The report documents activities and findings of the Preschool Evaluation Project which is developing a model for evaluating program provision to handicapped preschoolers and creating a longitudinal data base to track the short- and long-term progress of preschool children receiving special services in Montgomery County, Maryland. During the first year (1983-84) of the data base development phase the project conducted the following data collection activities: testing of 123 handicapped preschoolers with the Battelle Developmental Inventory (BDI); documentation of type and quantity of service provided; survey of parents regarding degree of satisfaction with their child's special education program. Major findings included the following: (1) with the exception of gross motor skills, Project children exhibited significant improvements in all areas of development beyond that expected by maturation alone; (2) the largest gains were in the areas of personal-social and cognitive skills; (3) children labeled multihandicapped made significant gains in all areas but motor skills; (4) children labeled "articulation disordered" or "language disordered" made gains but not in speech and language areas; (5) parents reported overwhelming satisfaction with their preschool child's program; (6) service providers did not use BDI test results in educational planning or discussions with parents. The body of the report details methodology, results, the parent satisfaction survey, and supplementary BDI validation studies. Appendixes include the parents' evaluation questionnaire, the BDI questionnaire, and additional information about the "value-added analysis" approach employed in the study methodology. (DB)