~~Table~~UNITED ofSTATES ~~Contents~~

~~UNITED~~SECURITIES ~~STATES~~AND EXCHANGE COMMISSION

~~SECURITIES~~Washington, ~~AND~~D.C. ~~EXCHANGE~~20549 ~~COMMISSION~~

~~Washington,~~FORM ~~D.C. 20549~~ 10-Q

~~FORM~~(Mark ~~10-Q~~ One)

~~(Mark~~x ~~One~~QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

xFor ~~QUARTERLY~~the ~~REPORT~~quarterly ~~PURSUANT~~period TOended ~~SECTION~~March 31, 132012 ~~OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934~~

~~For~~OR ~~the quarterly period ended September 30, 2011~~

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

¨For ~~TRANSITION~~the ~~REPORT~~transition ~~PURSUANT~~period ~~TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934~~from to

~~For~~Commission ~~the~~File ~~transition~~Number: ~~period from to~~000-30241

~~Commission~~DDi ~~File~~Corp. ~~Number: 000-30241~~

~~DDi~~(Exact ~~Corp.~~name of registrant as specified in its charter)

(Exact name of registrant as specified in its charter)

Delaware

06-1576013

(State or other jurisdiction

of incorporation or organization)

(I.R.S. Employer

Identification No.)

Delaware		06-1576013
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

1220 N. Simon Circle

~~1220~~Anaheim, N.California ~~Simon~~92806 ~~Circle~~

~~Anaheim,~~(Address ~~California~~of ~~92806~~principal executive offices) (Zip code)

(~~Address of principal executive offices~~714) ~~(Zip code)~~688-7200

(~~714)~~Registrant’s ~~688-7200~~telephone number, including area code)

~~(Registrant’s~~Not Applicable ~~telephone number, including area code)~~

~~Not Applicable~~(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant: (~~Former~~1) has ~~name,~~filed ~~former~~all ~~address~~reports ~~and~~required ~~former~~to ~~fiscal~~be ~~year,~~filed ifby ~~changed~~Section 13 ~~since~~or ~~last~~15(d) ~~report~~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 ¨

Indicate by check mark whether the registrant: ~~(1)~~ has ~~filed~~submitted ~~all~~electronically ~~reports~~and posted on its corporate Web site, if any, every Interactive Data File required to be ~~filed~~submitted byand ~~Section 13~~posted orpursuant ~~15(d)~~to Rule 405 of ~~the Securities~~Regulation ~~Exchange~~S-T ~~Act~~(§232.405 of ~~1934~~this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to ~~file~~submit ~~such reports),~~ and ~~(2) has~~post ~~been subject to~~ such ~~filing requirements for the past 90~~ ~~days~~files). Yes x No ¨

Indicate by check mark whether the registrant ~~has~~is ~~submitted~~a ~~electronically~~large ~~and~~accelerated ~~posted~~filer, onan ~~its~~accelerated ~~corporate~~filer, ~~Web~~a ~~site~~non-accelerated filer, ifor ~~any,~~a ~~every~~smaller ~~Interactive~~reporting ~~Data~~company. ~~File~~See ~~required~~the todefinitions beof ~~submitted~~“large ~~and~~accelerated ~~posted~~filer,” ~~pursuant~~“accelerated tofiler,” ~~Rule~~and ~~405~~“smaller ofreporting ~~Regulation~~company” ~~S-T~~in ~~(§232.405~~Rule 12b-2 of ~~this chapter) during~~ the ~~preceding~~Exchange 12Act). ~~months~~ (orcheck ~~for such shorter period that the registrant was required to submit and post such files~~one)~~. Yes x No ¨~~:

~~Indicate~~Large ~~by check mark whether the registrant is a large~~ accelerated filer, an¨ ~~accelerated~~Accelerated filer, ax ~~non~~Non-accelerated filer, or¨ a(Do ~~smaller reporting~~not ~~company.~~check ~~See~~if ~~the~~a ~~definitions of “large accelerated filer,” “accelerated filer,” and “~~smaller reporting company~~” in Rule 12b-2 of the Exchange Act~~). ~~(check~~Smaller ~~one):~~reporting company ¨

~~Large~~Indicate ~~accelerated~~by ~~filer~~check ¨mark ~~Accelerated~~whether ~~filer~~the xregistrant ~~Non-accelerated~~is ~~filer~~a ¨shell company (Doas ~~not~~defined ~~check~~in ifRule a12b-2 ~~smaller~~of ~~reporting~~the Exchange ~~company~~Act) ~~Smaller reporting company~~ . Yes ¨ No x

~~Indicate~~As byof ~~check~~April 24, ~~mark~~2012, ~~whether~~DDi ~~the~~Corp. ~~registrant~~had is20,538,737 ashares ~~shell~~of ~~company~~common ~~(as~~stock, ~~defined~~par invalue ~~Rule~~$0.001 ~~12b-2~~per ofshare, ~~the Exchange Act)~~outstanding. ~~Yes ¨ No x~~

~~As of October 28, 2011,~~ DDi Corp. ~~had 20,329,532 shares of common stock, par value $0.001 per share, outstanding.~~

~~Table~~Form of10-Q ~~Contents~~for the Quarterly Period Ended March 31, 2012

~~DDi~~TABLE ~~CORP.~~OF CONTENTS

Form 10-Q for the Quarterly Period Ended September 30, 2011


		Page No.
PART I – FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited):
	Unaudited Condensed Consolidated Balance Sheets as of March 31, 2012 and December 31, 2011	1
	Unaudited Condensed Consolidated Statements of Income and Comprehensive Income for the Three Months Ended March 31, 2012 and 2011	2
	Unaudited Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2012 and 2011	3
	Notes to Unaudited Condensed Consolidated Financial Statements	4
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	11
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	16
Item 4.	Controls & Procedures	17
PART II – OTHER INFORMATION
Item 1.	Legal Proceedings	18
Item 1A.	Risk Factors	18
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	18
Item 3.	Defaults Upon Senior Securities	18
Item 4.	Mine Safety Disclosure	19
Item 5.	Other Information	19
Item 6.	Exhibits	19
Signatures		21

~~TABLE~~PART OFI ~~CONTENTS~~— FINANCIAL INFORMATION

		PageNo.
PART I — FINANCIAL INFORMATION
Item 1.	Financial Statements:
	Unaudited Condensed Consolidated Balance Sheets as of September 30, 2011 and December 31, 2010		1
	Unaudited Condensed Consolidated Statements of Income and Comprehensive Income for the Three and Nine Months Ended September 30, 2011 and 2010		2
	Unaudited Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2011 and 2010		3
	Notes to Unaudited Condensed Consolidated Financial Statements		4
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		11
Item 3.	Quantitative and Qualitative Disclosures about Market Risk		19
Item 4.	Controls and Procedures		19
PART II — OTHER INFORMATION
Item 1.	Legal Proceedings		20
Item 1A.	Risk Factors		20
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		20
Item 3.	Defaults Upon Senior Securities		20
Item 4.	Removed and Reserved		20
Item 5.	Other Information		20
Item 6.	Exhibits		20
Signatures			22

Item 1. Financial Statements

~~Table~~DDi ~~of Contents~~CORP.

~~PART~~UNAUDITED ICONDENSED —CONSOLIDATED ~~FINANCIAL~~BALANCE ~~INFORMATION~~SHEETS

~~Item 1.~~(In ~~Financial~~thousands, ~~Statements~~except per share data)

DDi CORP.


	March 31, 2012			December 31, 2011
	March 31, 2012			December 31, 2011
ASSETS
Current assets:
Cash and cash equivalents	$	29,177		$	31,181
Accounts receivable, net of allowance for bad debts of $509 and $511 as of March 31, 2012 and December 31, 2011, respectively		43,122			39,747
Inventories, net		25,029			23,611
Prepaid expenses and other assets		2,294			2,054

Total current assets		99,622			96,593
Property, plant and equipment, net		54,114			46,904
Goodwill		3,664			3,664
Other assets		749			808

Total assets	$	158,149		$	147,969

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	21,738		$	21,739
Accrued expenses and other current liabilities		12,157			14,889
Current portion of long-term debt		1,271			1,076
Income taxes payable		272			233

Total current liabilities		35,438			37,937
Long-term debt		13,785			8,589
Other long-term liabilities		559			568

Total liabilities		49,782			47,094

Commitments and contingencies (Note 14)
Stockholders’ equity:
Common stock — $0.001 par value, 190,000 shares authorized, 23,475 shares issued and 20,528 shares outstanding at March 31, 2012 and 23,406 shares issued and 20,459 shares outstanding at December 31, 2011		23			23
Additional paid-in-capital		236,756			236,116
Treasury stock, at cost — 2,947 shares held in treasury at March 31, 2012 and December 31, 2011, respectively		(16,323	)		(16,323	)
Accumulated other comprehensive income		1,049			526
Accumulated deficit		(113,138	)		(119,467	)

Total stockholders’ equity		108,367			100,875

Total liabilities and stockholders’ equity	$	158,149		$	147,969

~~UNAUDITED~~The ~~CONDENSED~~accompanying ~~CONSOLIDATED~~notes ~~BALANCE~~are ~~SHEETS~~an integral part of these consolidated financial statements.

~~(In~~1 ~~thousands, except per share data)~~

	September 30,2011			December 31,2010
ASSETS
Current assets:
Cash and cash equivalents	$	28,436		$	28,347
Accounts receivable, net of allowance for bad debts of $588 and $571 as of September 30, 2011 and December 31, 2010, respectively		40,799			40,821
Inventories, net		23,854			20,970
Prepaid expenses and other assets		2,778			1,889
Total current assets		95,867			92,027
Property, plant and equipment, net		43,089			42,605
Intangible assets, net		44			614
Goodwill		3,664			3,664
Other assets		888			954
Total assets	$	143,552		$	139,864
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	22,663		$	25,137
Accrued expenses and other current liabilities		11,956			13,802
Current portion of long-term debt		1,209			1,751
Income taxes payable		269			311
Total current liabilities		36,097			41,001
Long-term debt		8,783			9,704
Other long-term liabilities		416			527
Total liabilities		45,296			51,232
Commitments and contingencies (Note 13)
Stockholders’ equity:
Common stock — $0.001 par value, 190,000 shares authorized, 23,264 shares issued and 20,317 shares outstanding at September 30, 2011 and 23,129 shares issued and 20,182 shares outstanding at December 31, 2010		23			23
Additional paid-in-capital		240,500			245,181
Treasury stock, at cost — 2,947 shares held in treasury at September 30, 2011 and December 31, 2010		(16,323	)		(16,323	)
Accumulated other comprehensive income		261			1,063
Accumulated deficit		(126,205	)		(141,312	)
Total stockholders’ equity		98,256			88,632
Total liabilities and stockholders’ equity	$	143,552		$	139,864

DDi CORP.

~~The~~UNAUDITED ~~accompanying~~CONDENSED ~~notes~~CONSOLIDATED ~~are~~STATEMENTS anOF ~~integral~~INCOME ~~part~~AND ofCOMPREHENSIVE ~~these~~INCOME ~~unaudited condensed consolidated financial statements.~~

1(In thousands, except per share data)


	Three Months Ended March 31,
	2012			2011
Net sales	$	68,913		$	66,459
Cost of goods sold		53,579			52,307

Gross profit		15,334			14,152
Operating expenses:
Sales and marketing		4,457			4,638
General and administrative		4,025			3,959
Amortization of intangible assets		—			190
Restructuring and other related charges		68			—

Total operating expenses		8,550			8,787

Operating income		6,784			5,365
Non-operating (income) expense:
Interest expense		200			387
Interest income		(4	)		(5	)
Other expense (income), net		213			(86	)

Income before income tax expense		6,375			5,069
Income tax expense		46			64

Net income	$	6,329		$	5,005

Net income per share:
Basic	$	0.31		$	0.25
Diluted	$	0.30		$	0.24
Dividends paid per share	$	0.12		$	0.10
Weighted-average shares used in per share computations:
Basic		20,499			20,226
Diluted		21,242			21,190

DDi CORP.


	Three Months Ended March 31,
	2012		2011
Comprehensive income:
Net income	$	6,329	$	5,005
Foreign currency translation adjustments		523		433

Comprehensive income	$	6,852	$	5,438

~~UNAUDITED~~The ~~CONDENSED~~accompanying ~~CONSOLIDATED~~notes ~~STATEMENTS~~are OFan ~~INCOME~~integral ~~AND~~part ~~COMPREHENSIVE~~of ~~INCOME~~these unaudited condensed consolidated financial statements.

~~(In~~2 ~~thousands, except per share data)~~

	Three Months EndedSeptember 30,						Nine Months EndedSeptember 30,
	2011			2010			2011			2010
Net sales	$	66,175		$	68,988		$	198,858		$	202,035
Cost of goods sold		52,267			53,450			156,355			157,196
Gross profit		13,908			15,538			42,503			44,839
Operating expenses:
Sales and marketing		4,142			4,330			13,064			13,131
General and administrative		3,968			4,250			11,773			12,463
Amortization of intangible assets		190			190			570			570
Restructuring and other related charges		392			48			1,015			338
Operating income		5,216			6,720			16,081			18,337
Interest expense		384			303			1,162			1,063
Interest income		(2	)		(7	)		(9	)		(31	)
Other expense (income), net		(272	)		(144	)		(298	)		220
Income before income tax expense		5,106			6,568			15,226			17,085
Income tax (benefit) expense		(46	)		69			119			790
Net income	$	5,152		$	6,499		$	15,107		$	16,295
Net income per share:
Basic	$	0.25		$	0.33		$	0.74		$	0.82
Diluted	$	0.25		$	0.31		$	0.72		$	0.80
Dividend declared per share	$	0.10		$	0.06		$	0.30		$	0.12
Weighted-average shares used in per share computations:
Basic		20,317			19,916			20,282			19,868
Diluted		20,845			20,671			21,013			20,396

DDi CORP.

	Three Months EndedSeptember 30,					Nine Months EndedSeptember 30,
	2011			2010		2011			2010
Comprehensive income:
Net income	$	5,152		$	6,499	$	15,107		$	16,295
Foreign currency translation adjustments		(1,145	)		310		(802	)		507
Comprehensive income	$	4,007		$	6,809	$	14,305		$	16,802

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

~~The~~(In ~~accompanying~~thousands) ~~notes are an integral part of these unaudited condensed consolidated financial statements.~~


	Three Months Ended Marc h 31,
	2012			2011
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	6,329		$	5,005
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		2,502			2,139
Amortization of intangible assets		—			190
Amortization of debt issuance costs		60			61
Amortization of deferred lease liability		—			(110	)
Stock-based compensation		235			269
Other		7			(37	)
Changes in operating assets and liabilities:
Accounts receivable		(3,112	)		(2,752	)
Inventories		(1,286	)		(2,699	)
Prepaid expenses and other assets		(204	)		(818	)
Accounts payable		(113	)		(544	)
Accrued expenses and other liabilities		(308	)		(2,224	)
Income taxes payable		15			(77	)

Net cash provided by (used in) operating activities		4,125			(1,597	)

CASH FLOWS FROM INVESTING ACTIVITIES :
Purchases of property and equipment		(9,350	)		(2,359	)

Net cash used in investing activities		(9,350	)		(2,359	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of long-term debt		5,625			—
Principal payments on long-term debt		(380	)		(507	)
Proceeds from exercise of stock options		410			308
Cash dividend payments to common shareholders		(2,465	)		(2,028	)

Net cash provided by (used in) financing activities		3,190			(2,227	)

Effect of exchange rate changes on cash and cash equivalents		31			(118	)

Net decrease in cash and cash equivalents		(2,004	)		(6,301	)
Cash and cash equivalents, beginning of period		31,181			28,347

Cash and cash equivalents, end of period	$	29,177		$	22,046

~~Table~~The accompanying notes are an integral part of ~~Contents~~these unaudited condensed consolidated financial statements.

~~DDi~~3 ~~CORP.~~

~~UNAUDITED~~DDI ~~CONDENSED~~CORP. ~~CONSOLIDATED STATEMENTS OF CASH FLOWS~~

~~(In~~NOTES ~~thousands)~~TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

	Nine Months EndedSeptember 30,
	2011			2010
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	15,107		$	16,295
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		7,021			6,501
Amortization of intangible assets		570			570
Amortization of debt issuance costs		183			—
Amortization of deferred lease liability		(330	)		(338	)
Stock-based compensation		931			1,041
Other		2			203
Changes in operating assets and liabilities:
Accounts receivable		(353	)		(11,923	)
Inventories		(3,081	)		(1,928	)
Prepaid expenses and other assets		(1,102	)		(994	)
Accounts payable		(2,305	)		5,437
Accrued expenses and other liabilities		(1,411	)		(3,551	)
Income taxes payable		(115	)		(1,352	)
Net cash provided by operating activities		15,117			9,961
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment		(8,191	)		(5,765	)
Net cash used in investing activities		(8,191	)		(5,765	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments on long-term debt		(1,304	)		(1,358	)
Payments of debt issuance costs		(2	)		(665	)
Repayment of revolving credit facility		—			(4,290	)
Proceeds from exercise of stock options		511			526
Cash dividend payments to common shareholders		(6,092	)		(2,394	)
Net cash used in financing activities		(6,887	)		(8,181	)
Effect of exchange rate changes on cash and cash equivalents		50			68
Net increase (decrease) in cash and cash equivalents		89			(3,917	)
Cash and cash equivalents, beginning of period		28,347			19,392
Cash and cash equivalents, end of period	$	28,436		$	15,475

NOTE 1. BASIS OF PRESENTATION AND DESCRIPTION OF BUSINESS

~~Supplemental~~Description ~~disclosures~~ of ~~non-cash~~Business ~~operating and financing activities:~~

	Nine Months EndedSeptember 30,
	2011		2010
Adjustment of inventory balance to goodwill relating to acquisition of Coretec	$	—	$	402

DDi is a leading provider of time-critical, technologically-advanced electronic interconnect design, engineering and manufacturing services. The Company specializes in engineering and fabricating complex multi-layer PCBs on a quick-turn basis, with lead times as short as 24 hours. DDi has over 1,000 customers in various market segments including communications and computing, military and aerospace, industrial electronics, instrumentation, medical and high-durability commercial markets. The Company’s engineering capabilities and manufacturing facilities located in the United States and Canada, together with its suppliers in Asia, enable it to respond to time-critical orders and technology challenges for its customers. DDi operates primarily in one geographical area, North America.

