This report discusses the challenges and successes in creating an education system that meets the needs of all students in Texas. The first two sections provide background information on a project investigating the achievement of students with disabilities in high achieving, high poverty Texas elementary schools, and present a framework for this state policy analysis. A third section discusses the educators and students of the Texas education system and the most notable features of school finance policies. The fourth section examines Texas schools today through the lens of reform efforts that began in the mid-1980s. Within this section, the four themes of accountability, inclusion of diverse learners, early intervention, and flexible use of funding are probed. Additionally, state technical assistance and professional development are examined. The report closes by describing key elements of the Texas education system: (1) it presents clear and concise education information; (2) it promotes an education system that includes diverse learners; (3) every component of the system is expected to focus attention on the teaching and learning process; (4) it encourages the development of consistent goals that allow flexible implementation; and (5) it uses data to identify areas in need of development. Appended are: Methodology Used for First Phase of NASDSE's (National Association of State Directors of Special Education's) Policy Analysis; list of Interview Participants; and the Interview Protocol. (Contains 29 references and 3 tables.) (CR)