SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                            ------------------------

                                   FORM 10-QSB

 (Mark One)

_X_   QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
      ACT OF 1934

                  For the quarterly period ended June 30, 1999

___   TRANSITION REPORT UNDER SECTION 13 OR 15(d) OR THE EXCHANGE ACT

                        For the transition period from to

                         Commission File No.: 000-21557

                             ACI TELECENTRICS, INC.
           (Name of Small Business Issuer as specified in its charter)

            MINNESOTA                                          41-1572571
(State or other jurisdiction of                              (IRS Employer
incorporation or organization)                            Identification Number)

         3100 WEST LAKE STREET, SUITE 300, MINNEAPOLIS, MINNESOTA, 55416
               (Address of principal executive offices)         (Zip Code)

         Issuer's telephone number, including area code: (612) 928-4700



      Check whether the Issuer (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the Registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Yes [X] No [ ]

      The Company had 5,756,267 shares of common stock, no par value per share,
outstanding as of August 5, 1999.

      Transitional Small Business Disclosure Format (Check One): YES [ ] NO [X]

<PAGE>


                         ACI TELECENTRICS, INCORPORATED
                                   FORM 10-QSB

                                TABLE OF CONTENTS


PART I           FINANCIAL INFORMATION


Item 1           Consolidated Financial Statements (unaudited)
                       Balance Sheets
                       Statements of Operations
                       Statements of Cash Flows
                       Notes to Financial Statements

Item 2           Management's Discussion and Analysis of
                       Financial Condition and Results of Operations



PART II          OTHER INFORMATION

Item 4           Submission of Matters to a Vote of Security Holders

Item 6           Exhibits and Reports on Form 8-K


Signature Page

<PAGE>


PART 1        FINANCIAL INFORMATION
ITEM 1        FINANCIAL STATEMENTS

                         ACI TELECENTRICS, INCORPORATED
                           CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                            June 30,       December 31,
                                                                              1999             1998
                                                                          (Unaudited)
                                                                          ------------     ------------
<S>                                                                       <C>              <C>
ASSETS

CURRENT ASSETS:
    Cash and cash equivalents                                             $    405,459     $  1,300,681
    Trade receivables, less allowance for doubtful
           accounts of $127,697 and $140,000, respectively                   4,608,264        1,456,431
    Deferred income taxes                                                      131,300          365,000
    Prepaid expenses                                                            37,979          111,117
    Other current assets                                                        27,566          131,667
                                                                          ------------     ------------
                  Total Current Assets                                       5,210,568        3,364,896

Property and equipment, net of accumulated depreciation                      2,482,457        2,824,381

OTHER ASSETS:
    Goodwill, less accumulated amortization of
           $133,955 and $99,000, respectively                                  916,820          951,858
    Deferred income taxes                                                      137,000          137,000
    Other assets                                                                34,235           63,676
                                                                          ------------     ------------
                  Total other assets                                         1,088,055        1,152,534
                                                                          ------------     ------------
TOTAL ASSETS                                                              $  8,781,080     $  7,341,811
                                                                          ============     ============

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:
    Revolving line of credit                                              $    350,000     $         --
    Trade accounts payable                                                     975,325          482,628
    Accrued expenses                                                           689,592          204,728
    Income taxes payable                                                         5,713           15,713
    Current portion of long-term debt and capital lease obligations            303,068          356,980
                                                                          ------------     ------------
                  Total current liabilities                                  2,323,698        1,060,049

LONG TERM LIABILITIES:
    Long-term debt and capital lease obligations, less current portion         168,742          257,711
    Deferred capital lease liabilities                                         350,000          473,201
                                                                          ------------     ------------
                  Total long-term liabilities                                  518,742          730,912

SHAREHOLDERS' EQUITY:
    Common stock, no par value;
           Authorized - 15,000,000
           Issued and outstanding shares - 5,743,812
             and 5,731,471, respectively                                     6,624,261        6,620,145
    Accumulated deficit                                                       (685,621)      (1,069,295)
                                                                          ------------     ------------
                  Total shareholders' equity                                 5,938,640        5,550,850
                                                                          ------------     ------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                                $  8,781,080     $  7,341,811
                                                                          ============     ============
</TABLE>


See accompanying notes to consolidated financial statements.

