Included in the report are DCE's mission statement, philosophy statement, goals statement, and EEO statement of policy. DCE programs focus on school improvement activities; academic programming including adult basic education, general education development, literacy incentive programs, and post- secondary programs; and vocational programming including an apprenticeship training program. Other topics covered here include enrollment, DCE special programs, and DCE youth schools. The activities of specific DCE divisions -- Personnel, Planning and Evaluation, Finance, and Information are described. Cost analyses are presented in this report. During the reporting period, DCE instituted a 6-hour school day in each adult correctional institution and established the maximum capacity for each class. Along with a 42-percent increase in academic enrollment and an 8-percent increase in vocational enrollment, the staff increased by 10 percent. The Literacy Incentive Program increased rapidly, and more than two-thirds of the program participants continued their education after completing the program. 10 figures and 12 appendixes