content: SECURITIES AND EXCHANGE COMMISSION
                               Washington, D.C. 20549
  
  
                                      FORM 8-K
  
  
                                   CURRENT REPORT
                       Pursuant to Section 13 or 15(d) of the
                           Securities Exchange Act of 1934
  
  
  
                  Date of Report (Date of earliest event reported):
                                 September 20, 1998
  
  
  
                             DIGITAL DATA NETWORKS, INC.
               (Exact name of registrant as specified in its charter)
  
  
  
  
        Washington                    0-27704                   91-1426372
  (State of Incorporation)      (Commission File No.)       (I.R.S. Employer
                                                            Identification Number)
  
  
                            3102 Maple Avenue, Suite 230
                                 Dallas, Texas 75201
                      (Address of principal executive offices)
  
  
                                   (214) 969-7200
                (Registrant's telephone number, including area code)
  
  <PAGE>
  
  
  
  
  ITEM 2.  Acquisition or Disposition of Assets.
  
           Pursuant to an Asset Purchase Agreement (the "Agreement") dated
  September 20, 1998, Digital Data Networks, Inc.'s (the "Registrant" or the
  "Company") wholly owned subsidiary, DDN Digital Data Networks (Canada), Inc.
  ("DDN Canada") sold all of its assets to Pro Net Communications, Inc. ("Pro
  Net"). Principals in Pro Net include Peter Ciccone, the Company's former Chief
  Operating Officer, and Stephen Willey, a former board member of the Company.
  
           The purchase price of the assets was approximately $11,000, which was
  applied to shareholder loans owed to Messrs. Ciccone and Willey by DDN Canada,
  totaling approximately $114,000. In addition, the Company agreed to pay Pro Net
  cash of approximately $20,000, and Pro Net assumed liabilities of DDN Canada,
  and Messrs. Ciccone and Willey agreed to release DDN Canada and the Company
  from, among other things, shareholder loans owed. Further, Messrs. Ciccone and
  Willey agreed to pledge their shares of the Company's common stock, a total of
  77,000 shares, as security for the performance of Pro Net's obligations with
  respect to assumed liabilities, for a period of ninety (90) days from the
  closing date.
  
  
  ITEM 7.  Financial Statements and Exhibits.
  
                    (a) Not applicable
  
                    (b) Included herewith is pro forma condensed consolidated
                        balance sheet as of June 30, 1998 presented on the basis
                        as if the Company's disposition of DDN Canada operations
                        had occurred on June 30, 1998, and condensed consolidated
                        statements of operations for the year ended December 31,
                        1997 and the six months ended June 30, 1998, presented on
                        the basis as if the Company's disposition of DDN Canada
                        operations had occurred at the beginning of the period
                        presented. These pro forma operating results do not
                        include the gain on disposition of discontinued operations
                        and may not be indicative of results to be expected in the
                        future.
  
                        The accompanying pro forma financial information gives
                        effect to the disposition of the DDN Canada business. This
                        business represented the Company's Internet services
                        segment and its disposition is required by generally
                        accepted accounting principles to be presented as
                        discontinued operations.
  
                        The pro forma financial information included herein should
                        be read in conjunction with the Company's audited, annual
                        financial statements included in the Company's December
                        31, 1997 Annual Report on Form 10-KSB and its unaudited
                        interim financial statements included in the Company's
                        June 30, 1998 Quarterly Report on Form 10-QSB.
  
                    (c) The following exhibit is furnished herewith in accordance
                        with the provisions of Item 601 of Regulation SB:
  
                        2.1  Asset Purchase Agreement dated September 20, 1998
                             between DDN Digital Data Networks (Canada), Inc., Pro
                             Net Communications, Inc., Digital Data Networks,
                             Inc., Peter Ciccone and Stephen Willey.
  
  
  
                                         2
  <PAGE>
  
  
                             Digital Data Networks, Inc.
                   Pro Forma Condensed Consolidated Balance Sheet
                                    June 30, 1998
                               (Dollars in thousands)
                                     (unaudited)
  
  <TABLE>
  <CAPTION>
                                                                              Pro Forma
                                                             Actual          Adjustments            Pro Forma
                                                             ------          -----------            ---------
  <S>                                                     <C>                <C>                    <C>      
  Current Assets
    Cash and cash equivalents                             $        281       $       (27) (a,b)     $     254
    Trade accounts receivable, net                                 109               (69) (a)              40
    Prepaid expenses and other current assets                      154               (14) (a)             140
                                                          ------------         ----------           ---------
       Total current assets                                        544              (110)                 434
  
  Equipment, net                                                   211               (55) (a)             156
  
  Other assets                                                     222                 -                  222
                                                          ------------         ----------           ---------
  