~~The~~On ~~accompanying~~April 3, 2012, ~~notes~~the ~~are~~Company anentered ~~integral~~into ~~part~~a merger agreement to be acquired by Viasystems Group, Inc. (“Viasystems”), a leading worldwide provider of ~~these~~complex ~~unaudited~~multi-layer ~~condensed~~printed ~~consolidated~~circuit ~~financial~~boards and electro-mechanical solutions. Under the terms of the ~~statements~~merger agreement, Viasystems will acquire all of the outstanding common stock of DDi Corp. (see Note 11 – Subsequent Events).

3Basis of Presentation

~~Table~~The unaudited condensed consolidated financial statements include the accounts of ~~Contents~~DDi Corp. and its wholly-owned subsidiaries (referred to herein as the “Company”, “DDi”, “we”, “our” or “us”). All intercompany transactions have been eliminated in consolidation.

~~DDi~~The accompanying ~~CORP~~condensed consolidated financial statements have been prepared by us, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission, or SEC. Certain information and disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations. These unaudited condensed consolidated financial statements reflect all adjustments (consisting only of normal recurring adjustments) which, in the opinion of management are necessary to present fairly the financial position, the results of operations and cash flows for the periods presented. It is suggested that these unaudited condensed consolidated financial statements be read in conjunction with the consolidated financial statements and the notes thereto included in our most recent Annual Report on Form 10-K. The results of operations for the interim periods are not necessarily indicative of the results to be expected for the full year.

~~NOTES~~All TOfinancial ~~UNAUDITED~~data are ~~CONDENSED~~presented ~~CONSOLIDATED~~in ~~FINANCIAL~~US ~~STATEMENTS~~Dollars. Certain data from 2010 was reclassified to conform to the current period presentation.

~~NOTE~~Use 1.of ~~BASIS OF PRESENTATION AND DESCRIPTION OF BUSINESS~~ Estimates

~~Description~~The preparation of ~~Business~~our unaudited condensed consolidated financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the dates of the financial statements and the reported amounts of net sales and expenses in the reporting periods. The accounting estimates that require management’s most significant and subjective judgments include revenue recognition, inventory valuation, the valuation of stock-based compensation, and the valuation of long-lived assets and goodwill. In addition, we have other accounting policies that involve estimates such as allowance for doubtful accounts, inventory reserves, warranty reserves, accruals for restructuring and valuation allowance for deferred tax assets. Actual results may differ from these estimates under different assumptions or conditions and such differences could be material.

~~DDi~~Recent isAccounting aPronouncements leading provider of time-critical, technologically-advanced electronic interconnect design, engineering and manufacturing services. We specialize in engineering and fabricating complex multi-layer printed circuit boards (“PCBs”) on a quick-turn basis, with lead times as short as 24 hours. DDi has over 1,000 customers in various market segments including communications, computing, military/aerospace, industrial electronics, instrumentation and medical and high-durability commercial markets. Our engineering capabilities and seven manufacturing facilities located in the United States and Canada, together with our suppliers in Asia, enable us to respond to time-critical orders and technology challenges for our customers. DDi operates primarily in one geographical area, North America.

OnThe ~~December 31,~~Company ~~2009~~has adopted various accounting updates recently issued, ~~DDi~~most ~~completed~~of which represented technical corrections to the ~~acquisition~~accounting literature ofor ~~Coretec~~application ~~Inc.~~to ~~(“Coretec”),~~specific industries and are not expected to have a ~~Canadian-based~~material ~~PCB~~impact ~~manufacturer~~on ~~whose~~the ~~shares~~Company’s consolidated financial position, ~~prior~~results toof operations or cash flows. Management does not believe that any of the ~~acquisition~~recently issued, but ~~were~~not ~~publicly~~yet ~~traded~~effective, accounting standards if currently adopted would have a material effect on the ~~Toronto~~ ~~Stock~~accompanying ~~Exchange~~unaudited financial statements.

~~Basis~~NOTE of2. ~~Presentation~~INVENTORIES

~~The~~Inventory ~~unaudited~~obsolescence — ~~condensed~~We ~~consolidated~~purchase ~~financial~~raw ~~statements~~materials ~~include~~in ~~the~~quantities ~~accounts~~that ofwe ~~DDi~~anticipate ~~Corp.~~will ~~and~~be ~~its~~fully ~~wholly-owned~~used in ~~subsidiaries~~the ~~(referred~~near toterm. ~~herein~~However, changes in operating strategy, such as the ~~“Company”,~~closure ~~“DDi”, “we”,~~of ~~“our”~~a facility or ~~“us”)~~changes in technology can limit our ability to effectively utilize all of the raw materials purchased. ~~All~~If ~~intercompany~~inventory ~~transactions~~is ~~have~~not ~~been~~utilized, ~~eliminated~~then inan ~~consolidation~~inventory impairment may be recorded.

~~The accompanying~~4 condensed consolidated financial statements have been prepared by us, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission, or SEC. Certain information and disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations. These condensed consolidated financial statements reflect all adjustments (consisting only of normal recurring adjustments) which, in the opinion of, management are necessary to present fairly the financial position, the results of operations and cash flows for the periods presented. It is suggested that these condensed consolidated financial statements be read in conjunction with the consolidated financial statements and the notes thereto included in our most recent Annual Report on Form 10-K. The results of operations for the interim periods are not necessarily indicative of the results to be expected for the full year.

~~All~~DDI ~~financial data are presented in US Dollars~~CORP. ~~Certain data from 2010 was reclassified to conform to the current year presentation.~~

~~Use~~NOTES ofTO ~~Estimates~~ UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~The~~Overage ~~preparation~~inventory of— ~~our~~Overage ~~unaudited~~inventory ~~condensed~~represents ~~consolidated~~units ~~financial~~produced ~~statements~~ in ~~accordance~~excess ~~with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts~~ of ~~assets and liabilities at~~ the ~~dates~~customer ofpurchase ~~the~~order ~~financial~~as ~~statements~~a ~~and~~result ~~the reported amounts~~ of manufacturing ~~net revenue and expenses in the reporting periods~~yield. ~~The~~We ~~accounting~~value ~~estimates that~~this ~~require management’s most significant and subjective judgments include revenue recognition,~~ inventory ~~valuation, the valuation of stock-~~based ~~compensation,~~on ~~and~~an ~~the~~estimate ~~valuation~~ of ~~long-lived~~our ~~assets~~historical ~~and~~sales ~~goodwill.~~experience Inof ~~addition~~overage inventory, weas ~~have~~well ~~other accounting policies that involve estimates such~~ as ~~warranty~~the ~~reserves,~~age ~~accruals~~of ~~for~~the ~~restructuring and valuation allowance for deferred tax assets~~inventory. ~~Actual results may differ from these estimates under different assumptions or conditions and such differences could be material.~~

~~Recent~~Inventories ~~Accounting~~are ~~Pronouncements~~stated at the lower of cost (determined on a first-in, first-out or average cost basis) or market and consisted of the following (in thousands):

In September 2011, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2011-08 pertaining to the goodwill impairment test required under Accounting Standards Codification (ASC) Topic 350, “Intangibles — Goodwill and Other”. Under the amendments in this ASU, an entity has the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If, after assessing the totality of events or circumstances, an entity determines it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then performing the two-step impairment test is unnecessary. However, if an entity concludes otherwise, then it is required to perform the first step of the two-step impairment test by calculating the fair value of the reporting unit and comparing with the carrying amount of the reporting unit. If the carrying amount of a reporting unit exceeds its fair


	March 31, 2012		December 31, 2011
Raw materials	$	11,226	$	10,920
Work-in process		8,908		8,006
Finished goods		4,895		4,685

Total	$	25,029	$	23,611

4NOTE 3. REVOLVING CREDIT FACILITY

~~Table~~On September 23, 2010, we entered into a Credit Agreement (the “Credit Agreement”) with JPMorgan Chase Bank, N.A., as Administrative Agent and U.S. Lender, and JPMorgan Chase Bank, N.A., Toronto Branch, as Canadian Administrative Agent and Canadian Lender. On March 14, 2011, we entered into an amendment (the “March 2011 Credit Amendment”) to the Credit Agreement dated September 23, 2010. The March 2011 Credit Agreement provides for a revolving credit facility in an aggregate principal amount of ~~Contents~~$25.0 million, with a Canadian sub-limit of $10.0 million. Pursuant to its terms and subject to the conditions set forth therein, the aggregate principal amount of the March 2011 Credit Agreement may be increased from $25.0 to $40.0 million. The maturity date of the March 2011 Credit Agreement is September 23, 2013.

~~value,~~The ~~then~~March ~~the~~2011 ~~entity~~Credit isAmendment ~~required~~amended ~~to perform~~ the ~~second~~Credit ~~step~~Agreement ~~of the goodwill impairment test~~ to ~~measure~~(i) reduce the ~~amount~~margin offrom ~~the~~3.25% ~~impairment~~to ~~loss, if any~~2.50% ~~Under~~that ~~the~~is added ~~amendments~~to inpublished ~~this~~interest ~~ASU,~~rates anto ~~entity~~determine ~~has~~ the ~~option~~applicable tointerest ~~bypass~~rates ~~the~~for ~~qualitative~~borrowing ~~assessment~~and ~~for~~(ii) increase ~~any~~the ~~reporting~~amount ~~unit~~of individends ~~any~~that ~~period~~we ~~and~~can ~~proceed~~pay ~~directly~~without toobtaining ~~performing~~ the ~~first~~consent ~~step~~ of the ~~two-step~~Lender ~~goodwill~~from ~~impairment test~~$8.0 Anmillion ~~entity may resume performing the qualitative assessment~~ in ~~any subsequent~~a ~~period.~~rolling ~~ASU 2011~~twelve-08month isperiod (and ~~effective for accounting periods beginning after December 15, 2011, with early adoption permitted~~$25.0 Wemillion ~~expect~~over ~~to adopt~~ the ~~provisions~~term of ~~ASU 2011-08 for our annual impairment test in~~ the ~~fourth~~Credit ~~quarter~~Agreement) ofto ~~2011~~$12. We0 domillion ~~not~~($40.0 ~~believe~~million over the ~~adoption~~term of ~~this~~the ~~guidance~~Credit ~~will have a material impact on our financial statements~~Agreement).

InAvailability ~~June~~under ~~2011,~~ the ~~FASB~~ ~~issued~~March ~~ASU No.~~ 2011~~-05,~~ ~~which~~Credit ~~amended~~Agreement ~~its~~is ~~guidance~~based on ~~the~~various ~~presentation~~borrowing ofbase ~~comprehensive income required under ASC Topic 220~~tests, ~~“Presentation~~including ofour ~~Comprehensive~~eligible ~~Income”,~~accounts inreceivable ~~financial statements to improve the comparability, consistency~~ and ~~transparency of financial reporting and to increase the prominence of items that are recorded in other comprehensive income~~inventories. ~~The~~As ~~new accounting guidance requires entities to report components~~ of ~~comprehensive income in either (1)~~March a31, ~~continuous statement of comprehensive income or (2) two separate but consecutive statements. The provisions of this new guidance are effective for fiscal years~~2012, ~~and~~we ~~interim~~had ~~periods~~no ~~within those years, beginning after~~borrowings ~~December 15,~~outstanding ~~2011,~~under ~~with early adoption permitted. We have applied provisions of this guidance beginning in~~ the ~~second~~March ~~quarter~~2011 ofCredit ~~2011~~Agreement and ~~continuing~~availability inunder the ~~three~~facility ~~and~~was ~~nine~~above ~~month~~the ~~periods~~applicable bymeasurement ~~presenting comprehensive income within a single consolidates statement of income and comprehensive income~~levels.

~~There~~NOTE ~~were~~4. ~~various~~LONG-TERM ~~other~~DEBT updates recently issued, most of which represented technical corrections to the accounting literature or application to specific industries and are not expected to have a material impact on our consolidated financial position, results of operations or cash flows.

~~Management~~Key ~~does~~Bank not believe that any other recently issued, but not yet effective, accounting standards if currently adopted would have a material effect on the accompanying unaudited condensed consolidated financial statements.

~~NOTE~~The 2Company has a term loan with Key Bank secured by the Company’s building located in North Jackson, Ohio. ~~INVENTORIES~~The loan has a principal balance of approximately $0.7 million at March 31, 2012, requires monthly payments of approximately $20,000 plus accrued interest, and bears interest at LIBOR plus 1.5% (1.74% at March 31, 2012). The note matures in April 2015.

~~Inventories~~Business ~~are~~Development ~~stated~~Bank ~~at the lower~~ of ~~cost~~Canada ~~(determined on a first-in, first-out or average cost basis) or market and consist of the following (in thousands):~~

	September 30,2011		December 31,2010
Raw materials	$	10,998	$	9,216
Work-in process		7,723		7,093
Finished goods		5,133		4,661
Total	$	23,854	$	20,970

There are two existing loans with Business Development Bank of Canada (the “BDC”) – an infrastructure loan and an equipment loan. The BDC loans are secured by the land and building of the Company’s Sheppard Avenue facility located in Toronto, Ontario, and the loan balance is guaranteed by us, a requirement of the BDC. The BDC loans require the Company to maintain an available funds coverage ratio of 1.5. As of March 31, 2012, we are in compliance with all required covenants.

~~NOTE~~The 3infrastructure loan was provided to finance the completion of the Company’s Sheppard Avenue facility. ~~REVOLVING~~The ~~CREDIT~~infrastructure ~~FACILITY~~loan has a principal balance of approximately $4.4 million as of March 31, 2012, requires monthly principal payments of approximately $22,000, and accrues interest at BDC’s floating base rate (4.25% at March 31, 2012). The loan matures in October 2028.

On5 September 23, 2010, we entered into a Credit Agreement (the “Credit Agreement”) with JPMorgan Chase Bank, N.A., as Administrative Agent and U.S. Lender, and JPMorgan Chase Bank, N.A., Toronto Branch, as Canadian Administrative Agent and Canadian Lender. On March 14, 2011, we entered into an amendment (the “March 2011 Credit Amendment”) to the Credit Agreement dated September 23, 2010. The Credit Agreement provides for a revolving credit facility in an aggregate principal amount of $25.0 million, with a Canadian sub-limit of $10.0 million. Pursuant to its terms and subject to the conditions set forth therein, the aggregate principal amount of the facility may be increased from $25.0 to $40.0 million. The maturity date of the facility is September 23, 2013.

~~The~~DDI ~~March 2011 Credit Amendment amended the Credit Agreement to (i) reduce the margin from 3~~CORP.~~25%~~ to 2.50% that is added to published interest rates to determine the applicable interest rates for borrowing and (ii) increase the amount of dividends that we can pay without obtaining the consent of the Lender from $8.0 million in a rolling twelve-month period (and $25.0 million over the term of the Credit Agreement) to $12.0 million ($40.0 million over the term of the Credit Agreement).

~~Availability under~~NOTES ~~the~~TO ~~Credit~~UNAUDITED ~~Agreement~~CONDENSED isCONSOLIDATED ~~based~~FINANCIAL onSTATEMENTS various borrowing base tests, including our eligible accounts receivable and inventories. As of September 30, 2011, we had no borrowings outstanding under the Credit Agreement and availability under the facility was above the applicable measurement levels.

The equipment loan has a principal balance of approximately $1.5 million as of March 31, 2012, requires monthly principal payments of approximately $36,000, and accrues interest at the 1-month floating base rate plus 0.6% (3.35% at March 31, 2012). The loan matures in October 2015.

~~Table~~The ofCompany ~~Contents~~also had a building loan with BDC, which matured in March 2012 and had been paid in full.

~~NOTE~~Zions 4.Bank ~~LONG-TERM~~Mortgage ~~DEBT~~

~~Key~~The Company has a mortgage with Zions Bank with a principal balance of approximately $1.5 million as of March 31, 2012, secured by the land and building of our Cuyahoga Falls, Ohio facility. The mortgage requires monthly principal and interest payments of approximately $11,000, accrues interest at the Federal Home Loan Bank of Seattle rate plus 2% (7.07% at March 31, 2012), and matures during 2032.

~~We have a term loan with Key Bank secured by our building located in North Jackson, Ohio. The loan has a principal balance of approximately $0.8 million at September 30, 2011, requires monthly~~GE ~~payments~~Real ofEstate ~~approximately~~Mortgage ~~$20,000 plus accrued interest, and bears interest at LIBOR plus 1.5% (1.72% at September 30, 2011). The note matures in April 2015.~~

~~Business~~The ~~Development~~Company ~~Bank~~has a mortgage with GE Real Estate, with a principal balance of ~~Canada~~$1.3 million as of March 31, 2012, secured by the land and building of our Littleton, Colorado facility. The mortgage requires monthly interest and principal payments of approximately $11,000, accrues interest at a fixed rate of 7.55% per annum, and matures in February 2032.