<PAGE>


                         ACI TELECENTRICS, INCORPORATED
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                              Three Months Ended                Six Months Ended
                                                   June 30,                         June 30,
                                        -----------------------------     -----------------------------
                                            1999             1998             1999             1998
                                        ------------     ------------     ------------     ------------
<S>                                     <C>              <C>              <C>              <C>
TELEMARKETING REVENUES                  $  5,498,648     $  4,329,991     $ 10,187,415     $  7,858,902

COST OF SERVICES                           3,136,027        2,492,710        5,814,040        4,493,433

SELLING, GENERAL AND
  ADMINISTRATIVE EXPENSES                  1,923,383        2,330,344        3,732,697        4,252,498
                                        ------------     ------------     ------------     ------------


OPERATING INCOME (LOSS)                      439,238         (493,063)         640,678         (887,029)

OTHER INCOME (EXPENSE)
      Interest income                          2,892            9,148            9,489           23,731
      Interest expense                       (15,953)         (17,494)         (27,072)         (26,014)
      Other, net                              (5,721)          10,328           (5,721)          10,133
                                        ------------     ------------     ------------     ------------
      Total other income (expense)           (18,782)           1,982          (23,304)           7,850
                                        ------------     ------------     ------------     ------------

INCOME (LOSS) BEFORE TAXES                   420,456         (491,081)         617,374         (879,179)

INCOME TAX EXPENSE (BENEFIT)                 158,900         (191,000)         233,700         (335,000)
                                        ------------     ------------     ------------     ------------

NET INCOME (LOSS)                       $    261,556     $   (300,081)    $    383,674     $   (544,179)
                                        ============     ============     ============     ============

Basic and diluted net income (loss)
      per share                                  .05             (.05)             .07             (.09)
                                        ============     ============     ============     ============

Basic shares used in computing net
      income (loss) per share              5,743,263        5,714,800        5,742,851        5,714,800
                                        ============     ============     ============     ============

Diluted shares used in computing net
      income (loss) per share              5,761,970        5,714,800        5,760,994        5,714,800
                                        ============     ============     ============     ============
</TABLE>


See accompanying notes to consolidated financial statements.

<PAGE>


                         ACI TELECENTRICS, INCORPORATED
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                 Six Months Ended June 30,
                                                               ---------------------------
                                                                   1999            1998
                                                               -----------     -----------
<S>                                                            <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)                                              $   383,674     $  (544,179)
Adjustments to reconcile net income (loss) to net cash
           provided by (used in) operating activities:
      Depreciation and amortization                                506,312         455,279
      Provision for losses on accounts receivable                  (12,303)             --
      Amortization of deferred capital lease liabilities          (153,201)        (40,700)
      Loss on sale of equipment                                      5,721              --
      Deferred income taxes                                        233,700          (7,886)
Changes in operating assets and liabilities:
           Trade receivables                                    (3,139,530)       (346,613)
           Prepaid expenses                                         73,138              --
           Other current assets                                    104,101         (22,278)
           Accounts payable and accrued expenses                   977,558          16,591
           Income taxes                                            (10,000)         28,417
                                                               -----------     -----------
                  Net cash used in operating activities         (1,030,830)       (461,369)
                                                               -----------     -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
      Purchase of property and equipment                          (175,070)       (257,605)
      Proceeds from sale of assets                                  40,000              --
      Decrease (increase) in other assets                           29,441          (6,360)
      Decrease in restricted investments                                --         115,744
                                                               -----------     -----------
                  Net cash used in investing activities           (105,629)       (148,221)
                                                               -----------     -----------

CASH FLOWS FROM FINANCING ACTIVITIES:
      Proceeds from revolving line of credit                       350,000         350,000
      Net proceeds from issuance of common stock                     4,116          18,430
      Proceeds from sale and leaseback of equipment                     --          93,922
      Repayments of long-term debt and capital leases             (112,879)        (77,444)
                                                               -----------     -----------
                  Net cash provided by financing activities        241,237         384,908
                                                               -----------     -----------

NET DECREASE IN CASH AND CASH EQUIVALENTS                         (895,222)       (224,682)

CASH AND CASH EQUIVALENTS AT BEGINNING
      OF PERIOD                                                  1,300,681         659,042
                                                               -----------     -----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD                     $   405,459     $   434,630
                                                               ===========     ===========

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
   NON CASH TRANSACTIONS:
      Accelerated forgiveness of deferred grant                $    60,000     $        --
      Equipment acquired through capital leases                $        --     $   372,773
      Deferred grant                                           $        --     $   100,000

   CASH PAID FOR INTEREST AND TAXES:
      Income taxes paid (refunds received)                     $    10,000     $  (355,531)
      Cash paid for interest                                   $    17,101     $    26,014
</TABLE>


See accompanying notes to consolidated financial statements.

