8-K

                    SECURITIES AND EXCHANGE COMMISSION
                          WASHINGTON, D.C. 20549

                                 FORM 8-K
                              CURRENT REPORT

                  Pursuant to Section 13 or 15(d) of the
                     Securities Exchange Act of 1934

                             January 25, 1998
                    (Date of earliest event reported)

                      Digital Equipment Corporation
          (Exact name of Registrant as specified in its charter)

Massachusetts                    1-5296              04-2226590
  (State of                    (Commission         (IRS Employer
Incorporation)                 File No.)           Identification No.)


            111 Powdermill Road, Maynard, Massachusetts      01754
       (Address of principal executive offices, including   zip code)

                              (978) 493-5111
           (Registrant's telephone number, including area code)



                     INFORMATION TO BE INCLUDED IN THE REPORT


Item 5.  Other Events.

On January 25, 1998, Digital Equipment Corporation, a Massachusetts
corporation (the "Digital"), and Compaq Computer Corporation, a Delaware
corporation ("Compaq"), entered into an Agreement and Plan of Merger (the
"Merger Agreement"). Pursuant to the Merger Agreement and subject to the
terms and conditions set forth therein, a newly formed wholly-owned
subsidiary of Compaq will be merged (the "Merger") with and into Digital,
and as a result of the Merger, Digital will become a wholly-owned
subsidiary of Compaq. At the Effective Time (as defined in the Merger
Agreement) of the Merger, (x) each issued and outstanding share of common
stock, par value $1.00 per share, of Digital (the "Digital Common
Stock"), together with the Rights (as defined in the Merger Agreement)
attached thereto, will (other than shares held by Digital as treasury
stock, owned by Compaq or any of its subsidiaries, or held by dissenting
stockholders of Digital) be converted into the right to receive (i) 0.945
shares of common stock, par value $0.01 per share, of Compaq and (ii)
$30.00 in cash, and (y) each issued and outstanding share of Series A
8-7/8% Cumulative Preferred Stock, par value $1.00 per share, of Digital
(the "Digital Preferred Stock"), will (other than shares held by Digital
as treasury stock, owned by Compaq or any of its subsidiaries, or held by
dissenting stockholders of Digital), subject to the following sentence,
be converted (the "Preferred Stock Conversion") into the right to receive
one share of Series A Cumulative Preferred Stock of Compaq, which will
have the same rights, privileges and preferences with respect to Compaq
as the Digital Preferred Stock has with respect to Digital, and will have
the same terms as those contained in Digital's Restated Articles of
Organization, as amended and currently in effect, except that the issuer
will be Compaq and the par value will be $0.01 per share. In the event
that the Preferred Stock Conversion is not approved by the holders of
Digital Preferred Stock, the Digital Preferred Stock will remain issued
and outstanding after the Merger as Digital Preferred Stock.

On January 26, 1998, Digital issued a press release which is filed
herewith as Exhibit 99 and is incorporated herein by reference.

Item 7.  Financial Statements and Exhibits

        (c)  Exhibits.

             Exhibit 99 -  Press Release of Digital Equipment
                           Corporation dated January 26, 1998.


                                    SIGNATURES

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


                         DIGITAL EQUIPMENT CORPORATION



                         By: /s/ Robert B. Palmer
                             Robert B. Palmer
                             Chairman of the Board, President
                             and Chief Executive Officer


Dated:  January 29, 1998



                                   EXHIBIT INDEX


Exhibit No.    Description

   99          Press Release of Digital Equipment Corporation
               dated January 26, 1998.

EX-99

 NEW YORK, January 26, 1998 - Compaq Computer Corporation (NYSE: CPQ) 
 and Digital Equipment Corporation (NYSE: DEC) today announced the
 completion of a definitive merger agreement. As Compaq continues its
 drive to become the global leader in enterprise computing solutions,
 this latest acquisition greatly accelerates its momentum and
 strengthens its value proposition to customers. 
  
 "We put tremendous value on the customer relationships Digital has 
 cultivated over the past 40 years.  We are committed to supporting
 these key customer relationships by investing in Digital's strategic
 assets, particularly its worldwide service organization, as well as its
 64-bit leadership with Alpha microprocessors, OpenVMS, Digital UNIX and
 Windows NT enterprise systems, open storage and software products,"
 said Eckhard Pfeiffer, president and CEO, Compaq. 
  
 "Digital's focused enterprise strategy coupled with demonstrable
 improvements in operational performance make this a timely choice for
 us," Pfeiffer said. In Digital's recently reported second quarter,
 profits doubled and the company experienced tremendous growth in its
 target markets. 
  
 The transaction will be the largest acquisition in the history of the
 computer industry, valued at $9.6 billion based on the January 23, 1998
 closing price of Compaq common stock. Under the terms of the
 transaction, shareholders of Digital will receive $30 in cash and
 approximately 0.945 shares of Compaq common stock for each share of
 Digital stock. Compaq will issue approximately 150 million shares of
 Compaq common stock and $4.8 billion of cash. Under the terms of the
 agreement, Digital will become a wholly owned subsidiary of Compaq. 
  
