<SUBMISSION>
<ACCESSION-NUMBER>0000930661-02-002954
<TYPE>10-Q
<PUBLIC-DOCUMENT-COUNT>3
<PERIOD>20020630
<FILING-DATE>20020814
<FILER>
<COMPANY-DATA>
<CONFORMED-NAME>DIVERSIFIED CORPORATE RESOURCES INC
<CIK>0000779226
<ASSIGNED-SIC>7361
<IRS-NUMBER>751565578
<STATE-OF-INCORPORATION>TX
<FISCAL-YEAR-END>1231
</COMPANY-DATA>
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<FILE-NUMBER>001-13431
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<BUSINESS-ADDRESS>
<STREET1>12801 N CENTRAL EXPRESSWAY
<STREET2>STE 350
<CITY>DALLAS
<STATE>TX
<ZIP>75243
<PHONE>2144588500
</BUSINESS-ADDRESS>
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<STREET1>12801 N CENTRAL EXPRESSWAY
<STREET2>STE 350
<CITY>DALLAS
<STATE>TX
<ZIP>75243
</MAIL-ADDRESS>
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<FORMER-CONFORMED-NAME>DIVERSIFIED HUMAN RESOURCES GROUP INC
<DATE-CHANGED>19920703
</FORMER-COMPANY>
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<TYPE>10-Q
<SEQUENCE>1
<FILENAME>d10q.txt
<DESCRIPTION>FORM 10-Q
<TEXT>
<PAGE>

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

                                   (Mark One)

[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
                              EXCHANGE ACT OF 1934
                  FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2002

                                       OR

[ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
                              EXCHANGE ACT OF 1934
                  FOR THE TRANSITION PERIOD FROM _____ TO _____

                         COMMISSION FILE NUMBER 0-13984

                      DIVERSIFIED CORPORATE RESOURCES, INC.
             (Exact name of registrant as specified in its charter)

                 TEXAS                               75-1565578
    (State or other jurisdiction of                (IRS Employer
     incorporation or organization)              Identification No.)

                         10670 NORTH CENTRAL EXPRESSWAY
                                    SUITE 600
                               DALLAS, TEXAS 75231
                    (Address of principal executive offices)

       Registrant's telephone number, including area code: (972) 458-8500

              Former name, former address and former fiscal year if
                           changed since last report:

Indicate by check mark whether registrant (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.   [X] Yes  [ ] No

Number of shares of common stock of the registrant outstanding on August 13,
2002 was 2,811,865

                                        1

<PAGE>

             DIVERSIFIED CORPORATE RESOURCES, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                                 (In Thousands)

<TABLE>
<CAPTION>
                                                                                            (Unaudited)
                                                                                              JUNE 30,       DECEMBER 31,
                                                                                                2002             2001
                                                                                           --------------    ------------
<S>                                                                                        <C>               <C>
                                     ASSETS
Current assets:
   Cash and cash equivalents...........................................................    $          191    $        159
   Trade accounts receivable, less allowance for doubtful accounts of approximately
    $361 and $340, respectively........................................................             6,761           7,281
   Prepaid expenses and other current assets...........................................               373             308
   Federal income taxes receivable.....................................................               942           1,513
                                                                                           --------------    ------------
     Total current assets..............................................................             8,267           9,261
Property and equipment, net............................................................             2,030           2,531
Other assets:
   Intangibles, net....................................................................            10,780          10,780
   Receivables from related parties....................................................               373             418
   Other...............................................................................               211             223
                                                                                           --------------    ------------
                                                                                           $       21,661    $     23,213
                                                                                           ==============    ============
                      LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
   Trade accounts payable and accrued expenses.........................................    $        4,533    $      4,440
   Obligations not liquidated because of outstanding checks............................               805             852
   Borrowings under revolving credit agreement.........................................             3,006           3,584
   Current maturities of capital lease obligations.....................................                99              99
   Current maturities of long-term debt................................................             2,701           2,805
                                                                                           --------------    ------------
     Total current liabilities.........................................................            11,144          11,780
Deferred lease rents...................................................................               312              28
Capital lease obligations, net of current maturities...................................                72             120
Long-term debt, net of current maturities..............................................               317             304
                                                                                           --------------    ------------
     Total liabilities.................................................................            11,845          12,232
                                                                                           --------------    ------------
Commitments and contingencies.

Stockholders' equity:
   Preferred stock, $1.00 par value; 1,000 shares authorized, none issued..............                 -               -
   Common stock, $.10 par value; 10,000 shares authorized, 3,397 shares issued.........               340             340
   Additional paid-in capital..........................................................            12,794          12,794
   Retained earnings (deficit).........................................................            (1,431)           (266)
   Common stock held in treasury (586 shares), at cost.................................            (1,649)         (1,649)
   Receivables from related parties....................................................              (238)           (238)
                                                                                           --------------    ------------
     Total stockholders' equity........................................................             9,816          10,981
                                                                                           --------------    ------------
                                                                                           $       21,661    $     23,213
                                                                                           ==============    ============
</TABLE>

                 See notes to consolidated financial statements.

                                        2

<PAGE>

             DIVERSIFIED CORPORATE RESOURCES, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                      (In Thousands Except Per Share Data)
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                         For the Three Months     For the Six Months
                                                                            Ended June 30,          Ended June 30,
                                                                         --------------------    --------------------
                                                                           2002        2001        2002        2001
                                                                         --------    --------    --------    --------
<S>                                                                      <C>         <C>         <C>         <C>
Net service revenues:
  Permanent placement ...............................................    $  3,262    $  5,304    $  6,148    $ 11,709
  Contract placement and specialty services .........................      10,095      14,512      19,943      28,038
                                                                         --------    --------    --------    --------
                                                                           13,357      19,816      26,091      39,747

Cost of services:
  Direct cost of contract placement and specialty services ..........       8,255      11,459      16,328      22,217
                                                                         --------    --------    --------    --------

Gross margin ........................................................       5,102       8,357       9,763      17,530

Operating expenses:
  Variable selling expenses .........................................       2,440       4,292       4,838       9,213
  General and administrative expenses ...............................       2,557       3,813       5,147       7,918
  Severance expense .................................................          53           -          53         439
  Depreciation and amortization expense .............................         285         481         571         964
                                                                         --------    --------    --------    --------
                                                                            5,335       8,586      10,609      18,534
Other income and (expense) items:
  Interest expense, net .............................................        (285)       (178)       (532)       (363)
  Other net .........................................................           7           2           7           2
                                                                         --------    --------    --------    --------
                                                                             (278)       (176)       (525)       (361)

Loss before income taxes ............................................        (511)       (405)     (1,371)     (1,365)
Income tax (benefit) ................................................           -        (154)       (206)       (532)
                                                                         --------    --------    --------    --------
Net loss ............................................................    $   (511)   $   (251)   $ (1,165)   $   (833)
                                                                         --------    --------    --------    --------

                                                                         --------    --------    --------    --------
Basic and diluted earnings  (loss) per share ........................    $  (0.18)   $  (0.09)   $  (0.41)   $  (0.30)
                                                                         ========    ========    ========    ========

Weighted average common shares outstanding ..........................       2,812       2,812       2,812       2,814
                                                                         ========    ========    ========    ========

Weighted average common and common
 equivalent shares outstanding ......................................       2,812       2,812       2,812       2,814
                                                                         ========    ========    ========    ========
</TABLE>

                 See notes to consolidated financial statements.

