A diagnostic review of reading achievement in the first three grades of the South East Education Development (SEED) project is presented. Comparisons are made with the 1969-1970 SEED data, which is considered baseline. The findings indicated that: (1) no significant difference existed in the pooled attendance for each grade between two successive school years, (2) the reading programs moved children to progress at grade level, (3) reading rates tended toward normal development, (4) the 1970-1971 students in SEED earned significantly higher grades in reading on the whole than the 1969-1970 cohort of students in these grades, (5) the SEED children, as a whole, did not achieve reading scores at the national normed level, and (6) the stimulating use of educational funds collaterally spent by school community groups can work. Tables and appendices are included. (See also ED 052 905 for the first year report of the SEED project and CS 000 113.) (WR)