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                                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 SEPTEMBER 30, 1999

                                      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 000-24389

                   VASCO Data Security International, Inc.
                         (Exact Name of Registrant as
                          Specified in Its Charter)


        DELAWARE                                             36-4169320
    (State or Other                                       (I.R.S. Employer
    Jurisdiction of                                        Identification
    Incorporation or                                            No.)
     Organization)

                      1901 South Meyers Road, Suite 210
                       Oakbrook Terrace, Illinois 60181
                       (Address of Principal Executive
                              Offices)(Zip Code)


      Registrant's telephone number, including area code: (630) 932-8844

        Indicate by check mark whether the registrant: (1) has filed all
   reports required to be filed by Section 13 or 15(d) of the Securities
   Exchange Act of  1934 during  the preceding  12 months  (or for  such
   shorter  period  that  the  registrant  was  required  to  file  such
   reports), and (2) has  been subject to  such filing requirements  for
   the past 90 days.

                  Yes  X                        No

        As of  November 13,  1999, 26,462,083  shares of  the  Company's
   Common Stock,  $.001  par  value per  share  (_Common  Stock_),  were
   outstanding.


                    VASCO Data Security International, Inc.
                                 Form 10-Q
               For The Three Months Ended September 30, 1999

                             Table of Contents




   PART I.  FINANCIAL INFORMATION
   Page No.


   Item 1.Consolidated Financial Statements:

         Consolidated Balance Sheets as of
         December 31, 1998 and September 30, 1999 (Unaudited) ..... 3

         Consolidated Statements of Operations (Unaudited)
         for the three and nine months
         ended September 30, 1998 and 1999 ........................ 4

         Consolidated Statements of Comprehensive Income (Unaudited)
         for the three and nine months
         ended September 30, 1998 and 1999 .........................5

         Consolidated Statements of Cash Flows (Unaudited)
         for the nine months ended September 30, 1998 and 1999 .... 6

         Notes to Consolidated Financial Statements ............... 7

   Item 2.Management's Discussion and Analysi
         of Financial Condition and Results of Operations ......... 7


   PART II. OTHER INFORMATION


   Item 6.Exhibits and Reports on Form 8-K........................ 11


   SIGNATURES..................................................... 12




             This  report  contains  the  following  trademarks  of  the
   Company, some  of  which  are registered:  VASCO,  AccessKey,  VACMan
   Server and VACMan/CryptaPak, AuthentiCard and Digipass.




 PART I.  FINANCIAL INFORMATION

   Item 1.   Consolidated Financial Statements

                  VASCO Data Security International, Inc.
                        Consolidated Balance Sheets

                                             December 31,   September 30,
                                                 1998            1999
                                                             (Unaudited)

   ASSETS
   Current assets:
    Cash                                     $ 1,523,075      $ 4,712,263
    Accounts receivable, net of allowance
    for doubtful accounts of $55,000 and
    $73,000 in 1998 and 1999                   3,376,218        2,310,842
    Inventories, net                           1,272,327          807,468
    Prepaid expenses                             692,326        1,298,516
    Deferred income taxes                         83,000           83,000
    Other current assets                         277,322          331,152
                                             ------------      -----------
        Total current assets                   7,224,268        9,543,241

   Property and equipment:
    Furniture and fixtures                       580,427          691,007
    Office equipment                             468,975          647,340
                                             ------------      -----------
                                               1,049,402        1,338,347
    Accumulated depreciation                    (691,806)        (835,997)
                                             ------------      -----------
                                                 357,596          502,350
   Goodwill, net of accumulated
   amortization of $327,000 and $424,000
   in 1998 and 1999                              575,211          478,526
   Other assets                                  943,821        2,414,986
                                             ------------      -----------
   Total assets                              $ 9,100,896       $12,939,103
                                             ============      ===========




   LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
   Current liabilities:
    Current maturities of long-term debt     $ 6,528,867       $   396,944
    Accounts payable                           1,144,506         1,341,192
    Customer deposits                            519,585           135,601
    Other accrued expenses                     2,117,599         2,019,627
                                             ------------      -----------
        Total current liabilities             10,310,557         3,893,364

