UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

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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): April 3, 2000

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PEGASUS SYSTEMS, INC.
(Exact name of registrant as specified in its charter)

DELAWARE 000-22935 75-2605174
(State or other jurisdiction of (Commission File Number) (IRS Employer Identification
incorporation) Number)

3811 TURTLE CREEK BOULEVARD
SUITE 1100
DALLAS, TEXAS 75219
(Address of principal executive offices)

(214) 528-5656
(Registrant's telephone number)

Item 2. Acquisition or Disposition of Assets

On November 16, 1999, Pegasus Systems, Inc., a Delaware corporation
("Pegasus") and its wholly owned subsidiary Pegasus Worldwide, Inc.
("PWI") entered into an Agreement and Plan of Merger ("Merger
Agreement") with REZ, Inc., a Delaware corporation ("REZ"), Reed
Elsevier Inc., a Massachusetts corporation ("Reed Elsevier"), and Utell
International Group, Ltd., a corporation organized under the laws of
England and Wales ("Utell"). Pursuant to the Merger Agreement, PWI
agreed to merge with and into REZ, with REZ being the surviving
corporation ("Merger").

The Merger was completed on April 3, 2000. REZ will operate as a wholly
owned subsidiary of Pegasus. The stockholders of REZ, including all REZ
option holders who have exercised their options within the prescribed
time period under the Merger Agreement, received the following merger
consideration on a pro rata basis:

1) An aggregate of 3.99 million shares of Pegasus common stock,
approximately 338,000 shares of which were placed in an
indemnification escrow account and approximately 123,000 shares of
which were placed in an escrow account pending the determination of
post-closing adjustments. The aggregate 3.99 million shares
constitute 16.4% of the total number of shares of Pegasus common
stock outstanding at March 31, 2000. No fractional shares will be
issued. REZ stockholders will receive a cash payment in lieu of any
fractional shares.

2) $95 million in cash, $5.5 million of which is in an indemnification
escrow account. The original purchase price included $115 million in
cash and was reduced by the amount of REZ's notes payable
outstanding and a working capital adjustment.

3) $20 million note payable to Utell, in lieu of cash consideration
otherwise receivable by Utell.

Pegasus utilized cash provided by operations and cash from the maturity
of short-term investments to fund the acquisition.

REZ is a leading provider of marketing and reservation services to the
hotel industry. The assets acquired primarily include furniture and
fixtures, computer and communication equipment, leasehold improvements,
intellectual property, and customer contracts. Pegasus intends to
continue to utilize the acquired assets in a manner consistent with
REZ's current operations. Pegasus also intends to utilize the acquired
assets to support other services offered to the hotel industry by the
combined company.

Prior Relationship of Pegasus and REZ

REZ managed and operated equipment owned by Pegasus at REZ's facilities.
REZ also provided equipment monitoring services, assurance of power
supply and communications link back up support for Pegasus. Pegasus
provided to REZ electronic distribution, commission processing and
Internet-based distribution services.

As consideration for a loan made to Pegasus which has since been repaid,
Pegasus granted to Reed Elsevier, the majority stockholder of REZ, a
license to use the Ultraswitch technology in connection with operations
unrelated to the hotel industry. As a part of this licensing
arrangement, Reed Elsevier agreed to not compete with the services
provided by Pegasus using the Ultraswitch technology.

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Several REZ directors and executives had previously served on the
Pegasus board of directors. REZ, its predecessors and several affiliates
of REZ, own Pegasus common stock.

Where You Can Find More Information

The Merger and the prior relationship between Pegasus and REZ are more
fully described in the Form S-4 filed by Pegasus and declared effective
by the Commission on March 31, 2000 (registration no. 333-92683).

Item 7. Financial Statements, Pro Forma Financial Information and Exhibits

(a) Financial Statements of Business Acquired

The financial statements of REZ required by this item are
incorporated by reference to the "Index to Financial Statements" in
the Form S-4 declared effective by the Commission on March 31, 2000
(registration no. 333-92683).

(b) Pro Forma Financial Information

The pro forma financial statements required by this item are
incorporated by reference to "Unaudited Pro Forma Financial
Information and Related Notes" in the Form S-4 declared effective by
the Commission on March 31, 2000 (registration no. 333-92683).

Exhibit Number Description

2.1 Agreement and Plan of Merger by and among Pegasus Systems, Inc.,
Pegasus Worldwide, Inc., REZ, Inc. and the Majority Stockholder
of REZ, Inc. dated November 16, 1999, as amended and restated
(incorporated by reference to the Form S-4 declared effective by
the Commission on March 31, 2000 - registration no. 333-92683)

23.1 Consent of Deloitte & Touche LLP

99.1 REZ, Inc. Consolidated Financial Statements as of December 31,
1999 and 1998 and for years ended December 31, 1999, 1998 and
1997 (incorporated by reference to the Form S-4 declared
effective by the Commission on March 31,2000 - registration no.
333-92683)

99.2 Press release issued April 3, 2000

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this current report on Form 8-K to be signed on its
behalf by the undersigned hereunto duly authorized.

PEGASUS SYSTEMS, INC.

April 18, 2000 /s/ Jerome L. Galant
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Chief Financial Officer

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EXHIBIT INDEX

Exhibit Number Description
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23.1 Consent of Deloitte & Touche LLP

99.2 Press release issued April 3, 2000