<PAGE>


                         ACI TELECENTRICS, INCORPORATED
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                THREE AND SIX MONTHS ENDED JUNE 30, 1999 AND 1998
                                   (UNAUDITED)

(1) BASIS OF PRESENTATION

         The balance sheet of ACI Telecentrics, Incorporated and subsidiary (the
         "Company") as of June 30, 1999 and the related statements of operations
         and cash flows for the three and six months ended June 30, 1999 and
         1998, have been prepared by the Company without being audited. In the
         opinion of management, these statements reflect all adjustments
         consisting of all normal recurring entries necessary to present fairly
         the financial position of the Company as of June 30, 1999 and the
         results of operations and cash flows for all periods presented. Certain
         information and footnote disclosures normally included in financial
         statements prepared in accordance with generally accepted accounting
         principles have been condensed or omitted. Therefore, these financial
         statements should be read in conjunction with the financial statements
         and notes thereto included in the Company's 1998 Form 10-KSB. The
         results of operations for interim periods are not necessarily
         indicative of results which will be realized for the full fiscal year.

         Effective January 1999, the Company dissolved its only subsidiary ACI
         Telecentrics of Illinois, Inc., and merged its operations into ACI
         Telecentrics, Inc. These financial statements include the consolidated
         balance sheet as of December 31, 1998 and the related consolidated
         statements of operations for the three and six months ended June 30,
         1998 and cash flows for the six months ended June 30, 1998. The balance
         sheet at June 30, 1999, the related statements of operations for the
         three and six months ended June 30, 1999 and cash flows for the six
         months ended June 30, 1999 are for the merged entity.

(2) EARNINGS (LOSS) PER SHARE (SFAS 128)

         Statement of Financial Accounting Standards ("SFAS") No. 128, "Earnings
         Per Share" was issued in February 1997 and requires the presentation of
         earnings per share on a basic and diluted basis. Basic earnings per
         share are computed by dividing earnings available to common
         shareholders by the weighted average number of common shares
         outstanding during each period. Diluted earnings per share are computed
         after giving effect to the exercise of all dilutive outstanding options
         and warrants. The Company adopted SFAS No. 128 in 1997. Both basic and
         diluted earnings per share for the three and six months ending June 30,
         1999 were the same. Basic and diluted earnings per share for the three
         and six months ended June 30, 1998 were the same due to net losses; the
         impact of the potential common shares outstanding would have been
         anti-dilutive. The following table reconciles the denominators used in
         computing basic and diluted earnings per share:

<TABLE>
<CAPTION>
                                                 Three Months Ended        Six Months Ended
                                                      June 30,                 June 30,
                                                 1999         1998         1999         1998
                                                 ----         ----         ----         ----
<S>                                           <C>          <C>          <C>          <C>
Weighted average common shares outstanding    5,743,263    5,714,800    5,742,851    5,714,800
Effect of dilutive stock options                 18,707           --       18,143           --
                                            ----------------------------------------------------
                                              5,761,970    5,714,800    5,760,994    5,714,800
                                            ====================================================
</TABLE>

(3) DISCONTINUED OPERATIONS

         During May 1998, the Company closed its inbound call center operations
         in Lombard, IL. As a result, the Company exited the inbound call center
         business. The net loss, on an after tax basis, accounted for $142,000
         ($.02 per share) and $221,000 ($.04 per share) of the losses for the
         three and six months ending June 30, 1998, respectively.

(4) PROPERTY AND EQUIPMENT

         Property and equipment consists of the following:

<TABLE>
<S>                                                                     <C>
           Furniture                                                          940,152
           Equipment                                                        4,264,251
           Leasehold Improvements                                              93,816
                                                                        -------------
                                                                            5,298,219
           Less accumulated depreciation and amortization                   2,815,762
                                                                        -------------
           Net property and equipment                                   $   2,482,457
                                                                        =============
</TABLE>

         The Company has equipment under capitalized leases totaling $513,615.

<PAGE>


(5) LINE OF CREDIT

         At June 30, 1999, the Company had outstanding borrowings of $350,000
         under its $2 million revolving line of credit. The loan agreement
         contains provisions requiring compliance with certain financial
         covenants. As of June 30, 1999, the Company was in compliance with all
         covenants and has obtained a waiver from the lender for the Company's
         violation of certain loan covenants as of March 31, 1999 and December
         31, 1998. Additionally, effective April 30, 1999, the Company and its
         lending institution executed an "Amended and Restated Revolving Credit
         Loan Agreement" that amended certain covenants and other loan
         provisions. Management believes that it will be able to maintain
         compliance with all debt covenants during 1999.