   Long-term debt, including stockholder
   note of $5,000,000 in 1998 and  1999        8,435,903         8,432,808

   Stockholders' equity (deficit):
    Common stock, $.001 par value -
      75,000,000 shares authorized;
      20,805,697 shares issued and
      outstanding in 1998; 24,650,005
      shares issued and outstanding in 1999       20,806            24,650
    Additional paid-in capital                 9,797,068        21,360,132
    Accumulated deficit                      (19,550,419)      (21,057,225)
    Accumulated other comprehensive
      income-cumulative translation adj.          86,981           285,374
                                             ------------      -----------

   Total stockholders' equity (deficit)       (9,645,564)          612,931
                                             ------------      -----------
   Total liabilities and stockholders'
   equity (deficit)                          $ 9,100,896       $12,939,103
                                             ============      ===========


   See accompanying notes to consolidated financial statements.



                  VASCO Data Security International, Inc.
                   Consolidated Statements of Operations
                                (Unaudited)

                                 Three months ended      Nine months ended
                                    September 30,          September 30,
                                   1998      1999        1998         1999


   Net revenues              $ 4,025,326  $ 4,652,793  $10,431,673  $13,412,035
   Cost of goods sold          1,877,796    1,870,978    5,023,831    5,420,400
                             ------------ ------------ ------------ ------------
   Gross profit                2,147,530    2,781,815    5,407,842    7,991,635
   Operating costs:
    Sales and marketing        1,117,710    1,098,201    3,046,850    3,744,438
    Research and development     420,815      598,124    1,248,781    1,771,355
    General and administrative   765,939      625,414    1,759,879    2,239,407
                             ------------ ------------ ------------ ------------

      Total operating costs    2,304,464    2,321,739    6,055,510    7,755,200
                             ------------ ------------ ------------ ------------
   Operating income (loss)      (156,934)     460,076     (647,668)     236,435

   Interest expense             (223,341)    (229,670)  (1,102,926)    (645,126)
   Other income (expense), net   (88,480)      39,019     (189,636)    (370,968)
                             ------------ ------------ ------------ ------------
   Income (loss) before
   income taxes                 (468,755)     269,425   (1,940,230)    (779,659)
   Provision for income taxes    248,407      383,337      379,750      744,381
                             ------------ ------------ ------------ ------------

   Net loss                  $  (717,162) $  (113,912) $(2,319,980) $(1,524,040)
                             ============ ============ ============ ============

Basic and diluted net loss   $     (0.04) $      0.00  $     (0.11) $     (0.07)
  per common share           ============ ============ ============ ============
Weighted average common
  shares outstanding          20,331,057   24,648,570   20,352,197   23,249,650
                             ============ ============ ============ ============

       See accompanying notes to consolidated financial statements.



                  VASCO Data Security International, Inc.
              Consolidated Statements of Comprehensive Income
                                (Unaudited)


                             Three months ended        Nine months ended
                                September 30,           September 30,
                             1998         1999        1998         1999
Comprehensive income:        ----         ----        ----         ----

 Net loss              $  (717,162) $  (113,912)  $(2,319,980)  $(1,524,040)

 Other comprehensive
 income-cumulative
 translation adj            85,788       98,698       190,740       198,393
                       ------------ ------------  ------------  ------------
Comprehensive loss     $  (631,374) $   (15,214)  $(2,129,240)  $(1,325,647)
                       ============ ============  ============  ============


       See accompanying notes to consolidated financial statements.