                                        3

<PAGE>

             DIVERSIFIED CORPORATE RESOURCES, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (In Thousands)
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                                           FOR THE SIX MONTHS ENDED
                                                                                                    JUNE 30,
                                                                                              2002          2001
                                                                                           ----------    ----------
<S>                                                                                        <C>           <C>
Cash flow from operating activities:
    Net loss ........................................................................      $   (1,165)   $     (833)
    Adjustments to reconcile net loss to cash provided by operating activities:
        Depreciation and amortization ...............................................             571           964
        Provision for allowances ....................................................              21          (464)
        Deferred income taxes .......................................................               -          (395)
        Accretion of interest on deferred payment obligations .......................              34            87
    Changes in operating assets and liabilities, net of acquisitions:
        Accounts receivable .........................................................             499         1,848
        Federal income taxes receivable .............................................             571             -
        Deferred lease rents ........................................................             284            (6)
        Prepaid expenses and other assets ...........................................             (58)         (183)
        Trade accounts payable and accrued expenses .................................              93        (1,427)
                                                                                           ----------    ----------
        Cash provided by (used in) operating activities .............................             850          (409)

Cash flows from investing activities:
    Capital expenditures ............................................................             (70)         (255)
    Deposits ........................................................................               -           (16)
    Business acquisition cost .......................................................               -           (37)
    Repayment from related parties ..................................................              50             1
                                                                                           ----------    ----------
        Cash (used in) investing activities .........................................             (20)         (307)

Cash flows from financing activities:
    Obligations not liquidated because of outstanding checks ........................             (47)        1,320
    Advances on long-term line of credit borrowings .................................          28,005        42,138
    Repayments of long-term line of credit borrowings ...............................         (28,583)      (43,002)
    Repurchase of treasury stock ....................................................               -           (25)
    Principal payments under long-term debt obligations .............................            (125)         (171)
    Principal payments under capital lease obligations ..............................             (48)          (43)
                                                                                           ----------    ----------
    Cash (used in) provided by financing activities .................................            (798)          217

Change in cash and cash equivalents .................................................              32          (499)
Cash and cash equivalents at beginning of year ......................................             159           499
                                                                                           ----------    ----------
Cash and cash equivalents at end of period ..........................................      $      191    $        -
                                                                                           ==========    ==========

Supplemental cash flow information:
    Cash paid for interest ..........................................................      $      498    $      284
                                                                                           ==========    ==========
    Cash paid (refunded) for taxes ..................................................      $     (777)   $      197
                                                                                           ==========    ==========
</TABLE>

                 See notes to consolidated financial statements.

                                        4

<PAGE>

             DIVERSIFIED CORPORATE RESOURCES, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

1.   BASIS OF PRESENTATION

       The consolidated financial statements include the operations of
Diversified Corporate Resources, Inc. and its wholly owned subsidiaries (the
"Company", "our", "we", or "us"). The financial information for the three and
six months ended June 30, 2002 and 2001, is unaudited but includes all
adjustments (consisting only of normal recurring accruals) which we consider
necessary for a fair presentation of the results for the periods. The financial
information should be read in conjunction with the consolidated financial
statements for the year ended December 31, 2001, included in our Annual Report
on Form 10-K ("Form 10-K"). Operating results for the three and six months ended
June 30, 2002, are not necessarily indicative of the results that may be
expected for the entire year ending December 31, 2002.

       All inter-company accounts and transactions have been eliminated in
consolidation.

       Certain reclassifications have been made to prior year balances to
conform to the current year presentation.

2.   EARNINGS PER SHARE

       Basic earnings (loss) per share ("EPS") was determined by dividing net
income (loss) by the weighted average number of shares of common stock
outstanding during the year. Diluted EPS includes these shares plus common stock
equivalents outstanding during the year. (Common stock equivalents are excluded
if the effects of inclusion are anti-dilutive.)

Following is a reconciliation of the weighted average number of shares
outstanding during the period for basic and diluted EPS:

<TABLE>
<CAPTION>
                                                                 For the Three Months               For the Six Months Ended
                                                                    Ended June 30,                          June 30,
                                                            -------------------------------     -------------------------------
(In Thousands)                                                  2002             2001               2002               2001
                                                            -------------    --------------     --------------    -------------
<S>                                                                 <C>               <C>                <C>              <C>
Basic.....................................................          2,812             2,812              2,812            2,814
Net effect of dilutive stock options......................              -                 -                  -                -
                                                            -------------    --------------     --------------    -------------
Diluted...................................................          2,812             2,812              2,812            2,814
                                                            =============    ==============     ==============    =============

Total options and warrants outstanding....................          1,621               998              1,621              998
                                                            =============    ==============     ==============    =============
Options and warrants not considered because effects of
 inclusion would be anti-dilutive.........................          1,621               998              1,621              998
                                                            =============    ==============     ==============    =============
</TABLE>

3.   LIQUIDITY AND MANAGEMENT PLANS

       We reported a net loss for the six months ended June 30, 2002 and year
ended December 31, 2001 of $1,165,000 and $3,978,000, respectively. In addition,
at June 30, 2002 we had cash on hand of $191,000, and our current liabilities
exceeded our current assets by $2,877,000.

       Also, as of June 30, 2002, we were not in compliance with the amended
terms and conditions of our financing agreement with our primary lender. Through
February 28, 2002, we operated under the terms and conditions of the Fourth
Amendment and Forbearance Agreement. Subsequent to the expiration of this
agreement, we have at all times been in default under the terms of this
obligation, and if our primary lender were to exercise its right to declare the
obligation to be due and payable, we would not be able to pay the obligation.

       The Company has also failed to make the required acquisition agreement
payments of $1,178,000, $867,000 and $171,000 to the former owners of Mountain,
Texcel, and Datatek respectively, which were due on October 1, 2001, October 8,
2001, and January 1, 2002, respectively. The Company has entered into agreements
with the former owners of each of Mountain, Texcel and Datatek pursuant to which
our payment obligations have been deferred for varying periods of time subject
to the Company timely funding the installment obligations payable to each of
these former owners. At this time, we believe the Company is in substantial
compliance with the terms of such agreements.

                                        5

<PAGE>

             DIVERSIFIED CORPORATE RESOURCES, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
                                   (Unaudited)

3.   LIQUIDITY AND MANAGEMENT PLANS (CONTINUED)

       Pursuant to the Note Purchase Agreement entered into in January 1999, by
and between DCRI LP No. 2 ("LP No. 2"), Mr. J. Michael Moore, our Chairman and
Chief Executive Officer, Compass Bank (the "Bank") and the Company, the Company
is obligated to purchase from the Bank the promissory notes (the "Notes") issued
by LP No. 2 to the Bank. We have been notified that an entity affiliated with
Mr. Moore has entered into a purchase agreement with the Bank which upon
completion would eliminate the Company's obligation to the Bank. As of July 31,
2002 the amount payable to the Bank is approximately $270,000. The Bank
obligation is currently secured by 168,500 shares of our common stock pledged to
the Bank by LP. No. 2 and or Mr. Moore. Based on the current market price of our
common stock on July 31, 2002, the unsecured balance of the liability to the
Bank by all parties involved is approximately $161,000. While there can be no
assurance that the purchase of the Notes by this new entity will be successful,
the Company does not have funds available to purchase the Notes if required to
do so under the terms of the Note Purchase Agreement. As the Notes are
guaranteed by Mr. Moore, we believe, based upon financial information provided
by Mr. Moore, that Mr. Moore has the financial ability to satisfy the Notes.

       These factors, among others, indicate that the Company may be unable to
continue as a going concern.

       Since November, 2001, the Company has been using the services of third
party advisors to assist us in evaluating our strategic options to maximize
shareholder value and to provide assistance to us in pursuing alternative
financing options in connection with our capital requirements and acquisition
debt obligations. At the present time, the Company is negotiating a lending
agreement with a prospective lender that would replace our primary lender and
would potentially provide additional liquidity to the Company. We can provide no
assurance that we will be successful in implementing the changes necessary to
accomplish these objectives, or if we are successful, that the changes will
improve our cash flow and liquidity.

       In January 2002, we filed a claim for refundable income taxes with the
Internal Revenue Service for $777,000 resulting from the carry back of our
operating loss to 1999 and 2000. This amount was received in February 2002. In
March, 2002, the federal government enacted the "Job Creation and Workers
Assistance Act of 2002" which permits the Company to carry its 2001 net loss
back to 1996. Accordingly, on May 6, 2002, we filed an additional claim for
refundable income taxes of $942,000 resulting from the carry back of our net
loss to tax years 2000 through 1996. This amount was received in July 2002.