(6) FACILITY CLOSING

         On May 28, 1999, the Company closed its Devils Lake, North Dakota call
         center. A number of factors led to this decision, including the recent
         decision by the City of Devils Lake to facilitate the opening of a call
         center by a competing teleservices firm. To meet and maintain increased
         capacity demands, a temporary call center has been re-established in
         Devils Lake, North Dakota until such time as the work being done at the
         Devils Lake facility can be moved to the Company's other call centers.

         During the quarter ending June 30, 1999, the Company recognized as
         income $60,000 associated with the City of Devils Lake waiving the
         remaining balance on an unamortized forgivable grant.

PART 1   FINANCIAL INFORMATION
ITEM 2   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

OVERVIEW

         ACI Telecentrics, Incorporated (ACI) provides telephone-based sales and
marketing services primarily to the telecommunications, insurance, publishing
and financial services industries. ACI was established in 1987 in Minneapolis,
Minnesota. The Company operates nine outbound call centers in five Midwest
states, which, as of June 30, 1999, had 446 calling stations. The Company had
770 full and part-time employees as of June 30, 1999.

         Revenue from telemarketing services is recognized as these services are
performed and is generally based on an hourly rate. Certain telemarketing
service revenues are performance-based. Cost of services includes compensation
and commissions for telephone sales representatives, payroll taxes and other
benefits associated with such personnel, telephone expenses and other direct
costs associated with providing services to customers. Selling, general and
administrative expenses include administrative, sales, marketing, occupancy,
depreciation and other indirect costs.


RESULTS OF OPERATIONS

THREE MONTHS ENDED JUNE 30, 1999, COMPARED TO THREE MONTHS ENDED JUNE 30, 1998

         REVENUE. Revenues for the three months ended June 30, 1999 increased
$1,168,657, or 27.0% to a record $5,498,648, compared to second quarter 1998
revenues of $4,329,991. Billable hours increased by 30.7% when compared to the
prior year period, however, revenue per billable hour decreased by approximately
2.8% when compared to the second quarter of 1998. During the period the Company
also utilized other telemarketing companies to perform some of its services,
although to a lesser extent than during the same period in 1998. The Company
derived 7.6% of its second quarter 1999 revenues from outsourcing compared to
12.7% during the same period in 1998. The Company operated an average of 451
call stations during the second quarter of 1999 compared to an average of 450
for the same period in 1998.

         Historically, the telecommunications industry segment has provided the
largest percentage of the Company's revenues. In a shift away from this
historical trend, financial services clients provided approximately

<PAGE>


57% of second quarter 1999 revenues compared to approximately 28% of revenues
during the second quarter of 1998. During the 1999 period the Company's largest
client represented approximately 28% of total revenue. During the prior year
period the Company's largest client represented approximately 19% of total
revenue. Other industry segments and their percentages of revenue in 1999
include publishing (22%), insurance (9%) and telecommunications (8%).

         COST OF SERVICES. Cost of services in the second quarter of 1999
increased $643,317, or 25.8% to $3,136,027, compared to $2,492,710 in the second
quarter of 1998. Second quarter 1999 labor and benefit costs increased by
$646,655, or 42.3% when compared to the second quarter of 1998. Long distance
telephone costs for telemarketing operations increased by $135,130, or 29.1% in
the second quarter of 1999 when compared to the 1998 period. These expense
increases were partially offset by a decrease in outsourced telemarketing
service costs of $148,327, or 31.6% when compared to the second quarter of 1998.

         As a percentage of revenue, cost of services for the 1999 second
quarter decreased slightly to 57.0% compared to 57.6% in the second quarter of
1998. The 0.6% decrease in cost of services, as a percent of revenue, was the
result of a 5% decrease in outsourced services expenses which was partially
offset by the 4.3% increase in labor and benefit costs. Outsourcing services are
costs associated with the Company's utilization of other telemarketing companies
for telemarketing some of its clients' programs. During the second quarter of
1999 the outsourced services had a cost of 76.9% compared to 85.1% during the
1998 period. Second quarter cost of services for internally generated
telemarketing was 55.4% in 1999 and 53.6% in 1998.

         SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Total selling, general
and administrative expenses for the second quarter of 1999 decreased $406,961,
or 17.5% to $1,923,383, from $2,330,344 during the second quarter of 1998. As a
percentage of revenue, second quarter 1999 selling general and administrative
expenses decreased by 18.8% to 35.0% compared to 53.8% during the second quarter
of 1998. Selling, general and administrative expenses for call center operations
decreased $149,353 during the second quarter of 1999 when compared to the same
period in 1998. The entire decrease can be attributed to the closing of the
Lombard, Illinois inbound call center in May of 1998. Corporate selling, general
and administrative expenses decreased $257,610 during the same period. The
decrease in corporate expenses was primarily the result of a decrease in salary
and related benefits and a one-time gain of $60,000 associated with the City of
Devils Lake waiving the remaining balance on an unamortized forgivable grant.
Salary and related benefits, for call center and corporate operations, accounted
for $256,539, or 63% of the second quarter 1999 expense decrease.

         OPERATING INCOME (LOSS). As a result of the factors discussed above,
the Company experienced second quarter operating income of $439,238, a $932,301
increase compared to the second quarter 1998 operating loss of $493,063. As a
percentage of revenue, operating income during the quarter was 8.0% compared to
a loss of 11.4% during the second quarter of 1998. The Company's closed inbound
call center in Lombard, Illinois accounted for approximately $230,000 ($142,000
on an after tax basis) of the second quarter 1998 operating loss.

         OTHER INCOME AND EXPENSES, NET. Other expenses were $18,782 in 1999
compared to an income of $1,982 in 1998. Interest was a net expense amount of
$13,061 and $8,346 in 1999 and 1998, respectively. The increase in net interest
expense was the result of lower cash investment balances producing lower
interest income and an increase in interest expense resulting from the full
quarter effect of $513,615 of leased equipment.

         NET INCOME (LOSS) AND NET INCOME (LOSS) PER SHARE. Pretax income for
the second quarter of 1999 was $420,456, a $911,537 increase compared to a
pretax loss of $491,081 in the second quarter of 1998. The Company recorded
income tax expense of $158,900, an effective tax rate of 38%, for the second
quarter of 1999 compared to an income tax benefit of $191,000, an effective tax
rate of 39%, in the second quarter of 1998. Net income for the second quarter
1999 was $261,556, or $.05 per share on a basic and fully diluted basis compared
to a net loss of $300,081, or $.05 per share in the second quarter of 1998.


SIX MONTHS ENDED JUNE 30, 1999, COMPARED TO SIX MONTHS ENDED JUNE 30, 1998

<PAGE>


         REVENUE. Revenues for the six months ended June 30, 1999 increased
$2,328,513 or 29.6% to $10,187,415, compared to 1998 revenues of $7,858,902.
Billable hours increased by 35.6% when compared to the prior year period,
however, revenue per billable hour decreased by approximately 4.4% when compared
to the same period of 1998. During the 1999 period the Company also utilized
other telemarketing companies to perform some of its services, although to a
lesser extent than during the same period in 1998. The Company derived 6.7% of
its 1999 revenues from outsourcing compared to 11.9% during the same period in
1998. The Company operated an average of 453 call stations during the six months
ended June 30, 1999 compared to 419 during the same period in 1998.

         Historically, the telecommunications industry segment has provided the
largest percentage of the Company's revenues. In a shift away from this
historical trend, financial services clients provided approximately 41% of 1999
six month revenues compared to approximately 20% of 1998 revenues. During the
1999 period the Company's largest client represented approximately 19% of total
revenue. During the prior year period the Company's largest client represented
approximately 23% of total revenue. Other industry segments and their
percentages of revenue in 1999 include publishing (22%), insurance (8%) and
telecommunications (27%).

         COST OF SERVICES. Cost of services for the six months ended June 30,
1999 increased $1,320,607, or 29.4% to $5,814,040, compared to $4,493,433 during
the 1998 period. Labor and benefit costs during the six months ended June 30,
1999, increased by $1,260,079, or 45.1% when compared to the same period of
1998. Long distance telephone costs for telemarketing operations increased by
$258,378, or 29.8% in the six months of 1999 when compared to the 1998 period.
These expense increases were partially offset by a decrease in outsourced
telemarketing service costs of $251,589, or 32.6% when compared to the first six
months of 1998.

         As a percentage of revenue, cost of services for the six month period
ended June 30, 1999, decreased slightly to 57.1% compared to 57.2% in the same
period of 1998. The 0.1% decrease in cost of services was the result of a 4.7%
decrease in outsourced services expenses which was partially offset by a 4.2%
increase in labor and benefit costs. Outsourcing services are costs associated
with the Company's utilization of other telemarketing companies for
telemarketing some of its client's programs. During the six months of 1999 the
outsourced services had a cost of 76.5% compared to 82.7% during the 1998
period. Cost of services for internally generated telemarketing was 55.7% in
1999 period and 53.7% in 1998 period.

         SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative expenses were $3,732,697 for the six months ended June 30, 1999
compared to $4,252,498 in 1998, a decrease of $519,801 or 12.2%. As a percentage
of revenue, selling general and administrative expenses decreased to 36.6% in
1999 compared to 54.1% during 1998. Selling, general and administrative expenses
for call center operations decreased $225,435 during the first six months of
1999 when compared to the same period in 1998. The entire decrease can be
attributed to the closing of the Lombard, Illinois inbound call center in May of
1998. Corporate selling, general and administrative expenses decreased $294,366
during the same period. The decrease in corporate expenses was primarily the
result of a decrease in salary and related benefits and a one-time gain of
$60,000 associated with the City of Devils Lake waiving the remaining balance on
an unamortized forgivable grant. Salary and related benefits, for call center
and corporate operations, accounted for $374,505, or 72.1% of the second quarter
1999 expense decrease.

         OPERATING INCOME (LOSS). As a result of the factors discussed above,
the operating income for the first six months of 1999 was $640,678, a $1,527,707
increase compared to an operating loss of $887,029 in 1998. As a percentage of
revenue, operating income during the 1999 period was 6.3% compared to a loss of
11.3% during 1998. The Company's closed inbound call center in Lombard, Illinois
accounted for approximately $356,000 ($221,000 on an after tax basis) of the
1998 operating loss.

         OTHER INCOME AND EXPENSES, NET. Other expenses were $23,304 in 1999
compared to an income of $7,850 in 1998. Interest was a net expense amount of
$17,583 and $2,283 in 1999 and 1998, respectively. The increase in net interest
expense was the result of lower cash investment balances producing lower
interest income and an increase in interest expense resulting from the full
quarter effect of $513,615 of leased equipment.

<PAGE>


         NET INCOME (LOSS) AND NET INCOME (LOSS) PER SHARE. Pretax income for
the six months ended June 30, 1999, was $617,374, a $1,496,553 increase compared
to a pretax loss of $879,179 in the same period of 1998. The Company recorded
income tax expense of $233,700, an effective tax rate of 38%, for 1999 compared
to an income tax benefit of $335,000, an effective tax rate of 38%, in 1998. Net
income for 1999 was $383,674, or $.07 per share on a basic and fully diluted
basis compared to a net loss of $544,179, or $.09 per share in 1998.

LIQUIDITY AND CAPITAL RESOURCES

         The Company has historically used cash from operating activities, bank
borrowings, capital leases and public and private sector financing received in
connection with the opening of call centers as its primary sources of liquidity.
The public and private sector (grants/financings) included low interest rate
loans, forgivable loan arrangements, and reimbursement for certain expenses and
leasehold improvements. In November 1997 the Company's Board of Directors
authorized a $2 million revolving line of credit which became effective in
January 1998. At June 30, 1999, the Company had outstanding borrowings of
$350,000 under the line of credit.

         At June 30, 1999, the Company had cash and cash equivalents of $405,459
compared to $1,300,681 at December 31, 1998. For the six months ended June 30,
1999 cash used by operating activities was $1,030,830 compared to cash used by
operating activities of $461,369 in the 1998 period. Cash used in 1999 operating
activities was primarily the result of an increase of $3,139,530 in Accounts
Receivable balances which resulted from the 29.6% increase in revenue. This
increase was partially offset by cash provided by net income of $383,674,
depreciation and amortization of $506,312, changes in working capital components
of $1,144,797 and non-cash items of $73,917. Cash flows used by operating
activities in the 1998 period included the net loss of $544,179, changes in
working capital components of $323,883 and non-cash items of $48,586. These uses
were partially offset by cash provided by depreciation and amortization of
$455,279.

         Net cash used by investing activities in the six months ended June 30,
1999 was $105,629 compared to net cash used by investing activities of $148,221
in 1998. The purchase of $175,070 of property and equipment was partially offset
by proceeds of $40,000 received from the sale of assets combined with a decrease
of $29,441 in other assets. During the 1998 period the Company had net purchases
of property and equipment of $257,605. The release of restricted investments in
the amount of $125,000 partially offset the property and equipment purchases.

