Form 10-C

Securities and Exchange Commission
Washington, DC 20549

Report by issuer of securities quoted on The Nasdaq Stock Market, filed pursuant
to section 13 or 15(d) of the Securities Exchange Act of 1934 and Rule 13a-17 or
15d-17 thereunder.

EXACT NAME OF ISSUER AS SPECIFIED IN CHARTER:  Computer Telephone Corp.
ADDRESS OF PRINCIPAL EXECUTIVE OFFICES:  360 Second Ave., Waltham MA 02171
ISSUER'S TELEPHONE NUMBER (INCLUDING AREA CODE:)  (617) 466-8080


I. Change in Number of Shares Outstanding
Indicate any change  (increase or decrease of five percent or more in the number
of shares outstanding:

1.       Title of Security  Class I Common Stock

2.       Number of shares outstanding before the change  3,119,483

3.       Number of shares outstanding after the change  5,377,092 (includes
         465,245 shares attributable to unexercised stock options.

4.       Effective Date of change  July 25, 1995

5.       Method of change

Specify method (such as merger, acquisition exchange distribution,  stock split,
reverse split,  acquisition of stock for treasury,  etc.) Stock split Give brief
description of  transaction  Three for two common stock split in which one share
of Class I Common  Stock will be issued for every two shares owned on the record
date July 25, 1995)


II. Change in Name of Issuer

1.       Name prior to change

2.       Name after change

3.       Effective date of charter amendment changing name

4.       Date of shareholder approval of change, if required


         July 14, 1995     /s/ John D. Pittenger, Treasurer
--------------------------------------------------------------------------------
         DATE                       OFFICER'S SIGNATURE AND TITLE

Return to:        The NASDAQ Stock Market
                  Attn: 10C Form
                  80 Merritt Boulevard
                  Trumbull, CT 06611
                  (203) 375-9609

(C) October 1993, The Nasdaq Stock Market,  Inc. All rights  reserved.  NASD and
Nasdaq are  registered  service marks of the National  Association of Securities
Dealers, Inc. (NASD). The Nasdaq Stock Market is a service mark of NASD.


<PAGE>



                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549


                                    FORM 10-Q


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


For Quarter ended June 30, 1995.

Commission File Number 0-13627.

                            COMPUTER TELEPHONE CORP.
             (Exact name of registrant as specified in its charter)

Massachusetts                                                         04-2731202
(State or other jurisdiction of                              (IRS Employer
incorporation or organization)                               Identification No.)

360 Second Avenue, Waltham, Massachusetts                                  02154
(Address of principal executive offices)                              (Zip Code)

                                 (617) 466-8080
               (Registrant's telephone number including area code)


              (Former name, former address and former fiscal year,
                          if changed since last report)

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 X   No

                      APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares  outstanding  of each of the  Issuer's  classes of
Common Stock, as of the latest practicable date:

As of July 26, 1995,  4,681,662 shares of Class I, $.01 par value,  Common Stock
were outstanding.


<PAGE>

                            COMPUTER TELEPHONE CORP.
                                    FORM 10-Q
                                      INDEX


Part I            FINANCIAL STATEMENTS                                  PAGE NO.

         Item 1.  Financial Statements

                  Condensed Balance Sheets
                  as of June 30 and March 31, 1995                             3

                  Condensed Statements of Income
                  Three Months Ended June 30, 1995 and 1994                    4

                  Condensed Statements of Cash Flows
                  Three Months Ended June 30, 1995 and 1994                    5

                  Notes to Condensed Financial Statements                      6

         Item 2.  Management's Discussion and Analysis of
                  Financial Condition and Results of Operations              7-8

Part II  OTHER INFORMATION

         Item 1.  Legal Proceedings                                 Inapplicable

         Item 2.  Changes in Securities                             Inapplicable

         Item 3.  Default Upon Senior Securities                    Inapplicable

         Item 4.  Submission of Matters to a
                  Vote of Security Holders                          Inapplicable

         Item 5.  Other Information                                 Inapplicable

         Item 6.  Exhibits and Reports on Form 8-K

         The following exhibit is included herein:

                  (11)   Statements Regarding Computation
                         of Per Share Earnings
                         Three Months ended June 30, 1995 and 1994             9

The Company did not file any reports on Form 8-K during the three  months  ended
June 30, 1995.

                                        2

<PAGE>



                             COMPUTER TELEPHONE CORP
                            CONDENSED BALANCE SHEETS

<TABLE>
<CAPTION>

                                                     June 30,               March 31,
                                                       1995                   1995
                                                     --------               ---------
<S>                                                <C>                   <C>           
ASSETS

Current Assets

Cash and cash equivalents                          $   2,336,243         $    2,390,546
Accounts receivable, net                               4,610,698              3,639,220
Inventories                                               32,087                 36,512
Prepaid expenses and other current assets                411,115                353,381
                                                   -------------         --------------
        Total Current Assets                           7,390,143              6,419,659

Furniture, Fixtures and Equipment                      5,386,903              5,287,289
Less accumulated depreciation                         (4,300,417)            (4,162,417)
                                                   -------------         --------------
        Total Equipment                                1,086,486              1,124,872

Deferred tax asset                                       153,000                153,000
Other Assets                                              27,085                 28,285
                                                   -------------         --------------
        Total Assets                               $   8,656,714          $   7,725,816
                                                   =============          =============


LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities

Accounts payable and accrued expenses              $     390,481          $      456,094
Accrued salaries and related taxes                     1,773,457               1,445,937
Accrued income taxes                                     265,519                 281,569
Deferred revenue                                               0                   4,209
Customer deposits                                         12,412                  12,412
                                                   -------------          --------------
        Total Current Liabilities                      2,441,869               2,200,221

Stockholders' Equity

Common stock                                              31,244                 31,244
Additional paid in capital                             4,871,302              4,871,302
Retained-earnings                                      1,485,984                796,734
                                                   -------------         --------------
                                                       6,388,530              5,699,280
Amounts due from stockholders                           (159,825)              (159,825)
Less treasury stock, at cost                             (13,860)               (13,860)
                                                   -------------         --------------
        Total Stockholders' Equity                     6,214,845              5,525,595
                                                   -------------         --------------

        Total Liabilities and
        Stockholders' Equity                       $   8,656,714         $    7,725,816
                                                   =============         ==============
</TABLE>



The accompanying notes are an integral part of these financial statements.