4.   LINE OF CREDIT AND LONG-TERM DEBT:

       On May 18, 2000, we entered into a three-year revolving line of credit
agreement with General Electric Capital Corporation ( "GE"). The agreement
permits borrowings up to $15,000,000. Upon the closing of this facility, we
borrowed $3,800,000 and repaid, in its entirety, the outstanding borrowings
under our previous revolving credit facility. The borrowings are collateralized
by our accounts receivable and other assets and are based upon a borrowing base
as defined in the agreement.

       As noted above in footnote No. 2, "Liquidity and Management Plans," as of
June 30, 2002, we were not in compliance with the amended terms and conditions
of the GE financing agreement. Since February 28, 2002, the date of expiration
of a forbearance agreement related to this obligation, we have not been in
compliance with the terms of this obligation. If GE were to exercise its right
to declare the obligation to be due and payable, we could not pay the
obligation.

       Under the terms of the agreement with GE, the outstanding loan balances
bear interest at the bank index rate, which is defined as the latest prime rate
quoted on the last business day of each calendar month plus 2.875%. Interest is
payable monthly. The weighted average interest rate on the borrowings was 7.625%
for the six months ended June 30, 2002. The interest rate at June 30, 2002 was
7.625%. As of June30, 2002, the amounts outstanding under the revolving line of
credit amounted to $3,006,000.

                                        6

<PAGE>

             DIVERSIFIED CORPORATE RESOURCES, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
                                   (Unaudited)

5.   INCOME TAXES

       The income tax provision (benefit) and the amount computed by applying
the federal statutory income tax rate to income before income taxes differs as
follows:

<TABLE>
<CAPTION>
                                                                  For the Three Months Ended          For the Six Months Ended
                                                                           June 30,                           June 30,
                                                                -------------------------------    ------------------------------
(In Thousands)                                                       2002              2001             2002             2001
                                                                --------------     ------------    -------------     ------------
<S>                                                             <C>                <C>             <C>               <C>
Tax provision at statutory rate.............................    $         (179)    $       (141)   $        (480)    $       (477)
Other.......................................................                 -               16                -               20
Increase in valuation allowance for deferred taxes                         179                -              274                -
State income taxes (benefit) net of federal income
 tax effect.................................................                 -              (29)               -              (75)
                                                                --------------     ------------    -------------     ------------
                                                                $            -     $       (154)   $        (206)    $       (532)
                                                                ==============     ============    =============     ============
</TABLE>

       As at June 30, 2002, we have a federal net operating loss carryforward of
approximately $2,385,000, which if unused, expires in 2021. In addition, we have
various state net operating loss carryforward totaling approximately $5,825,000
as of December 31, 2001, which, if unused, expire in varying amounts over the
next 20 years.

       As of June 30, 2002, because of the factors discussed in Footnote No. 3,
"Liquidity and Management Plans," we recorded a net valuation allowance of
$1,024,000 against the entire amount of the net deferred tax asset.

6.   CONTINGENCIES

       In 1996, Ditto Properties Company ("DPC") filed a suit against DCRI L.P.
No. 2 ("L.P. No. 2"), which is controlled by Mr. Moore. Mr. Moore and the
Company were also initially named as garnishees in the lawsuit (the "Ditto
Litigation") with respect to 899,200 shares (the "LP Shares") of common stock of
the Company which were the subject matter of a series of transactions in 1993
which ultimately resulted in the LP Shares being conveyed by DPC to L.P. No. 2.
Subsequent to the initial filing of the litigation by DPC, Mr. Moore and the
Company were added as defendants in such proceedings, and F. Scott Otey ("Otey")
and Jeffery Loadman ("Loadman") intervened as parties to the litigation involved
(herein referred to as the "Ditto Litigation"). Due to the recently granted
motions for summary judgment in favor of L.P. No. 2, Mr. Moore and us, neither
Otey nor Loadman remain as parties to the Ditto Litigation. There is currently
no trial date pending, but we expect that the trial date will be set for some
time in early 2003. For a more detailed discussion of the Ditto Litigation,
please see Item 1, Part II of our Form 10-Q for the first quarter ended March
31, 2002 (such disclosures are hereby incorporated by reference). In the past,
we have incurred legal fees and have funded certain of the legal fees and
expenses of Mr. Moore and/or L.P. No. 2 in connection with the Ditto Litigation.
As a result of the Company being named as a defendant in such case, in 2001 the
Company, Mr. Moore and L.P. No. 2 decided that the Company should have separate
counsel from Mr. Moore and L.P. No. 2. The Board of Directors of the Company (a)
approved the payment to Mr. Moore of up to $250,000 (herein referred to as the
"JMM Cap") to fund legal fees and expenses anticipated to be incurred by Mr.
Moore, L.P. No. 2 and No. 1 in the Ditto Litigation, (b) authorized the Company
to enter into an Indemnification Agreement with each of the officers and
directors of the Company pursuant to which these individuals will be indemnified
in connection with matters related to the Ditto Litigation; the form of these
Indemnification Agreements, including the Moore Indemnification Agreement was
filed as Exhibit 10.2 to our Form 10-Q for the first quarter ended March 31,
2001 (such exhibit is hereby incorporated by reference), and (c) approved an
amendment to the Bylaws of the Company to require us to indemnify its present
and former officers and directors to the full extent permitted by the laws of
the state of Texas, in connection with any litigation in which such persons
became a party subsequent to March 29, 2001 and in which such persons are
involved in connection with performing their duties as an officer or director of
the Company. July, 2002, the Board of Directors of the Company determined that
approximately $101,000 of legal services rendered by counsel for Mr. Moore and
L.P. No. 2 benefited the Company, directly or indirectly, and the amounts
previously allocated to the JMM Cap were reduced by such amount. Through June
30, 2002, the Company has expended approximately $165,000(in connection with the
JMM Cap) on behalf of Mr. Moore in the defense of the Ditto matter. No amount of
loss reserves has been established by the Company in connection with the Ditto
Litigation because management of the Company does not believe that the amount of
any damage claims against the Company in connection with the Ditto Litigation
should adversely impact our financial position or results of operation.

                                        7

<PAGE>

6.   CONTINGENCIES - CONTINUED

       We are also involved in certain other litigation and disputes not noted.
With respect to these matters, management believes the claims against us are
without merit and has concluded that the ultimate resolution of such will not
have a material effect on our consolidated financial position or results of
operations.

                                        8

<PAGE>

MANAGEMENT'S  DISCUSSION  AND  ANALYSIS OF  FINANCIAL  CONDITION  AND RESULTS OF
OPERATIONS

COMPARISON OF THREE MONTHS ENDED JUNE 30, 2002 AND 2001

Service Revenue Summary:

<TABLE>
<CAPTION>
                                                                                For the Three Months Ended           Increase /
(US $ in millions)                                                                       June 30,                    (decrease)
                                                                             ---------------------------------    ----------------
                                                                                  2002               2001          2002 vs. 2001
                                                                             --------------     --------------    ----------------
<S>                                                                          <C>                <C>               <C>
Permanent placement...................................................       $          3.3     $          5.3    $           (2.0)
Contract placement and  specialty services............................                 10.1               14.5                (4.4)
                                                                             --------------     --------------    ----------------
Net service revenue...................................................       $         13.4     $         19.8    $           (6.4)
                                                                             ==============     ==============    ================
</TABLE>

       For the quarter ended June 30, 2002, net service revenue decreased $6.4
million, or 33%, to $13.4 million as compared to $19.8 million for the previous
year period. As noted in the table above, revenue derived from contract and
specialty placements decreased $4.4 million or 30%, and permanent placement
revenue decreased $2.0 million, or 39% as a result of the continuing effect of
hiring freezes and staff reductions implemented by our customers due to the
recession in the economy. We continue to experience a change in our business mix
as revenue derived from contract placement and specialty services comprised 76%
of total revenue for the quarter ended June 30, 2002, as compared to 73% of
total revenue in the previous year period.

       For the quarter ended June 30, 2002, our total gross margin decreased by
$3.3 million, or 39%, to $5.1 million as compared to $8.4 million in the
previous year period. The decline in permanent placement revenues accounted for
$2.0 million, or 61% of the absolute decrease in total gross margin. The decline
in revenue derived from contract and specialty placements accounted for the
balance of the absolute decrease in total gross margin. Overall gross margin, as
a percentage of net service revenue declined to 38%, as compared with 42% in the
previous year period, partially due to the change in business mix noted above.
As a percentage of contract and specialty placement revenue, the gross margin
derived from contract and specialty placements for the quarter ended June 30,
2002 was 18%, down 3% as compared to the previous year period.