~~There~~Wells ~~are~~Fargo ~~four~~Mortgage existing loans with Business Development Bank of Canada (the “BDC”) — a term loan, an infrastructure loan, an equipment loan and a building loan. The BDC loans are secured by the land and building of our Sheppard Avenue facility located in Toronto, Ontario, and the loan balance is guaranteed by us, a requirement of the BDC. The BDC loans require us to maintain an available funds coverage ratio of 1.5. As of September 30, 2011, we are in compliance with all required covenants.

On March 28, 2012, DDi Global Corp. (the “Borrower”), a subsidiary of the Company, entered into a credit agreement dated March 28, 2012 between the Borrower and Wells Fargo Bank (the “Wells Fargo Credit Agreement”). The ~~outstanding~~Wells ~~BDC~~Fargo ~~term~~Credit ~~loan~~Agreement ~~has~~provides for a ~~principal~~term ~~balance~~loan of(the ~~approximately~~“Term Loan”) of $05.1625 million asmaturing ofon ~~September~~March 3031, ~~2011~~2019. The ~~loan~~Term ~~requires~~Loan bears interest at a rate equal to 4.326% per ~~monthly~~annum. ~~principal~~Repayment of the term loan will be amortized over fifteen years, with monthly payments of approximately $5042,~~000~~500, ~~over~~and a balloon payment at maturity. The Borrower is permitted to make voluntary prepayments on the ~~loan~~Term ~~term~~Loan ~~and~~in ~~bears~~minimum ~~interest~~increments of $100,000 ~~payable~~upon ~~monthly,~~the atpayment ~~BDC’s~~of ~~floating~~a ~~base~~yield ~~rate~~maintenance ~~less~~prepayment 1fee.5% ~~(3.50%~~The atLoan ~~September 30,~~Agreement ~~2011)~~requires the Borrower to maintain a minimum fixed charge coverage ratio of 1.25 ~~The~~to ~~loan~~1.0 ~~matures~~and incontains ~~December~~other ~~2011~~customary covenants.

The ~~infrastructure~~obligations ~~loan~~under ~~was~~the ~~provided~~Term toLoan ~~finance~~are ~~the~~guaranteed ~~completion~~by ofDDi ~~our~~Corp. ~~Sheppard~~and ~~Avenue~~certain ~~facility.~~of ~~The~~the ~~infrastructure~~Company’s ~~loan~~existing ~~has~~wholly-owned asubsidiaries. ~~principal~~The ~~balance~~Term ofLoan ~~approximately~~is ~~$4.4~~secured ~~million~~by asa offirst-priority ~~September 30,~~mortgage ~~2011,~~on ~~requires~~the ~~monthly~~Company’s ~~principal~~recently-acquired ~~payments~~facility oflocated ~~approximately~~in ~~$20~~Anaheim,~~000~~ California, ~~and~~pursuant ~~accrues~~to ~~interest~~the atterms ~~BDC’s~~of ~~floating~~a ~~base~~deed ~~rate~~of (4trust.~~25%~~ ~~at September 30, 2011). The loan matures in October 2028.~~

~~The~~NOTE ~~equipment loan has a principal balance of approximately $1~~5.8 ~~million~~PRODUCT asWARRANTY of September 30, 2011, requires monthly principal payments of approximately $40,000, and accrues interest at the 1-month floating base rate plus 0.6% (3.3% at September 30, 2011). The loan matures in October 2015.

The ~~building~~Company ~~loan~~accrues ~~has~~warranty aexpense, ~~principal~~including ~~balance~~cost for other damages beyond our products in some cases, which is included in cost of ~~approximately~~goods $0sold, at the time revenue is recognized.1 ~~million~~Management asestimates future warranty obligations related to defective PCBs at the time of ~~September 30~~shipment, ~~2011,~~based ~~requires~~upon ~~monthly~~the ~~principal~~relationship between historical sales volumes and anticipated ~~payments~~costs. Factors that affect the warranty liability include the number of ~~approximately~~units ~~$20~~sold,~~000,~~ historical and ~~accrues~~anticipated ~~interest~~rates atof ~~BDC’s~~warranty ~~floating~~claims ~~base~~and ~~rate~~the ~~plus~~estimated 0cost of repair.~~25%~~ (5Management assesses the adequacy of the warranty accrual each quarter.~~25%~~ atTo ~~September 30~~date, actual ~~2011)~~warranty claims and costs have been in line with the management’s estimates. The ~~loan~~warranty ~~matures~~accrual is included in ~~March~~accrued ~~2012~~expenses and other current liabilities.

~~Zions~~Changes ~~Bank~~in ~~Mortgage~~the Company’s warranty reserves were as follows (in thousands):

We have a mortgage with Zions Bank with a principal balance of approximately $1.5 million as of September 30, 2011, secured by the land and building of our Cuyahoga Falls, Ohio facility. The mortgage requires monthly fixed principal and interest payments of approximately $11,000, accrues interest at the Federal Home Loan Bank rate plus 2% (7.07% at September 30, 2011), and matures during 2032.


	Three Months Ended March 31,
	2012			2011
Beginning balance	$	1,096		$	1,167
Warranties issued during the period		664			1,131
Warranty expenditures		(666	)		(1,007	)

Ending Balance	$	1,094		$	1,291

GENOTE ~~Real Estate~~6. ~~Mortgage~~INCOME TAXES

WeThe ~~have~~Company aapplies ~~mortgage~~the ~~with~~provisions GEof ~~Real~~FASB ~~Estate~~Accounting Standards Codification (“ASC”) 740, ~~with~~“Income Taxes”, awhich ~~principal~~established ~~balance~~standards of ~~$1.3~~financial ~~million~~accounting asand ofreporting ~~September 30, 2011,~~for ~~secured~~income bytaxes ~~the~~that ~~land~~result ~~and~~from ~~building~~an ofentity’s ~~our~~activities ~~Littleton,~~during ~~Colorado~~the ~~facility~~current and preceding years. The ~~mortgage~~Company ~~requires~~has ~~monthly~~$0.3 ~~fixed~~million ~~principal~~of ~~and~~total ~~interest~~gross ~~payments~~unrecognized oftax benefits ~~approximately~~at ~~$11~~March 31,~~000~~ 2012 and December 31, ~~accrues~~2011, ~~interest~~respectively. atIf arecognized ~~fixed~~in ~~rate~~future ofperiods ~~7.55% per~~there ~~annum,~~would ~~and~~be ~~matures~~a ~~during 2032~~favorable effect of $0.2 million

~~Table~~DDI ofCORP. ~~Contents~~

~~NOTE~~NOTES 5.TO ~~PRODUCT~~UNAUDITED ~~WARRANTY~~CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

We to ~~accrue~~the ~~warranty~~effective ~~expense,~~tax ~~which~~rate. isManagement ~~included~~anticipates ina ~~cost~~decrease of ~~goods~~approximately ~~sold,~~$0.2 atmillion in the ~~time~~tax ~~revenue~~contingency isreserve ~~recognized~~during ~~for estimated future warranty obligations related to defective PCBs at~~ the ~~time~~remainder of ~~shipment,~~2012 ~~based~~due ~~upon~~to ~~the~~statute ~~relationship between historical sales volumes and anticipated costs~~expirations. ~~Factors~~The ~~that~~Company files ~~affect~~income ~~the~~tax ~~warranty~~returns ~~liability~~in ~~include~~ the ~~number~~U.S. offederal ~~units sold~~jurisdiction, ~~historical~~ ~~and~~various ~~anticipated~~state ~~rates~~jurisdictions ofand ~~warranty~~Canada. ~~claims~~The ~~and~~Company ~~the~~has ~~estimated~~substantially ~~cost~~concluded ofall ~~repair~~U.S. Wefederal ~~assess~~income ~~the~~tax ~~adequacy~~matters offor ~~the~~years ~~warranty~~through ~~accrual each quarter~~2004. ToCanadian ~~date,~~income ~~actual~~tax ~~warranty~~matters ~~claims and costs~~ have been inexamined through ~~line with our estimates~~2008. ~~The~~State ~~warranty~~jurisdictions ~~accrual is~~that ~~included~~remain insubject ~~accrued~~to ~~expenses~~examination ~~and~~range ~~other~~from ~~current~~2005 ~~liabilities~~to 2009.

~~Our~~The ~~warranty~~Company’s ~~accrual~~effective income ~~and~~tax ~~cost~~rate ~~activity~~differs isfrom the U.S. federal statutory tax rate of 35% primarily as ~~follows~~a (result of utilization of tax loss carryforwards and to a lesser extent, research and development credits, and state income taxes. The reduced income tax rate in ~~thousands):~~2012 was primarily the result of reserved net operating loss carryforwards and tax credits available to offset profitable operating results in 2012.

	Three Months EndedSeptember 30,						Nine Months EndedSeptember 30,
	2011			2010			2011			2010
Beginning balance	$	1,187		$	1,250		$	1,167		$	1,100
Warranties issued during the period		1,833			1,773			5,891			5,007
Warranty expenditures		(1,827	)		(1,814	)		(5,865	)		(4,898	)
Ending Balance	$	1,193		$	1,209		$	1,193		$	1,209

NOTE 7. STOCK-BASED COMPENSATION

~~NOTE~~Stock 6.Options ~~INCOME TAXES~~

WeThe ~~apply~~Company uses the ~~provisions~~Black-Scholes ofoption ~~FASB~~pricing ~~ASC~~model ~~Topic 740, “Income Taxes”, which established standards of financial accounting~~ and ~~reporting~~applies ~~for~~the ~~income~~single-option ~~taxes~~valuation ~~that~~approach ~~result~~to ~~from an entity’s activities during~~ the ~~current~~stock ~~and~~option ~~preceding~~valuation ~~years.~~to Wedetermine ~~have~~the ~~$0.3~~fair ~~million~~value ~~and $0.4 million~~ of ~~total~~stock ~~gross~~options. ~~unrecognized~~The ~~tax~~fair ~~benefits~~value as of restricted ~~September 30,~~stock ~~2011~~awards and ~~December 31,~~ ~~2010.~~restricted Ifstock ~~recognized~~units inis ~~future~~determined ~~periods~~using ~~there~~the ~~would~~closing bemarket aprice ~~favorable effect~~ of ~~$0.2~~DDi’s ~~million~~common tostock on the ~~effective~~date ~~tax~~of ~~rate~~grant. The ~~tax~~Company ~~contingency~~recognizes ~~reserve~~stock-based ~~decreased~~compensation ~~approximately~~expense ~~$60,000~~on ~~due~~a tostraight-line ~~statute~~basis ~~expirations~~over in the ~~third quarter of~~requisite ~~fiscal~~service ~~2011.~~period ~~Management~~for ~~anticipates~~time-based novesting ~~additional~~awards ~~decreases in the tax contingency reserve during the remainder~~ of ~~2011.~~stock ~~We file income tax returns in the U.S. federal jurisdiction~~options, ~~various~~restricted ~~state~~stock ~~jurisdictions~~awards and ~~Canada.~~restricted Westock ~~have substantially concluded all U~~units.S. ~~federal~~Certain ~~income~~of ~~tax~~the ~~matters~~stock ~~for~~options ~~years~~may ~~through~~vest ~~2004.~~on ~~Canadian~~an ~~income~~accelerated ~~tax matters have been examined through 2008~~basis. ~~State jurisdictions that remain subject to examination range from 2003 to 2010.~~

~~Our~~The ~~effective~~Black-Scholes ~~income~~option ~~tax~~pricing ~~rate~~model ~~differs~~was ~~from~~developed ~~the~~for ~~U.S.~~use ~~federal~~in ~~statutory~~estimating ~~tax~~the ~~rate~~fair value of ~~35%~~traded ~~primarily~~options asthat ahave ~~result~~no ~~of the mix of earnings~~vesting ~~between~~restrictions ~~tax jurisdictions, research~~ and ~~development~~are ~~credits,~~fully ~~state~~transferable. ~~income~~This ~~taxes~~model ~~and~~requires ~~our continuous evaluation of~~ the ~~realization~~input of ~~our~~highly ~~deferred~~subjective ~~tax~~assumptions, ~~assets~~including ~~and~~the ~~uncertain~~expected ~~tax~~stock ~~positions.~~price ~~The~~volatility, ~~reduced~~risk-free ~~income~~interest ~~tax~~rates, dividend rate, ~~in 2011 was primarily the result of reserved net operating loss carryforwards~~ and ~~tax~~expected ~~credits available to offset profitable operating results~~term.

~~NOTE~~There 7were 22,500 stock options granted during the three months ended March 31, 2012 and 15,000 stock options granted during the three months ended March 31, 2011. ~~STOCK~~As of March 31, 2012, the total compensation cost related to non-~~BASED~~vested ~~COMPENSATION~~stock options not yet recognized was $1.2 million, net of estimated forfeitures. This cost will be amortized on a straight-line basis over the remaining weighted-average period of approximately 1.7 years.

~~Stock~~In ~~Options~~connection with the impending merger with Viasystems (See Note 11 – Subsequent Events), all unvested outstanding options as of the effective time will be accelerated.

In May 2011, our stockholders approved the DDi Corp. 2011 Stock Incentive Plan (the “2011 Plan”). Awards under the 2011 Plan may be made to key employees and directors of DDi whose participation in the 2011 Plan is determined to be in the best interests of DDi by the Compensation Committee of the Board of Directors (the “Compensation Committee”). The ~~2011~~following ~~Plan~~table ~~permits~~summarizes the granting of options (both incentive and nonqualified stock options), share appreciation rights, restricted common stock, deferred share units and performance awards. The Plan reserves 1,750,000 shares for future awards to eligible persons. The number of shares available for awards, as well as the terms of outstanding awards, will be adjusted as provided in the 2011 Plan for share splits, share dividends, reclassifications, recapitalizations, and other similar events. Any shares reserved for awards will again be available for future awards if the shares for any reason will never be issued to a participant or beneficiary pursuant to an award due to the awardCompany’s ~~forfeiture,~~stock ~~cancellation,~~option ~~expiration,~~activity orunder ~~net settlement without the issuance of shares. In addition,~~ all ~~shares that are available for future grant under~~ the ~~2005~~plans ~~Stock Incentive Plan and awards granted under the 2005 Stock Incentive Plan that expire, terminate or are otherwise forfeited will become available~~ for ~~subsequent award under~~ the ~~2011 Plan. Generally, options that have been granted to employees under the 2011 Plan have a ten year term and vest over~~ three ~~years~~months ~~from~~ended ~~the~~March 31, ~~date~~2012: ~~of grant in equal annual installments. Certain of the grants may vest on an accelerated basis.~~

In order to determine the fair value of stock options, we use the Black-Scholes option pricing model and apply the single-option valuation approach to the stock option valuation. In order to determine the fair value of restricted stock awards and restricted stock units we use the closing market price of DDi common stock on the date of grant. We recognize stock-based compensation expense on a straight-line basis over the requisite service period for time-based vesting awards of stock options, restricted stock awards and restricted stock units.


	Options Outstanding (in thousands)			Weighted Average Exercise Price Per Option		Weighted Average Remaining Contractual Life in Years		Aggregate Intrinsic Value (in thousands)
Balance as of December 31, 2011		2,779		$	8.35		6.32	$	5,911
Granted		23		$	10.88
Exercised		(80	)	$	5.09			$	462
Forfeited		(9	)	$	9.96

Balance as of March 31, 2012		2,713		$	8.47		6.1	$	12,881

Options exercisable as of March 31, 2012		1,883		$	8.53		4.8	$	9,659

7The aggregate intrinsic value represents the difference between the exercise price of the underlying awards and the quoted price of DDi’s common stock for those awards that have an exercise price below the quoted price at March 31, 2012.

~~Table~~Restricted ofStock ~~Contents~~

~~The~~There ~~Black-Scholes~~were ~~option~~no ~~pricing~~grants ~~model~~of ~~was~~restricted ~~developed~~stock ~~for~~awards during ~~use~~the inthree ~~estimating~~months ~~the~~ended ~~fair~~March 31, ~~value~~2012 ~~of traded~~and ~~options~~2011. ~~that~~All ~~have~~previously nogranted ~~vesting~~restricted ~~restrictions~~stock ~~and~~became ~~are~~ fully ~~transferable.~~vested ~~This~~in ~~model~~October ~~requires~~2011. ~~the~~As ~~input~~ of ~~highly~~March 31, ~~subjective assumptions~~2012, ~~including~~there ~~the~~is ~~expected~~no ~~stock~~compensation ~~price~~cost ~~volatility,~~related ~~risk-free~~to ~~interest~~restricted ~~rates,~~stock ~~dividend~~awards ~~rate,~~that ~~and~~remains ~~expected~~to ~~term.~~be recognized.

~~There~~7 were 18,500 and 725,100 grants of stock options during the three and nine months ended September 30, 2011, respectively. There were 10,000 and 575,800 grants of stock options during the three and nine months ended September 30, 2010, respectively. As of September 30, 2011, the total compensation cost related to non-vested stock options not yet recognized was $1.8 million, net of estimated forfeitures. This cost will be amortized on a straight-line basis over the remaining weighted-average period of approximately 2.0 years.

~~The~~DDI ~~following~~CORP. ~~table summarizes our stock option activity under all the plans for the nine months ended September 30, 2011:~~

	OptionsOutstanding(in thousands)			WeightedAverageExercise PricePer Option		WeightedAverageRemainingContractual Lifein Years		AggregateIntrinsic Value(in thousands)
Balance as of December 31, 2010		2,466		$	7.87		6.43	$	12,483
Granted		725		$	8.86
Exercised		(204	)	$	6.30			$	807
Forfeited		(61	)	$	8.63
Balance as of September 30, 2011		2,926		$	8.21		6.6	$	2,369
Options exercisable as of September 30, 2011		1,907		$	8.48		5.2	$	1,601

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~The~~Stock ~~aggregate~~Compensation ~~intrinsic~~Expense value represents the difference between the exercise price of the underlying awards and the quoted price of DDi’s common stock for those awards that have an exercise price below the quoted price at September 30, 2011.

