SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549
                                    FORM 10-Q


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


                        FOR QUARTER ENDED: March 31, 1998

                         COMMISSION FILE NUMBER: 0-13738


                        RADIATION DISPOSAL SYSTEMS, INC.
                        --------------------------------
             (Exact name of registrant as specified in its charter)

    NORTH CAROLINA                                    56-1426581
    --------------                                    -----------
(State of Incorporation)                  (I. R. S. Employer Identification No.)


1104 Nueces Street,  Austin, Texas                   78701-2128
----------------------------------                   ----------
(Address of Principal Executive Offices)             (Zip Code)

                                 (512) 671.3858
              (Registrant's telephone number, including area code)


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 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           NO   X
    -----       -----

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock, as of the latest practicable date.

         Class                                     Outstanding at March 31, 1998
         -----                                     -----------------------------
Common Stock, $.001 par value                              9,977,495












<PAGE>


<TABLE>
<CAPTION>


                        RADIATION DISPOSAL SYSTEMS, INC.

                                      INDEX


PART I - FINANCIAL INFORMATION                                                Page No.
<S>                                                                              <C>     


     ITEM 1.  CONDENSED FINANCIAL STATEMENTS

         BALANCE SHEETS                                                          3
              March 31, 1998 and December 31, 1997

         STATEMENTS OF LOSS                                                      4
              Three months ended March 31, 1998 and 1997, and the
              period from January 10, 1984 (inception) to March 31, 1998

         STATEMENTS OF CASH FLOWS                                                6
              Three months ended March 31, 1998 and 1997, and the
              period from January 10, 1984 (inception) to March 31, 1998

         STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY                           7
              Three months ended March 31, 1998 and the year ended
              December 31, 1997, and the period from January 10, 1984
              (inception) to March 31, 1998

         NOTES TO CONDENSED FINANCIAL STATEMENTS                                 9

     ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS
              OF THE FINANCIAL CONDITION AND RESULTS
              OF OPERATIONS                                                      10

PART II - OTHER INFORMATION                                                      11



</TABLE>












<PAGE>



                        RADIATION DISPOSAL SYSTEMS, INC.
                          (A Development Stage Company)

                           Balance Sheets (continued)
                                   (Unaudited)

                      Liabilities and Stockholders' Equity


                                                         March 31,  December 31,
                                                            1998          1997
Current liabilities                        
      Accounts payable                                     12,612         9,497
      Notes payable                                        52,280        44,231
      Accrued interest payable                             22,421        21,097
                                                       ----------    ----------

                  Total current liabilities                87,313        74,825


Stockholders' equity
      Convertible preferred stock - non-voting
       non-cumulative, $.50 par value,
       authorized 1,500,000 shares, issued
       and subsequently converted to common
       stock, 650,000 shares
      Common stock, $.001 par value, authorized
       20,000,000 shares,  issued and
       outstanding - 9,977,495 shares                       9,977         9,977
      Additional paid-in capital                        3,451,590     3,451,590
      Deficit accumulated during development stage     (3,548,852)   (3,536,233)
                                                       ----------    ----------

                                                          (87,285)      (74,666)


                                                               28           159
                                                       ==========    ==========








                                     Page 2



<PAGE>

                        RADIATION DISPOSAL SYSTEMS, INC.
                          (A Development Stage Company)

                                 Balance Sheets
                                   (Unaudited)

                                     Assets



                                             Assets

                                           March 31, 1998      December 31, 1997
Assets      
     Cash                                 $         28.00     $           159.00
                                          ---------------     ------------------
                  Total Assets            $         28.00     $           159.00
                                                                
                                          ===============     ==================


      See notes to the financial statements.










