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): February 6, 1998


                       DATA SYSTEMS & SOFTWARE INC.
            (Exact Name of Registrant as Specified in Charter)


DELAWARE                        0-19771                      22-2786081
(State or Other          (Commission File Number)          (IRS Employer 
Jurisdiction of                                          Identification No.)
Incorporation)

200 ROUTE 17, MAHWAH, NEW JERSEY                               07430
(Address of Principal Executive Offices)                     (Zip Code)


Registrant's telephone number, including area code:  (201) 529-2026

                           Not Applicable.
      (Former Name or Former Address, if Changed Since Last Report)





ITEM 5.     OTHER EVENTS.

            On February 6, 1998, Data Systems & Software Inc. (the
"Company") entered into a settlement agreement (the "Agreement") with a
small group of dissident stockholders consisting of Messrs. Dwayne A.
Moyers and Jeffrey A. Cummer, and certain entities they control (the
"Moyers/Cummer Group"). Upon execution of the Agreement, the
Moyers/Cummer Group terminated their effort to solicit consents from the
Company's stockholders and revoked a consent previously submitted to the
Company by one member of the Moyers/Cummer Group.

            Pursuant to the Agreement, the Moyers/Cummer Group and the
Company agreed that the Company may nominate such persons as it deems
appropriate to stand for election to the Board of Directors at the
Company's 1998 Annual Meeting of Stockholders (the "1998 Annual
Meeting"). There are no restrictions on the Company's discretion in
selecting the nominees. The members of the Moyers/Cummer Group agreed to
vote, and to cause their affiliates and associates to vote, all their
shares of common stock of the Company in favor of the persons nominated
by the Company's Board of Directors (the "Board") at the 1998 Annual
Meeting.

            The Agreement also provides that for a period of five years
the members of the Moyers/Cummer Group will not, and will cause each of
their affiliates and associates not to, directly or indirectly: (i)
acquire, offer or propose to acquire, or agree to acquire, directly or
indirectly (whether by purchase, tender or exchange offer or otherwise)
any voting securities of the Company; (ii) engage, or in any way
participate, directly or indirectly, in any solicitation of proxies or
consents, seek to advise, encourage or influence any person with respect
to the voting of any voting securities, or initiate, propose or otherwise
solicit stockholders of the Company for the approval of any stockholder
proposal; (iii) seek, propose or make any public statement with respect
to, any merger, consolidation, business combination, tender or exchange
offer, sale or purchase of assets, sale or purchase of securities,
dissolution, liquidation, restructuring, recapitalization or similar
transactions involving the Company or any of its affiliates; (iv) form,
join or in any way participate in any "group" (within the meaning of
Section 13(d)(3) of the Securities Exchange Act of 1934, as amended, with
respect to any voting securities, other than the "group" identified in a
Schedule 13D filed with the Securities and Exchange Commission on
December 18, 1997, as amended as of the date of the Agreement, by members
of the Moyers/Cummer Group; (v) deposit any voting securities in any
voting trust or subject any voting securities to any arrangement or
agreement with respect to the voting of any voting securities, except as
provided in the Agreement; (vi) otherwise act, alone or in concert with
others, to control or seek to control or influence or seek to influence
the management, the Board or policies of the Company; (vii) seek to call
a meeting of stockholders, seek representation on the Board, or seek the
removal of any member of the Board; (viii) publicly disclose any proposal
regarding any of the foregoing, or make any proposal, statement or
inquiry, or disclose any intention, plan or arrangement inconsistent with
the foregoing; or (ix) take or cause others to take any action
inconsistent with any of the foregoing.

            The Company agreed that following the 1998 Annual Meeting the
Board will establish a new Compensation Committee consisting of three
directors, at least two of whom are not employees of the Company. The
Company also agreed to dismiss its lawsuit against the members of the
Moyers/Cummer Group pending in the United States District Court for the
District of New Jersey.

            In the Agreement, the Moyers/Cummer Group retracted certain
statements made by them about officers and directors of the Company, and
agreed to reimburse the Company for a portion of the Company's
out-of-pocket expenses incurred in connection with the consent
solicitation and related matters in an aggregate amount equal to $20,000.