       Operating expenses amounted to $5.3 million for the quarter ended June
30, 2002; a decrease of $3.3 million, or 38%, as compared to the previous year
period. Included in operating expenses for the quarter ended June 30, 2002 was
$2.4 million of variable sales expenses, which declined $1.9 million as compared
to the previous year period due primarily to the reduction in commissions
associated with the decline in revenue from permanent placements. In addition,
for the quarter ended June 30, 2002, general and administrative expenses
amounted to $2.6 million, a decline of $1.3 million, or 33%, as compared to the
previous year period. Business initiatives implemented throughout 2001 and 2002
including a review of our business processes, our organizational structure and
the level of our permanent workforce, accounted for the decrease in general and
administrative expenses. Depreciation and amortization expense amounted to $0.3
million as compared to $0.5 million in the previous year period. The decrease is
due to the adoption of the Financial Accounting Standards Board, SFAS 142,
Goodwill and Other Intangible Assets, which provides that certain goodwill and
intangibles no longer be amortized. As part of the adoption of SFAS 142, during
the fourth quarter of 2002, the Company intends to complete its evaluation of
the carrying value of its intangible assets and will record the adjustment, if
any required in the fourth quarter. Also, during the quarter ended June 30,
2002,the Company recorded a charge for restructuring and severance of $0.1
million.

       For the quarter ended June 30, 2002, net interest expense was $0.3
million, up slightly as compared to the previous year period due to the increase
in the interest rate being charged to the Company by its lender while the
Company is in default of its lending agreement.

       For the quarter ended June 30, 2002, we reported a net loss before taxes
of $0.5 million, as compared to a net loss before taxes of $0.4 million in the
previous year period.

       Because of a valuation allowance provided for deferred income taxes, we
reported no income tax benefit in the quarter ended June 30, 2002 compared to an
income tax benefit of $0.1 million in the previous year period. In addition, at
June 30, 2002, the Company has a net operating loss carry forward of $2.4
million which it will use to offset future periods taxable income.

       As a result of the items discussed above, we reported a $0.5 million net
loss for the quarter ended June 30, 2002 as compared to a net loss of $0.3
million for the previous year period.

                                        9

<PAGE>

COMPARISON OF SIX MONTHS ENDED JUNE 30, 2002 AND 2001

Service Revenue Summary:

<TABLE>
<CAPTION>
                                                                                 For the Six Months Ended            Increase /
(US $ in millions)                                                                       June 30,                    (decrease)
                                                                             ---------------------------------    ----------------
                                                                                 2002               2001            2002 vs. 2001
                                                                             --------------     --------------    ----------------
<S>                                                                          <C>                <C>               <C>
Permanent placement...................................................       $          6.1     $         11.7    $           (5.6)
Contract placement and  specialty services............................                 20.0               28.0                (8.0)
                                                                             --------------     --------------    ----------------
Net service revenue...................................................       $         26.1     $         39.7    $          (13.6)
                                                                             ==============     ==============    ================
</TABLE>

       For the six months ended June 30, 2002, net service revenue decreased
$13.6 million, or 34%, to $26.1 million as compared to $39.7 million for the
previous year period. As noted in the table above, revenue derived from contract
and specialty placements decreased $8.0 million or 29%, and permanent placement
revenue decreased $5.6 million, or 48% as a result of the continuing effect of
hiring freezes and staff reductions implemented by our customers due to the
recession in the economy. We continue to experience a change in our business mix
as revenue derived from contract placement and specialty services comprised 76%
of total revenue for the six months ended June 30, 2002, as compared to 70% of
total revenue in the previous year period.

       For the six months ended June 30, 2002, our total gross margin decreased
by $7.7 million, or 44%, to $9.8 million as compared to $17.5 million in the
previous year period. The decline in permanent placement revenues accounted for
$5.6 million, or 72% of the absolute decrease in total gross margin. The decline
in revenue derived from contract and specialty placements accounted for the
balance of the absolute decrease in total gross margin. Overall gross margin, as
a percentage of net service revenue declined to 37%, as compared with 44% in the
previous year period, primarily due to the change in business mix noted above.
As a percentage of contract and specialty placement revenue, the gross margin
derived from contract and specialty placements for the six months ended June 30,
2002 was 18%, down 3% as compared to the previous year period.

       Operating expenses amounted to $10.6 million for the six months ended
June 30, 2002; a decrease of $7.9 million, or 43%, as compared to the previous
year period. Included in operating expenses for the six months ended June 30,
2002 was $4.8 million of variable sales expenses, which declined $4.4 million as
compared to the previous year period due primarily to the reduction in
commissions associated with the decline in revenue from permanent placements. In
addition, for the six months ended June 30, 2002, general and administrative
expenses amounted to $5.1 million, a decline of $2.8 million, or 35%, as
compared to the previous year period. Business initiatives implemented
throughout 2001 and 2002 including a review of our business processes, our
organizational structure and the level of our permanent workforce, accounted for
the decrease in general and administrative expenses. Depreciation and
amortization expense amounted to $0.6 million as compared to $1.0 million in the
previous year period. The decrease is due to the adoption of the Financial
Accounting Standards Board, SFAS 142, Goodwill and Other Intangible Assets,
which provides that certain goodwill and intangibles no longer be amortized. As
part of the adoption of SFAS 142, during the fourth quarter of 2002, the Company
intends to complete its evaluation of the carrying value of its intangible
assets and will record the adjustment, if any required in the fourth quarter.
Also, during the six months ended June 30, 2002, the Company recorded a charge
for restructuring and severance of $0.1 million as compared to $0.4 million in
the previous year period, of which approximately $0.3 million was related to the
resignation of our former president.

       For the six months ended June 30, 2002, net interest expense was $0.5
million, up $0.2 million as compared to the previous year period due to the
increase in the interest rate being charged to the Company by its lender while
the Company is in default of its lending agreement.

       For the six months ended June 30, 2002, we reported a net loss before
taxes of $1.4 million, the same as in the previous year period.

       Because of a valuation allowance provided for deferred income taxes, we
reported an income tax benefit in the six months ended June 30, 2002 of only
$0.2 million as compared to an income tax benefit of $0.5 million in the
previous year period. In addition, at June 30, 2002, the Company has a net
operating loss carry forward of $2.4 million which it will use to offset future
periods taxable income.

       As a result of the items discussed above, we reported a $1.2 million net
loss for the six months ended June 30, 2002 as compared to a net loss of $0.8
million for the previous year period.

                                       10

<PAGE>

LIQUIDITY AND CAPITAL RESOURCES

       For the six months ended June 30, 2002, cash provided by operating
activities approximated $0.8 million, principally from the receipt of our
initial 2001 Federal Income Tax refund and a reduction in accounts receivable.
Most of the cash generated was used to reduce our debt obligations.

       As of June 30, 2002, we were not in compliance with the amended terms and
conditions of our financing agreement with GE, our primary lender. Through
February 28, 2002, we operated under the terms and conditions of the Fourth
Amendment and Forbearance Agreement with GE. Subsequent to the expiration of
this agreement, we have been in default of this debt obligation at all times,
and we would not be able to pay this obligation if GE were to elect to exercise
its right to declare the obligation to be due and payable. .

       The Company has also failed to make the required acquisition agreement
payments of $1,178,000, $867,000 and $171,000 to the former owners of Mountain,
Texcel, and Datatek respectively, which were due on October 1, 2001, October 8,
2001, and January 1, 2002, respectively. The Company has entered into agreements
with the former owners of each of Mountain, Texcel and Datatek pursuant to which
our payment obligations have been deferred for varying periods of time subject
to the Company timely funding the installment obligations payable to each of
these former owners. At this time, we believe the Company is in substantial
compliance with the terms of such agreements.