                                     Page 3




<PAGE>


<TABLE>

<CAPTION>
                                                             
                        RADIATION DISPOSAL SYSTEMS, INC.
                          (A Development Stage Company)

                               Statements of Loss

                                                                                        Period from January 10, 1984
                                              Three months ended                       (inception) to March 31, 1998
                                               March 31, 1998   March 31, 1997         (memorandum only)
<S>                                                                                               <C>     
                                              ----------------------------------                  -----------------
Sales - net                                            $      -          $     0                     $      394,447
 
     Cost of sales                                            0                0                            330,606
                                              ----------------------------------                  -----------------

     Gross margin                                             0                0                             63,841

                                              ----------------------------------                  -----------------
Engineering, research and
development expenses
     Engineering expenses                                     0                0                            243,499
     Consulting expenses                                      0                0                            218,205
     Materials and supplies                                   0                0                            148,623
     Depreciation                                             0                0                            453,237
     Amortization of improvements
       to research facility                                   0                0                             29,644
     Labor and salaries                                       0                0                            667,144
     Service and use
       agreement expense                                      0                0                             14,065
     Loss on abandoned property
       and equipment                                          0                0                            356,516
     Taxes and licenses                                       0                0                             42,824
                                              ----------------------------------                  -----------------
                                                              0                0                          2,173,757

                                              ----------------------------------                  -----------------
Administrative expenses
     Salaries                                                 0                0                          1,059,183
     Consulting fees                                      3,115                0                            201,388
     Public relations                                         0                0                            142,344
     Professional fees                                        0                0                            830,948
     Depreciation                                             0                0                              7,569
     Amortization of patent and
       organization expense                                   0                0                            205,455
     Rent                                                     0                0                             35,339
     Travel and entertainment                                 0                0                            214,845
     Office expense                                         331              389                            272,341
     Group insurance                                          0                0                             30,889
     Insurance                                                0                0                             85,837
     Transfer agent fees                                    735              746                             60,279
     Taxes and licenses                                       0                0                             67,004
     Advertising                                              0                0                              7,010
     Commissions                                              0                0                             31,145
     Bad debt                                                 0                0                             24,096
     Disposal fees                                        7,849                0                              7,849
     Other                                                    0                0                             51,665
                                              ----------------------------------                  -----------------
                                                         12,030            1,135                          3,335,186

                                              ----------------------------------                  -----------------
                 Loss from operations                    12,030            1,135                          5,446,225


</TABLE>



                                   (continued)
                                     Page 4

<PAGE>


<TABLE>

<CAPTION>

                        RADIATION DISPOSAL SYSTEMS, INC.
                          (A Development Stage Company)

                               Statements of Loss



                                                                                       Period from January 10, 1984
                                                  Three months ended                   (inception) to March 31, 1998
                                                  March 31, 1998    March 31, 1997     (memorandum only)
                                              --------------------------------                    ------------------
<S>                                           <C>                  <C>                            <C>    

Other income (expense)
     Interest                                    $         -       $         -                       $       788,820
     Other - net (principally
       replacement part sales,
       testing and rental income)                          0                 0                               178,791
     Transfer agent fees                                 735               746                                 3,816
     Cancellation of debt                                  0                 0                               945,974
     Gain on sale of assets                                0                 0                                 1,789
     Interest expense                                (1,324)           (1,149)                              (22,940)
                                              --------------------------------                    ------------------
                                                       (589)             (403)                             1,896,250

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

                             Net loss                 12,619             1,538                             3,548,852

                                              ================================                    ==================
Weighted average shares
of common stock                                    9,977,495         9,977,495

                                              ================================
Net loss per share                               $      0.01       $         -
                                                                              


</TABLE>










                                     Page 5


<PAGE>

<TABLE>

<CAPTION>

                        RADIATION DISPOSAL SYSTEMS, INC.
                          (A Development Stage Company)

                            Statements of Cash Flows
                                   (Unaduited)

                                                                                                 Period from January 10, 1984
                                                           Three months ended                    (inception) to March 31, 1998
                                                             March 31, 1998   March 31, 1997     (memorandum only)
<S>                                                         <C>              <C>                   <C>   

