The State Educational Technology Directors Association is pleased to release its third annual Trends Report on educational technology. In addition to reporting trends on the third round (FY 04) of the No Child Left Behind, Title II, Part D, Enhancing Education Through Technology (EETT) program, the 2006 report also includes general state policy trends in educational technology. The findings in the 2006 report are based on surveys from 50 states and the District of Columbia, representing 15,997 local education agencies (LEAs) and the federal NCLB II D dollars allocated across the United States in 2004-2005. Data from the first two annual National Reports for Rounds 1 and 2 serve as a baseline. Those first two reports represented a similar population (46 states and the District of Columbia for Round 1 and 49 states plus the District of Columbia for Round 2). In Round 3 the respondent states and the District of Columbia awarded 1,630 competitive grants and 13,667 formula grants. Together with the 5% of administrative support funds expended at the state level, the total funding was $635,027,468. Seven trends were reported across the first three years of the NCLB II D program: (1) Promising Interim Results at 3-Year Mark Warrant Continued Investment; (2) States Have Set the Bar High for Professional Development; (3) States Are Leveraging Resources through Collaborations and Partnerships; (4) The Large Volume of Small Formula Grants Diminishes Overall Impact; (5) States Are Grappling with Evaluation and Impact Research; (6) Through Leadership, a Knowledge Base Is Emerging; and (7) In Many States, NCLB II D is the Only Source of Funding for Technology. The findings from SETDA's national survey provide states, local school districts, policymakers, and the U.S. Department of Education with insights into the following questions: (1) Is the Title II D program helping to close the achievement gap, leading to the attainment of NCLB II D goals?; (2) How are grant recipients across the nation structuring programs to meet NCLB II D goals?; (3) What administrative approaches by states are most effective in guiding and supporting LEAs toward NCLB goals?; and (4) Are the general trends in technology and learning indicating increased effectiveness in the use of technology for learning as outlined in NCLB II D? In general, states are increasingly focusing their technology resources on improving academic achievement and technology literacy, increasing professional development for teachers and providing more current technologies and robust access in networked environments for learning. Sustained funding and educational technology program continuation are critical to realizing the potential that technology brings to learning and teaching. Educational Technology Policy Trends are appended. (Contains 32 figures and 1 table.) [For the "National Trends: Enhancing Education through Technology--No Child Left Behind, Title II D--Year Two in Review," see ED537543.]