Pursuant to the Note Purchase Agreement entered into in January 1999, by and
between DCRI LP No. 2 ("LP No. 2"), Mr. J. Michael Moore, our Chairman and Chief
Executive Officer, Compass Bank (the "Bank") and the Company, the Company is
obligated topurchase from the Bank the promissory notes (the "Notes") issued by
LP No. 2 to the Bank. In March 2002, the Company was notified that an entity
affiliated with Mr. Moore has entered into a purchase agreement with the Bank
which upon completion would eliminate the Company's obligation to the Bank. As
of July 31, 2002 the amount payable to the Bank is approximately $270,000. The
Bank obligation is currently secured by 168,500 shares of our common stock
pledged to the Bank by LP. No. 2 and or Mr. Moore. Based on the current market
price of our common stock on July 31, 2002, the unsecured balance of the
liability to the Bank by all parties involved is approximately $161,000. While
there can be no assurance that the purchase of the Notes by this new entity will
be successful, the Company does not have funds available to purchase the Notes
if we became required to do so under the terms of the Note Purchase Agreement.
As the Notes are guaranteed by Mr. Moore, we believe, based upon financial
information provided by Mr. Moore, that Mr. Moore has the financial ability to
satisfy the Notes.

       We have reported a net loss for the six months ended June 30, 2002 and
for the year ended December 31, 2001 of $1.2 million and $4.0 million,
respectively. In addition, given the current state of the economy and the
cyclical nature of our business, we may continue to report losses for the
foreseeable future.

       These factors, among others, indicate that the Company may be unable to
continue as a going concern.

       Since November, 2001, we have been using the services of third party
advisors to assist us in evaluating our strategic options to maximize
shareholder value and to provide ongoing assistance in pursuing those options.
Additionally, we are evaluating various financing and restructuring strategies
to be utilized to meet the working capital requirements of the Company as well
as satisfy our acquisition obligations. At the present time, the Company is
negotiating a lending agreement with a prospective lender that would replace GE
and would potentially provide additional liquidity to the Company. We can
provide no assurance that we will be successful in implementing the changes
necessary to accomplish these objectives, or if we are successful, that the
changes will improve our cash flow and liquidity.

       In January 2002, we filed a claim for refundable income taxes with the
Internal Revenue Service for $777,000 resulting from the carry back of our
operating loss to 1999 and 2000. This amount was received in February 2002. In
March, 2002, the federal government enacted the "Job Creation and Workers
Assistance Act of 2002" which permits the Company to carry its 2001 net loss
back to 1996. Accordingly, on May 6, 2002, we filed an additional claim for
refundable income taxes of $942,000 resulting from the carry back of our net
loss to tax years 2000 through 1996. This amount was received in July 2002.

       Inflation has not had a significant effect on our operating results.

                                       11

<PAGE>

RECENT ACCOUNTING PRONOUNCEMENTS

In September 2001, the Financial Accounting Standards Board approved SFAS No.
141, "Business Combinations", and SFAS No. 142, "Goodwill and Other Intangible
Assets. SFAS No 141 requires that the purchase method of accounting be used for
all business combinations initiated after September 30, 2001. SFAS No. 142 will
be effective for fiscal years beginning after December 15, 2001 and will require
1) intangible assets (as defined in SFAS 141) to be reclassified into goodwill,
2) the ceasing amortization of goodwill, and 3) the testing of goodwill for
impairment for transaction and at interim periods (if an event or circumstance
would result in an impairment). We adopted SFAS 142 on January 1, 2002. Due to
cost constraints, the Company has not completed the transitional goodwill
impairment test (which consists of determining and disclosing if the carry value
of a reporting unit, including assigned goodwill, exceeds the fair value of that
reporting unit), as required by SFAS 142 to be completed by June 30, 2002.
However, because of the Company's financial position at the initial adoption
date (January 1, 2002), it is at least reasonably possible that goodwill has
been impaired. The Company plans to perform the transitional goodwill impairment
test, as well as the initial annual goodwill impairment test in the fourth
quarter of 2002.

ACTUAL RESULTS MAY DIFFER FROM FORWARD-LOOKING STATEMENTS

       Statements in this Quarterly Report on Form 10-Q that are not historical
facts, including, but not limited to, projections or expectations of future
financial or economic performance of the Company, and statements of our plans
and objectives for future operations are "forward-looking" statements within the
meaning of Section 27A of the Securities Act of 1993, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended ("the Exchange act") and
involve a number of risks and uncertainties. No assurance can be given that
actual results or events will not differ materially from those projected,
estimated, assumed or anticipated in any such "forward-looking" statements.
Important factors (the "Cautionary Disclosures") that could result in such
differences include: general economic conditions in our markets, including
inflation, recession, interest rates and other economic factors; the
availability of qualified personnel; our ability to successfully integrate
acquisitions or joint ventures with our operations (including the ability to
successfully integrate businesses that may be diverse as to their type,
geographic area or customer base); the level of competition experienced by us;
our ability to implement our business strategies and to manage our growth; the
level of development revenues and expenses; the level of litigation expenses;
our ability to effectively implement an e-commerce strategy; those factors
identified in our Prospectus dated September 30, 1997 as risk factors; and other
factors that affect businesses generally. Subsequent written and oral
"forward-looking" statements attributable to us, or persons acting on our
behalf, are expressly qualified by the Cautionary Disclosures.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

       We are exposed to market risks from fluctuations in interest rates and
the effects of those fluctuations on the earnings of its cash equivalent
short-term investments; as well as interest expense on line of credit
borrowings. Assuming interest rates increased by 200 basis points (2%) above the
interest rate at June 30, 2002, on an annualized basis interest expense would
increase by approximately $0.1 million based on the outstanding line of credit
borrowings of $3.0 million at June 30, 2002.

                                       12

<PAGE>

                           PART II: OTHER INFORMATION
             DIVERSIFIED CORPORATE RESOURCES, INC. AND SUBSIDIARIES

ITEM 1.  LEGAL PROCEEDINGS

       In 1996, Ditto Properties Company ("DPC") file suit against DCRI L.P. No.
2 ("L.P. No. 2"), which is controlled by Mr. J. Michael Moore ("Mr. Moore"), our
Chairman and Chief Executive Officer. Mr. Moore and the Company were also
initially named as garnishees in the lawsuit (the "Ditto Litigation") with
respect to 899,200 shares (the " LP Shares") of common stock of the Company
which were the subject matter of a series of transactions in 1993 which
ultimately resulted in the LP Shares being conveyed by DPC to L.P. No. 2.
Subsequent to the initial filing of the litigation by DPC, Mr. Moore and the
Company were added as defendants in such proceedings, and F. Scott Otey ("Otey")
and Jeffery Loadman ("Loadman") intervened as parties to the litigation involved
(herein referred to as the "Ditto Litigation"). Due to the recently granted
motions for summary judgement in favor of LP No.2, Mr. Moore and us, neither
Otey nor Loadman remain as parties to the Ditto Litigation. For more information
regarding the Ditto Litigation, please see Item 1, Part II of our Form 10-Q for
the first quarter ended March 31, 2002 (such disclosures are hereby incorporated
by reference.

       For more information regarding the legal fees paid by the Company, on its
behalf and on behalf of LP No. 2 and Mr. Moore, please see footnote 6,
Contingencies, to our financial statements included as part of this Form 10=Q
(such disclosures are hereby incorporated by reference).

       We are also involved in certain other litigation and disputes not noted.
With respect to these matters, management believes the claims against us are
without merit and has concluded that the ultimate resolution of such will not
have a material effect on our consolidated financial position or results of
operations.

ITEM 2.  CHANGES IN SECURITIES

Not Applicable.

ITEM 3.  DEFAULTS ON SENIOR SECURITIES

Not Applicable.

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

Not Applicable.

ITEM 5.  OTHER INFORMATION

In June, 2002, Deborah A. Farrington resigned as a member of the Board of
Directors of the Company (the "Board"), and Anthony G. Schmeck resigned as an
employee of the Company and as the Secretary, Treasurer and Chief Financial
Officer of the Company.