Cash flows from operating activities
     Net loss                                                $  (12,619.00)  $    (1,462.00)       $ (3,548,852)
     Adjustment to reconcile net loss
       to net cash used by operating activities
     Deprecation and amortization                                         0                0             695,906
     Loss on abandoned property & equipment                               0                0             356,516
     Book value of machinery included
       in cost of sales                                                   0                0               6,236
     (Increase) decrease in accounts receivable                           0                0                   0
     (Increase) decrease in prepaid expenses                              0                0                   0
     Increase (decrease) in accounts payable                          3,115                0              12,612
     Increase (decrease) in accrued liabilities                       1,324            1,044              22,421
     Net cash provided by (used by)
                                                           ----------------------------------    ----------------
       operating activities                                         (8,180)            (418)         (2,455,161)
Cash flows from investing activities
     Property and equipment additions                                     0                0           (853,202)
     Costs incurred in connection with purchase
       and protection of patent rights                                    0                0           (201,270)
     Increase in organization expense                                     0                0             (4,185)

                                                           ----------------------------------    ----------------
         Net cash used in investing activities                            0                0          (1,058,657)

Cash flows from financing activities
     Proceeds from the issuance of common stock                           0                0           4,171,841
     Costs incurred in connection with the issuance
       of common and convertible preferred stock,
       including costs classified as deferred expense                     0                0           (710,274)
     Issuance of notes payable                                        8,049              400             126,876
     Retirement of notes payable                                          0                0            (74,597)

                                                           ----------------------------------    ----------------
     Net cash provided (used) by financing activities                 8,049              400           3,513,846

                                                           ----------------------------------    ----------------
     Net increase (decrease) in cash                                  (131)             (18)                  28

Cash
     Beginning                                                          159              193                   0

     Ending                                                        $  28.00      $    175.00          $    28.00
                                                                                                      

     See notes to the financial statements.

</TABLE>



                                     Page 6



<PAGE>

<TABLE>

<CAPTION>


                        RADIATION DISPOSAL SYSTEMS, INC.
                          (A Development Stage Company)

                  Statements of Changes in Stockholders' equity
                                   (Unaudited)
      Three months ended March 31, 1998, the year ended December 31, 1997,
       and the period from January 10, 1984 (Inception) to March 31, 1998


                                                                      Convertible                             Accumulated
                                         Common Stock                 Preferred    Convertible   Additional   During
                                         Number of                    Stock        Preferred     Paid-in      Development
                                         Shares              Amount   Subscribed   Stock         Capital      Stage        Total
------------------------------------------------------------------------------------------------------------------------------------
<S>                                       <C>              <C>        <C>          <C>             <C>        <C>         <C>

Issuance of common stock for cash              5,777.3873  $  5,777   $        -   $      -        $    532   $        -  $    6,309
Issuance of common stock under
  patent assignment agreement                    532.1077       532            0           0               0           0         532
Change in par value of common stock
  $1.00 per share to $.001 per share       6,303,185.5050                      0           0               0           0           0
Subscriptions received from
  Convertible preferred stock
  through private placement                                              325,000           0               0           0     325,000
Net loss for the initial period ended
  December 31, 1984                                                            0           0               0     (1,255)     (1,255)
Issuance of convertible
  preferred stock                                                      (325,000)     325,000               0           0           0
Issuance of common stock through
  public offering                          2,700,000.0000     2,700            0           0       3,372,300           0   3,375,000
Costs incurred in the issuance of
  common and convertible preferred stock:
    Reclassification of deferred
      Expense at December 31, 1984                 0.0000         0            0           0        (78,387)           0    (78,387)
    Costs incurred subsequent to
      December 31, 1984                            0.0000         0            0           0       (558,492)           0   (558,492)
Net loss for the year ended
  December 31, 1985                                0.0000         0            0           0               0   (125,808)   (125,808)
Net loss for the year ended
  December 31, 1986                                0.0000         0            0           0               0   (201,064)   (201,064)
Conversion of convertible
  preferred stock to common stock            650,000.0000       650            0   (325,000)         324,350           0           0
Net loss for the year ended
  December 31,1987                                 0.0000         0            0           0               0   (427,685)   (427,685)
Exercise of warrants held by
  Underwriter                                270,000.0000       270            0           0         404,730            0    405,000
                                         

</TABLE>

                               (continued) Page 7


<PAGE>


<TABLE>
<CAPTION>
                        RADIATION DISPOSAL SYSTEMS, INC.
                          (A Development Stage Company)

                  Statements of Changes in Stockholders' equity
                                   (Unaudited)
      Three months ended March 31, 1998, the year ended December 31, 1997,
       and the period from January 10, 1984 (Inception) to March 31, 1998
                                                                                                                   