~~Restricted~~The ~~Stock~~following table sets forth expense related to stock-based compensation (in thousands):

During the three and nine months ended September 30, 2011, there were 1,913 and 4,657 of increases, respectively, to shares subject to outstanding Restricted Stock Units (“RSUs”) as the result of required adjustments due to quarterly dividend payments, and there were no other issuances of restricted stock awards. During the three and nine months ended September 30, 2010, there was an increase of 3,874 shares subject to outstanding RSUs as the result of required adjustments due to quarterly dividend payments, and zero and 25,000 grants of restricted stock awards. As of September 30, 2011, the total compensation cost related to non-vested restricted stock awards not yet recognized was $78,000, net of estimated forfeitures. This cost will be amortized on a straight-line basis over the remaining weighted-average period of approximately 0.2 years.


	Three Months Ended March 31,
	2012		2011
Stock-based compensation expense:
Cost of goods sold	$	78	$	78
Sales and marketing expenses		34		37
General and administrative expenses		123		154

Total stock-based compensation expense	$	235	$	269

ANOTE ~~summary~~8. ofSEGMENT ~~the~~REPORTING ~~status of our non-vested restricted shares as of September 30, 2011 and changes during the nine months ended September 30, 2011 is presented below:~~

	Non-vestedSharesOutstanding(in thousands)			WeightedAverageGrant-DateFair Value
Non-vested at December 31, 2010		144		$	3.96
Granted		5	(a)	$	3.92
Vested		(9	)	$	4.48
Forfeited		—			—
Non-vested at September 30, 2011		140		$	3.92

Based on evaluation of the Company’s financial information, management believes that the Company operates in one reportable segment related to the design, development, manufacture and test of complex PCBs. Net sales are attributed to the country in which the customer buying the product is located.

~~(a)~~The ~~Under~~following ~~the~~table ~~terms~~summarizes ofnet ~~the~~sales ~~DDi~~by ~~2005~~geographic ~~Stock~~area ~~Incentive~~(in ~~Plan,~~thousands): the number of shares subject to outstanding RSUs are adjusted upon the payments of cash dividends. As a result of the quarterly dividend payments during the nine months ended September 30, 2011, the number of shares subject to outstanding RSUs increased by 4,657 shares.


	Three Months Ended March 31,
	2012		2011
Net sales:
North America (1)	$	61,257	$	60,639
Asia		6,459		4,700
Other		1,197		1,120

Total	$	68,913	$	66,459

~~Table~~(1) The majority of ~~Contents~~sales in North America are to customers located in the United States.

~~Stock-Based~~NOTE ~~Compensation~~9. ~~Expense~~NET INCOME PER SHARE

~~The~~Basic ~~following~~net ~~table~~income ~~sets~~per ~~forth~~share ~~expense~~is ~~related~~computed toby dividing the net income for the period by the weighted-average number of common shares outstanding during the period, net of shares of common stock held in treasury. Diluted net income per share is computed by dividing the net income for the period by the weighted-~~based~~average ~~compensation~~number (of common and common equivalent shares outstanding during the period, if dilutive. The dilutive effect of outstanding options and restricted stock is reflected in ~~thousands):~~diluted earnings per share by application of the treasury stock method, which includes consideration of share-based compensation.

	Three Months EndedSeptember 30,				Nine Months EndedSeptember 30,
	2011		2010		2011		2010
Stock-based compensation expense:
Cost of goods sold	$	119	$	115	$	298	$	355
Sales and marketing expenses		53		56		137		200
General and administrative expenses		183		181		496		486
Total stock-based compensation expense	$	355	$	352	$	931	$	1,041

The following table sets forth the calculation of basic and diluted net income per share of common stock (in thousands, except per share data):

NOTE 8. SEGMENT REPORTING


	Three Months Ended March 31,
	2012		2011
Weighted-average shares of common stock outstanding—basic		20,499		20,226
Weighted-average common stock equivalents		743		964

Weighted-average shares of common stock outstanding—diluted		21,242		21,190

Net income	$	6,329	$	5,005
Net income per share—basic	$	0.31	$	0.25
Net income per share—diluted	$	0.30	$	0.24

~~Based~~8 on evaluation of our financial information, management believes that DDi operates in one reportable segment related to the design, development, manufacture and test of complex PCBs. Net sales are attributed to the country in which the customer buying the product is located.

~~The~~DDI ~~following~~CORP. ~~table summarizes net sales by geographic area (in thousands):~~

	Three Months EndedSeptember 30				Nine Months EndedSeptember 30
	2011		2010		2011		2010
Net sales:
North America (1)	$	60,504	$	61,340	$	181,428	$	179,075
Asia		4,392		6,696		14,164		19,586
Other		1,279		952		3,266		3,374
Total	$	66,175	$	68,988	$	198,858	$	202,035

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~(1)~~For ~~The~~the ~~majority~~three months ended March 31, 2012 and 2011, common shares issuable upon exercise of ~~net~~outstanding ~~sales~~stock inoptions ~~North~~and ~~America~~vesting ~~are~~of restricted tostock ~~customers~~of ~~located~~1,970,582 inand 1,493,407, respectively, were excluded from the ~~United~~diluted ~~States~~net income per common share calculation as their impact would have been anti-dilutive.

NOTE 910. ~~NET~~DIVIDENDS ~~INCOME PER SHARE~~

~~Basic~~We ~~net~~have ~~income~~paid ~~per~~quarterly ~~share~~cash isdividends ~~computed~~since ~~by dividing~~ the ~~net~~second ~~income~~quarter ~~for~~of ~~the~~2010. ~~period~~On byDecember 13, 2011, the ~~weighted-average~~board ~~number~~ of ~~common~~directors ~~shares~~declared ~~outstanding~~a ~~during~~cash ~~the~~dividend ~~period, net~~ of ~~shares of common stock held in treasury~~$0.12 ~~Diluted net income~~ per share. isIt ~~computed~~was bypaid ~~dividing~~on ~~the~~March 30, ~~net~~2012 ~~income for~~ (the ~~period~~“Payment byDate”) ~~the~~to ~~weighted-average~~stockholders ~~number~~ of ~~common~~record ~~and~~as ~~common~~of ~~equivalent shares outstanding during the period~~March 15, if2012 ~~dilutive. The dilutive effect of outstanding options and restricted stock is reflected in diluted earnings per share by application of~~ (the ~~treasury~~“Record ~~stock method, which includes consideration of share-based compensation~~Date”).

~~The~~DDi ~~following~~Corp. ~~table~~is ~~sets~~a ~~forth~~Delaware ~~the~~corporation. ~~calculation~~Delaware ofcode ~~basic~~allows a corporation to declare and ~~diluted~~pay ~~net~~dividends ~~income~~out ~~per~~of ~~share~~the corporations “surplus”, which is defined as total assets minus total liabilities minus par value of ~~common~~issued stock. ~~(in~~DDi had a positive surplus balance as defined by Delaware law of $108.3 million as of March 31, 2012. When the Company records a ~~thousands~~dividend, ~~except~~the ~~per~~charge ~~share~~is ~~amounts):~~recorded to additional paid-in capital as opposed to retained earnings since the Company has an accumulated deficit.

	Three Months EndedSeptember 30,				Nine Months EndedSeptember 30,
	2011		2010		2011		2010
Weighted-average shares of common stock outstanding — basic		20,317		19,916		20,282		19,868
Weighted-average common stock equivalents		528		755		731		528
Weighted-average shares of common stock outstanding — diluted		20,845		20,671		21,013		20,396
Net income	$	5,152	$	6,499	$	15,107	$	16,295
Net income per share — basic	$	0.25	$	0.33	$	0.74	$	0.82
Net income per share — diluted	$	0.25	$	0.31	$	0.72	$	0.80

The payment of future cash dividends will be at the discretion of the board of directors and will depend upon earning levels, capital requirements and alternative uses of cash.

~~For~~The ~~the~~merger ~~three~~agreement ~~and~~with ~~nine~~Viasystems ~~months~~imposes ~~ended~~certain ~~September 30,~~restrictions ~~2011,~~on ~~common~~DDi’s ~~shares~~ability ~~issuable~~to ~~upon~~pay ~~exercise~~future of outstanding stock options and vesting of restricted stock of 2,538,455 and 2,334,661 respectively, were excluded from the diluted net income per common share calculation as their impact would have been anti-dilutivedividends. ~~For~~(see ~~the~~Note ~~three~~11 ~~and nine months~~– ~~ended~~Subsequent September 30, 2010, common shares issuable upon exercise of outstanding stock options and vesting of restricted stock of 2,148,339 and 2,376,187 respectively, were excluded from the diluted net income per common share calculationEvents).

9NOTE 11. SUBSEQUENT EVENTS

~~Table~~On April 3, 2012, the Company entered into a merger agreement to be acquired by Viasystems Group, Inc. (“Viasystems”), a leading worldwide provider of ~~Contents~~complex multi-layer printed circuit boards and electro-mechanical solutions. Under the terms of the merger agreement, Viasystems will acquire all of the outstanding common stock of DDi Corp.

~~NOTE~~The ~~10.~~Company’s ~~RESTRUCTURING~~Board ~~AND~~of ~~OTHER~~Directors ~~RELATED~~has ~~CHARGES~~unanimously approved the merger and the related agreement and plan of merger, which must also be approved by a majority of the Company’s stockholders entitled to vote thereon and is expected to be completed late in the second quarter or early in the third quarter of 2012.

~~The~~Pursuant ~~acquisition~~to ofthe ~~Coretec~~merger ~~on December 31~~agreement, ~~2009 prompted us to integrate~~ the ~~operations~~Company ofhas ~~DDi’s~~agreed ~~legacy facility~~not into ~~Toronto~~declare, ~~(McNicoll)~~set ~~with Coretec’s Toronto facility (Sheppard Avenue) during 2010~~aside, ~~which~~make ~~reduced~~or ~~fixed~~pay ~~overhead~~additional ~~costs,~~dividends ~~rationalized~~without ~~capacity,~~the ~~and~~consent of ~~allowed~~Viasystems ~~for~~until ~~taking~~the ~~full~~earlier ~~advantage~~ of the ~~modern~~consummation ~~Sheppard~~of ~~Avenue~~the ~~manufacturing~~merger ~~facility. During~~or the ~~second~~termination ~~quarter~~ of ~~2011,~~the wemerger ~~incurred~~agreement, ~~$0.6~~except ~~million~~that ofDDi’s ~~severance~~board ~~costs~~is ~~related~~permitted to ~~the~~declare ~~final~~a ~~phase~~second ofquarter ~~the~~dividend ~~Toronto~~of ~~integration plan~~$0.12 Inper ~~September~~share ~~2011,~~of ~~our~~DDi’s ~~management~~common ~~approved~~stock, ~~committed~~provided ~~to and initiated plans to restructure and improve~~the ~~efficiencies~~record indate ~~our~~for ~~operations.~~such ~~During~~dividend ~~the~~is ~~three~~set ~~months~~no ~~ended~~earlier ~~September~~than June 30, ~~2011, we incurred $0~~2012.4 ~~million~~Should ofthe ~~severance~~merger ~~costs~~be ~~that~~consummated ~~are~~prior ~~related~~ to athis ~~reduction~~record indate, ~~workforce.~~this ~~During~~dividend ~~the~~would ~~three~~not ~~and~~be ~~nine~~paid. ~~months~~Such ~~ended~~dividend ~~September 30,~~has ~~2010,~~not ~~we incurred~~been ~~$48,000~~declared ~~and~~as ~~$0.3 million~~ of ~~integration~~the ~~costs~~date ~~which were composed~~ of ~~estimated~~this ~~site~~Quarterly ~~remediation,~~Report ~~asset~~on ~~disposals, severance, and other typical integration expenses~~Form 10-Q.

AsNOTE ~~of September 30, 2011, accrued restructuring and other related charges totaled $0~~12.7 ~~million,~~RESTRUCTURING consisting of $0.3 million related to the Toronto site integration and $0.4 million related to a reduction in workforce. These amounts are included in other current liabilities on the condensed consolidated balance sheet. We do not anticipate any further charges related to these restructuring activities, however we continue to seek opportunities to drive efficiencies in the business.

~~NOTE~~During 11the first quarter of 2012, the Company completed the purchase of a new manufacturing facility located in Anaheim, CA. ~~DIVIDENDS~~Additionally, the board approved, committed to and initiated a plan to exit the current Anaheim manufacturing facility. The Company estimates restructuring charges associated with this move between $2.5-$3.0 million. The move will be completed before the end of the year. Exit costs primarily consist of clean-up costs associated with returning the current leased facilities to its original condition as well as move related costs. For the three months ended March 31, 2012, the Company incurred $68,000 of restructuring costs, which is included as a separate component within operating expenses. There were no restructuring charges for the three months ended March 31, 2011.

WeNOTE ~~have paid quarterly cash dividends since the third quarter of 2010~~13. ~~The~~FAIR ~~following~~VALUE ~~table~~MEASUREMENTS ~~sets forth the dividends declared during the three and nine months ended September 30, 2011 and 2010 (in thousands except per share data):~~

	Three Months EndedSeptember 30,				Nine Months EndedSeptember 30,
	2011		2010		2011		2010
Dividend per share	$	0.10	$	0.06	$	0.30	$	0.12
Total declared	$	2,032	$	1,197	$	6,092	$	2,394

The Company applies fair value measurements to assets and liabilities reported in its financial statements based on a market participant to acquire an asset or settle a liability. The Company applies a hierarchy for disclosure of the inputs to valuation used to measure fair value. This hierarchy prioritizes the inputs into three broad levels as follows:

~~DDi~~Level ~~Corp.~~1: isQuoted amarket ~~Delaware~~prices ~~corporation.~~in ~~Delaware~~active ~~law~~markets ~~allows~~for aidentical ~~corporation to declare and pay dividends out of the corporations “surplus”, which is defined as total~~ assets ~~minus~~or ~~total~~ liabilities ~~minus par value of issued stock~~. DDi had a surplus as defined by Delaware code of $98.0 million and $85.0 million as of September 30, 2011 and September 30, 2010, respectively. When we record a dividend, the charge is recorded to additional paid-in capital as opposed to retained earnings since we have an accumulated deficit.

~~NOTE~~9 ~~12. FAIR VALUE MEASUREMENTS~~

~~Effective~~DDI January 1, 2008, we began applying fair value measurements to assets and liabilities reported in our financial statements at fair value on a recurring basis as required by FASB ASC Topic 820, “Fair Value Measurements and Disclosures”CORP. ~~This topic establishes a valuation hierarchy for disclosure of the inputs used to measure fair value. This hierarchy prioritizes the inputs into three broad levels as follows:~~

Level 1:		Quoted market prices in active markets for identical assets or liabilities.
Level 2:		Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that can be corroborated by observable market data for substantially the full term of the assets or liabilities.
Level 3:		Unobservable inputs that are not corroborated by market data.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

A financial asset’s or liability’s classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement. The estimated fair values of our financial instruments, which include cash and cash equivalents, accounts receivable, revolving credit facility, accounts payable, accrued liabilities and income taxes payable, approximate their carrying values due to their short maturities. These items are classified as either Level 1 or Level 2 inputs.



Level 2		Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3:		Unobservable inputs that are not corroborated by market data.

~~Cash~~The ~~equivalents~~Company ~~consist~~has ofno ~~our~~financial ~~excess~~assets ~~cash~~or ~~invested~~liabilities inthat ~~highly liquid money market accounts. These amounts~~ are ~~reflected~~remeasured ~~within cash and cash equivalents~~ on ~~the~~a ~~unaudited~~recurring ~~condensed~~basis, ~~consolidated balance~~and ~~sheet~~management athas anot ~~net~~elected ~~value~~the ~~of 1:1 for each dollar invested. The cost and~~ fair value ofoption ~~our cash equivalents was $28.4 million as of September 30, 2011 and was based on quoted market prices in active markets~~ for ~~identical~~any other assets, aor ~~Level 1 input~~liabilities.

ToNOTE calculate the estimated fair value of our variable and fixed rate notes payable and mortgage debt as of September 30, 2011, we estimated that in the current market our cost of borrowing on similar debt would, on average, be approximately 514.2% ~~based~~COMMITMENTS onAND ~~our~~CONTINGENCIES current debt rating and an analysis of current market rates. Using this estimated interest rate and a discount rate of 8.0% (Level 2 and 3 inputs), we estimated the fair value of our debt to be approximately $49,000 higher than its carrying value of $10.0 million.

10Litigation

~~Table~~From time to time the Company is involved in litigation and government proceedings incidental to its business. These proceedings are in various procedural stages. The Company believes as of ~~Contents~~the date of this report that provisions or accruals made for any potential losses, to the extent estimable, are adequate and that any liabilities or costs arising out of these proceedings are not likely to have a materially adverse effect on its unaudited condensed consolidated financial statements. The outcome of any of these proceedings, however, is inherently uncertain, and if unfavorable outcomes were to occur, there is a possibility that they would, individually or in the aggregate, have a materially adverse effect on the Company’s unaudited condensed consolidated financial statements.

~~NOTE~~On April 5, 132012, a purported class action lawsuit on behalf of the Company’s stockholders was filed in Superior Court, Orange County, State of California, captioned Irving S. ~~COMMITMENTS~~Braun, ~~AND~~et. ~~CONTINGENCIES~~al. v. DDi Corp., et. al., Case No. 30-2012-00559763-CU-BT-CXC. On April 5, 2012, another purported class action lawsuit was filed in Superior Court, Orange County, State of California, on behalf of our stockholders captioned Lousiana Municipal Police Employees’ Retirement System v. DDi Corp., et. al., Case No. 30-2012-00559772-CU-BT-CXC. On April 9, 2012, a purported class action lawsuit was filed in the Court of Chancery of the State of Delaware captioned Joseph P. Daly v. DDi Corp., et. al., Civil Action No. 7407-VCG.