In July, 2002, Mark E. Cline was elected as a member of the Board by vote of the
other members of the Board.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

A.       Exhibits

         10.1 Director Option Agreement 2002 Re: Cline.
         10.2 Indemnification Agreement dated as of July 9, 2002, between the
              Company and Mark E. Cline.
         99   Certification of officers

B.       Reports on Form 8-K

         Not Applicable.

                                       13

<PAGE>

                                   SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                      DIVERSIFIED CORPORATE RESOURCES, INC.
                                   Registrant


Date: August 14, 2002              By:              /s/ J. Michael Moore
                                                    --------------------
                                                      J. Michael Moore
                                               Chairman of the Board and Chief
                                                      Executive Officer
                                                (Principal Executive Officer)

Date: August 14, 2002              By:             /s/ James E. Filarski
                                                   ---------------------
                                                     James E. Filarski
                                                   President and Director
                                               (Principal Financial Officer)

                                       14

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.1
<SEQUENCE>3
<FILENAME>dex101.txt
<DESCRIPTION>DIRECTOR OPTION AGREEMENT
<TEXT>
<PAGE>

                                                                    EXHIBIT 10.1

                    DIRECTOR OPTION AGREEMENT 2002 RE: CLINE

     THIS AGREEMENT is by and between Diversified Corporate Resources, Inc., a
Texas corporation (herein called the "Company"), and Mark E. Cline (herein
called "Optionee").

     WHEREAS, the Optionee has recently been elected as a director of the
Company; and

     WHEREAS, the Company considers it desirable and in its best interests that
Optionee be given an opportunity to acquire an equity interest in the Company in
the form of an option to purchase shares of common stock, par value $.10 per
share (the "Common Stock"), of the Company; and

     WHEREAS, the option covered by this Agreement is issued pursuant to the
Company's Non-Employee Director 1998 Stock Option Plan (the "Plan").

     NOW THEREFORE, in consideration of the premises, it is agreed as follows:

     1.  GRANT OF OPTION. The Company shall and does hereby grant to Optionee
the right, privilege and option to purchase 15,000 shares (the "Shares") of
Common Stock for the price per share in the manner and subject to the conditions
hereinafter provided.

     2.  TIME OF EXERCISE, VESTING AND EXERCISE PRICE OF OPTION. Subject to the
terms hereof, the option herein granted must be exercised in whole or in part at
any time or times prior to July 9, 2012. Subject to the terms hereof, the option
herein granted shall become exercisable (i.e. shall vest) as to 3,750 shares of
Common Stock on the last day of each calendar quarter ended on the last day of
March, June, September and December commencing with the quarter ended September
30, 2002 and ending with the quarter ended June 30, 2003. The exercise price of
the option shall be $ 0.79 per share, subject to adjustment as herein provided.
The parties hereto acknowledge and agree that (a), except as set forth below,
such vesting is contingent upon the Optionee being a director of the Company as
of any applicable vesting date, regardless of the reason that the Optionee may
cease to be a director of the Company, and (b) subject to the restrictions
herein as to when the option is exercisable,

                                        1

<PAGE>

the Optionee shall have the right to select the portion of the option if and
when the Optionee exercises any of this option.

         If a "Special Change in Control" (as herein defined) occurs, and
whether or not Optionee continues as a director of the Company following the
Effective Date (as herein defined) of such Special Change in Control, then,
notwithstanding any provision of this Agreement to the contrary, and without
limitation, the Optionee will be fully vested with respect to all of the options
then covered by this Agreement; such options will be exercisable at the exercise
price set forth in the preceding paragraph as may be adjusted pursuant to
Section 5(a) hereof, and will terminate as herein provided.

     3.  METHOD OF EXERCISE.

         a. In order to exercise this option, in whole or in part, the Optionee
shall deliver to the Company at its principal place of business, or at such
other offices as shall be designated by the Company (i) a written notice of
Optionee's election to exercise this option, which notice shall specify the
number of shares of Common Stock to be purchased pursuant to such exercise and
(ii) either (A) cash or a check, payable to the order of the Company, equal to
the option price, (B) notice that the exercise price is satisfied by reduction
of the number of shares to be received by the Optionee upon exercise of this
option as provided in Section 3(b) below, with the amount of such reduction
specified in such notice, (C) shares of Common Stock having a fair market value
equal to the option price, or (D) a combination of the above; the option price
shall be the exercise price multiplied by the number of shares of Common Stock
to be purchased pursuant to the exercise involved. The Company shall undertake
to make prompt delivery of the stock certificate(s) evidencing such part of the
Shares, provided that if any law or regulation requires the Company to take any
action with respect to the Shares specified in such notice before the issuance
thereof, then the date of delivery of such Shares shall be extended for the
period necessary to take such action.

         b. At the election of the Optionee, the Optionee may exercise this
option without a cash payment of the exercise price by designating that the
number of shares of

                                        2

<PAGE>

Common Stock issuable to Optionee upon such exercise shall be reduced by the
number of shares having a fair market value equal to the amount of the option
price for such exercise. In such instance, no cash or other consideration will
be paid by the Optionee in connection with such exercise and no commission or
other remuneration will be paid or given by the Optionee or the Company in
connection with such exercise.

         c. For this purpose, the fair market value of the shares of Common
Stock with respect to the exercise of an option shall be determined as of the
last business day prior to such exercise of the option.

     4.  TERMINATION OF OPTION. To the extent not theretofore exercised, the
option herein granted shall terminate on the earlier of (a) July 9, 2012, or (b)
six (6) months from the date on which Optionee ceases to be a director of the
Company for any reason other than death or disability of the Optionee, or (c)
one (1) year from the date on which Optionee ceases to be a director of the
Company if such event is due to the death or disability of the Optionee.

     5.  RECLASSIFICATION, CONSOLIDATION, MERGER AND SPECIAL CHANGE IN CONTROL.

         a. If and to the extent that the number of shares of Common Stock of
the Company shall be increased or reduced by change in par value, split-up,
reclassification, distribution of a dividend payable in stock, or the like, the
number of shares of Common Stock subject to the option herein granted, and the
option price therefor, shall be appropriately adjusted.

         b. For all purposes hereof "Special Change in Control" means (i) any
person or entity, including a "group" as defined in Section 13(d)(3) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), other than the
Company, a majority-owned subsidiary thereof, J. Michael Moore ("Moore") or any
affiliate of Moore, becomes the beneficial owner (as defined pursuant to
Schedule 13(d) under the Exchange Act) of the Company's securities having
twenty-five percent (25%) or more of the combined voting power of the then
outstanding securities of the Company that may be cast for the election of
directors of the Company, or (ii)

                                        3

<PAGE>

as the result of, or in connection with, any cash tender or exchange offer,
merger or other business combination, sales of assets or contested election, or
any combination of the foregoing transactions, less than a majority of the
combined voting power of the then outstanding securities of the Company or any
successor corporation or entity entitled to vote generally in the election of
the directors of the Company or such other corporation or entity after such
transaction are beneficially owned (as defined pursuant to Section 13(d) of the
Exchange Act) in the aggregate by the holders of the Company's securities
entitled to vote generally in the election of directors of the Company
immediately prior to such transaction, or (iii) during any period of two (2)
consecutive years, individuals who at the beginning of any such period
constitute the Board of Directors of the Company cease for any reason to
constitute at least a majority thereof, unless the election, or the nomination
for election by the Company's shareholders, of each director of the Company
first elected during such period was approved by a vote of at least two- thirds
of the directors of the Company then still in office who were directors of the
Company at the beginning of any such period. The "Effective Date" of such
Special Change in Control shall be the earlier of the date on which an event
described in (i), (ii), or (iii) occurs, or (iv) if earlier, the date of the
occurrence of the approval by the Company's shareholders of an agreement
involving the Company, the consummation of which would result in an event
described in (i), (ii), or (iii), hereof, or (v) if earlier, the date of
occurrence of the acquisition of beneficial ownership (as defined pursuant to
Section 13(d) of the Exchange Act), directly or indirectly, by any entity,
person or group (other than the Company, majority-owned subsidiary of the
Company, Moore or any affiliate of Moore) of securities of the Company
representing five percent (5%) or more of the combined voting power of the
Company's outstanding securities; provided, however, that the events described
in (iv) and (v) will be considered the Effective Date of a Special Change in
Control if they are followed within six (6) months by an event described in (i),
(ii) or (iii).