       Total assets                                       $        977       $      (165)           $     812
                                                          ============         ==========           =========
  
  
  
  Current liabilities
    Accounts payable and accrued liabilities              $        386       $      (107) (a)       $     279
    Current portion of long-term debt                               22                 -                   22
    Unearned income                                                 52               (32) (a)              20
                                                          ------------         ----------           ---------
       Total current liabilities                                   460              (139)                 321
  Long-term obligations
    Long-term debt, less current portion                           157                 -                  157
    Due to shareholders                                            114              (114) (a)               -
                                                          ------------         ----------           ---------
       Total liabilities                                           731              (253)                 478
                                                          ------------         ----------           ---------
  
  Stockholders' equity
    Common stock, net of Treasury stock                         13,369                 -               13,369
    Accumulated deficit                                        (13,128)               93  (a)         (13,035)
    Cumulative foreign currency translation adjustment               5                (5) (a)               -
                                                          ------------         ----------           ---------
       Total stockholders' equity                                  246                88                  334
                                                          ------------         ----------           ---------
       Total liabilities and stockholders' equity         $        977         $    (165)            $    812
                                                          ============         ==========           =========
  </TABLE>
  
  
  
  (a)  To record sale of all DDN Canada assets, the Purchaser's assumption of
       liabilities and release of indebtedness due to stockholders, who are
       acquiring the business, and to record resulting gain on disposition of
       discontinued operations.
  
  (b)   To record payment of cash to Purchaser.
  
  
  
                                         3
  <PAGE>
  
  
  
  
  
                             Digital Data Networks, Inc.
              Pro Forma Condensed Consolidated Statements of Operations
                (Dollars in thousands, except per share information)
                                     (unaudited)
  
  
  <TABLE>
  <CAPTION>
                                               Year Ended December 31, 1997               Six Months Ended June 30, 1998
                                               ----------------------------               ------------------------------
  
                                                         Pro Forma                                   Pro Forma
                                              Actual    Adjustments   Pro Forma          Actual     Adjustments    Pro Forma
                                            ----------  -----------   ---------        ----------   -----------    ---------
                                                            (a)                                        (a)
  <S>                                       <C>         <C>           <C>              <C>          <C>            <C>      
  Revenues                                  $      889  $      (365)  $     524        $      455   $     (167)    $     288
                                            ----------  -----------   ---------        ----------   -----------    ---------
  
  Expenses:
    Direct operating costs                         477          (28)        449               116          (36)           80
    Salaries and related                           740         (117)        623               243          (36)          207
    Marketing, general and administrative          783         (242)        541               251         (122)          129
    Financing, legal and other consulting          348         (199)        149                80           (6)           74
    Product development costs                      103         (103)          -                 -            -             -
    Write-off of goodwill                          343         (343)          -                 -            -             -
    Provision for notes receivable reserve       1,048                    1,048
                                            ----------  -----------   ---------        ----------   -----------    ---------
       Total Expenses                            3,842       (1,032)      2,810               690         (200)          490
  
  Other Income, net                                 31                       31                21             1           20
                                            ----------  -----------   ---------        ----------   -----------    ---------
  
  Loss from continuing operations              (2,922)          667      (2,255)             (214)           34         (182)
  
  Loss from discontinued operations                            (667)            (b)                         (34)             (b)
                                            ----------  -----------   ---------        ----------   -----------    ---------
  
  Net loss                                    $(2,922)  $         -   $  (2,255)        $    (214)  $         -    $    (182)
                                            ==========  ===========   =========        ==========   ===========    =========
  
  
  Loss from continuing operations per
    share                                    $  (1.25)                $   (0.97)       $    (0.09)                 $   (0.08)
                                            ==========                =========        ==========                  =========
  
  Net loss per share                         $  (1.25)                $   (0.97)       $    (0.09)                 $   (0.08)
                                            ==========                =========        ==========                  =========
  
  Weighted average shares outstanding        2,335,000                2,335,000         2,329,000                  2,329,000
                                            ==========                =========        ==========                  =========
  </TABLE>
  
  
  (a)  To reclassify operating results of DDN Canada from continuing operations to
       a net one-line item presentation of loss from discontinued operations. This
       statement of operations does not include the gain on disposition of
       discontinued operations.
  
  (b)  In accordance with SEC requirements for presentation of pro forma financial
       information, the loss from discontinued operations is not included in the
       pro forma results of operations.
  
  
  
                                         4
  <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 hereunto duly authorized.
  
  
                                         DIGITAL DATA NETWORKS, INC.
  