~~Litigation~~On April 23, 2012, another purported class action lawsuit was filed in Superior Court, Orange County, State of California, on behalf of our stockholders captioned Edward Jennings v. DDi Corp., et. al., Case No. 30-2012-00564093-CU-BT-CXC.

~~From~~These ~~time~~complaints toname ~~time~~as wethe ~~are~~primary ~~involved~~defendants, inDDi ~~litigation~~Corp., Viasystems, Victor Merger Sub Corp., and ~~government~~the ~~proceedings~~members ~~incidental~~of tothe ~~our~~Company’s ~~business. These~~board ~~proceedings~~of ~~are~~directors inand ~~various~~generally ~~procedural~~allege, ~~stages.~~among other things, that (i) Wethat ~~believe~~the asmembers of ~~the~~our ~~date~~board of ~~this Report~~directors ~~that~~violated ~~provisions~~the orfiduciary ~~accruals~~duties ~~made~~owed ~~for~~to ~~any~~stockholders ~~potential~~by ~~losses~~approving the merger agreement, to(ii) that the ~~extent~~members ~~estimable,~~of ~~are~~our ~~adequate~~board ~~and~~of ~~that~~directors ~~any~~engaged ~~liabilities~~in oran ~~costs~~unfair ~~arising~~process ~~out~~and ofagreed ~~these~~to ~~proceedings~~a ~~are~~price ~~not~~that allegedly ~~likely~~fails to ~~have~~maximize avalue ~~materially~~for ~~adverse~~stockholders ~~effect~~and on(iii) that ~~our~~DDi, ~~unaudited~~Viasystems ~~condensed consolidated~~and ~~financial~~merger ~~statements.~~sub ~~The~~aided ~~outcome~~and ofabetted ~~any~~the board members’ alleged breach of ~~these~~fiduciary ~~proceedings,~~duties. ~~however~~These complaints seek, isamong ~~inherently~~other ~~uncertain~~things, ~~and~~to ifenjoin ~~unfavorable~~the ~~outcomes~~transaction until ~~were~~corrective toactions ~~occur~~are taken, ~~there~~as iswell aas ~~possibility~~to ~~that~~award ~~they~~to ~~would,~~plaintiffs ~~individually~~the orcosts inand disbursements of the ~~aggregate~~action, ~~have~~including aattorneys’ ~~materially adverse~~fees ~~effect~~and onexperts’ fees. We, the members of our ~~unaudited~~board ~~condensed~~of ~~consolidated~~directors ~~financial~~and ~~statements~~each of the other named defendants intend to defend ourselves vigorously in these actions.

~~Item~~10 ~~2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.~~

~~The~~Item ~~following is a discussion of the financial condition and results of operations for our three and nine months ended September 30, 2011~~2. ~~As used herein, the “Company,” “we,” “us,” or “our” means DDi Corp. and its wholly-owned subsidiaries. This discussion and analysis should be read in conjunction with~~ Management’s Discussion and Analysis of Financial Condition and Results of Operations ~~set forth in DDi Corp~~.~~’s Annual Report on Form 10-K for the year ended December 31, 2010 (the “Form 10-K”).~~

~~Some~~The offollowing ~~the~~is ~~statements~~a indiscussion ~~this~~of ~~section~~the ~~contain~~financial ~~forward-looking~~condition ~~statements regarding our assumptions, projections, expectations, targets, intentions or beliefs about future events, which involve risks~~ and ~~uncertainties.~~results ~~All statements other than statements~~ of ~~historical~~operations ~~facts~~for ~~included~~our infiscal ~~this~~quarter ~~section~~ended ~~relating to expectation of future financial performance~~March 31, ~~continued growth, changes in economic conditions or capital markets and changes in customer usage patterns and preferences, are forward-looking statements~~2012. InAs ~~some~~used ~~cases~~herein, ~~you can identify forward-looking statements by terms such as may, will, should, expect, plan, intend, forecast, anticipate, believe, estimate, predict, potential,~~ ~~continue or~~ the ~~negative of these terms or other comparable terminology. The forward-looking statements contained in this section involve known and unknown risks~~“Company,” ~~uncertainties and situations that may cause our or our industry’s actual results~~“we, ~~level~~” ~~of activity~~“us,” ~~performance~~ or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these statements. Factors that might cause actual events or results to differ materially from those indicated by these forward-looking statements may include the matters listed under “~~Risk Factors~~our” inmeans ~~Part~~DDi I,Corp. ~~Item 1A in our Form 10-K~~ and ~~Part~~its ~~II, Item 1A of this Quarterly Report on Form 10~~wholly-Q,owned ~~including, but~~subsidiaries. ~~not~~This ~~limited~~discussion ~~to,~~and ~~changes~~analysis inshould ~~general~~be ~~economic~~read ~~conditions~~ in ~~the~~conjunction ~~markets~~with inManagement’s ~~which~~Discussion ~~we may compete~~ and ~~fluctuations~~Analysis ~~in demand in the electronics industry; increased competition; increased costs; our ability to retain key members~~ of ~~management; our~~Financial ~~ability~~Condition ~~to address changes to environmental laws~~ and ~~regulations;~~Results ~~potential impacts~~ of ~~natural~~Operations ~~disasters~~set onforth ~~the~~in ~~electronics~~DDi ~~industry and the company~~Corp.’s ~~supply~~Annual ~~chain;~~Report ~~risks~~on ~~associated~~Form ~~with~~10-K ~~acquisitions;~~for ~~adverse state, federal or foreign legislation or regulation or adverse determinations by regulators; and other factors identified from time to time in our filings with~~ the U.year S.ended ~~Securities~~December 31, ~~and~~2011 ~~Exchange Commission~~ (the “~~SEC~~Form 10-K”).

~~Any~~Some of the statements in this section contain forward-looking ~~statement~~statements ~~speaks~~regarding ~~only~~our asassumptions, ofprojections, ~~the~~expectations, ~~date~~targets, onintentions or beliefs about future events, which ~~such~~involve ~~statement~~risks and isuncertainties. ~~made~~All statements other than statements of historical facts included in this section relating to expectation of future financial performance, continued growth, changes in economic conditions or capital markets and changes in customer usage patterns and preferences, ~~except~~are asforward-looking ~~required~~statements. In some cases, you can identify forward-looking statements by ~~law~~terms such as may, wewill, ~~undertake~~should, noexpect, ~~obligation~~plan, intend, forecast, anticipate, believe, estimate, predict, potential, tocontinue ~~update~~or ~~any~~the negative of these terms or other comparable terminology. The forward-looking ~~statement~~statements contained in this section involve known and unknown risks, uncertainties and situations that may cause our or our industry’s actual results, level of activity, performance or achievements to ~~reflect~~be materially different from any future results, levels of activity, performance or achievements expressed or implied by these statements. Factors that might cause actual events or ~~circumstances~~results ~~after~~to differ materially from those indicated by these forward-looking statements may include the ~~date~~matters listed under “Risk Factors” in Item 1A of this Quarterly Report on ~~which~~Form ~~such~~10-Q ~~statement~~and isin ~~made~~in orour Form 10-K including, but not limited to, ~~reflect~~expenses and other risks associated with the ~~occurrence~~announced merger agreement between DDi and Viasystems Group, Inc.; the severity and duration of ~~unanticipated~~current ~~events~~economic and financial conditions, including volatility in interest and exchange rates, commodity and equity prices; the impact of U.S. ~~New~~and foreign government programs to restore liquidity and stimulate national and global economies; the impact of conditions in the financial and credit markets on the availability and cost of credit for DDi and its customers; the impact of potential decreases in U.S. defense spending; the costs and potential business disruption associated with the relocation of our Anaheim operations and corporate headquarters; the level of demand and financial performance of the major industries we serve, including, without limitation, communications, computing, military/aerospace, industrial electronics, instrumentation and medical; increased competition; increased costs; the impact of state, federal or foreign legislation or regulation; investigative and legal proceedings and legal compliance risks; strategic actions, including acquisitions and dispositions and our success in integrating acquired businesses; other matters of national, regional and global scale, including those of a political, economic, business and competitive nature; and other factors ~~emerge~~identified from time to time, ~~and~~in itour isfilings ~~not~~with ~~possible~~the ~~for management~~U. toS. ~~predict~~Securities ~~all~~and ~~such~~Exchange ~~factors~~Commission (“SEC”).

~~Our~~Any ~~Company~~forward-looking statement speaks only as of the date on which such statement is made, and, except as required by law, we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of unanticipated events. New factors emerge from time to time, and it is not possible for management to predict all such factors.

We are a leading provider of time-critical, technologically-advanced electronic interconnect design, engineering and manufacturing services. We specialize in engineering and fabricating complex multi-layer printed circuit boards (“PCBs”) on a quick-turn basis, with lead times as short as 24 hours, and manufacturing products with high levels of complexity and reliability with low-to-moderate production volumes. We have over 1,000 PCB customers in various market segments including communications, computing, military/aerospace, industrial electronics, instrumentation, medical and high-durability commercial markets. Our ~~customers~~Company include both original equipment manufacturers (“OEMs”) and electronic manufacturing services (“EMS”) providers. With such a broad customer base and approximately 60 new PCB designs tooled per day, we have accumulated significant process and engineering expertise. Our core strength is developing

11We are a leading provider of time-critical, technologically-advanced printed circuit board (“PCB”) engineering and manufacturing services. We specialize in engineering and fabricating complex multi-layer PCBs on a quick-turn basis, with lead times as short as 24 hours, and in manufacturing products with high levels of complexity and reliability with low-to-moderate production volumes. We have over 1,000 PCB customers in various market segments including communications, computing, military/aerospace, industrial electronics, instrumentation, medical and high-durability commercial markets. Our customers include both original equipment manufacturers (“OEMs”) and electronic manufacturing services (“EMS”) providers. With such a broad customer base and approximately 50 new PCB designs tooled per day, we have accumulated significant process and engineering expertise. Our core strength is developing innovative, high-performance solutions for customers during the engineering, test and launch phases of new electronic product development and supporting long-term requirements for low and mid-volume requirements,, such as those required by the military/aerospace market. Our entire organization is focused on rapidly and reliably filling complex customer orders and building long-term customer relationships. Our engineering capabilities and seven manufacturing facilities located in the United States and Canada, together with our relationships with suppliers in Asia, enable us to respond to time-critical orders and technology challenges for our customers.

~~Table~~On April 3, 2012, we entered into a merger agreement to be acquired by Viasystems Group, Inc. (“Viasystems”), a leading worldwide provider of ~~Contents~~complex multi-layer printed circuit boards and electro-mechanical solutions. Under the terms of the merger agreement, Viasystems will acquire all of the outstanding common stock of DDi Corp. For a description of the merger agreement, see Note 11 of the notes to unaudited consolidated financial statements - Subsequent Events.

~~innovative,~~11 high-performance solutions for customers during the engineering, test and launch phases of new electronic product development and supporting long-term requirements for low-to-moderate production volumes, such as those required by the military/aerospace market. Our entire organization is focused on rapidly and reliably filling complex customer orders and building long-term customer relationships. Our engineering capabilities and seven manufacturing facilities located in the United States and Canada, together with our suppliers in Asia, enable us to respond to time-critical orders and technology challenges for our customers.

Industry Overview

PCBs are a fundamental component of virtually all electronic equipment. A PCB is comprised of layers of laminate and copper and contains patterns of electrical circuitry to connect electronic components. The level of PCB complexity is determined by several characteristics, including interconnect and circuit density, size, layer count, hole diameter, material type and functionality. High-end commercial and military/aerospace equipment manufacturers require complex PCBs fabricated with ~~higher layer counts,~~ greater interconnect and circuit density and advanced materials, and higher layer counts, and demand highly complex and sophisticated manufacturing capabilities. By contrast, other PCBs, such as those used in non-wireless consumer electronic products, are generally less complex and have less sophisticated manufacturing requirements.

Critical Accounting Policies and Use of Estimates

The unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America which require us to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the unaudited condensed consolidated financial statements and revenues and expenses during the periods reported. Actual results could differ from those estimates. Information with respect to our critical accounting policies which we believe could have the most significant effect on our reported results and require subjective or complex judgments by management is contained on pages 24 to 26 in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, of the Company’s Annual Report on Form 10-K. We believe that as of ~~September~~ March 3031, ~~2011~~2012 there had been no material changes to this information.

Results of Operations —- Summary

~~During~~We exited the ~~third~~first quarter ~~ended~~of ~~September~~2012 ~~30,~~with ~~2011,~~record webookings ~~experienced a slightly reduced level~~ of ~~demand from the second quarter ended June 30, 2011, as customer orders fell sequentially by 1.6% to~~ $6574.2 million, ~~reflecting~~representing a ~~0.98~~ book -to -bill ratio of 1. ~~This~~08. ~~sequential~~Net ~~decrease~~sales ~~during~~grew ~~the~~both ~~third~~sequentially ~~quarter~~and ofyear ~~2011~~over ~~followed~~year. anWe 8%continue ~~reduced~~to ~~level~~manage ofour ~~demand~~costs ~~during~~and ~~the~~drive ~~second~~bottom ~~quarter of~~line ~~2011~~performance. ~~and~~We aalso ~~18%~~have ~~sequential~~invested ~~increase~~heavily in ~~customer~~our ~~orders~~capabilities, toboth ain ~~record~~equipment ~~level~~across ofthe ~~$72.2~~business ~~million~~and ~~during~~with purchasing ~~the~~a ~~first~~new ~~quarter~~facility ~~ended~~in ~~March 31~~Anaheim, ~~2011~~California. ~~During~~As ~~the~~we ~~fourth~~continue ~~quarter~~to ~~ended~~execute ~~December 31,~~on ~~2010~~our strategy, we ~~experienced~~believe aour ~~15%~~technical ~~sequential~~capabilities, ~~decrease~~our ~~in customer~~sales ~~orders~~distribution ~~from~~network ~~the~~and ~~third~~our ~~quarter~~extensive ~~ended~~customer ~~September 30,~~base ~~2010.~~continue ~~These~~to ~~four~~position ~~consecutive~~us ~~quarters~~to ofexceed ~~inconsistent~~the ~~trends~~anticipated mid-single indigit ~~customer~~annual ~~demand~~growth ~~follows~~rate ~~five~~for ~~consecutive~~the ~~quarters~~North ofAmerican ~~increasing~~PCB ~~customer~~industry ~~orders~~in ~~starting~~2012 inand ~~the~~take ~~third~~incremental ~~quarter~~market ~~of 2009~~share.

~~For~~Results ~~the nine months ended September 30, 2011, total customer orders were $203.5 million which reflects a decrease~~ of 4.5% compared to the nine months ended September 30, 2010 total customer orders of $213.1 million. This decrease is primarily comprised of lower demand in the consumer electronics, communications, instrumentation and medical andOperations ~~industrial electronics segments offset by increases in the computer and military/aerospace segments. Likewise, the net sales were $198.9 million~~ for the ~~nine~~Three ~~months~~Months ~~ended~~Ended ~~September~~March 3031, ~~2011~~2012 ~~which~~Compared ~~are lower compared~~ to the ~~net~~Three ~~sales~~Months ~~for~~Ended ~~the nine months ended September~~March 3031, ~~2010~~2011 ~~of $202.0 million.~~

~~Looking~~The ~~forward~~following ~~to the remainder of 2011, we remain cautious~~tables ~~regarding~~set ~~the~~forth ~~uncertainties~~select ~~relating~~data tofrom ~~the~~our ~~global~~Unaudited ~~economy~~Condensed ~~and~~Consolidated ~~continue~~Statements ~~to monitor the impact on the demand for PCBs in the sector that we serve. In particular, we have observed forecasts~~ of ~~softer~~Income ~~demand in the military/aerospace market sector as a result of anticipated budget pressures on the U.S. Department of Defense~~ and ~~our~~Comprehensive ~~customers~~ Income(in ~~this~~thousands): market segment. Notwithstanding these economic uncertainties, we remain intensely focused on operational and financial discipline, gaining market share in our core markets, and technological innovation to continue to improve DDi’s overall business platform.

Results of Operations for the Three Months Ended September 30, 2011 Compared to the Three Months Ended September 30, 2010


	Three Months Ended March 31,
	2012			2011			$ Change		% Change
Net sales	$	68,913		$	66,459		$	2,454		3.7	%
Cost of goods sold		53,579			52,307			1,272		2.4	%

Gross profit	$	15,334		$	14,152		$	1,182		8.4	%

Gross profit as a percentage of net sales		22.3	%		21.3	%

~~The following~~Net ~~tables~~Sales ~~set forth select data from our Unaudited Condensed Consolidated Statements of Income and Comprehensive Income (in thousands):~~

12Net sales are derived from the engineering and manufacture of complex, technologically-advanced multi-layer PCBs.

~~Table~~Net ofsales ~~Contents~~increased $2.5 million, to $68.9 million for the three months ended March 31, 2012, from $66.5 million for the three months ended March 31, 2011. The increase in net sales was primarily due to stronger demand for products in the communications, computer, consumer electronics and automotive end markets. These increases were partially offset by lower net sales in the military and aerospace, instrumentation and medical and business retail end markets.

	Three Months EndedSeptember 30,
	2011			2010			$ Change			% Change
Net sales	$	66,175		$	68,988		$	(2,813	)		(4.1	%)
Cost of goods sold		52,267			53,450			(1,183	)		(2.2	%)
Gross profit	$	13,908		$	15,538		$	(1,630	)		(10.5	%)
Gross profit as a percentage of net sales		21.0	%		22.5	%

Gross Profit

~~Net~~Gross ~~Sales~~profit increased $1.2 million, or 8.4%, to $15.3 million for the three months ended March 31, 2012, compared to $14.2 million, or 21.3% of net sales, for the three months ended March 31, 2011. The increase in gross profit was primarily due to higher net sales, lower labor costs and overhead.

