8-K

                                 UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, DC  20549
                                       
                                   FORM 8-K
                                       
                                CURRENT REPORT
    PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
                                       
       Date of Report (Date of earliest event reported): August 24, 1998
                                       
                              DAOU SYSTEMS, INC.
            (Exact name of registrant as specified in its charter)
                                       
                                   DELAWARE
                (State or other jurisdiction of incorporation)


                0-22073                         330284454
       (Commission File Number)       (IRS Employer Identification No.)
                                       

               5120 Shoreham Place, San Diego, California  92122
         (Address of principal executive offices, including zip code)
                                      
 
                                (619) 452-2221
             (Registrant's telephone number, including area code)
                                       
                                       



ITEM 5.  OTHER EVENTS.

     DAOU Systems, Inc. (the "Registrant") incorporates by reference herein 
the press release dated August 25, 1998, with respect to the Registrant's 
announcement of the filing of a purported class action lawsuit ("Adele Brody 
v. DAOU Systems, Inc., Georges J. Daou, Daniel J. Daou, Fred C. McGee, David 
W. Jahns and John H. Moragne") filed against the Registrant in the U.S. 
District Court of the Southern District of California.  The lawsuit was filed 
on August 24, 1998 as a purported class action by the plaintiff, on behalf of 
herself and all others similarly situated.  The named individual defendants, 
Georges J. Daou, Daniel J. Daou, Fred C. McGee, David W. Jahns and John H. 
Moragne, are directors and/or executive officers of the Registrant.

ITEM 7.  FINANCIAL STATEMENTS AND EXHIBITS.

(c)  Exhibits.

     (i)  Exhibit 99.1 -- Press Release dated August 25, 1998.


                                   SIGNATURES

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

Date: August 31, 1998                DAOU SYSTEMS, INC.


                                     By: /s/ Fred C. McGee
                                        ----------------------------------------
                                        Fred C. McGee, Executive Vice President,
                                        Chief Financial Officer and Secretary





                                       -2-

EX-99.1

Exhibit 99.1

Company Press Release

DAOU Systems Announces Filing of Litigation

SAN DIEGO, Aug. 25, 1998 - DAOU Systems, Inc. (NASDAQ:DAOU) announced that on 
Monday, August 24, 1998, a shareholder filed a purported class action 
complaint against the Company and certain of its officers and directors in 
the United States District Court for the Southern District of California. The 
complaint alleges improper use of accounting principles and seeks to recover 
unspecified damages on behalf of investors who purchased shares of DAOU's 
common stock on the open market between February 13, 1997 and August 14, 
1998. The complaint has not been served on the Company and a date for a 
formal response to the lawsuit has not been established. DAOU believes it has 
meritorious defenses to the claims embodied in this litigation, has referred 
the matter to legal counsel and intends to defend against this lawsuit 
vigorously.

DAOU Systems, Inc. is a provider of integrated Information Technology (IT) 
solutions and services to the U.S. healthcare industry. DAOU's capabilities 
range from up-front strategic consulting to IT system design, implementation 
and long-term tactical support. DAOU's IT offerings include data, voice and 
video networking, applications consulting and implementation, as well as 
operational and Internet solutions. The Company employs over 700, and has 
provided services to more than 1,300 healthcare organizations, including 50% 
of the nation's top 100 integrated delivery systems. DAOU's clients include 
organizations such as Stanford Health, Mercy Health Services, Saint Barnabas 
Health Care, and Humana Healthcare.

Except for the historical information contained herein, the matters discussed 
in this press release are forward-looking statements that involve risks and 
uncertainties. The Company's actual results could differ materially from 
those projected or implied in such forward-looking statements.

Contact:

     DAOU Systems, Inc.
     Fred McGee, 619/646-2996
     fred.mcgee@daou.com