1



                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                  SCHEDULE 13D

                    Under the Securities Exchange Act of 1934
                                (Amendment No. 2)

                         INTERLINQ SOFTWARE CORPORATION
                                (Name of Issuer)

                          COMMON STOCK, PAR VALUE $.01
                         (Title of Class of Securities)

                                   458753100
                                 (CUSIP Number)

                               Mr. Bruce G. Wilcox
                              Cumberland Associates
                           1114 Avenue of the Americas
                            New York, New York 10036
                                 (212) 536-9700
                       (Name, Address and Telephone Number
                     of Person Authorized to Receive Notices
                               and Communications)



                                 December 11, 1996
                      (Date of Event which Requires Filing
                               of this Statement)


If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box |_|.



2



                                  SCHEDULE 13D

CUSIP No. 458753100

1.  NAME OF REPORTING PERSON
    S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON

         CUMBERLAND ASSOCIATES

2.  CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
                                                                        a[ ]
                                                                        b[X]
3.  SEC USE ONLY

4.  SOURCE OF FUNDS*
         WC,00

5.  CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
    PURSUANT TO ITEMS 2(d) OR 2(e)                                      [ ]

6.  CITIZENSHIP OR PLACE OF ORGANIZATION
         New York

                       7.  SOLE VOTING POWER

                           0

 NUMBER OF             8.  SHARED VOTING POWER
  SHARES
BENEFICIALLY               0
 OWNED BY
   EACH                9.  SOLE DISPOSITIVE POWER
 REPORTING
  PERSON                   0
   WITH
                      10.  SHARED DISPOSITIVE POWER

                           0

11.  AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
            0

12.  CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
     CERTAIN SHARES*                                                    [ ]

13.  PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
          0.0%

14.  TYPE OF REPORTING PERSON*
          PN, IA


3




Item 1.  Security and Issuer.

                  This Amendment No. 2, which is being filed pursuant to Rule
13d-2 of the General Rules and Regulations under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), amends the Schedule 13D, filed November
24, 1993, as amended by Amendment No. 1, filed August 20, 1996 (the "Schedule
13D"), of Cumberland Associates, a New York limited partnership, and relates to
the Common Stock, par value $.01 per share (the "Common Stock" or the
"Shares"), of Interlinq Software Corporation (the "Company"), which has its
principal executive offices at 11255 Kirkland Way, Kirkland, Washington 98033.
Unless otherwise indicated, all capitalized terms used herein but not defined
herein shall have the meanings ascribed to such terms in the Schedule 13D.

Item 2.  Identity and Background.

                  Item 2 of the Schedule 13D is hereby restated in its entirety
to read as follows:

                  This statement is being filed by Cumberland Associates.
Cumberland Associates is a limited partnership organized under the laws of the
State of New York, and is engaged in the business of managing, on a
discretionary basis, ten securities accounts, the principal one of which is
Cumberland Partners. The address of the principal business and office of
Cumberland Associates is 1114 Avenue of the Americas, New York, New York 10036.


4


                  K. Tucker Andersen, Richard Reiss, Jr., Oscar S. Schafer,
Bruce G. Wilcox, Glenn Krevlin, Andrew Wallach and Eleanor Poppe are the
general partners (the "General Partners") of Cumberland Associates.  The
business address of each of the General Partners is the same as that of
Cumberland Associates.  Each of the General Partners is a citizen of the United
States.

                  Neither Cumberland Associates nor any of the General Partners
have, during the last five years, been convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors), nor has any such
person, during the last five years, been a party to a civil proceeding of a
judicial or administrative body of competent jurisdiction as a result of which
any such person was or is subject to a judgment, decree or final order
enjoining future violations of, or prohibiting or mandating activities subject
to, federal or state securities laws or finding any violation with respect to
such laws.

Item 3. Source and Amount of Funds or Other Consideration.

                  Item 3 of the Schedule 13D is hereby amended and restated in
its entirety to read as follows:

                  As of the date hereof, Cumberland Associates does not hold
any shares of Common Stock.

Item 5.  Interest in Securities of the Issuer.

                  Item 5 of the Schedule 13D is hereby amended and restated in
its entirety to read as follows:


5


                  As of the date hereof, Cumberland Associates does not hold
any shares of Common Stock.

                  Set forth in Appendix A attached hereto and incorporated
herein by reference are descriptions of the transactions in the Common Stock
effected by Cumberland Associates within the period beginning 60 days prior to
December 11, 1996 and ending on the date of this filing.

                  As of December 11, 1996, Cumberland Associates is no longer
the beneficial owner of more than 5 percent of the Common Stock outstanding.
Accordingly, until such time as Cumberland Associates acquires, directly or
indirectly, beneficial ownership of additional Common Stock in excess of the 5
percent threshold, Cumberland Associates is no longer required to report
pursuant to Rule 13d-1 with respect to the Common Stock.


6




                  After reasonable inquiry and to the best knowledge and belief
of the undersigned, the undersigned certifies that the information set forth in
this statement is true, complete and correct.

Date:    December 23, 1996

                              CUMBERLAND ASSOCIATES


                             By: /s/ Bruce G. Wilcox
                                     Bruce G. Wilcox
                                     General Partner








                                   APPENDIX A*


1.       TRANSACTIONS EFFECTED BY CUMBERLAND ASSOCIATES

     DATE OF          NO. OF UNITS       NO. OF UNITS       PRICE PER
   TRANSACTION         PURCHASED             SOLD             UNIT
   -----------        ------------       ------------       ---------

     12/11/96                               392,000          $4 5/8
     12/4/96                                  8,000          $4 1/2

- ---------------
*        Each of the transactions set forth in this Appendix was a
         regular way transaction.