This yearbook provides special education information (for the period July 1, 1985 to June 30, 1986) including federal policy actions, state policy, important reports, statistical data on exceptional students served and personnel employed, and directory listings of key offices and officials concerned with special education. Summaries are presented of legislation affecting the education of exceptional children and youth, federal administrative actions, and judicial decisions. A set of goals is presented for providing exceptional children in the United States and Canada with a high-quality education. Other reports include the executive summary of the Eighth Annual Report to Congress on the Implementation of the Education of the Handicapped Act and information regarding handicapped children in Head Start programs. Six figures and 62 tables provide information on the number of exceptional children served in various programs, children served in Head Start programs, environments where handicapped children are served, special education teachers, other school staff, federal special education funding, Canadian special education statistics, and special education annual awards. Directory information is included for federal resources, state directors of special education, state coordinators for the gifted and talented, and Canadian special education officials. (CB)