Methods and systems are described for improved drilling operations through the use of real-time drilling data to predict bit wear, lithology, pore pressure, a rotating friction coefficient, permeability, and cost in real-time and to adjust drilling parameters in real-time based on the predictions. The real-time lithology prediction is made by processing the real-time drilling data through a multilayer neural network. The real-time bit wear prediction is made by using the real-time drilling data to predict a bit efficiency factor and to detect changes in the bit efficiency factor over time. These predictions may be used to adjust drilling parameters in the drilling operation in real-time, subject to override by the operator. The methods and systems may also include determining various downhole hydraulics parameters and a rotary friction factor. Historical data may be used in combination with real-time data to provide expert system assistance and to identify safety concerns.