                  VASCO Data Security International, Inc.
                   Consolidated Statements of Cash Flows
                                (Unaudited)

                                                For the Nine Months Ended
                                                     September 30,
                                                 1998            1999
Cash flows from operating activities:            ----            ----
 Net loss                                    $ (2,319,980)   $ (1,524,040)
 Adjustments to reconcile net income to
   net cash provided by
   (used in) operating activities:
     Depreciation and amortization                743,770         846,765
     Interest paid in shares of common stock            -          78,750
     Loss on disposition of fixed assets            5,113               -
     Gain on sale of fixed assets                       -         (16,096)
     Changes in assets and liabilities:
     Accounts receivable, net                    (822,065)      1,065,376
     Inventories, net                            (728,590)        464,859
     Other current assets                        (500,013)       (660,120)
     Accounts payable                            (215,270)        196,686
     Customer deposits                             55,462        (383,984)
     Other accrued expenses                       337,643         (97,972)
     Other assets                                       -      (1,100,000)
                                              ------------    ------------
     Net cash used in operating activities     (3,443,930)     (1,129,776)
                                              ------------    ------------

Cash flows from investing activities:
  Acquisition of SecureWare/DMIC                        -        (287,023)
  Additions to property and equipment            (205,640)       (288,945)
                                              ------------    ------------
     Net cash used in investing activities       (205,640)       (575,968)
                                              ------------    ------------

Cash flows from financing activities:
  Proceeds from exercise of stock options           1,000          94,225
  Net proceeds from sales of common stock         115,347      10,737,332
  Proceeds from issuance of debt                2,545,837               -
  Repayment of debt                                     -      (6,135,018)
                                              ------------    ------------
     Net cash provided by financing activities  2,662,184       4,696,539
                                              ------------    ------------
Effect of exchange rate changes on cash           190,740         198,393
                                              ------------    ------------
     Net increase (decrease) in cash             (796,646)      3,189,188
     Cash, beginning of period                  1,897,666       1,523,075
                                              ------------    ------------

     Cash, end of period                      $ 1,101,020     $ 4,712,263
                                              ============    ============




Supplemental disclosure of cash flow
 information:
   Interest paid                              $   693,668     $   719,514
   Income taxes paid                          $   227,852     $   398,655

Supplemental disclosure of non-cash
 investing activity:                          $         -     $   698,300
   Stock issued for acquisition

          See accompanying notes to consolidated financial statements.



                  VASCO Data Security International, Inc.
                Notes to Consolidated Financial Statements



   Note 1 - Basis of Presentation

        The accompanying  unaudited  consolidated  financial  statements
   include the accounts of VASCO  Data Security International, Inc.  and
   its subsidiaries (collectively, the _Company_) and have been prepared
   pursuant to the rules and regulations of the Securities and  Exchange
   Commission regarding interim financial reporting.  Accordingly,  they
   do not include all of the information and notes required by generally
   accepted accounting principles for complete financial statements  and
   should be read in conjunction with the audited consolidated financial
   statements included in the Company's Annual  Report on Form 10-K  for
   the year ended December 31, 1998.

        In  the  opinion  of  management,  the  accompanying   unaudited
   consolidated financial  statements have  been  prepared on  the  same
   basis as the audited  consolidated financial statements, and  include
   all adjustments,  consisting only  of normal  recurring  adjustments,
   necessary for the  fair presentation of  the results  of the  interim
   periods presented.   The operating  results for  the interim  periods
   presented are not necessarily indicative of the results expected  for
   a full year.


   Note 2 - Exchange Offer

         VASCO Data  Security  International,  Inc.  ("VDSI  Inc.")  was
   organized in  1997  as  a  subsidiary  of  VASCO  Corp.,  a  Delaware
   corporation  ("VASCO  Corp.").     Pursuant  to  an  exchange   offer
   ("Exchange Offer") by VDSI  Inc. for securities  of VASCO Corp.  that
   was completed  March  11,  1998, VDSI  Inc.  acquired  97.7%  of  the
   outstanding common stock  of VASCO Corp.   Consequently, VASCO  Corp.
   became  a  subsidiary  of  VDSI   Inc.,  with  certain  VASCO   Corp.
   shareholders holding the  remaining 2.3%  of the  VASCO Corp.  common
   stock representing a minority interest.   On October 28, 1998,  VASCO
   Corp. was merged with and into the Company and VASCO Corp. ceased  to
   exist.