            A copy of the Agreement is filed as Exhibit 99.1 hereto and
is incorporated herein by reference. The foregoing description of the
Agreement does not purport to be complete and is qualified in its
entirety by reference to such Exhibit.


ITEM 7:     FINANCIAL STATEMENTS, PRO FORMA FINANCIAL
            INFORMATION AND EXHIBITS.

            (a)   Not applicable.
            (b)   Not applicable.
            (c)   Exhibits.

            99.1 Settlement Agreement, dated February 6, 1998, by and
among Jeffrey A. Cummer, Dwayne A. Moyers, Cummer/Moyers Capital
Advisors, Inc., Cummer/Moyers Capital Partners, Inc., Cummer/Moyers
Holdings, Inc. Profit Sharing Plan, Cummer/Moyers Holdings, Inc.,
Cummer/Moyers Securities, Inc., IRA for Dwayne A. Moyers and The
Committee to Enhance Data Systems & Software Inc. Stockholder Value; and
Data Systems & Software Inc.

            99.2 Press release issued by the Company on February 6, 1998
concerning the Settlement Agreement.



                              SIGNATURE

            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.


                              DATA SYSTEMS & SOFTWARE INC.


                              By:     /s/ George Morgenstern
                                 -------------------------------------
                                   Name:  George Morgenstern
                                   Title: Chairman, President and
                                             Chief Executive Officer


Date:  February 9, 1998



                            EXHIBIT INDEX

99.1  Settlement Agreement, dated February 6, 1998, by and among Jeffrey
      A. Cummer, Dwayne A. Moyers, Cummer/Moyers Capital Advisors, Inc.,
      Cummer/Moyers Capital Partners, Inc., Cummer/Moyers Holdings, Inc.
      Profit Sharing Plan, Cummer/Moyers Holdings, Inc., Cummer/Moyers
      Securities, Inc., IRA for Dwayne A. Moyers and The Committee to
      Enhance Data Systems & Software Inc. Stockholder Value; and Data
      Systems & Software Inc.

99.2  Press release issued by the Company on February 6, 1998
      concerning the Settlement Agreement.
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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): February 6, 1998

                       DATA SYSTEMS & SOFTWARE INC.
            (Exact Name of Registrant as Specified in Charter)

DELAWARE                        0-19771                      22-2786081
(State or Other          (Commission File Number)          (IRS Employer 
Jurisdiction of                                          Identification No.)
Incorporation)

200 ROUTE 17, MAHWAH, NEW JERSEY                               07430
(Address of Principal Executive Offices)                     (Zip Code)

Registrant's telephone number, including area code:  (201) 529-2026

                           Not Applicable.
      (Former Name or Former Address, if Changed Since Last Report)

ITEM 5.     OTHER EVENTS.

            On February 6, 1998, Data Systems & Software Inc. (the
"Company") entered into a settlement agreement (the "Agreement") with a
small group of dissident stockholders consisting of Messrs. Dwayne A.
Moyers and Jeffrey A. Cummer, and certain entities they control (the
"Moyers/Cummer Group"). Upon execution of the Agreement, the
Moyers/Cummer Group terminated their effort to solicit consents from the
Company's stockholders and revoked a consent previously submitted to the
Company by one member of the Moyers/Cummer Group.

            Pursuant to the Agreement, the Moyers/Cummer Group and the
Company agreed that the Company may nominate such persons as it deems
appropriate to stand for election to the Board of Directors at the
Company's 1998 Annual Meeting of Stockholders (the "1998 Annual
Meeting"). There are no restrictions on the Company's discretion in
selecting the nominees. The members of the Moyers/Cummer Group agreed to
vote, and to cause their affiliates and associates to vote, all their
shares of common stock of the Company in favor of the persons nominated
by the Company's Board of Directors (the "Board") at the 1998 Annual
Meeting.