~~Net~~12 ~~sales are derived from the engineering and manufacture of complex, technologically-advanced multi-layer PCBs.~~

~~Net~~Sales sales decreased $2.8 million, or 4.1%, to $66.2 million for the three months ended September 30, 2011, compared to $69.0 million for the three months ended September 30, 2010. The decrease in net sales was primarily due to lower sales volumes in our industrial electronics, communications and ~~consumer~~Marketing ~~electronics~~Expenses ~~segments, offset by higher sales in our computer, military/aerospace and instrumentation and medical segments.~~

Gross Profit


	Three Months Ended March 31,
	2012			2011			$ Change			% Change
Sales and marketing expenses	$	4,457		$	4,638		$	(181	)		(3.9	%)
Percentage of net sales		6.5	%		7.0	%

~~Gross~~Sales ~~profit~~and marketing expenses decreased by $10.62 million, or 103.59%, to $134.95 million, or 6.5% of net sales, for the three months ended ~~September~~March 3031, ~~2011~~2012, compared to $154.56 million, or 7% of net sales, for the three months ended ~~September~~March 3031, ~~2010~~2011. The decrease in ~~gross~~sales ~~profit~~and marketing was primarily due to lower ~~net~~variable ~~sales, higher material costs driven by higher commodity prices and depreciation, partially offset by lower labor and overhead costs~~compensation. ~~Lower overhead costs during the third quarter of 2011 primarily represent the benefits realized from our Toronto facilities integration.~~

~~Sales~~General and ~~Marketing~~Administrative ~~Expenses~~

	Three Months EndedSeptember 30,
	Three Months EndedMarch 31,
	2011			2010			$ Change			% Change
	2012			2011			$ Change			% Change
Sales and marketing expenses	$	4,142		$	4,330		$	(188	)		(4.3	%)
General and administrative expenses	$	4,025		$	3,959		$	66			1.7	%
Percentage of net sales		65.38	%		6.30	%

~~Sales~~General and ~~marketing~~administrative expenses ~~decreased~~remained ~~$0.2~~relatively ~~million,~~flat ~~or 4.3%, to $4.1 million~~ for the three months ended ~~September~~ March 3031, ~~2011~~ 2012, compared to ~~$4.3 million for~~ the three months ended ~~September~~March 3031, ~~2010.~~2011 ~~The~~at ~~slight~~$4.0 ~~decrease in sales and marketing expenses was primarily due to lower variable compensation~~million.

~~General~~Amortization ~~and~~of ~~Administrative~~Intangibles ~~Expenses~~

	Three Months EndedSeptember 30,
	Three Months EndedMarch 31,
	2011			2010			$ Change			% Change
	2012			2011			$ Change			% Change
General and administrative expenses	$	3,968		$	4,250		$	(282	)		(6.6	%)
Amortization of intangible assets	$	—		$	190		$	(190	)		(100.0	%)
Percentage of net sales		6.0	%		6.2	%

~~General~~Amortization ~~and~~of ~~administrative~~intangible ~~expenses~~assets ~~decreased~~relates ~~$0.3~~to ~~million,~~customer orrelationships ~~6.6%,~~identified toin ~~$4.0~~connection ~~million~~with ~~for~~ the ~~three months~~ ~~ended~~purchase ~~September 30,~~of ~~2011,~~Sovereign ~~compared~~Circuits ~~to $4~~Inc.3 ~~million~~in ~~for~~ the ~~three~~fourth ~~months~~quarter ~~ended~~of ~~September 30, 2010~~2006. ~~The~~These ~~decrease~~intangible inassets ~~general~~completely ~~and~~amortized ~~administrative~~in ~~expenses~~October ~~was~~of ~~primarily due to lower professional fees (primarily legal) and variable compensation, partially offset by higher administrative expenses and depreciation~~2011.

~~Amortization~~Restructuring ofand ~~Intangibles~~Other Related Charges

	Three Months EndedSeptember 30,
	Three Months EndedMarch 31,
	2011		2010		$ Change		% Change
	2012		2011		$ Change		% Change
Amortization of intangible assets	$	190	$	190	$	—		0.0	%
Restructuring and other related charges	$	68	$	—	$	68		100.0	%

~~Amortization~~Restructuring ofcharges ~~intangible~~primarily ~~assets~~consist ~~relates~~of toclean-up ~~customer~~costs ~~relationships~~associated ~~identified~~with inreturning ~~connection~~the ~~with~~current ~~the~~leased ~~purchase~~facilities ofto ~~Sovereign~~its ~~Circuits~~original ~~Inc.~~condition inas ~~the~~well ~~fourth~~as ~~quarter~~move ofrelated ~~2006~~costs. ~~These~~For ~~intangible~~the ~~assets~~three ~~are~~months ~~being~~ended ~~amortized~~March 31, ~~using~~2012, the ~~straight-line~~Company ~~method~~incurred ~~over~~$68,000 anof ~~estimated~~costs ~~useful~~related ~~life~~to ofthe ~~five~~Anaheim ~~years,~~facility ~~resulting~~move. inThere ~~$0.2~~were ~~million of~~no ~~amortization~~restructuring ~~expense~~charges for the three months ended ~~September~~March 3031, 2011 ~~and 2010~~.

13Interest Expense, Net


	Three Months Ended March 3 1,
	2012			2011			$ Change			% Change
Interest expense	$	200		$	387		$	(387	)		(100.0	%)
Interest income		(4	)		(5	)		5			(100.0	%)

Interest expense, net	$	196		$	382		$	(382	)		(100.0	%)

~~Restructuring~~Net ~~and~~interest ~~Other~~expense ~~Related~~consists ~~Charges~~of amortization of debt issuance costs, interest expense associated with long-term leases,

	Three Months EndedSeptember 30,
	2011		2010		$ Change		% Change
Restructuring and other related charges	$	392	$	48	$	344		716.7	%

~~The~~ and ~~acquisition~~interest ~~of Coretec~~ on ~~December 31,~~six ~~2009~~asset-backed ~~prompted~~term usloans. toNet ~~integrate~~interest ~~the~~expense ~~operations~~decreased ~~of DDi’s~~$0.2 ~~legacy~~million ~~facility~~for inthe ~~Toronto~~three ~~(McNicoll)~~months ~~with~~ended ~~Coretec’s Toronto facilities (primarily Sheppard Avenue) during 2010~~March 31, ~~which~~2012 ~~reduced~~compared ~~fixed~~to ~~overhead~~$0.4 ~~costs,~~million ~~rationalized~~for ~~capacity,~~the ~~and~~same ~~allowed~~period ~~improved~~in ~~utilization~~2011. ~~of the more modern Sheppard~~The ~~Avenue~~decrease ~~manufacturing~~was ~~facility.~~primarily ~~During~~due ~~the~~to ~~three~~lower ~~months~~overall ~~ended~~principal ~~September 30,~~balances ~~2010,~~on weour ~~incurred $48~~loans,~~000~~ ofas ~~integration~~well ~~costs~~as ~~which~~the ~~were~~termination ~~composed~~ of ~~estimated~~the ~~site~~long-term ~~remediation,~~lease ~~asset disposals, severance, and other related expenses incurred~~ in ~~connection~~ ~~with~~September ~~the integration of our Toronto operations~~2011.

InOther ~~September~~Income ~~2011,~~(Expense) our management approved, committed to and initiated plans to restructure and improve efficiencies in our business. Related to this effort, during the three months ended September 30, 2011, we incurred $0.4 million of severance costs that are related to a reduction in workforce.

Interest Expense


	Three Months Ended March 31,
	2012		2011			$ Change		% Change
Other expense (income)	$	213	$	(86	)	$	299		(347.7	%)

	Three Months EndedSeptember 30,
	2011			2010			$ Change		% Change
Interest Expense	$	384		$	303		$	81		26.7	%
Interest Income		(2	)		(7	)	$	5		(71.4	%)
Net Interest Expense	$	382		$	296		$	86		29.1	%

Net other expense (income) consists of foreign exchange transaction gains or losses related to our Canadian operations and other miscellaneous non-operating items.

~~Interest~~Income ~~expense~~Tax ~~consists~~Expense of amortization of debt issuance costs, interest expense associated with long-term deferred leases, and interest on seven asset-backed term loans. Interest expense increased $81,000, or 26.7%, to $0.4 million for the three months ended September 30, 2011 compared to $0.3 million for the three months ended September 30, 2010. The increase in interest expense was primarily due to the amortization of fees associated with our credit facility with JPMorgan Chase Bank, N.A., which was executed in September 2010.

Net Other Expense (Income)


	Three Months Ended March 31,
	2012		2011		$ Change			% Change
Income tax expense	$	46	$	64	$	(18	)		(28.1	%)

	Three Months EndedSeptember 30,
	2011			2010			$ Change			% Change
Other expense (income)	$	(272	)	$	(144	)	$	(128	)		88.9	%

The Company recorded income tax expense for the three months ended March 31, 2012 of $46,000, or 0.7% of pre-tax income, compared to income tax expense of $64,000, or 1.2% of pre-tax income, for the three months ended March 31, 2011. The decrease was primarily due to higher than historical Canadian income tax expense in the first quarter of 2011. Our effective income tax rate differs from the U.S. federal statutory tax rate of 35% primarily as a result of utilization of tax loss carryforwards and to a lesser extent, research and development credits, state income taxes and our continuous evaluation of the realization of our deferred tax assets and uncertain tax positions, and the impact of the recognition of the tax benefit of net operating loss carryforwards to the extent of current earnings.

~~Net~~Liquidity ~~other expense (income) consists of foreign exchange transaction gains or losses related to our Canadian operations~~ and ~~other~~Capital ~~miscellaneous~~Resources non-operating items. Net other expense (income) increased $0.1 million or 88.9% to $0.3 million for the three months ended September 30, 2011 compared to $0.1 million for the three months ended September 30, 2010. The increase in net other income is primarily due to a foreign currency gain as a result of the change in the value of the Canadian dollar in relation to the United States dollar.

Income Tax (Benefit) Expense


	As of March 31,
	2012		2011
	(Dollars in thousands)
Working capital	$	64,184	$	58,656
Current ratio (current assets to current liabilities)		2.8 : 1.0		2.5 : 1.0
Cash and cash equivalents	$	29,177	$	31,181
Long-term debt, including current portion	$	15,056	$	9,665

	Three Months EndedSeptember 30,
	2011			2010		$ Change			% Change
Income tax (benefit) expense	$	(46	)	$	69	$	(115	)		(166.7	%)

The primary drivers affecting cash and liquidity are net income, working capital requirements, capital expenditures, dividend payments to our shareholders and principal payments on our debt. Historically, the payment terms we have had to offer our customers have been relatively similar to the terms received from our creditors and suppliers. We typically bill customers on an open account basis subject to our standard credit quality and payment terms ranging from net 30 to net 60 days. If our sales increase, it is likely that our accounts receivable balance will also increase. Conversely, if our net sales decrease, it is likely that our accounts receivable will also decrease. Our accounts receivable could increase if customers, such as our large EMS customers, delay their payments or if we grant them extended payment terms.

14As of March 31, 2012, we had cash and cash equivalents of $29.2 million and $64.2 million of working capital compared to $31.2 million of cash and cash equivalents and $58.7 million of working capital as of December 31, 2011.

~~Table~~Management defines cash and cash equivalents as highly liquid deposits with original maturities of ~~Contents~~90 days or less when purchased. We maintain cash and cash equivalents at certain financial institutions in excess of amounts insured by federal agencies. However, management does not believe this concentration subjects the Company to any unusual financial risk beyond the normal risk associated with commercial banking relationships. We frequently monitor the third-party depository institutions that hold our cash and cash equivalents. Our emphasis is primarily on safety of principal and secondarily on maximizing yield on those funds.

We ~~recorded~~believe anthat ~~income~~our ~~tax~~current ~~benefit~~cash ~~for the three months ended September 30~~balance, ~~2011 of $46,000 or 0.9% of pre-tax income, compared to an income tax expense of $0.1 million, or 1% of pre-tax income, for the three months ended September 30, 2010. The decrease~~ in ~~the~~combination ~~income~~with ~~tax~~net ~~effective~~cash ~~tax~~expected ~~rate during the three months ended September 30, 2011 was primarily due~~ to ~~uncertain~~be ~~tax~~generated ~~positions and the federal allowance of expensing of capital expenditures in 2011. Our effective income tax rate differs~~ from ~~the~~operations ~~U.S.~~and ~~federal~~available ~~statutory~~borrowing ~~tax~~under ~~rate~~our ofrevolving ~~35%~~line ~~primarily as a result~~ of ~~the mix of earnings between tax jurisdictions~~credit, ~~research~~will ~~and~~fund ~~development~~ongoing ~~credits~~operations ~~and~~for at ~~the~~least ~~impact of~~ the ~~recognition~~next oftwelve ~~the tax benefit of net operating loss carryforwards to the extent of current earnings~~months.

~~Results~~14 ~~of Operations for the Nine Months Ended September 30, 2011 Compared to the Nine Months Ended September 30, 2010~~

~~The following tables set forth select data from our Unaudited Condensed~~ Consolidated ~~Statements~~Cash ofFlows ~~Income and Comprehensive Income (in thousands):~~

	Nine Months EndedSeptember 30,
	2011			2010			$ Change			% Change
Net sales	$	198,858		$	202,035		$	(3,177	)		(1.6	%)
Cost of goods sold		156,355			157,196			(841	)		(0.5	%)
Gross profit	$	42,503		$	44,839		$	(2,336	)		(5.2	%)
Gross profit as a percentage of net sales		21.4	%		22.2	%

The following table summarizes our statements of cash flows for the three months ended March 31, 2012 and 2011 (in thousands):

Net Sales


	Three Months Ended March 31,
	2012			2011
Net cash provided by (used in):
Operating activities	$	4,125		$	(1,597	)
Investing activities		(9,350	)		(2,359	)
Financing activities		3,190			(2,227	)
Effect of exchange rates on cash		31			(118	)

Net decrease in cash and cash equivalents	$	(2,004	)	$	(6,301	)

~~Net~~Operating ~~sales~~Activities decreased $3.2 million, or 1.6%, to $198.9 million for the nine months ended September 30, 2011, compared to $202.0 million for the nine months ended September 30, 2010. The decrease in net sales is primarily due to lower sales volume in our consumer electronics, communications, instrumentation and medical and industrial electronics segments, partially offset by higher sales in our computer and military/aerospace segments.

~~Gross~~Net ~~Profit~~cash provided by operating activities for the three months ended March 31, 2012 was $4.1 million compared to net cash used of $1.6 million for the three months ended March 31, 2011. The operating activities that affected cash consisted primarily of net income, which totaled $6.3 million for the three months ended March 31, 2012 compared to $5.0 million for the three months ended March 31, 2011. The increase in our net income for the three months ended March 31, 2012 compared to three months ended March 31, 2011was primarily attributable to higher sales and improved gross margin, with continued success in driving operational efficiencies throughout the organization.

~~Gross~~The ~~profit~~adjustments ~~decreased~~to ~~$2.3~~reconcile ~~million,~~net orincome ~~5.2%,~~ to ~~$42.5~~net ~~million~~cash ~~for~~provided ~~the~~by ~~nine~~operating ~~months~~activities ~~ended September 30, 2011, compared to $44.8 million~~ for the ~~nine~~three months ended ~~September~~ March 3031, ~~2010.~~2012 ~~The~~that ~~decrease in~~did ~~gross~~not ~~profit~~affect iscash primarily ~~due~~consisted toof ~~lower~~depreciation ~~net~~of ~~sales,~~$2.5 ~~higher material costs driven by higher commodity prices and depreciation~~million, ~~partially~~stock-based ~~offset~~compensation byof ~~lower~~$0.2 ~~labor~~million and ~~overhead~~amortization ~~costs.~~of ~~Lower~~debt ~~overhead~~issuance costs ~~during the third quarter~~ of ~~2011 primarily represent the benefits realized from our Toronto facilities integration~~$60,000.

~~Sales~~Cash flows from operations include uses of cash of $3.1 million related to an increase in accounts receivable as a result of higher net sales, $1.3 million related to an increase in inventory primarily due to an increase in the cost of raw materials, as well as an increase in work in process and ~~Marketing~~finished ~~Expenses~~goods to support our new customer orders. Cash flows from operations also included a $0.1 million increase in accounts payable which was primarily related to the timing of inventory purchases and payments to our suppliers. In addition, we used $0.3 million of cash from operations for accrued expenses and other liabilities primarily resulting from a reduction in accrued compensation and professional fees. Prepaid expenses and other assets used $0.2 million of cash primarily relating to the timing of the amortization of various prepaid expenses.

	Nine Months EndedSeptember 30,
	2011			2010			$ Change			% Change
Sales and marketing expenses	$	13,064		$	13,131		$	(67	)		(0.5	%)
Percentage of net sales		6.6	%		6.5	%

Investing Activities

~~Sales~~Cash ~~and~~used ~~marketing~~in ~~expenses~~investing ~~decreased~~activities ~~$67~~for the three months ended March 31,~~000,~~ or2012 0was $9.~~5%,~~4 million compared to $132.14 million for the ~~nine~~three months ended ~~September~~ March 3031, 2011,. ~~compared~~Cash toused ~~$13.1~~in ~~million~~investing activities for the ~~nine~~three months ended ~~September~~March 3031, ~~2010.~~2012 ~~The~~was ~~slight~~due ~~decrease~~to the purchase of the new building in ~~sales~~Anaheim, California for $7.5 million and ~~marketing~~purchases ~~expenses~~of capital equipment to extend our technical capabilities. Cash used in investing activities for the three months ended March 31, 2011 was primarily due to athe ~~decrease~~purchase inof ~~variable~~equipment ~~compensation~~for our facilities as well as building improvements to some of our facilities.