  Date:   October 5, 1998           By:  /s/  Donald B. Scott, Jr.
                                         --------------------------
                                         Donald B. Scott, Jr., President
  
  
  Date:   October 5, 1998           By: /s/   Richard J. Boeglin
                                        ------------------------
                                        Richard J. Boeglin, Vice President,Finance
                                        and Operations (Principal Financial and
                                        Accounting Officer)
  
  
  
                                         5
  <PAGE>
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text: SECURITIES AND EXCHANGE COMMISSION
                               Washington, D.C. 20549
  
                                      FORM 8-K
  
                                   CURRENT REPORT
                       Pursuant to Section 13 or 15(d) of the
                           Securities Exchange Act of 1934
  
                  Date of Report (Date of earliest event reported):
                                 September 20, 1998
  
                             DIGITAL DATA NETWORKS, INC.
               (Exact name of registrant as specified in its charter)
  
        Washington                    0-27704                   91-1426372
  (State of Incorporation)      (Commission File No.)       (I.R.S. Employer
                                                            Identification Number)
  
                            3102 Maple Avenue, Suite 230
                                 Dallas, Texas 75201
                      (Address of principal executive offices)
  
                                   (214) 969-7200
                (Registrant's telephone number, including area code)
  ITEM 2.  Acquisition or Disposition of Assets.
  
           Pursuant to an Asset Purchase Agreement (the "Agreement") dated
  September 20, 1998, Digital Data Networks, Inc.'s (the "Registrant" or the
  "Company") wholly owned subsidiary, DDN Digital Data Networks (Canada), Inc.
  ("DDN Canada") sold all of its assets to Pro Net Communications, Inc. ("Pro
  Net"). Principals in Pro Net include Peter Ciccone, the Company's former Chief
  Operating Officer, and Stephen Willey, a former board member of the Company.
  
           The purchase price of the assets was approximately $11,000, which was
  applied to shareholder loans owed to Messrs. Ciccone and Willey by DDN Canada,
  totaling approximately $114,000. In addition, the Company agreed to pay Pro Net
  cash of approximately $20,000, and Pro Net assumed liabilities of DDN Canada,
  and Messrs. Ciccone and Willey agreed to release DDN Canada and the Company
  from, among other things, shareholder loans owed. Further, Messrs. Ciccone and
  Willey agreed to pledge their shares of the Company's common stock, a total of
  77,000 shares, as security for the performance of Pro Net's obligations with
  respect to assumed liabilities, for a period of ninety (90) days from the
  closing date.
  
  ITEM 7.  Financial Statements and Exhibits.
  
                    (a) Not applicable
  
                    (b) Included herewith is pro forma condensed consolidated
                        balance sheet as of June 30, 1998 presented on the basis
                        as if the Company's disposition of DDN Canada operations
                        had occurred on June 30, 1998, and condensed consolidated
                        statements of operations for the year ended December 31,
                        1997 and the six months ended June 30, 1998, presented on
                        the basis as if the Company's disposition of DDN Canada
                        operations had occurred at the beginning of the period
                        presented. These pro forma operating results do not
                        include the gain on disposition of discontinued operations
                        and may not be indicative of results to be expected in the
                        future.
  
                        The accompanying pro forma financial information gives
                        effect to the disposition of the DDN Canada business. This
                        business represented the Company's Internet services
                        segment and its disposition is required by generally
                        accepted accounting principles to be presented as
                        discontinued operations.
  
                        The pro forma financial information included herein should
                        be read in conjunction with the Company's audited, annual
                        financial statements included in the Company's December
                        31, 1997 Annual Report on Form 10-KSB and its unaudited
                        interim financial statements included in the Company's
                        June 30, 1998 Quarterly Report on Form 10-QSB.
  
                    (c) The following exhibit is furnished herewith in accordance
                        with the provisions of Item 601 of Regulation SB:
  
                        2.1  Asset Purchase Agreement dated September 20, 1998
                             between DDN Digital Data Networks (Canada), Inc., Pro
                             Net Communications, Inc., Digital Data Networks,
                             Inc., Peter Ciccone and Stephen Willey.
  
                                         2
  Digital Data Networks, Inc.
                   Pro Forma Condensed Consolidated Balance Sheet
                                    June 30, 1998
                               (Dollars in thousands)
                                     (unaudited)
  Pro Forma
                                                             Actual          Adjustments            Pro Forma
                                                             ------          -----------            ---------
  Current Assets
    Cash and cash equivalents                             $        281       $       (27) (a,b)     $     254
    Trade accounts receivable, net                                 109               (69) (a)              40
    Prepaid expenses and other current assets                      154               (14) (a)             140
                                                          ------------         ----------           ---------
       Total current assets                                        544              (110)                 434
  
  Equipment, net                                                   211               (55) (a)             156
  