            The Agreement also provides that for a period of five years
the members of the Moyers/Cummer Group will not, and will cause each of
their affiliates and associates not to, directly or indirectly: (i)
acquire, offer or propose to acquire, or agree to acquire, directly or
indirectly (whether by purchase, tender or exchange offer or otherwise)
any voting securities of the Company; (ii) engage, or in any way
participate, directly or indirectly, in any solicitation of proxies or
consents, seek to advise, encourage or influence any person with respect
to the voting of any voting securities, or initiate, propose or otherwise
solicit stockholders of the Company for the approval of any stockholder
proposal; (iii) seek, propose or make any public statement with respect
to, any merger, consolidation, business combination, tender or exchange
offer, sale or purchase of assets, sale or purchase of securities,
dissolution, liquidation, restructuring, recapitalization or similar
transactions involving the Company or any of its affiliates; (iv) form,
join or in any way participate in any "group" (within the meaning of
Section 13(d)(3) of the Securities Exchange Act of 1934, as amended, with
respect to any voting securities, other than the "group" identified in a
Schedule 13D filed with the Securities and Exchange Commission on
December 18, 1997, as amended as of the date of the Agreement, by members
of the Moyers/Cummer Group; (v) deposit any voting securities in any
voting trust or subject any voting securities to any arrangement or
agreement with respect to the voting of any voting securities, except as
provided in the Agreement; (vi) otherwise act, alone or in concert with
others, to control or seek to control or influence or seek to influence
the management, the Board or policies of the Company; (vii) seek to call
a meeting of stockholders, seek representation on the Board, or seek the
removal of any member of the Board; (viii) publicly disclose any proposal
regarding any of the foregoing, or make any proposal, statement or
inquiry, or disclose any intention, plan or arrangement inconsistent with
the foregoing; or (ix) take or cause others to take any action
inconsistent with any of the foregoing.

            The Company agreed that following the 1998 Annual Meeting the
Board will establish a new Compensation Committee consisting of three
directors, at least two of whom are not employees of the Company. The
Company also agreed to dismiss its lawsuit against the members of the
Moyers/Cummer Group pending in the United States District Court for the
District of New Jersey.

            In the Agreement, the Moyers/Cummer Group retracted certain
statements made by them about officers and directors of the Company, and
agreed to reimburse the Company for a portion of the Company's
out-of-pocket expenses incurred in connection with the consent
solicitation and related matters in an aggregate amount equal to $20,000.

            A copy of the Agreement is filed as Exhibit 99.1 hereto and
is incorporated herein by reference. The foregoing description of the
Agreement does not purport to be complete and is qualified in its
entirety by reference to such Exhibit.

ITEM 7:     FINANCIAL STATEMENTS, PRO FORMA FINANCIAL
            INFORMATION AND EXHIBITS.

            (a)   Not applicable.
            (b)   Not applicable.
            (c)   Exhibits.

            99.1 Settlement Agreement, dated February 6, 1998, by and
among Jeffrey A. Cummer, Dwayne A. Moyers, Cummer/Moyers Capital
Advisors, Inc., Cummer/Moyers Capital Partners, Inc., Cummer/Moyers
Holdings, Inc. Profit Sharing Plan, Cummer/Moyers Holdings, Inc.,
Cummer/Moyers Securities, Inc., IRA for Dwayne A. Moyers and The
Committee to Enhance Data Systems & Software Inc. Stockholder Value; and
Data Systems & Software Inc.

            99.2 Press release issued by the Company on February 6, 1998
concerning the Settlement Agreement.

                              SIGNATURE

            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.

                              DATA SYSTEMS & SOFTWARE INC.

                              By:     /s/ George Morgenstern
                                 -------------------------------------
                                   Name:  George Morgenstern
                                   Title: Chairman, President and
                                             Chief Executive Officer

Date:  February 9, 1998

                            EXHIBIT INDEX

99.1  Settlement Agreement, dated February 6, 1998, by and among Jeffrey
      A. Cummer, Dwayne A. Moyers, Cummer/Moyers Capital Advisors, Inc.,
      Cummer/Moyers Capital Partners, Inc., Cummer/Moyers Holdings, Inc.
      Profit Sharing Plan, Cummer/Moyers Holdings, Inc., Cummer/Moyers
      Securities, Inc., IRA for Dwayne A. Moyers and The Committee to
      Enhance Data Systems & Software Inc. Stockholder Value; and Data
      Systems & Software Inc.

99.2  Press release issued by the Company on February 6, 1998
      concerning the Settlement Agreement.