15Financing Activities

~~Table~~Cash provided by financing activities for the three months ended March 31, 2012 was $3.2 million compared to cash used of ~~Contents~~$2.2 million for the three months ended March 31, 2011. Cash provided by financing activities for the three months ended March 31, 2012 was primarily due to proceeds from the Wells Fargo mortgage of $5.625 million used to refinance our new building and proceeds from the exercise of stock options of $0.4 million, partially offset by cash dividends paid to common shareholders of $2.5 million and principal payments on long-term debt of $0.4 million. Cash used in financing activities for the three months ended March 31, 2011 is attributable to cash dividend payments to common shareholders of $2.0 million, principal payments of long-term debt of $0.5 million, partially offset by proceeds from the exercise of stock options of $0.3 million.

~~General~~In February 2012, we completed the purchase of an approximately 96,000 square foot building located in Anaheim, California. The building consists of approximately two-thirds manufacturing space and ~~Administrative~~one-third ~~Expenses~~office space. We plan to relocate our corporate headquarters and Anaheim manufacturing operations to the new building during 2012. The cost to purchase the building is $7.5 million and we estimate we will spend an additional $7.0 to $8.0 million on building improvements and new manufacturing equipment throughout 2012. In addition, we expect to incur additional costs in connection with the relocation of our operations and the exit from our existing Anaheim facilities.

	Nine Months EndedSeptember 30,
	2011			2010			$ Change			% Change
General and administrative expenses	$	11,773		$	12,463		$	(690	)		(5.5	%)
Percentage of net sales		5.9	%		6.2	%

~~General~~On ~~and~~March 28, ~~administrative~~2012, ~~expenses~~DDi ~~decreased~~Global $0Corp.7 ~~million~~(the “Borrower”), ora ~~5.5%,~~subsidiary toof ~~$11.8~~the Company, ~~million~~entered ~~for~~into ~~the~~a ~~nine~~Credit ~~months ended~~Agreement, ~~September~~dated March 3028, ~~2011~~2012, ~~compared~~between the Borrower and Wells Fargo Bank (the “Wells Fargo Credit Agreement”) to ~~$12~~finance the purchase of the new Anaheim facility.5 ~~million~~The Wells Fargo Credit Agreement provides for a term loan (the ~~nine~~“Term ~~months~~Loan”) ~~ended~~of ~~September~~$5.625 million maturing on March 3031, ~~2010~~2019. The ~~decrease~~Term inLoan ~~general~~will bear interest at a rate equal to 4.326% per annum. Repayment of the term loan will be amortized over fifteen years, with monthly payments of approximately $42,500, and ~~administrative~~a ~~expenses~~balloon ~~was~~payment ~~primarily~~at ~~due~~maturity. The Borrower is permitted to ~~lower~~make ~~professional~~voluntary ~~fees~~prepayments ~~(primarily~~on ~~legal)~~the Term Loan in minimum increments of $100,000 ~~administrative~~upon ~~expenses~~the payment of a yield maintenance prepayment fee. The Loan Agreement requires the Borrower to maintain a minimum fixed charge coverage ratio of 1.25 to 1.0 and ~~variable~~contains ~~compensation~~other customary covenants. The obligations under the Term Loan are guaranteed by DDi Corp. and certain of the Company’s existing wholly-owned subsidiaries. The Term Loan is secured by a first-priority mortgage on the Company’s recently-acquired facility located in Anaheim, California, pursuant to the terms of a deed of trust.

~~Amortization~~Revolving ofCredit ~~Intangible~~Facilities ~~Assets~~

	Nine Months EndedSeptember 30,
	2011		2010		$ Change		% Change
Amortization of intangible assets	$	570	$	570	$	—		0.0	%

JPMorgan Chase Credit Agreement. On September 23, 2010, we entered into a Credit Agreement (the “Credit Agreement”) with JPMorgan Chase Bank, N.A., as Administrative Agent and U.S. Lender, and JPMorgan Chase Bank, N.A., Toronto Branch, as Canadian Administrative Agent and Canadian Lender. On March 14, 2011, we entered into an amendment (the “March 2011 Credit Amendment”) to the Credit Agreement dated September 23, 2010. The March 2011 Credit Agreement provides for a revolving credit facility in an aggregate principal amount of $25.0 million, with a Canadian sub-limit of $10.0 million. Pursuant to its terms and subject to the conditions set forth therein, the aggregate principal amount of the March 2011 Credit Agreement may be increased from $25.0 to $40.0 million. The maturity date of the March 2011 Credit Agreement is September 23, 2013.

~~Amortization~~The ofMarch ~~intangible~~2011 ~~assets~~Credit ~~relates~~Amendment amended the Credit Agreement to ~~customer~~(i) reduce ~~relationships~~the ~~identified~~margin infrom ~~connection~~3.25% ~~with~~to ~~the purchase~~2.50% ofthat ~~Sovereign~~is ~~Circuits~~added into published interest rates to determine the ~~fourth~~applicable ~~quarter~~interest rates for borrowing and (ii) increase the amount of ~~2006.~~dividends ~~These~~that ~~intangible~~we ~~assets~~can ~~are~~pay ~~being~~without ~~amortized~~obtaining ~~using~~the consent of the ~~straight~~Lender from $8.0 million in a rolling twelve-~~line~~month ~~method~~period ~~over~~(and an$25.0 ~~estimated~~million over ~~useful~~the ~~life~~term of ~~five~~the ~~years~~Credit ~~resulting~~Agreement) into $012.60 million of ~~amortization~~($40.0 ~~expense~~million ~~for~~over the ~~nine months~~term ~~ended~~of ~~September 30,~~the ~~2011~~Credit ~~and 2010~~Agreement).

~~Restructuring~~Availability under the March 2011 Credit Agreement is based on various borrowing base tests, including our eligible accounts receivable and ~~Other~~inventories. ~~Related~~As ~~Charges~~of March 31, 2012, we had no borrowings outstanding under the March 2011 Credit Agreement and availability under the facility was above the applicable measurement levels.

	Nine Months EndedSeptember 30,
	2011		2010		$ Change		% Change
Restructuring and other related charges	$	1,015	$	338	$	677		200.3	%

Recent Accounting Pronouncements

~~The~~There ~~acquisition~~were ofvarious ~~Coretec~~other onupdates ~~December 31~~recently issued, ~~2009~~most ~~prompted us to integrate the operations~~ of ~~DDi’s~~ ~~legacy facility in Toronto (McNicoll) with Coretec’s Toronto facilities (primarily Sheppard Avenue) during 2010,~~ which ~~reduced~~represented ~~fixed~~technical ~~overhead~~corrections ~~costs,~~to ~~rationalized capacity, and allowed improved utilization of~~ the ~~more~~accounting ~~modern~~literature ~~Sheppard~~or ~~Avenue~~application ~~manufacturing~~to ~~facility.~~specific ~~During~~industries ~~the~~and ~~second~~are ~~quarter~~not ofexpected ~~2011, we incurred $0.6 million of severance costs related~~ to ~~the~~have ~~final~~a ~~phase~~material ofimpact ~~the~~on ~~Toronto integration plan. During~~ the ~~nine~~Company’s ~~months~~consolidated ~~ended~~financial ~~September 30~~position, ~~2010,~~results ~~we incurred $0.3 million~~ of ~~integration~~operations ~~costs~~or ~~which~~cash ~~were composed of estimated site remediation, asset disposals, severance, and other related expenses incurred in connection with the integration of our Toronto operations~~flows.

InManagement ~~September~~does ~~2011,~~not ~~our~~believe ~~management~~that ~~approved,~~any ~~committed~~other torecently ~~and~~issued, ~~initiated~~but ~~plans~~not toyet ~~restructure and improve efficiencies in our business. During the three months ended September 30~~effective, ~~2011,~~accounting westandards ~~incurred~~if ~~$0.4~~currently ~~million~~adopted ofwould ~~severance~~have ~~costs~~a ~~that~~material ~~are~~effect ~~related~~on tothe aaccompanying ~~reduction~~financial ~~in workforce~~statements.

~~Interest~~Item ~~Expense~~3. Quantitative and Qualitative Disclosures About Market Risk.

	Nine Months EndedSeptember 30,
	2011			2010			$ Change		% Change
Interest expense	$	1,162		$	1,063		$	99		9.3	%
Interest income		(9	)		(31	)		22		(71.0	%)
Net interest expense	$	1,153		$	1,032		$	121		11.7	%

Interest Rate Risk

~~Interest~~Variable ~~expense~~Rate ~~consists~~Debt of amortization of debt issuance costs, interest expense associated with long-term deferred leases, and interest on seven asset-backed term loans. Interest expense increased $0.1 million, or 9.3%, to $1.2 million for the nine months ended September 30, 2011, compared to $1.1 million for the nine months ended September 30, 2010. The increase in interest expense was primarily due to the amortization of fees associated with our credit facility with JPMorgan Chase Bank, N.A., which was executed in September 2010.

16In connection with our acquisitions of Sovereign and Coretec, we assumed variable-rate debt including notes payable and mortgages previously used to finance the purchase of certain real estate holdings, infrastructure or plant and equipment, as well as our March 2011 Credit Agreement. The interest rates on our variable rate debt are tied to various floating base rates such as the London Interbank Offered Rate (“LIBOR”). These debt obligations, therefore, expose us to variability in interest payments due to changes in these rates. If interest rates increase, interest expense increases. Conversely, if interest rates decrease, interest expense decreases. However, we do not believe such exposure is material to our consolidated financial position or liquidity.

~~Table~~16 ~~of Contents~~

~~Other~~At ~~Expense~~March 31, ~~(Income)~~2012, ~~Net~~we had $8.1 million outstanding under such agreements at interest rates ranging from 1.74% to 7.07% per annum.

	Nine Months EndedSeptember 30,
	2011			2010		$ Change			% Change
Other expense (income)	$	(298	)	$	220	$	(518	)		(235.5	%)

Fixed Rate Debt

~~Net~~The ~~other~~fair ~~expense~~market ~~(income)~~value ~~consists~~ of ~~foreign~~our ~~exchange~~two ~~transaction~~long-term ~~gains~~fixed orinterest ~~losses~~rate ~~related~~mortgages are subject to ~~our Canadian~~interest ~~operations~~rate ~~and~~risk. ~~other~~As ~~miscellaneous~~of ~~non-operating~~March 31, ~~items.~~2012, ~~Net~~we have ~~other~~two ~~expense~~fixed ~~(income)~~rate ~~decreased~~loans, ~~$0.5~~one ~~million~~in toconnection $with our acquisition of Coretec (07.~~3 million~~55%), ~~for~~and the ~~nine~~Wells ~~months~~Fargo ~~ended~~loan ~~September~~(4.326%) ~~30,~~that ~~2011,~~was ~~compared~~used to $0finance the new Anaheim, CA facility.2 ~~million~~If ~~for~~interest ~~the~~rates ~~nine~~fall, ~~months~~we ~~ended~~will be locked into paying above-market ~~September 30,~~interest ~~2010.~~rates ~~The~~on ~~decrease~~our infixed-rate ~~net~~mortgages ~~other~~unless ~~expense~~we iscan ~~primarily~~refinance ~~due~~at tomore aadvantageous ~~foreign~~rates. ~~currency~~Conversely, ~~gain~~if asinterest arates ~~result~~rise ofwe ~~the~~may ~~change~~benefit infrom ~~the~~paying ~~value~~below-market ofinterest ~~the~~rates ~~Canadian~~on ~~dollar~~our infixed-rate ~~relation~~mortgages. toThe interest rate changes affect the ~~United~~fair ~~States~~market ~~dollar~~value but do not impact earnings or cash flows.

~~Income~~Foreign ~~Tax~~Currency ~~Expense~~Exchange Risk

	Nine Months EndedSeptember 30,
	2011		2010		$ Change			% Change
Income tax expense	$	119	$	790	$	(671	)		(84.9	%)

A portion of the sales and expenses of our Canadian operations are transacted in Canadian dollars, which is deemed to be the functional currency for our Canadian entity. Thus, assets and liabilities are translated to U.S. dollars at period-end exchange rates in effect. Sales and expenses are translated to U.S. dollars using an average monthly exchange rate. Translation adjustments are included in accumulated other comprehensive income in stockholders’ equity, except for translation adjustments related to an intercompany note denominated in Canadian dollars between our U.S. entity and our Canadian entity. Settlement of the note is planned in the foreseeable future; therefore, currency adjustments are included in determining net income for the period, and could have a material impact on results of operations and cash flows in the event of significant currency fluctuations. Gains and losses on foreign currency transactions are included in operations. We have foreign currency translation risk equal to our net investment in those operations. We do not use forward exchange contracts to hedge exposures to foreign currency denominated transactions and do not utilize any other derivative financial instruments for trading or speculative purposes.

~~The~~Item ~~Company recorded an income tax expense for the nine months ended September 30, 2011 of $0.1 million, or 0.8% of pre-tax income, as compared to an income tax expense of $0.8 million, or~~ 4.6% ofControls pre-tax income, for the nine months ended September 30, 2010. The decrease in income tax effective tax rate was primarily due to federal allowance of expensing of capital expenditures in 2011. Our effective income tax rate differs from the U.S. federal statutory tax rate of 35% primarily as a result of the mix of earnings between tax jurisdictions, research and ~~development credits and the impact of the recognition of the tax benefit of net operating loss carryforwards to the extent of current earnings~~Procedures.

~~Liquidity~~Evaluation of Disclosure Controls and ~~Capital~~ ~~Resources~~Procedures

	September 30,2011		December 31,2010
	(Dollars in thousands)
Working capital	$	59,770	$	51,026
Current ratio (current assets to current liabilities)		2.7 : 1.0		2.2 : 1.0
Cash and cash equivalents	$	28,436	$	28,347
Long-term debt, including current portion	$	9,992	$	11,455

Our Chief Executive Officer and Chief Financial Officer have concluded, based on their evaluation as of the end of the period covered by this report, that our disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) are effective to ensure that all information required to be disclosed by us in the reports filed or submitted by us under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the U.S. Securities and Exchange Commission (the “SEC”), and include controls and procedures designed to ensure that information required to be disclosed by us in such reports is accumulated and communicated to our management, including the Chief Executive Officer and the Chief Financial Officer, as appropriate, and allow timely decisions regarding required disclosure.

~~The~~Changes ~~primary~~in ~~drivers~~Internal ~~affecting~~Controls cash and liquidity are net income, working capital requirements, capital expenditures, dividend payments to our shareholders and principal payments on our debt. Historically, the payment terms we have had to offer our customers have been relatively similar to the terms received from our creditors and suppliers. We typically bill customers on an open account basis subject to our standard credit quality and payment terms ranging from net 30 to net 60 days. If our net sales increase, it is likely that our accounts receivable balance will also increase. Conversely, if our net sales decrease, it is likely that our accounts receivable will also decrease. Our accounts receivable could increase if customers, such as our large EMS customers, delay their payments or if we grant them extended payment terms.

AsNo ofchange ~~September 30,~~in ~~2011,~~our weinternal ~~had~~control ~~$28.4~~over ~~million~~financial ofreporting ~~cash~~occurred ~~and~~during ~~cash~~the ~~equivalents~~quarter ~~and~~ended ~~$59.8~~March 31, ~~million~~2012 ofthat ~~working~~has ~~capital compared~~materially toaffected, ~~$28.3~~or ~~million~~is ofreasonably ~~cash~~likely ~~and~~to ~~cash~~materially ~~equivalents and $51.0 million of working capital as of December 31~~affect, ~~2010.~~our ~~The~~internal control ~~increase~~over infinancial ~~cash and cash equivalents is further described below~~reporting.

~~Table~~PART ofII ~~Contents~~— OTHER INFORMATION

~~Consolidated~~Item ~~Cash~~1. ~~Flows~~Legal Proceedings

~~The~~Reference ~~following~~is ~~table~~made ~~summarizes~~to our ~~statements~~Annual ofReport ~~cash~~on ~~flows~~Form 10-K for the ~~nine~~period ~~months~~ ended ~~September~~December 3031, 2011 ~~and 2010~~ (inthe ~~thousands~~“Form 10-K”): for a summary of our previously reported legal proceedings. Since the date of the Form 10-K, there have been no material developments in previously reported legal proceedings.

	Nine Months EndedSeptember 30,
	2011			2010
Net cash provided by (used in):
Operating activities	$	15,117		$	9,961
Investing activities		(8,191	)		(5,765	)
Financing activities		(6,887	)		(8,181	)
Effect of exchange rates on cash		50			68
Net increase (decrease) in cash and cash equivalents	$	89		$	(3,917	)

On April 5, 2012, a purported class action lawsuit on behalf of the Company’s stockholders was filed in Superior Court, Orange County, State of California, captioned Irving S. Braun, et. al. v. DDi Corp., et. al., Case No. 30-2012-00559763-CU-BT-CXC. On April 5, 2012, another purported class action lawsuit was filed in Superior Court, Orange County, State of California, on behalf of our stockholders captioned Lousiana Municipal Police Employees’ Retirement System v. DDi Corp., et. al., Case No. 30-2012-00559772-CU-BT-CXC. On April 9, 2012, a purported class action lawsuit was filed in the Court of Chancery of the State of Delaware captioned Joseph P. Daly v. DDi Corp., et. al., Civil Action No. 7407-VCG.