                                                                           Convertible                             
                                                Common Stock               Preferred   Convertible   Additional    
                                                Number of                  Stock       Preferred     Paid-in       
                                                Shares            Amount   Subscribed  Stock         Capital    
----------------------------------------------------------------------------------------------------------------
<S>                                             <C>               <C>           <C>         <C>      <C>    
  Costs incurred to register the
  common stock underlying the warrants                  0.0000      0.00            0          0        (73,395)   
Exercise of common stock options                   24,000.0000     24.00            0          0          29,976   
Net loss for the year ended December 31, 1988           0.0000      0.00            0          0               0   
Exercise of common stock options                   24,000.0000     24.00            0          0          29,976   
Net loss for the year ended December 31, 1989           0.0000      0.00            0          0               0   
Net loss for the year ended December 31, 1990           0.0000      0.00            0          0               0   
Net loss for the year ended December 31, 1991           0.0000      0.00            0          0               0   
Net loss for the year ended December 31, 1992           0.0000      0.00            0          0               0   
Balance, December 31, 1992                      9,977,495.0000  $  9,977        $   -       $  -     $ 3,451,590   
                                                                                         

Net loss for the year ended December 31, 1993           0.0000      0.00         0.00       0.00            0.00   
Balance, December 31, 1993                      9,977,495.0000  $  9,977        $   -       $  -     $ 3,451,590   
                                                                               
Net loss for the year ended December 31, 1994           0.0000      0.00         0.00       0.00            0.00   
Balance, December 31, 1994                      9,977,495.0000  $  9,977         0.00       0.00       3,451,590   

Net loss for the year ended December 31, 1995           0.0000      0.00         0.00       0.00            0.00   
Balance, December 31, 1995                      9,977,495.0000  $  9,977         0.00       0.00       3,451,590   

Net loss for the year ended December 31, 1996           0.0000      0.00         0.00       0.00            0.00   
Balance, December 31, 1996                      9,977,495.0000  $  9,977         0.00       0.00       3,451,590   

Net loss for the year ended December 31, 1997           0.0000      0.00         0.00       0.00            0.00   
Balance, December 31, 1997                      9,977,495.0000  $  9,977         0.00       0.00       3,451,590   
Net loss for the three months
ended March 31, 1998                                    0.0000      0.00         0.00       0.00            0.00   
Balance, March 31, 1998                         9,977,495.0000  $  9,977         0.00       0.00       3,451,590   


                                                                     Deficit
                                                                     Accumulated
                                                                     During
                                                                     Development                                    
                                                                     Stage         Total
-----------------------------------------------------------------------------------------------

Costs incurred to register the                                   
  common stock underlying the warrants                                         0       (73,395)  
Exercise of common stock options                                               0         30,000  
Net loss for the year ended December 31, 1988                          (694,368)      (694,368)
Exercise of common stock options                                               0         30,000  
Net loss for the year ended December 31, 1989                          (897,153)      (897,153)  
Net loss for the year ended December 31, 1990                          (597,782)      (597,782)  
Net loss for the year ended December 31, 1991                          (437,019)      (437,019)  
Net loss for the year ended December 31, 1992                          (373,346)      (373,346)  
Balance, December 31, 1992                                         $ (3,755,480)   $  (293,913)  
                                                                                                 
Net loss for the year ended December 31, 1993                          (318,269)    (318269.00)  
Balance, December 31, 1993                                         $ (4,073,749)   $  (612,182)  
                                                                                                 
Net loss for the year ended December 31, 1994                          (197,861)      (197,861)  
Balance, December 31, 1994                                           (4,271,610)      (810,043)  
                                                                                                 
Net loss for the year ended December 31, 1995                            741,198        741,198  
Balance, December 31, 1995                                           (3,530,412)       (68,845)  
                                                                                                 
Net loss for the year ended December 31, 1996                            (4,349)        (4,349)  
Balance, December 31, 1996                                           (3,534,761)       (73,194)  
                                                                                                 