   Item 2.   Management's Discussion and Analysis of Financial Condition
   and Results of Operations

        VDSI  Inc.  designs,   develops,  markets   and  supports   open
   standards-based hardware and software  security systems which  manage
   and secure access to data.

        The following discussion is based upon VDSI Inc.'s  consolidated
   results of operations for the three  and nine months ended  September
   30, 1999  as  compared  to  VASCO  Corp.'s  consolidated  results  of
   operations for the three  and nine months  ended September 30,  1998.
   See Note 2 "Exchange Offer."  References to the "Company" or "VDSI
   Inc." represent the  consolidated entity.   References to "VASCO  NA"
   represent the North American operations, including VDSI, Inc.,  VASCO
   Corp., and VDS.  References to "VASCO Europe" mean the operations  of
   Lintel Security, VASCO  Data Security nv/sa  and VASCO Data  Security
   Europe.


   Cautionary Statement for Purposes of the "Safe Harbor" Provisions  of
   the Private Securities Litigation Reform Act of 1995

        This Quarterly Report on Form 10-Q, including the  "Management's
   Discussion  and  Analysis  of  Financial  Condition  and  Results  of
   Operations," contains "forward-looking statements" within the meaning
   of the Private Securities Litigation  Reform Act of 1995  concerning,
   among  other  things,  the   prospects,  developments  and   business
   strategies  for  the  Company  and  its  operations,  including   the
   development and marketing of certain new products and the anticipated
   future growth  in  certain markets  in  which the  Company  currently
   markets and sells its products  or anticipates selling and  marketing
   its products in the future.  These forward-looking statements (i) are
   identified by  their use  of such  terms and  phrases as  "expected,"
   "expects," "believe," "believes," "will," "anticipated,"  "emerging,"
   "intends,"   "plans,"   "could,"   "may,"   "estimates,"    "should,"
   "objective,"  and  "goals"  and  (ii)   are  subject  to  risks   and
   uncertainties and  represent the  Company's present  expectations  or
   beliefs concerning  future events.   The  Company cautions  that  the
   forward-looking statements are  qualified by  important factors  that
   could cause actual  results to differ  materially from  those in  the
   forward-looking statements,  including (a)  risks of  general  market
   conditions, including demand for the Company's products and services,
   competition and price levels and the Company's historical  dependence
   on  relatively  few  products,  certain  suppliers  and  certain  key
   customers, and  (b)  risks  inherent  to  the  computer  and  network
   security industry,  including rapidly  changing technology,  evolving
   industry standards, increasing numbers of patent infringement claims,
   changes in customer requirements, price competitive bidding, changing
   government  regulations   and   potential   competition   from   more
   established firms and others.   Therefore, results actually  achieved
   may differ materially from expected  results included in, or  implied
   by these statements.


   Comparison of  Three and  Nine Months  Ended September  30, 1998  and
   September 30, 1999

        The  following  discussion  and  analysis  should  be  read   in
   conjunction with the Company's Consolidated Financial Statements  for
   the three and nine months ended September 30, 1998 and 1999.

   Revenues
        Revenues for  the three  months ended  September 30,  1999  were
   $4,653,000, an increase of $627,000, or 16%, as compared to the three
   months ended September 30, 1998.  This increase can be attributed  to
   new customers and add-on orders for the Company's flagship  products,
   Digipass 300  and  Digipass 500,  as  well as  the  newly  introduced
   Digipass 100, 600 and 700.

        For the nine months ended September 30, 1999, revenues increased
   29% to  $13,412,000 from  $10,432,000 for  the same  period in  1998.
   Again, the Company continues  to enter new  markets and develops  new
   applications for its products, as well  as enjoys a loyalty from  its
   current customers in the form of additional orders.