~~Management~~On ~~defines~~April ~~cash~~23, ~~and~~2012, ~~cash~~another ~~equivalents~~purported asclass ~~highly~~action ~~liquid~~lawsuit ~~deposits~~was ~~with~~filed ~~original maturities of 90~~in ~~days~~Superior orCourt, ~~less~~Orange ~~when~~County, ~~purchased.~~State Weof ~~maintain~~California, ~~cash~~on ~~and~~behalf ~~cash~~of ~~equivalents~~our atstockholders ~~certain~~captioned ~~financial~~Edward ~~institutions~~Jennings inv. ~~excess~~DDi ofCorp., ~~amounts insured by federal agencies~~et. ~~However~~al., ~~management~~Case ~~does not believe this concentration subjects the Company to any unusual financial risk beyond the normal risk associated with commercial banking relationships~~No. ~~We frequently monitor the third~~30-~~party depository institutions that hold our cash and cash equivalents~~2012-00564093-CU-BT-CXC. ~~Our emphasis is primarily on safety of principal and secondarily on maximizing yield on those funds.~~

~~Operating~~These ~~Activities~~complaints name as the primary defendants, DDi Corp., Viasystems, Victor Merger Sub Corp., and the members of the Company’s board of directors and generally allege, among other things, that (i) that the members of our board of directors violated the fiduciary duties owed to stockholders by approving the merger agreement, (ii) that the members of our board of directors engaged in an unfair process and agreed to a price that allegedly fails to maximize value for stockholders and (iii) that DDi, Viasystems and merger sub aided and abetted the board members’ alleged breach of fiduciary duties. These complaints seek, among other things, to enjoin the transaction until corrective actions are taken, as well as to award to plaintiffs the costs and disbursements of the action, including attorneys’ fees and experts’ fees. We, the members of our board of directors and each of the other named defendants intend to defend ourselves vigorously in these actions.

~~Net~~Item ~~cash provided by operating activities for the nine months ended September 30, 2011 was $15~~1A.1 ~~million~~Risk compared to $10.0 million of cash provided by operating activities for the nine months ended September 30, 2010. The operating activities that affected cash consisted primarily of net income, which totaled $15.1 million for the nine months ended September 30, 2011 compared to $16.3 million for the nine months ended September 30, 2010. The decrease in our net income was primarily attributable to lower net sales and gross profit partially offset by lower operating expenses. Factors

~~The~~Other ~~adjustments to reconcile net income to net cash provided by operating activities for~~ than the ~~nine~~risk ~~months~~factors ~~ended~~enumerated ~~September 30~~below, ~~2011 that~~as ~~did~~of ~~not~~the ~~affect~~date ~~cash consisted~~ of ~~depreciation~~this offiling, ~~$7.0~~there ~~million,~~have ~~stock-based~~been ~~compensation~~no ofmaterial ~~$0.9~~changes ~~million,~~to ~~amortization~~the ofRisk ~~intangible~~Factors ~~assets~~included ofin ~~$0.6~~our ~~million~~Annual ~~and~~Report ~~amortization~~on ofForm ~~debt~~10-K ~~issuance~~for ~~costs~~the ofyear ~~$0.2~~ended ~~million~~December 31, ~~offset~~2011, byfiled with the ~~amortization~~Securities ofand aExchange ~~deferred~~Commission ~~lease~~on ~~liability~~February 17, ~~of ($0~~2012.3) ~~million.~~

~~Cash~~We ~~flows~~have ~~from~~recently ~~operations~~announced ~~include~~a ~~uses~~merger ofagreement ~~cash~~with ofViasystems ~~$3.1 million related to an increase in inventory,~~ which ~~was~~requires ~~primarily due to an increase in~~ the ~~value~~approval of ~~raw materials (specifically the value of gold), as well as an increase in work in process and finished goods to support~~ our ~~customer orders. Cash flows from operations~~ ~~also included a $2~~shareholders.3 ~~million~~If ~~decrease in accounts payable which was primarily related to~~ the ~~timing~~merger ofis ~~inventory~~not ~~purchases~~completed, ~~and payments to~~ our ~~suppliers.~~results ~~In addition, we used $1.4 million~~ of ~~cash from~~ operations ~~for~~or ~~accrued~~stock ~~expenses~~price ~~and~~may ~~other liabilities~~be ~~primarily~~negatively ~~resulting from a reduction in accrued compensation and professional fees~~impacted. ~~Prepaid expenses and other assets used $1.1 million of cash primarily related to the timing of the amortization of various prepaid expenses.~~

~~Investing~~On April 4, ~~Activities~~2012, we announced that we had entered into a merger agreement to be acquired by Viasystems. The merger requires the approval of our stockholders and certain other conditions and is expected to be complete in the second quarter of fiscal 2012. However, if such approval is not obtained or the merger transaction is not completed for any other reason, our operations or stock price may be negatively impacted. The impacts of a merger failure may include:

~~Cash~~• ~~used in investing activities for~~ the ~~nine~~required ~~months~~payment ~~ended~~of ~~September 30,~~Viasystems’ ~~2011~~expenses ~~was~~or ~~approximately~~a ~~$8.2~~termination ~~million~~fee ~~compared~~up to $59.8 million for the nine months ended September 30, 2010. Cash used in investing activities for the nine months ended September 30, 2011 was due to purchases of capital equipment to extend our technical capabilities. Cash used in investing activities for the nine months ended September 30, 2010 was primarily due to the purchase of equipment for our facilities as well as building improvements to some of our facilities. ;

~~Financing Activities~~• reduced net sales as a result of our customers’ response to the anticipated merger, or the failure to complete the merger transaction;

~~Cash~~• ~~used~~reduced inoperational ~~financing~~efficiency ~~activities~~resulting ~~for~~from ~~the~~diversion ~~nine months ended September 30, 2011 was approximately $6.9 million compared to cash used in financing activities~~ of ~~$8.2~~management million for the nine months ended September 30, 2010. Cash used in financing activities for the nine months ended September 30, 2011 was primarily due to cash dividends paid to common shareholders of $6.1 million and principal payments on long-term debt of $1.3 million partially offset by proceeds from the resources;

18• the requirement to replace employees that terminated employment in anticipation of the merger completion; or

~~Table~~• a stock price decline due to shareholder and market perception of ~~Contents~~a merger failure.

~~exercise~~Item of stock options of $0.5 million. Cash used in financing activities for the nine months ended September 30, 2010 is attributable to the repayment of our revolving credit facility of $4.3 million, cash dividend payments to common shareholders of $2.4 ~~million,~~Unregistered ~~principal~~Sales ~~payment on long-term debt~~ of ~~$1.4~~Equity ~~million~~Securities and ~~payments~~Use of ~~debt issuance costs of $0.7 million partially offset by proceeds from the exercise of stock options of $0.5 million.~~ Proceeds

Based on current macro-economic conditions and conditions in the state of the printed circuit board business, our own organizational structure and our current outlook, we presently expect our cash and cash equivalents will be sufficient to fund our operations, working capital and capital requirements for at least the next 12 monthsNone.

~~Revolving~~Item ~~Credit~~3. ~~Facilities~~Defaults Upon Senior Securities

~~JPMorgan Chase Credit Agreement~~None. On September 23, 2010, the Company entered into a Credit Agreement (the “Credit Agreement”) with JPMorgan Chase Bank, N.A., as Administrative Agent and U.S. Lender, and JPMorgan Chase Bank, N.A., Toronto Branch, as Canadian Administrative Agent and Canadian Lender (the “Lender”). On March 14, 2011, the Company entered into an amendment (the “March 2011 Credit Amendment”) to the Credit Agreement dated September 23, 2010.

~~The~~18 Credit Agreement provides for a revolving credit facility in an aggregate principal amount of $25.0 million, with a Canadian sub-limit of $10.0 million. Pursuant to its terms and subject to the conditions set forth therein, the aggregate principal amount of the facility may be increased from $25.0 to $40.0 million.

~~The~~Item ~~March 2011 Credit Amendment amends the Credit Agreement to (i) reduce the margin from 3~~4.~~25%~~ ~~to 2.50%~~Mine ~~that~~Safety is added to published interest rates to determine the applicable interest rates for borrowing and (ii) increase the amount of dividends that the Company can pay without obtaining the consent of the Lender from $8 million in a rolling twelve-month period (and $25.0 million over the term of the Credit Agreement) to $12.0 million ($40.0 million over the term of the Credit Agreement). Disclosure

AsNone ~~of September 30, 2011, we had no borrowings outstanding under the Credit Agreement.~~

AsItem of September 30, 2011 there had been no material changes in the Company’s significant contractual obligations and commitments as disclosed in its Annual Report on Form 10-K for the year ended December 31, 20105. Other Information

~~Item~~On April 323, 2012, the Board of Directors of the Company adopted an amendment to the DDi Corp. ~~Quantitative~~Senior Management Bonus Program for the fiscal year ending December 31, 2012 (as amended, the “2012 Bonus Program”) to clarify the calculation and ~~Qualitative~~payment ~~Disclosures~~of ~~About~~bonuses ~~Market~~under ~~Risk~~the 2012 Bonus Program upon the completion of the pending merger with Viasystems. Under the 2012 Bonus Program, as amended, upon a change in control: (i) the bonus measurement period for purposes of calculating performance will terminate as of the effective time of the merger, (ii) the amount of any bonus under the 2012 Bonus Program will be calculated based upon performance results through the effective time of the merger, and (iii) the amount of any bonuses actually paid will be equal to the pro rata portion of the bonus so calculated attributable to the period from January 1, 2012 to the effective time of the merger (but guaranteed in no event to be less than 50% of the annual target bonus). Payments of bonuses will be made as follows after the consummation of the merger: (a) distributions of bonuses will be made in the first quarter of 2013 for employees who continue to be employed by the Company at such time; (b) distributions of bonuses will be made as soon as practicable following an employee’s termination date if a the employee is terminated without cause or resigns voluntarily for good reason.

~~For quantitative and qualitative disclosures about market risk affecting the Company, see “Quantitative and Qualitative Disclosures About Market Risk” in~~ Item 7A ~~of Part II of our Annual Report on Form 10-K for the year ended December 31, 2010 (the “Form 10-K”) which is incorporated herein by reference~~6. ~~Our exposure to market risk has not changed materially since December 31, 2010.~~ Exhibits

~~Item~~The 4exhibits listed below are hereby filed with the SEC as part of this Quarterly Report on Form 10-Q. ~~Controls~~Certain of the following exhibits have been previously filed with the SEC pursuant to the requirements of the Securities Act or the Exchange Act. Such exhibits are identified in the chart to the right of the Exhibit and ~~Procedures~~are incorporated herein by reference.

Evaluation of Disclosure Controls and Procedures

Incorporated by Reference

Exhibit

Description

Filed
Herewith

Form

Period

Ending

Exhibit

Filing

Date

2.1

Agreement and Plan of Merger by and among DDi, Viasystems and Merger Sub, dated April 3, 2012

8-K

2.1

4/4/2012

3.1

Amended and Restated Certificate of Incorporation of DDi Corp.

8-K

3.1

12/13/2003

3.2

Amended and Restated Bylaws of DDi Corp.

8-K

3/10/2011

3.2

3/15/2011

10.1

Real Estate Sales Contract and Joint Escrow Instructions dated December 30, 2011 by and between DDi Global Corp. and Multi-Fineline Electronix, Inc.

10-K

12/31/2011

10.2

2/17/2012

10.2

DDi Corp. 2012 Senior Management Bonus Program, as amended

10.3

Credit Agreement, dated March 28, 2012 between DDi Global Corp. and Wells Fargo Bank, N.A,

10.4

Promissory Note dated March 28, 2012 by DDi Global Corp. in favor of Wells Fargo Bank, N.A.

10.5

Guaranty dated March 28, 2012 by DDi Corp. in favor of Wells Fargo Bank, N.A.

10.6

Deed of Trust and Assignment of Rents and Leases dated March 28, 2012 by DDi Global Corp. in favor of Wells Fargo Bank, N.A.

10.7

Letter Agreement dated April 3, 2012 between DDi Corp. and Mikel H. Williams

31.1

Certification of Chief Executive Officer of DDi Corp., Pursuant to Rule 13a-14 of the Securities Exchange Act

31.2

Certification of Chief Financial Officer of DDi Corp., Pursuant to Rule 13a-14 of the Securities Exchange Act

32.1

Certification of Chief Executive Officer of DDi Corp., Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

~~The~~19 Company’s management, including our Chief Executive Officer and the Interim Chief Financial Officer of the Company, conducted an evaluation of the effectiveness of the Company’s disclosure controls and procedures as of September 30, 2011. Based on their evaluation, the Chief Executive Officer and the Interim Chief Financial Officer have concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) are effective to ensure that all information required to be disclosed by us in the reports filed or submitted by us under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the U.S. Securities and Exchange Commission (the “SEC”), and include controls and procedures designed to ensure that information required to be disclosed by us in such reports is accumulated and communicated to the Company’s management, including the Chief Executive Officer and the Interim Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

Changes in Internal Controls

Incorporated by Reference

Exhibit

Description

Filed

Herewith

Form

Period

Ending

Exhibit

Filing
Date

32.2

Certification of Chief Financial Officer of DDi Corp., Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.INS

XBRL Instance Document

101.SCH

XBRL Taxonomy Extension Schema Document

101.CAL

XBRL Taxonomy Extension Calculation Linkbase Document

101.LAB

XBRL Taxonomy Extension Label Linkbase Document

101.PRE

XBRL Taxonomy Extension Presentation Linkbase Document

No20 change in our internal control over financial reporting occurred during the quarter ended September 30, 2011 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

19SIGNATURES

~~Table~~Pursuant to the requirements of ~~Contents~~the Securities Exchange Act of 1934, DDi Corp. has duly caused this report to be signed on its behalf by the undersigned, thereto duly authorized.

PART II — OTHER INFORMATION


				DDi CORP.

		Date: April 25, 2012		/s/ MIKEL H. WILLIAMS
				Mikel H. Williams
				*President and Chief Executive Officer*
				*(Principal Executive Officer)*

Item 1. Legal Proceedings


		Date: April 25, 2012		/s/ WAYNE T. SLOMSKY
				Wayne T. Slomsky
				*Chief Financial Officer*
				*(Principal Financial Officer*
				*and Principal Accounting Officer)*

~~Reference~~21 ~~is made to the Form 10-K for a summary of our previously reported legal proceedings. Since the date of the Form 10-K, there have been no material developments in previously reported legal proceedings.~~

Item 1A. Risk Factors

Other than the risk factors enumerated below, as of the date of this filing, there have been no material changes to the Risk Factors included in the Form 10-K.

A significant portion of our business is derived from products and services sold to customers in the defense industry. Changes in export control or other federal regulations could result in increased competition from offshore competitors which could have a material adverse effect on our business.

A significant portion of our net sales are derived from products and services ultimately sold to customers in the defense industry. Many of these products are currently subject to export controls and other regulatory requirements that limit the ability of overseas competitors to manufacture such products. The federal government is currently in the process of reviewing and revising the United States Munitions List. Such changes could reduce or eliminate restrictions that currently apply to some of the products we produce. If these regulations or others are changed in a manner that reduces restrictions on their being manufactured overseas, we would likely face increased competition from overseas manufacturers. Such increased competition could have a material adverse effect on our business.

Natural disasters in certain regions could adversely affect the global electronics supply chain which, in turn, could have a negative impact on our business, the cost of and demand for our products and our results of operations.

The occurrence of natural disasters in certain regions, such as the recent earthquake and tsunami in Japan, could have a negative impact on our supply chain, our ability to deliver products to our customers and on the cost of and demand for our products. We may also encounter reduced demand for our printed circuit boards in the event customers are unable to obtain adequate supplies of other components due to the events in Japan. We are rigorously assessing our potential exposure but uncertainties exist such that the extent and duration of these supply constraints cannot be currently determined. As a result, our business, results of operations or financial condition could be materially adversely affected by these events.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Removed and Reserved

Item 5. Other Information

Item 6. Exhibits

The exhibits listed below are hereby filed with the SEC as part of this Quarterly Report on Form 10-Q. Certain of the following exhibits have been previously filed with the SEC pursuant to the requirements of the Securities Act or the Exchange Act. Such exhibits are identified in the chart to the right of the Exhibit and are incorporated herein by reference.

Incorporated by Reference

Exhibit

Description

FiledHerewith

Form

PeriodEnding

Exhibit

FilingDate

3.1

Amended and Restated Certificate of Incorporation of DDi Corp.

8-K

3.1

12/13/2003

3.2

Amended and Restated Bylaws of DDi Corp.

8-K

3/10/2011

3.2

3/15/2011

31.1

Certification of Chief Executive Officer of DDi Corp., Pursuant to Rule 13a-14 of the Securities Exchange Act

31.2

Certification of Chief Financial Officer of DDi Corp., Pursuant to Rule 13a-14 of the Securities Exchange Act

32.1

Certification of Chief Executive Officer of DDi Corp., Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2

Certification of Chief Financial Officer of DDi Corp., Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.INS

XBRL Instance Document

101.SCH

XBRL Taxonomy Extension Schema Document

101.CAL

XBRL Taxonomy Extension Calculation Linkbase Document

101.LAB

XBRL Taxonomy Extension Label Linkbase Document

101.PRE

XBRL Taxonomy Extension Presentation Linkbase Document

SIGNATURES

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

				DDi CORP.
Date: October 28, 2011				/s/ MIKEL H. WILLIAMS
				Mikel H. Williams President and Chief Executive Officer (Principal Executive Officer)

Date: October 28, 2011 /s/ WAYNE T. SLOMSKY Wayne T. Slomsky Interim Chief Financial Officer and Chief Accounting Officer (Principal Finance Officer and Principal Accounting Officer)

Table of Contents

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Table of Contents

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