Net loss for the year ended December 31, 1997                            (1,472)        (1,472)  
Balance, December 31, 1997                                           (3,536,233)       (74,666)  
Net loss for the three months                                                                    
ended March 31, 1998                                                    (12,619)       (12,619)  
Balance, March 31, 1998                                              (3,548,852)       (87,285)  
                                                                   

</TABLE>
                                     Page 8

<PAGE>


                        RADIATION DISPOSAL SYSTEMS, INC.
                          (A Development Stage Company)

                     Notes to Condensed Financial Statements
                                 March 31 , 1998
                                   (Unaudited)



Note 1 - Condensed financial statements

In the opinion of the Company,  the accompanying  unaudited  condensed financial
statements  contain  all  adjustments   (consisting  of  only  normal  recurring
adjustments)  necessary to present fairly the financial position as of March 31,
1998 and December 31,1997,  the results of operations for the three months ended
March 31, 1998 and 1997, and for the period from January 10, 1984 (inception) to
March 31, 1998,  the changes in  stockholders  equity for the three months ended
March 31, 1998,  the year ended  December 31, 1997,  and the period from January
10, 1984  (inception) to March 31, 1998, and the cash flows for the three months
ended March 31, 1998 and 1997, and the period from January 10, 1984  (inception)
to March 31, 1998.

The  financial  statements  have been  prepared  assuming  that the Company will
continue as a going concern. The Company has been in the development stage since
its inception (January 10, 1984) and as such has been devoting substantially all
its efforts in the areas of engineering  and research and, in more recent years,
in developing  markets for systems  designed to apply the ozone  technologies to
treat   non-radioactive   wastes  and  water.  The  Company  has  not  generated
significant  operating revenues,  has incurred  substantial losses, and has made
substantial  investments in property and equipment and patent costs.  Because of
continuing  losses  incurred  during  the  development  stage,  the  substantial
depletion of the Company's cash reserves and the uncertainty surrounding whether
additional debt or equity funds can be obtained,  substantial doubt exists about
the Company's ability to continue as a going concern.

Certain  information  and footnote  disclosures  normally  included in financial
statements prepared in accordance with generally accepted accounting  principles
have been condensed or omitted.  While the Company believes that the disclosures
presented are adequate to make the information  not misleading,  it is suggested
that  the  condensed  financial  statements  be read  in  conjunction  with  the
financial  statements  and notes  included in the  Company's  Form 10-K,  Annual
Report pursuant to Section 13 or 15 (d) of the Securities  Exchange Act of 1934,
for the Fiscal Year ended December 31, 1997, which was filed with the Securities
and Exchange Commission.

Because the Company is in the development  stage,  the results of operations for
the three month period are not necessarily  indicative of the results for a full
year under normal operations.

Note 2 - Net loss per share

The net loss per share calculations are made using the  weighted-average  number
of common shares outstanding.

Note 3 - Notes Payable

During the first quarter of 1998,  the former  President and the Chairman of the
Board of Directors made loans to the Company totaling $8,049.  Promissory notes,
payable on demand and secured by a vast majority of the  Company's  tangible and
intangible  assets,  were issued.  The  interest  rate on the notes was the rate
publicly announced by NationsBank of North Carolina,  N. A. in Charlotte,  North
Carolina from time to time as its prime rate. Interest expense relating to those
notes was $1,109 for the three months ended March 31, 1998.



The total amounts of interest  payable  relating to notes  payable,  $16,647 and
$15,5538 at March 31, 1995, and December 31, 1997, respectively, are included in
other accrued liabilities in the accompanying balance sheets.

Note 4 - Litigation

Thomas  Publishing  Co. filed a lawsuit  against the Company for collection of a
past due account in the total of $3,265,  in the District Court of Western North
Carolina.  On May 5, 1995, the Company  settled the lawsuit by signing a Consent
Judgment  providing that Thomas Publishing Co. have and recover Judgment against
the Company in the sum of $3,265,  plus interest at 18% per annum and collection
costs of $1,179 plus  interest  of 8% per annum from the date of Judgment  until
paid in full,  and court  costs.  The Company has included  collection  costs of
$1,179 in accounts  payable.  For the three  months  ended March 31,  1998,  the
amounts of $89,  were  included  in interest  expense.  The amount of $3,265 was
included in accounts payable in the accompanying balance sheets.