   Cost of Goods Sold

        Cost of goods sold for the three months ended September 30, 1999
   was $1,871,000, a  decrease of  $7,000, or  .4%, as  compared to  the
   three months ended  September 30, 1998.   As a  percentage of  sales,
   cost of goods  sold decreased to  40% from 47%  for the year  earlier
   period as a result of manufacturing efficiencies and increased volume
   discounts.

        For the nine months ended September 30, 1999, cost of goods sold
   increased 8% to $5,420,000  from $5,024,000 in 1998.   Cost of  goods
   sold for the nine month period ended September 30, 1999 decreased  to
   40% of  sales  from  48%  for  the year  earlier  period.    This  is
   consistent with the decrease experienced  for the three month  period
   ended September 30, 1999.

   Gross Profit

        The Company's gross profit for the three months ended  September
   30, 1999 was $2,782,000, an increase of $634,000, or 30%, as compared
   to the three  months ended  September 30,  1998.   This represents  a
   gross margin of 60%, as compared to 53% for the same period of  1998.
   This increase can be attributed to efficiencies in the design of  the
   products, which resulted in reduced third-party manufacturing costs.

        For the nine months ended September  30, 1999, gross profit  was
   $7,992,000, an increase of $2,584,000, or  48%, as compared to  1998.
   This represents a gross margin of 60% as compared to 52% for the same
   period in 1998.

   Sales and Marketing Expenses

        Sales  and  marketing  expenses  for  the  three  months   ended
   September 30, 1999  were $1,098,000, a  decrease of  $20,000, or  2%,
   over the  three  months  ended  September  30,  1998.    Selling  and
   marketing expenses increased 23% in the first nine months of 1999  to
   $3,744,000 from $3,047,000  in the first  nine months of  1998.   The
   increase is attributed to increased sales efforts including, in part,
   increased travel  costs  and  an increase  in  marketing  activities,
   including the  development of  a company-wide  marketing program  and
   other efforts.  Additionally, the Company continues to invest in  its
   customer  support  infrastructure,  which   becomes  more  and   more
   important as our client base continues to expand.

   Research and Development

        Research and  development  costs  for  the  three  months  ended
   September 30, 1999 were $598,000, an increase of $177,000, or 42%, as
   compared to the three months ended September 30, 1998.  Research  and
   development costs increased 42% in the  first nine months of 1999  to
   $1,771,000 from $1,249,000  in the first  nine months of  1998.   The
   increase is due to the addition  of R&D personnel, mainly in  France,
   due to the acquisition of Secureware in May 1999.

   General and Administrative Expenses

        General and administrative expenses  for the three months  ended
   September 30, 1999  were $625,000, a  decrease of  $141,000, or  18%,
   compared to the three months ended  September 30, 1998.  General  and
   administrative expenses increased  27% in  the first  nine months  of
   1999 to $2,239,000 from $1,760,000 in the first nine months of  1998.
   This increase is due to the addition of administrative support  staff
   and legal fees associated with a lawsuit that was settled earlier  in
   1999.

   Interest Expense

        Interest expense for the three  months ended September 30,  1999
   was $230,000, compared to $223,000, an  increase of 3% over the  same
   period of 1998.   Interest expense  decreased 42% in  the first  nine
   months of 1999 to $645,000 from  $1,103,000 in the first nine  months
   of 1998.   This decrease  is due  to a  reduction in  the debt  base,
   facilitated by the private placement of common stock that occurred in
   April 1999.

   Operating Income (Loss)

        The Company's  operating  income  for  the  three  months  ended
   September 30, 1999  was $460,000, compared  to an  operating loss  of
   $157,000 for the three months ended September 30, 1998.  The  Company
   had operating income of $236,000 for  the first nine months of  1999,
   as compared  to an  operating loss  of $648,000  for the  first  nine
   months of 1998.

   Income Taxes

        Income tax expense for the three months ended September 30, 1999
   was $383,000,  compared  to  $248,000  for  the  three  months  ended
   September 30, 1998.   For the nine months  ended September 30,  1999,
   income tax expense totaled $744,000, compared to expense of  $380,000
   for the same period  in 1998.  Income  taxes are attributable to  the
   Company's European operations.