         Net cash provided by financing activities during the six months of 1999
was $241,237 compared to $384,908 during 1998. The primary source of this cash
was $350,000 borrowed under the Company's revolving line of credit. In addition,
the Company issued stock from its Employee Stock Purchase Plan for $3,616 and
for the exercise of stock options for $500. Proceeds for 1999 were partially
offset by repayments of long-term debt and capital leases in the amount of
$112,879. Cash flows from financing activities during the first six months of
1998 included $350,000 borrowed under the Company's revolving line of credit,
$93,922 received from the sale and leaseback of capital equipment leases for
equipment purchased in 1997 and proceeds of $18,430 from the issuance of common
stock under the Company's Employee Stock Purchase Plan. These cash proceeds were
partially offset by repayment of long-term debt and capital leases in the amount
of $77,444.

         During the six months ending June 30, 1999 the Company did not acquire
any assets through capital leases. During the comparable 1998 period the Company
financed $372,773 of asset purchases through capital leases.

         As a result, net cash and cash equivalents decreased by $895,222 during
the first six months of 1999 compared to a decrease of $224,682 in 1998. The
Company believes that funds available at June 30, 1999, together with funds
which should be generated from future operations and amounts available under its
revolving line of credit arrangement, will be sufficient to finance its current
and future business operations including working capital requirements. The
Company has no material commitments for capital expenditures for 1999.


QUARTERLY RESULTS

         The telemarketing industry tends to be slower in the first and third
quarters of the year because client marketing and customer service programs are
typically slower in the post-holiday and summer months. The

<PAGE>


Company has experienced, and expects to continue to experience, quarterly
fluctuations in revenues and operating income principally as a result of the
timing of clients' telemarketing campaigns, the commencement of new contracts,
changes in the Company's revenue mix, opening of new call centers, and the
additional selling, general and administrative expenses to acquire and support
such new business.

OUTLOOK

         Certain of the statements in this section are "forward-looking
statements" within the meaning of the federal securities laws. The following
forward-looking statements are subject to risks and uncertainties that could
cause actual results to differ materially from those expressed or implied by
such statements.

         Management believes that total marketing expenditures by US companies
directed towards telemarketing will continue to grow and that the trend for
these companies will be towards outsourcing their telemarketing programs to
companies like ACI, which should result in an increase in the Company's calling
revenue in 1999. There is no assurance that the Company's marketing efforts will
generate new business or that businesses will continue to outsource their
telemarketing needs. Client demand is extremely volatile in the Company's
business and may decrease notwithstanding the Company's efforts to diversify and
stabilize its client base. There is no assurance that client demand will fulfill
expectations based on current and anticipated customer orders and that business
will be generated from new customers at anticipated levels. As is common in the
telemarketing industry, the Company's projects are often not subject to formal
contracts, the agreements with its clients do not assure that ACI will generate
a specific level of revenue, do not designate ACI as the client's exclusive
service provider, and are terminable by the client on relatively short notice
and without penalty. In addition, the amount of revenues ACI generates from a
particular client generally is dependent upon their customers' interest in, and
use of, the client's products or services.

         The Company believes that it currently has enough capacity in its
existing call centers to handle current demand from existing and new clients.
Should demand from existing and/or new clients continue to increase as it has
the Company may need to add one (1) or more new call centers in 1999.

         While the Company anticipates an increase in demand for its services
during the remainder of 1999, there is no assurance that the Company, due to the
current low unemployment levels, will be able to hire and train all of the
necessary personnel in the most cost-efficient manner to fully utilize the
currently existing capacity to meet this increased demand.

         During the second quarter of 1999 and for the six months ending June
30, 1999, the Company reduced its selling, general and administrative expenses
by over $400,000 and $500,000, respectively. These reductions are a result of
the Company's effort to improve its processes to reduce costs and increase the
efficiency of the organization. However, if the Company's growth continues, the
Company may not be able to maintain its lower level of SG&A expenses if client
demand continues to grow. There is no assurance that further cost reductions
will continue to be realized or that these costs can be contained.

         With the quarter ending June 30, 1999, the Company posted profits for
the second consecutive quarter. During the first quarter of 1999 the Company
returned to profitability for the first time since the second quarter of 1997; a
time span of seven quarters. There is no assurance that the Company will be able
to maintain profitability in 1999.


YEAR 2000 COMPLIANCE

         Many currently installed computer systems and software products are
coded to accept only two-digit entries in the date code field. When year 2000
begins, these computers may interpret "00" as the year 1900 and could either
stop processing date related computations or could process them incorrectly.
Beginning in the year 2000, these date code fields may need to accept four-digit
entries to distinguish 21st century dates from 20th century dates to be year
compliant.

