This interim report on the National Day Care Study (NDCS) presents preliminary findings of the 4-year research program designed to answer major policy questions about federal funding of center-based preschool day care. Major NDCS objectives have been to determine the impact of variations in staff-child ratio, group size, and staff size and qualifications on both the development of preschool children and the costs of center care. This document outlines the policy context within which the NDCS has been conducted, discusses its major objectives and overall design, and concludes with a presentation of preliminary findings and their implications, particularly the implications for Federal Interagency Day Care Requirements (FIDCR). The NCDS consists of a major cost-effects study, to which most of this report is devoted, and two substudies, from which findings are also included: an Infant Day Care Study (focusing on group care for children under 3 in 54 centers) and a Supply Study (a nationwide telephone survey of 3,100 centers). The major study has involved 1,800 children, 1,100 parents, caregivers in 120 classroom groups, and program and cost data gathered from 57 centers in Atlanta, Detroit and Seattle. (BF)