  Other assets                                                     222                 -                  222
                                                          ------------         ----------           ---------
  
       Total assets                                       $        977       $      (165)           $     812
                                                          ============         ==========           =========
  
  Current liabilities
    Accounts payable and accrued liabilities              $        386       $      (107) (a)       $     279
    Current portion of long-term debt                               22                 -                   22
    Unearned income                                                 52               (32) (a)              20
                                                          ------------         ----------           ---------
       Total current liabilities                                   460              (139)                 321
  Long-term obligations
    Long-term debt, less current portion                           157                 -                  157
    Due to shareholders                                            114              (114) (a)               -
                                                          ------------         ----------           ---------
       Total liabilities                                           731              (253)                 478
                                                          ------------         ----------           ---------
  
  Stockholders' equity
    Common stock, net of Treasury stock                         13,369                 -               13,369
    Accumulated deficit                                        (13,128)               93  (a)         (13,035)
    Cumulative foreign currency translation adjustment               5                (5) (a)               -
                                                          ------------         ----------           ---------
       Total stockholders' equity                                  246                88                  334
                                                          ------------         ----------           ---------
       Total liabilities and stockholders' equity         $        977         $    (165)            $    812
                                                          ============         ==========           =========
  (a)  To record sale of all DDN Canada assets, the Purchaser's assumption of
       liabilities and release of indebtedness due to stockholders, who are
       acquiring the business, and to record resulting gain on disposition of
       discontinued operations.
  
  (b)   To record payment of cash to Purchaser.
  
                                         3
  Digital Data Networks, Inc.
              Pro Forma Condensed Consolidated Statements of Operations
                (Dollars in thousands, except per share information)
                                     (unaudited)
  Year Ended December 31, 1997               Six Months Ended June 30, 1998
                                               ----------------------------               ------------------------------
  
                                                         Pro Forma                                   Pro Forma
                                              Actual    Adjustments   Pro Forma          Actual     Adjustments    Pro Forma
                                            ----------  -----------   ---------        ----------   -----------    ---------
                                                            (a)                                        (a)
  Revenues                                  $      889  $      (365)  $     524        $      455   $     (167)    $     288
                                            ----------  -----------   ---------        ----------   -----------    ---------
  
  Expenses:
    Direct operating costs                         477          (28)        449               116          (36)           80
    Salaries and related                           740         (117)        623               243          (36)          207
    Marketing, general and administrative          783         (242)        541               251         (122)          129
    Financing, legal and other consulting          348         (199)        149                80           (6)           74
    Product development costs                      103         (103)          -                 -            -             -
    Write-off of goodwill                          343         (343)          -                 -            -             -
    Provision for notes receivable reserve       1,048                    1,048
                                            ----------  -----------   ---------        ----------   -----------    ---------
       Total Expenses                            3,842       (1,032)      2,810               690         (200)          490
  
  Other Income, net                                 31                       31                21             1           20
                                            ----------  -----------   ---------        ----------   -----------    ---------
  
  Loss from continuing operations              (2,922)          667      (2,255)             (214)           34         (182)
  
  Loss from discontinued operations                            (667)            (b)                         (34)             (b)
                                            ----------  -----------   ---------        ----------   -----------    ---------
  
  Net loss                                    $(2,922)  $         -   $  (2,255)        $    (214)  $         -    $    (182)
                                            ==========  ===========   =========        ==========   ===========    =========
  
  Loss from continuing operations per
    share                                    $  (1.25)                $   (0.97)       $    (0.09)                 $   (0.08)
                                            ==========                =========        ==========                  =========
  
  Net loss per share                         $  (1.25)                $   (0.97)       $    (0.09)                 $   (0.08)
                                            ==========                =========        ==========                  =========
  
  Weighted average shares outstanding        2,335,000                2,335,000         2,329,000                  2,329,000
                                            ==========                =========        ==========                  =========
  (a)  To reclassify operating results of DDN Canada from continuing operations to
       a net one-line item presentation of loss from discontinued operations. This
       statement of operations does not include the gain on disposition of
       discontinued operations.
  
  (b)  In accordance with SEC requirements for presentation of pro forma financial
       information, the loss from discontinued operations is not included in the
       pro forma results of operations.
  
                                         4
  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 hereunto duly authorized.
  
                                         DIGITAL DATA NETWORKS, INC.
  
  Date:   October 5, 1998           By:  /s/  Donald B. Scott, Jr.
                                         --------------------------
                                         Donald B. Scott, Jr., President
  
  Date:   October 5, 1998           By: /s/   Richard J. Boeglin
                                        ------------------------
                                        Richard J. Boeglin, Vice President,Finance
                                        and Operations (Principal Financial and
                                        Accounting Officer)
  
                                         5