In response to requests for information on a city day-care program, a demonstration project for infants and toddlers, the Demonstration Nursery Center at the University of North Carolina, is reported. Physical makeup of the facilities is described, along with daily procedures and staff activities. To study the effects of day care on babies, a comparison was made with a non-nursery control group. Almost no differences were found in the areas of physical-medical, mental-motor-sensory, social, and emotional-personality development. The low rate of illness and absenteeism and the general satisfaction of the parents seem to indicate the lack of negative effects on young children of day care. The key concept is quality care, reproducing as much as possible the home environment and the best features of the "establishment" well-functioning nursery school. Quality is stressed in relationships, play experiences, and health care (by means of a Sick Bay). Goals still to be achieved are in areas of innovation in involving parents and grandparents, learning and social development in a mix of age levels in a group, and cost accounting. (LH)