     6.  RIGHTS PRIOR TO EXERCISE OF OPTION. The option herein granted is
nontransferable by Optionee except as herein otherwise provided. This option may
be pledged

                                        4

<PAGE>

for the sole purpose of exercising stock options granted to the Optionee by the
Company to purchase shares of Common Stock of the Company. Unless the Optionee
is deceased or disabled, with the determination of the existence or nonexistence
of such disability such disability left to the reasonable discretion of the
Board of Directors of the Company, or pledged as permitted hereunder, the option
herein may only be exercised by the Optionee. If the Optionee dies during the
period of time that all or any of part of this option is exercisable, the
Optionee's executor or legal representative may exercise all or any part of this
option at any time or times during the period of time in which the option herein
is granted. If the Optionee is disabled, as aforesaid, the Optionee's legal
representative shall have the right to exercise all or any part of this option
at any time or times during the period of time in which the Optionee is disabled
and the option herein granted has not expired by the terms of this Agreement.
With respect to the shares of stock which are subject to the option herein
granted, Optionee shall have no rights as a stockholder until payment of the
option price for the shares being purchased by exercise of the option herein
granted, and the issuance of the shares involved.

     7.  BINDING EFFECT. Without limitation, the option herein granted is issued
under and granted in all respects subject to all of the provisions of the Plan,
all of which provisions of the Plan are incorporated herein by reference.
Provided, however, without limitation, that (a) the provisions of this Agreement
will determine the agreement of the parties with respect to each matter set
forth herein to the extent the provisions of the Agreement do not require a
result that is inconsistent with the Plan, (b) the parties expressly agree that
no inference shall be drawn with respect to the intent of the parties based on
the inclusion of, reference to, some provisions of the Plan in this Agreement,
and the omission of such inclusion or reference with respect to other provisions
of the Plan in this Agreement, and (c) this Agreement shall be binding upon and
inure to the benefit of the Company, and its representatives, successors and
assigns, and the Optionee and his or her legal representative (to the extent
expressly permitted).

     8.  MULTIPLE ORIGINALS. This Agreement may be executed in multiple
counterparts with each counterpart constituting an original for all purposes.

                                        5

<PAGE>

     9.  TOTAL AGREEMENT. This Agreement may not be amended or revised except by
a written instrument executed by both of the parties to this Agreement.

     10. BOARD AUTHORITY. Any questions concerning the interpretation of
Agreement, including the incorporated provisions of the Plan, shall be
determined by the Board of Directors of the Company in its reasonable
discretion.

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed the ____ day of July, 2002.

                                    DIVERSIFIED CORPORATE RESOURCES, INC.


                                    By:
                                        ----------------------------------------
                                    Name:
                                           -------------------------------------
                                    Title:
                                           -------------------------------------


                                    OPTIONEE:


                                    --------------------------------------------
                                    Mark E. Cline

                                        6

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.2
<SEQUENCE>4
<FILENAME>dex102.txt
<DESCRIPTION>INDEMNIFICATION AGREEMENT
<TEXT>
<PAGE>

                                                                    EXHIBIT 10.2

                            INDEMNIFICATION AGREEMENT

     THIS INDEMNIFICATION AGREEMENT (this "Agreement"), is between Diversified
Corporate Resources, Inc., a Texas corporation (the "Company") and Mark E. Cline
(the "Indemnitee").

                              W I T N E S S E T H:
                              - - - - - - - - - -

     WHEREAS, the Indemnitee is an officer and/or director of the Company; and

     WHEREAS, the Company is a party to certain litigation proceedings (the
"Lawsuit") which (a) involves Donald R. Ditto, Sr. and Ditto Properties Company
(collectively referred to herein as "Ditto"), the Company and others, and (b) is
pending before the 290th Judicial District Court of Dallas County, Texas (Cause
No. 97-02079-M); and

     WHEREAS, the Board of Directors of the Company have determined that it is
in the best interests of the Company to indemnify the officers and directors of
the Company in connection with the Lawsuit and related matters; and

     WHEREAS, the purpose of this Agreement is to document the Company's
commitment to indemnify the Indemnitee to the fullest extent permitted by law;
and

     WHEREAS, the Company is willing to indemnify Indemnitee in order to retain
the services of Indemnitee.

     NOW, THEREFORE, for and in consideration of the mutual premises and
covenants contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Company and
Indemnitee hereby agree as follows:

1.   Certain Definitions.

         (a) Claim: any threatened, pending, or completed action, suit, or
proceeding or any inquiry or investigation (including discovery), whether
conducted by the Company or any other party, directly or indirectly related to
the Lawsuit, the fact and matters involved in the Lawsuit, and the actions and
inaction's of the Company and/or the Board of Directors of the Company in
connection with or related to the manner in which the Company (i) has pursued
its claims for damages against Ditto, and Ditto's claims, if any, for damages
against the Company, and (ii) has funded the payment of legal fees, expenses,
interest and bank debt payments by J. Michael Moore ("Moore") and DCRI LP NO 2,
Inc., a Texas corporation, directly or indirectly related to the Lawsuit and
other disputes involving Moore and Ditto.

         (b) Expenses: all costs, expenses (including attorneys' and expert
witnesses' fees), judgments, fines, penalties, amounts paid in settlement and
obligations (including all interest, assessments, and other charges paid or
payable in connection with or in respect of such expenses, judgments, fines,
penalties, or amounts paid in settlement) paid or incurred in connection with
investigating, defending (including affirmative defenses and counterclaims),
settling, being a witness in, or participating in (including on appeal), or
preparing to defend, be a witness in, or participate in, any Claim relating to
any lndenmifiable Event.

                                        1

<PAGE>

         (c) Indemnifiable Event: any event or occurrence related to, or arising
out of, the fact that Indemnitee is or was a director, officer, employee,
trustee, or agent of the Company, or is or was serving at the request of the
Company as a director, officer, employee, trustee, or agent of mother
corporation, partnership, joint venture, employee benefit plan, trust, or other
enterprise, or by reason of any thing done or not done by Indemnitee in any such
capacity.

2.   Basic Indemnification and Expense Reimbursement Arrangement.

         (a) In the event Indemnitee was, is, or becomes a party to or witness
or other participant in, or is threatened to be made a party to or witness or
other participant in, a Claim by reason of (or arising in part out of) an
Indemnifiable Event, the Company shall indemnify Indemnitee to the fullest
extent permitted by law as soon as practicable but in any event no later than
thirty (30) days after written demand is presented to the Company, against any
and all Expenses of or with respect to that Claim.

         (b) If so requested by Indemnitee, the Company shall pay any and all
Expenses incurred by Indemnitee (or, if applicable, reimburse Indemnitee for any
and all Expenses incurred by Indemnitee and previously paid by Indeminitee)
within ten days after such request (an "Expense Advance"). However, such request
must contain (i) a statement reasonably detailing the Expenses for which
advancement is requested, and (ii) an undertaking by Indemnitee, or on
Indemnitee's behalf, to repay such advancement of Expenses if it is ultimately
determined by a final judicial decision from which there is no further right to
appeal that Indemnitee is not entitled to be indemnified for such expenses under
this Agreement or otherwise. The Company shall be obligated to make or pay an
Expense Advance in advance of the final disposition or conclusion of any Claim
in accordance with this Section 2(b). Any dispute as to the reasonableness of
any Expense shall not delay an Expense Advance by the Company, and the Company
agrees that any such dispute shall be resolved only upon the disposition or
conclusion of the underlying Claim against the Indemnitee.