   Liquidity and Capital Resources

        Since inception, the Company has financed its operations through
   a  combination  of  the   issuance  of  equity  securities,   private
   borrowings,  short-term   commercial  borrowings,   cash  flow   from
   operations, and loans from Mr. T.  Kendall Hunt, its Chairman of  the
   Board,  and  one  of  the  stockholders  of  the  Company's  original
   corporate predecessor.

        The Company's  cash  and  cash equivalents  were  $4,712,000  at
   September 30, 1999, which is an increase of approximately  $3,189,000
   from $1,523,000 at December 31, 1998.  As of September 30, 1999,  the
   Company had working capital of $5,650,000.  During the third  quarter
   of 1999, the Company used the cash provided by operations principally
   for working capital needs.

        Capital expenditures during the first  nine months of 1999  were
   $289,000 and  consisted primarily  of computer  equipment and  office
   furniture and  fixtures.   The  Company  acquired a  French  company,
   SecureWare, in May  1999 for $1,500,000.   Payment was  made in  both
   stock and cash, with payments being spread over 1 year.

        In April  1999, the  Company completed  a private  placement  of
   common stock  in  the  amount of  $11.5  million.    The  transaction
   represented  a  sale  of  the  Company's  common  stock  to  European
   institutional investors at a price of  $3.50 per share.  The  Company
   believes  that  its  current  cash  balances  and  anticipated   cash
   generated from operations will be sufficient to meet its  anticipated
   cash needs through  2000.   Continuance of  the Company's  operations
   beyond 2000, however, will depend on the Company's ability to  obtain
   adequate financing.  The Company has entered into engagement  letters
   with Artesia  Bank and  Bank DeGroof  for  a possible  future  public
   offering.

        The Company intends to seek acquisitions of businesses, products
   and technologies that are complementary or  additive to those of  the
   Company.  While from time to time the Company engages in  discussions
   with respect to  potential acquisitions, the  Company has no  present
   plans,  commitments   or  agreements   with  respect   to  any   such
   acquisitions as of the date of this Form 10-Q and currently does  not
   have excess cash  for use in  making acquisitions.   There can be  no
   assurance that any such acquisitions will be made.


   Year 2000 Considerations

        Many existing computer systems  and software products are  coded
   to accept only two digit entries in the date code field with  respect
   to year. The date  code field in these  systems and products must  be
   adjusted to allow for a four digit year of otherwise modified so that
   they recognize "00" to  indicate the year 2000  rather that the  year
   1900.  Based upon its current assessments, which are based in part on
   certain representations of third party service and product providers,
   the Company does  not expect that  it will  experience a  significant
   disruption of its operations as a result of the Year 2000.

        The Company plans to continue to identify, assess and to resolve
   all material Year 2000  issues by the  end of 1999.   The Company  is
   developing contingency  plans  to address  significant  internal  and
   external Year 2000 issues as they are identified.  These  contingency
   plans are expected to be complete by the end of 1999.  Even with  the
   effort to address the  Year 2000 issue made  by the Company to  date,
   there can be no assurance that the systems of other entities on which
   the Company  relies, including  the  Company's internal  systems  and
   proprietary software, will be remedied in a timely fashion, or that a
   failure to remediate by another entity and/or the Company, would  not
   have a material effect on the Company's results of operations.

        The Company  has  incurred  approximately $150,000  to  date  in
   addressing Year 2000 issues, and believes that no additional material
   expenses will  be incurred  related  to the  Year  2000 issue.    The
   Company has completed its assessment of products and mission critical
   systems for Year  2000 readiness  and believes  no material  expenses
   will be incurred in the future.

        Additionally, the Company believes that the purchasing  patterns
   of customers and potential customers may be affected by the Year 2000
   issues as  companies expend  significant resources  to upgrade  their
   current software systems for  Year 2000 compliance.   This, in  turn,
   could result  in  reduced  funds  available  to  be  spent  on  other
   technology applications, such as those offered by the Company,  which
   could have a material  adverse effect on  the Company's business  and
   results of operations.