 "The combined companies will provide significant economic value
 growth for our shareholders," said Earl Mason, chief financial officer
 of Compaq. "In addition, the combination will be accretive within a year,
 meeting all of Compaq's economic tests." 
  
 "This merger gives Digital tremendous reach and credibility in the
 marketplace," said Digital Chairman Robert B. Palmer. "It gives us the
 scale and resources to make continued investments in our key technologies
 and services. Customers will benefit from the very complementary strengths
 of both companies. For example, together we will offer customers the
 greatest concentration of enterprise Windows NT products and lifecycle
 services available in the market today." 
  
 Pfeiffer said the combination achieves Compaq's stated goal of becoming
 one of the top three global IT companies. More importantly, it creates
 a new breed of enterprise leader; one committed to delivering high
 customer value through standards-based, partner-leveraged computing that
 features  world class lifecycle services and support, market-segment
 focused solutions, particularly communications, manufacturing and finance,
 and enterprise technology excellence. 
  
 The combined company will create the largest channel network in the
 world delivering over 80 percent of its products and solutions to
 customers. Compaq's field resources will continue to complement the
 strong reseller channel, focusing on building enduring customer
 relationships worldwide. These resources include individuals dedicated
 to pre-sales and sales account management, professional and consulting
 services and global service and support. 
  
 The acquisition of Tandem Computers in 1997 extended the company's
 addressable market with high-end, mission-critical solutions and
 doubled the sales and service field resources. In 1998, the
 Compaq/Digital/Tandem combination further strengthens the focus on
 creating competitive  advantage for enterprise customers by delivering
 the widest range of technology based solutions from hand-helds,
 notebooks, desktop computers, workstations, servers; high-end servers
 based on the 64-bit Alpha architecture and highly available and
 scaleable NonStop systems. 
  
 Subject to the approval of Digital's shareholders as well as clearance
 under antitrust laws and other customary closing conditions, the
 transaction is expected to be completed in the second quarter of 1998. 
  
 Company Backgrounds 
  
 Compaq Computer Corporation, a Fortune 100 company, is the fifth
 largest computer company in the world and the largest global supplier
 of personal computers, delivering useful innovation through products
 that connect people with people and people with information.  The
 company is an industry leader in environmentally friendly programs
 and business practices.  Compaq is strategically organized to meet
 the current and future needs of its customers, offering Internet and
 enterprise computing solutions, networking products, commercial PC
 products and consumer PCs. As the leader in distributed enterprise
 solutions, Compaq has shipped over a million servers. In 1997, the
 company reported worldwide sales of $24.6 billion. Compaq products
 are sold and supported in more than 100 countries through a network
 of authorized Compaq marketing partners. Customer support and
 information about Compaq and its products can be found at
 http://www.Compaq.com or by calling 1-800-OK-COMPAQ. Product
 information and reseller locations  can be obtained by calling
 1-800-345-1518. 
  
 Digital Equipment Corporation, recognized for product and service
 excellence, is a leading supplier of  high-performance, Web-based
 computing solutions, which help enterprises compete in the global 
 marketplace.  Digital gives its customers a winning Internet advantage
 through a comprehensive portfolio of Internet solutions based on
 award-winning systems, advanced networking infrastructure, innovative
 software, and industry applications - including those from its business
 partners. The expertise and experience of Digital employees help
 customers plan, design, implement, manage and support Internet
 solutions in countries throughout the world. For the latest company
 information, visit Digital on the World Wide Web at
 http://www.Digital.com and/or http://www.newsdesk.com 
  
 This release contains forward-looking statements based on current
 expectations that involve a number of risks and uncertainties. The
 potential risks and uncertainties that could cause actual results to
 differ materially included the operational integration associated with
 mergers and acquisitions; market responses to pricing actions and
 promotional programs; the implementation of operations and systems
 improvements; timely development, production, and acceptance of the
 products; continued competitive factors and pricing pressures; changes
 in product mix; and inventory risks due to shifts in market demand.
 Further information on the factors that could affect the companies'
 financial results are included in each company's SEC filings, including
 the Compaq Form 10-Q for the quarter ended Sept. 30, 1997, and the Form
 10-K for the year ended Dec. 31, 1997, to be filed shortly, and the
 Digital Form 10-Q for the quarter ended Dec. 27, 1997, and the Form
 10-K for the year ended June 30, 1997. 

                                 # # # 

 Compaq, Registered U.S. Patent and Trademark Office. Digital is a
 registered trademark of Digital Equipment Corporation. Tandem is a
 registered trademark of Tandem Computers Incorporated in the United
 States and/or other countries. Product names mentioned herein may be
 trademarks and/or registered trademarks of their respective companies. 
  
 For more information contact: 
  
 Mike Berman                      Dan Kaferle 
 Compaq Computer Corporation      Digital Equipment Corporation 
 281-514-2510                     978-493-2195 
 mike.berman@compaq.com           dan.kaferle@digital.com 
  
 For further financial information contact: 
 Compaq Investor Relations: 281-514-9549 
 For financial publications, contact 800-433-2391 or 281-518-0435