                                     Page 9


<PAGE>



McKinney & Moore,  Inc. filed a lawsuit  against the Company for collection of a
past due  account in the total of $3,802,  in the  District  Court of  Henderson
County,  Texas. On February 25, 1993, McKinney & Moore, Inc. received a Judgment
to recover  the debt,  attorney  fees of $1,250,  prejudgement  in the amount of
$211,  plus  interest at 10% per annum from the date of  Judgment  until paid in
full. The Company has included attorney fees of $1,250 in accounts payable.  For
the three  months  ended March 31, 1998,  the amount of $126,  were  included in
interest  expense.  The amount of $3,802 was included in accounts payable in the
accompanying balance sheets.

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

                              RESULTS OF OPERATIONS

     The Company had no sales for the three  months  ended March 31,  1998,  and
1997.

     Historically,  the  Company  has had few sales of  machines  and  equipment
utilizing the  application  of waste and water  treatment  technologies  ("Ozone
Technologies"),  and, to date,  the Company has been  unsuccessful  in marketing
machines and equipment that utilize the Ozone Technologies.

     The  Company  has not been able to  generate  sales of its  products,  and,
consequently,  the Company  has  incurred  and  continues  to incur  substantial
losses. The Company experienced a net loss of $12,619 for the three months ended
March 31,  1998,  compared to $1,538 for the  comparable  period in 1997,  for a
increase  loss of $11,081.  The increase  was due, in large part,  to no Company
sales.

     For  the  three  months  ended  March  31,  1998,   the  Company   incurred
administrative expenses of $12,030, compared to $1,135 for the comparable period
in 1997,  for a increase  loss of $10,895.  The  significant  components  of the
administrative expenses for the three months ended March 31,1998,  together with
comparative  data where  significant  change has  occurred  in  relation  to the
comparable period in 1997, include the following:

         (a)  Consultant  fee of $3,115  for the  method  for  removal of unused
         chemicals and materials of the Company.  (b) The Disposal fee of $7,849
         for the removal of unused chemicals and materials of the Company.

                        FINANCIAL CONDITION AND LIQUIDITY

         (a) The Company had no significant  cash change during the three months
ended March 31, 1998, compared to the same period in 1997.

     As of March 31, 1998,  the  Company's  significant  commitments  which will
result in  identifiable  expenses  in the  immediate  future  were  pursuant  to
employment agreement with its two former officers.  Under employment  agreements
with the Company,  Manuel E. Kane as President  and Treasurer and Albert D. Kane
as Chairmen of the Board and Secretary each receive  annual  salaries of $50,000
subject to any increases,  plus any bonuses  approved by the Company's  Board of
Directors.  The Kane's employment  continues for successive  periods of one year
unless terminated by either party.

     Manuel E. Kane and Albert D. Kane,  officers and  Directors of the Company,
made certain loans to the Company  totaling  $5,200 to provide  working  capital
during the quarter ended  September  30, 1995.  In  connection  with such loans,
promissory  notes,  payable on demand,  were executed by the Company in favor of
Manuel E. Kane and Albert D. Kane. These notes were secured by all the Company's
account  receivables,  contract  claims,  choices in action,  money and  general
intangibles;  inventory;  other goods;  and  insurance and other  proceeds.  The
interest rate on the notes was the rate  publicly  announced by  NationsBank  of
North  Carolina,  N. A. in  Charlotte,  North  Carolina from time to time as its
prime rate.

     The Company settled a lawsuit by signing a Consent Judgment  providing that
the  Plaintiff  have and  recover  Judgment  against  the  Company in the sum of
$3,265,  plus interest at 18% per annum from the date of Judgment  until paid in
full, and court costs.  The Company has included  interest  expense of $2,029 in
other accrued liabilities at September 30, 1995 (see the discussion under "LEGAL
PROCEEDINGS" in Part ii, Item 1.).