                        PART II.  OTHER INFORMATION


   Item 1. Legal Proceedings.  None.

   Item 2.   Changes in Securities.  None.

   Item 3.   Quantitative and Qualitative Disclosures about Market Risk.

        Approximately 80% of the Company's business is conducted outside
   the United  States  in Europe  and  Asia/Pacific.   The  majority  of
   business operations  are  transacted in  foreign  currencies.   As  a
   result, the Company  has exposure to  foreign exchange  fluctuations.
   The Company  is affected  by both  foreign currency  translation  and
   transaction adjustments.  The Company  does  not hold  any  financial
   instruments for  trading purposes.   Translation  adjustments  result
   from the conversion of the  foreign subsidiaries' balance sheets  and
   income statements  to U.S.  dollars at  year-end exchange  rates  and
   weighted   average   exchange   rates,   respectively.    Translation
   adjustments resulting from  this process are  recorded directly  into
   stockholders' equity.  Transaction adjustments  result from  currency
   exchange movements when a foreign subsidiary transacts business in  a
   currency that differs from its local currency. These transactions are
   recorded as gains or losses in the Company's statement of operations.

        The Company's foreign exchange exposure was minimized in 1999 as
   the  majority  of  the   Company's  foreign  subsidiaries'   business
   transactions were spread across approximately 40 different  countries
   and currencies. This  geographic diversity  reduces the  risk to  the
   Company's operating  results. Company  has not  entered into  foreign
   currency exchange forward contracts or other derivative  arrangements
   to manage risks associated  with foreign exchange rate  fluctuations.
   Also, the Company performs  periodic reviews of outstanding  balances
   and  settles  intercompany  accounts  to  minimize  foreign  exchange
   transaction gains and losses.

        The Company has  minimal interest  rate risk.  The Company's  $8
   million debt is  made up of  fixed rate notes,  ranging from 9.0%  to
   9.5%, which are not subject to market fluctuations. The maturities of
   these notes range from 2001 to 2002.

   Item 4.   Submission of Matters to a Vote of Securityholders.  None.

   Item 5.   Other Information. None.

   Item 6.   Exhibits and Reports on Form 8-K

        a)   The following exhibits  are filed  with this  Form 10-Q  or
   incorporated by reference as set forth below:



     Exhibit
      Number Description


        27  Financial Data Schedule.

   (b)  Reports on Form 8-K

        No reports on Form 8-K have been filed by the Registrant  during
   the quarter ended September 30, 1999.


                                SIGNATURES

        Pursuant to  the requirements  of Section  13  or 15(d)  of  the
   Securities Exchange Act of 1934, the Registrant has duly caused  this
   Report to be signed on its behalf by the undersigned, thereunto  duly
   authorized, on November 13, 1999.

                                 VASCO Data Security International, Inc.


                                      /s/  Mario R. Houthooft

                                 Mario R. Houthooft
                                 Chief Executive Officer and President



                                      /s/  Gregory T. Apple

                                 Gregory T. Apple
                                 Vice President and Treasurer
                                 (Principal  Financial  Officer and
                                   Principal Accounting Officer)




                             EXHIBIT INDEX

    Exhibit
     Number  Description


        27  Financial Data Schedule.

  

 5

                             
                   9-MOS
                          DEC-31-1999
                               SEP-30-1999
                                       4,712,263
                                         0
                                2,383,842
                                    73,000
                                    807,468
                             9,543,241
                                       1,338,347
                                 835,997
                              12,939,103
                        3,893,364
                                              0
                                0
                                          0
                                        24,650
                                     588,281
                12,939,103
                                     13,412,035
                            13,412,035
                                        5,420,400
                                7,755,200
                               370,968
                                     0
                             645,126
                              (779,659)
                                   744,381
                        (1,524,040)
                                       0
                                      0
                                            0
                               (1,524,040)
                                     (0.07)
                                   (0.07)