<PAGE>


         The Company recognizes the need to ensure its operations will not be
adversely impacted by Year 2000 software failures. The Company has completed an
assessment of its internal information systems and has determined that its
financial and operational systems (1) are year 2000 compliant; (2) can be
upgraded to be year 2000 compliant without significant cost or effort; or (3) do
not pose a significant issue to the Company if left uncorrected. The Company is
currently making necessary software conversion and programming modifications to
comply with the Year 2000 issues and believes that all other appropriate actions
are being taken. Total costs to upgrade the Company's internal information
systems are not material to the operations of the Company and are not expected
to materially impact earnings. During the fourth quarter of 1998 and the first
quarter of 1999 the Company, as part of equipment and software enhancements to
its call processing technology and capabilities, also upgraded its call
processing software to be year 2000 compliant in all nine (9) of its call
centers. Total costs for the equipment and software enhancements, including year
2000 compliance, was approximately $147,500. These costs were capitalized.
Additional costs to upgrade the Company's internal information systems are
expected to cost approximately $125,000. These additional costs will not be
capitalized and will be treated as expenses as they are incurred.

         The Year 2000 issue may also affect the systems and applications of the
Company's customers and/or suppliers. The Company is reviewing its systems as it
relates to interfacing with customers and suppliers to determine if the
Company's interface systems may be vulnerable to a third parties failure to
correct their own Year 2000 issues. Although the Company does not currently
anticipate any material adverse impact or costs associated with client or
supplier failure to correct their Year 2000 issues in a timely manner, no
assurance can be given that the failure by one or more of the Company's major
clients to become Year 2000 compliant, will not have a material adverse impact
on the Company's operations.

         The Company expects to complete its overall Year 2000 conversions prior
to any impact on its operations. However, should the Company not be able to
complete its Year 2000 conversions prior to an impact on its operations, the
Company has not developed a contingency plan to deal with any issues that may
arise as a result of systems that stop processing date related computations or
processes them incorrectly. In addition, the Company has not yet developed a
contingency plan for any failure of the Company's customers and/or suppliers
systems and applications to be Year 2000 compliant.


INFLATION

         Inflation has not had a material impact on operating results and the
Company does not expect it to have a significant impact in the future. However,
there can be no assurance that the Company's business will not be affected by
inflation in the future.



PART II  OTHER INFORMATION
ITEM 4   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS


         At the Annual Meeting of Stockholders held May 13, 1999, in addition to
the election of the directors, the stockholders voted upon the board proposal
contained in the Registrant's Proxy Statement dated April 8, 1999.

         The board nominees were elected as directors with the following vote:

<PAGE>


                                                  Shares Voted
                                                  ------------
                                           For                  Withheld
                                           ---                  --------

          Rick N. Diamond               5,554,130                2,145
          Gary B. Cohen                 5,554,130                2,145
          Seymour Levy                  5,554,130                2,145
          Douglas W. Franchot           5,554,130                2,145
          Phillip T. Levin              5,554,130                2,145
          Thomas F. Madison             5,554,130                2,145


         The board proposal was approved with the following vote:

                                              For        Against       Abstain
                                              ---        -------       -------
          Setting the corporate number of
          directorships at six              5,545,201     10,074        1,000


         No other matters were submitted to a vote of the security holders.



PART II  OTHER INFORMATION
ITEM 6   EXHIBITS AND REPORTS ON FORM 8-K

         (a)      Exhibits

                  10.39    Amendment to Terminate Sublease between ACI
                           Telecentrics, Inc. and Forward Devils Lake
                           Corporation dated April 1, 1999.

                  10.40    Amended and Restated Revolving Credit Loan Agreement
                           between ACI Telecentrics, Inc. and National City Bank
                           dated as of April 30, 1999

                  27       Financial Data Schedule

<PAGE>


SIGNATURES

         Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                                                ACI TELECENTRICS, INCORPORATED
                                                Registrant


Dated: /s/ August 12, 1999               By:    /s/ GARY B. COHEN
       ----------------------                   --------------------------------
                                                Gary B. Cohen
                                                President and Chief
                                                 Financial Officer
                                                (Principal Accounting Officer)


Dated: /s/ August 12, 1999               By:    /s/ RICK N. DIAMOND
       ----------------------                   --------------------------------
                                                Rick N. Diamond
                                                Chief Executive Officer and
                                                 Director