Section 5. Construction. The Plan is intended to be construed so that
participation in the Plan will be exempt from Section 16(b) of the Securities
Exchange Act of 1934 pursuant to regulations and interpretations issued from
time to time by the Securities and Exchange Commission.

Section 6. Misconduct. If the Committee determines that any Non-Employee
Director has (a) used for profit or disclosed to unauthorized persons
confidential information or trade secrets of the Company or (b) breached any
contract with or violated any fiduciary obligation to the Company, such
Non-Employee Director shall forfeit all rights hereunder to the receipt or
exercise of any Option.

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