3.   Indemnification for Additional Expenses. The Company shall indemnify
Indemnitee against any and all costs and expenses (including attorneys' and
expert witnesses' fees), and, if requested by Indemnitee, shall (within ten (10)
business days of that request) advance or reimburse those costs and expenses to
Indemnitee, that are incurred by Indemnitee in connection with (a) the
negotiation and execution of this Agreement, which shall include, without
limitation, the review of the Company's Articles of Incorporation, Bylaws and
the directors' and officers' liability insurance policies and (b) any claim,
asserted against or action brought by Indemnitee for (i) indemnification or
advance payment of Expenses by the Company under this Agreement or any other
agreement or provision of the Company's Articles of Incorporation or Bylaws now
or hereafter in effect relating to Claims for Indemnifiable Events, or (ii)
recovery under any directors' and officers' liability insurance policies
maintained by the Company; provided, however, that Indemnitee shall repay such
advancement of costs and expenses if it is ultimately determined by a final
judicial decision from which there is no further right to appeal that Indemnitee
is not entitled to be indemnified for such costs or expenses under this
Agreement or otherwise.

4.   Partial Indemnity. If Indemnitee is entitled under any provision of this
Agreement to indemnification by the Company for some or a portion of the
Expenses but not, however, for all of the total amount thereof, the Company
shall nevertheless indemnify Indemnitee for the portion thereof to which
Indemnitee is entitled. Moreover, notwithstanding any other provision of this
Agreement, to the extent that Indemnitee has been successful on the merits or
otherwise in defense of any or all claims relating in whole or in part to an
Indemnifiable Event or in defense of

                                        2

<PAGE>

any issue or matter herein, including dismissal without prejudice, Indemnitee
shall be indemnified against all Expenses incurred in connection therewith.

5.   Contribution.

     (a) Contribution Payment. To the extent the indemnification provided for
under any provision of this Agreement is determined (in the manner hereinabove
provided) not to be permitted under applicable law, then in the event Indemnitee
was, is, or becomes a party to or witness or other participant in, or is
threatened to be made a party to or witness or other participant in, a Claim by
reason of (or arising in part out of) an Indemnifiable Event, to the extent
contribution with respect to such Indemnifiable Event is permitted under
applicable law, the Company, in lieu of indemnifying Indemnitee, shall
contribute to the amount of any and all Expenses assessed against or incurred or
paid by Indemnitee on account of or with respect to that Claim for which such
contribution is permitted ("Contribution Amounts"), in such proportion as is
appropriate to reflect the relative fault with respect to the Indemnifiable
Event giving rise to the Contribution Amounts of Indemnitee, on the one hand,
and of the Company and any and all other parties (including officers and
directors of the Company other than Indemnitee) who may be at fault with respect
to such Idemnifiable Event (collectively, such parties, including the Company,
are herein referred to as the "Third Parties") on the other hand.

     (b) Relative Fault. The relative fault of the Third Parties and the
Indemnitee shall be determined (i) by reference to the relative fault of
lndemnitee as determined by the court or other governmental agency assessing the
Contribution Amounts or (ii) to the extent such court or other governmental
agency does not apportion relative fault, by a majority of the disinterested
members of the Company's Board of Directors after giving effect to, among other
things, the relative intent, knowledge, access to information, and opportunity
to prevent or correct the applicable Indemnifiable Event and other relevant
equitable considerations of each party. The Company and Indemnitee agree that it
would not be just and equitable if contribution pursuant to this Section 5(b)
were determined by pro rata allocation or by any other method of allocation
which does take account of the equitable considerations referred to in this
Section 5(b).

6.   Presumption. Indemnitee shall be presumed to be entitled to indemnification
for any act or omission covered in this Agreement. The burden of proof of
establishing that Indemnitee is not entitled to indemnification because of the
failure to fulfill any legal requirement shall be on the Company.

7.   Non-exclusivity. The rights of lndemnitee hereunder shall be in addition to
any other rights Indemnitee may have under the Company's Bylaws or Articles of
Incorporation or the Texas Business Corporation Act ("TBCA") or otherwise. To
the extent that a change in the TBCA (whether by statute or judicial decision)
permits greater indemnification by agreement than would be afforded currently
under the Company's Bylaws or Articles of Incorporation and this Agreement, it
is the intent of the parties hereto that Indemnitee shall enjoy by this
Agreement the greater benefits so afforded by that change.

8.   Liability Insurance. Except as otherwise agreed to by the Company and
Indemnitee in a written agreement, to the extent the Company maintains an
insurance policy or policies providing directors' and officers' liability
insurance, Indemnitee shall be covered by that policy or those policies, in
accordance with its or their terms, to the maximum extent of the coverage
available for any Company director or officer.

                                        3

<PAGE>

9.   Miscellaneous.

         (a) Notice Provision. Any notice, payment, demand or communication
required or permitted to be delivered or given by the provisions of this
Agreement shall be deemed to have been effectively delivered and received (i) if
personally delivered, upon receipt, (ii) if sent via facsimile, upon mechanical
confirmation of successful transmission thereof generated by the sending
telecopy machine only if such notice is also delivered by hand, or deposited in
the United States mail, postage prepaid, registered or certified mail, on or
before three (3) business days after its delivery by facsimile, or (iii) if sent
by registered or certified mail five (5) days after deposit thereof in the U.S.
mail and addressed to the parties at the addresses set forth above their
signatures to this Agreement.

     (b) Entire Agreemcnt. This Agreement constitutes the entire understanding
of the parties and supersedes all prior understandings, whether written or oral,
between the parties with respect to the subject matter of this Agreement.

     (c) Severability of Provisions. If any provision of this Agreement is held
to be illegal, invalid, or unenforceable under present or future laws effective
during the term of this Agreement, such provision shall be fully severable; this
Agreement shall be construed and enforced as if such illegal, invalid, or
unenforceable provision had never comprised a part of this Agreement; and the
remaining provisions of this Agreement shall remain in full force and effect and
shall not be affected by the illegal, invalid, or unenforceable provision or by
its severance from this Agreement. Furthermore, in lieu of each such illegal,
invalid, or unenforceable provision there shall be added automatically as a part
of this Agreement a provision as similar in terms to such illegal, invalid or
unenforceable provision as may be possible and be legal, valid, and enforceable.

     (d) Applicable Law. This Agreement shall be governed by and construed under
the laws of the State of Texas.

     (e) Execution in Counterparts. Th. is Agreement and any amendment may be
executed simultaneously or in two or more counterparts, each of which together
shall constitute one and the same instrument.

     (f) Cooperation and Intent. The Company shall cooperate in good faith with
Indemnitee and use its best efforts to ensure that Indemnitee is indemnified for
liabilities described herein to the fullest extent permitted by law.

     (g) Amendment. No amendment, modification or alteration of the terms of
this Agreement shall be binding unless in writing, dated subsequent to the date
of this Agreement, and executed by the parties hereto.

     (h) Binding Effect. The obligations of the Company to Indemnitee hereunder
shall survive and continue as to Indemnitee even if Indemnitee ceases to be a
director, officer employee and/or agent of the Company. Each and all of the
covenants, terms and provisions of this Agreement shall be binding upon and
inure to the benefit of the successors to the Company and to the benefit of the
estate, heirs, executors, administrators and personal representatives of
Indemnitee.

     (I) Effective Date. The provisions of this Agreement shall cover claims,
actions, suits and proceedings whether now pending or hereafter commenced and
shall be retroactive to

                                        4

<PAGE>

cover acts or omissions or alleged acts or omissions which heretofore have taken
place. By way of example but not of limitation, this Agreement shall apply to
all liabilities, known or unknown, contingent or otherwise, that presently exist
or arise in the future, regardless whether the liabilities relate to activities
of Indemnitee and/or the Company preceding or subsequent to the date of this
Agreement.

     IN WITNESS WHEREOF, the undersigned have duly executed this Indemnification
Agreement on the ____ day of _________, 2002 but effective as of the 9th day of
July, 2002.

                                   THE COMPANY

                                   DIVERSIFIED CORPORATE RESOURCES, INC.

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


                                   ---------------------------------------
                                   Name


                                   ---------------------------------------
                                   Title

                                   Address: 10670 North Central Expressway
                                            Suite 350
                                            Dallas, TX  75231


                                   THE INDEMNITEE:


                                   ----------------------------------------
                                     Mark E. Cline

                                     Address:  5104 Scarborough Lane
                                               Dallas, Texas 75287

                                        5

</TEXT>
</DOCUMENT>
</SUBMISSION>