     The Company has, to date,  generated no significant  revenues.  Because the
Company's  available  remaining  funds  are  extremely  limited,  Management  is
operating the Company on a severely curtailed basis.  However, at March 31, 1998
the Company's  financial  resources  were almost  completely  exhausted.  In the
absence of a capital  infusion or the location of other sources of funds,  which
Management  believes  unlikely,  the  Company  will have  insufficient  funds to
continue operations beyond December, 1998. See Item 1.--"CONDENSED FINANCIAL".


                                     Page 10


<PAGE>


                                CAPITAL RESOURCES

     Subsequent to September 30, 1995, and as of November 10, 1995, the Company
has had no significant expenditures for the purchase of materials, machinery and
other testing equipment.

                           PART II - OTHER INFORMATION

     ITEM 1.  LEGAL PROCEEDINGS
Thomas  Publishing  Co. filed a lawsuit  against the Company for collection of a
past due account in the total of $3,265,  in the District Court of Western North
Carolina.  On May 5, 1995, the Company  settled the lawsuit by signing a Consent
Judgment  providing that Thomas Publishing Co. have and recover Judgment against
the Company in the sum of $3,265,  plus interest at 18% per annum and collection
costs of $1,179 plus  interest  of 8% per annum from the date of Judgment  until
paid in full,  and court  costs.  The Company has included  collection  costs of
$1,179 in accounts  payable.  For the three  months  ended March 31,  1998,  the
amounts of $89,  were  included  in interest  expense.  The amount of $3,265 was
included in accounts payable in the accompanying balance sheets.

McKinney & Moore,  Inc. filed a lawsuit  against the Company for collection of a
past due  account in the total of $3,802,  in the  District  Court of  Henderson
County,  Texas. On February 25, 1993, McKinney & Moore, Inc. received a Judgment
to recover  the debt,  attorney  fees of $1,250,  prejudgement  in the amount of
$211,  plus  interest at 10% per annum from the date of  Judgment  until paid in
full. The Company has included attorney fees of $1,250 in accounts payable.  For
the three  months  ended March 31, 1998,  the amount of $126,  were  included in
interest  expense.  The amount of $3,802 was included in accounts payable in the
accompanying balance sheets.

     ITEM 2.  CHANGES IN SECURITIES
         None
     ITEM 3.  DEFAULTS ON SENIOR SECURITIES
         None
     ITEM 4.  SUBMISSION TO A VOTE OF SECURITY HOLDERS
         None
     ITEM 5.  OTHER INFORMATION
         None
     ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K
         None
     ITEM 7.  SUBSEQUENT EVENTS
On September 21, 1998,  the Company's  Board of Directors  approved the trade of
10,000,000  shares  of  Radiation  Disposal  Systems,  Inc.  for  the  1,000,000
authorized shares of Asset Technology International, Inc. On such date Manuel E.
Kane resigned as President, Principal Executive Officer, Principal Financial and
Accounting  Officer,  Treasurer and Director and Rudy W. De La Garza was elected
as director by Albert D. Kane, the sole remaining director of the Company, until
his successor is elected, to fill the vacancy on the board resulting from Manuel
E. Kane's  resignation.  On such day Albert D. Kane  resigned as Chairman of the
Board,  Secretary  and Director and Wayne  Gronquist  was elected as director by
Rudy W. De La Garza,  the sole  remaining  director  of the  Company,  until his
successor is elected,  to fill the vacancy on the board resulting from Albert D.
Kane's  resignation.  Rudy W. De La Garza was elected by the Board as  President
and Chief  Executive  Officer of the Company and Wayne  Gronquist was elected by
the  Board to the  offices  of  Executive  Vice  President  and  Secretary.  The
resignations  of Manuel E. Kane and Albert D. Kane as directors  and officers of
the Company was accepted. The transaction of the trade of shares resulted in the
transfer of an approximate  50.0056%  controlling interest in the company to the
two single  shareholders of Asset Technology  International,  Inc.,  namely, the
JonRuco Company and Wayne  Gronquist,  Trustee both owning equal shares of Asset
Technology International, Inc. prior to the trade.

                                   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, hereunto duly authorized.

                                           RADIATION DISPOSAL SYSTEMS, INC.


     DATE:                            BY:  /s/ Rudy W. De La Garza
                                           -------------------------------------
                                           Rudy W. De La Garza - President & CEO

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