                                        3

<PAGE>



                             COMPUTER TELEPHONE CORP
                         CONDENSED STATEMENTS OF INCOME

<TABLE>
<CAPTION>

                                                             Three Months Ended

                                                       June 30,             June 30,
                                                         1995                 1994
                                                       --------              -------
<S>                                                <C>                   <C>           
 Revenue
     Network service commission income             $   5,667,426         $    3,872,239
     Long distance usage income                        1,048,576                546,466
                                                   -------------         --------------
                                                       6,716,002              4,418,705

Costs and expenses
     Cost of long distance network                       827,844                449,300
     Selling, general and administrative expenses      4,767,574              3,774,387
                                                   -------------         --------------
                                                       5,595,418              4,223,687
                                                   -------------         --------------
Income from operations                                 1,120,584                195,018

Other
     Interest income                                      32,024                 19,496
     Interest expense                                          0                 (2,035)
     Other                                                    (8)                 2,621
                                                   -------------         --------------
                                                          32,016                 20,082
                                                   -------------         --------------
Income before income taxes                             1,152,600                215,100

Provision for income taxes                               463,350                 78,500
                                                   -------------         --------------

Net income                                         $     689,250         $      136,600
                                                   =============         ==============

Net income per common share
     Primary                                       $        0.20          $        0.05
                                                   =============          =============
     Fully diluted                                 $        0.20         $         0.05
                                                   =============         ==============

Weighted average number of common shares
     Primary                                           3,423,320              2,742,591
                                                   =============         ==============
     Fully diluted                                     3,448,213              2,761,025
                                                   =============         ==============
</TABLE>


                                        4

<PAGE>



                             COMPUTER TELEPHONE CORP
                        CONDENSED STATEMENT OF CASH FLOWS


<TABLE>
<CAPTION>

                                                             Three Months Ended

                                                       June 30,             June 30,
                                                         1995                 1994
                                                       --------              -------
<S>                                                <C>                   <C>           

OPERATING ACTIVITIES

Net Income                                         $     689,250         $      136,600

Adjustments to reconcile net income to
  net cash provided by operating activities:
  Depreciation and amortization                          138,000                150,000

Changes in noncash working capital items:
  Accounts receivable                                   (971,478)              (198,471)
  Inventories                                              4,425                    957
  Other current assets                                   (57,734)                (7,966)
  Income tax receivable                                        0                 50,000
  Other assets                                             1,200                      0
  Accounts payable                                       (65,613)               (98,787)
  Accrued liabilities                                    327,520                 91,250
  Deferred revenue                                        (4,209)                (6,744)
  Accrued taxes                                          (16,050)               (17,260)
                                                   -------------         --------------
Net cash provided by operating activities                 45,311                 99,579

INVESTING ACTIVITIES

Additions to equipment                                   (99,614)              (360,769)
                                                   -------------         --------------
Net cash used in investing activities                    (99,614)              (360,769)

FINANCING ACTIVITIES

Repayment of capital lease obligations                         0                 (3,570)
                                                   -------------         --------------
Net cash used by financing activities                          0                 (3,570)

Decrease in cash                                         (54,303)              (264,760)
Cash at beginning of year                              2,390,546              1,238,811
                                                   -------------         --------------

Cash and cash equivalents
  at end of period                                 $  32,336,243          $     974,051
                                                   =============          =============
</TABLE>


                                        5


<PAGE>




                            COMPUTER TELEPHONE CORP.
                          NOTES TO FINANCIAL STATEMENTS

NOTE 1:           BASIS OF PRESENTATION

The accompanying condensed financial statements have been prepared in accordance
with the  instructions  to form 10-Q and do not include all the  information and
footnote  disclosures  required by generally accepted accounting  principles for
complete  financial  statements.  In the opinion of management  all  adjustments
(consisting of normal recurring accruals) necessary for a fair presentation have
been  included.  Operating  results for the three months ended June 30, 1995 are
not  necessarily  indicative  of the results  that may be expected  for the year
ending March 31, 1996. These  statements  should be read in conjunction with the
financial  statements and related notes included in the Company's  Annual Report
to Shareholders on Form 10-K for the year ended March 31, 1995.

NOTE 2:           CASH DIVIDENDS

The Company has not paid cash dividends during the period presented.

NOTE 3:           COMMITMENTS AND CONTINGENCIES

The Company is party to suits  arising in the normal  course of  business  which
either individually or in the aggregate are not material.

NOTE 4.           COMMON STOCK TRANSACTIONS SUBSEQUENT TO
                  MARCH 31, 1995

On July 5, 1995,  the Computer  Telephone  Corp.  Employee  Stock  Purchase Plan
purchased  2,337  shares of Class 1 Common  Stock from the Company at $9.775 for
the purchase period ended June 30, 1995.

On July 13,1995,  the Board of Directors  approved a 3-for-2 Stock Split payable
to  shareholders  of Record on July 25,  1995.  A total of  1,560,554  shares of
common stock were issued in connection with the split.

Through  July 25,  1995,  2,534  shares of Class 1 Common Stock were issued as a
result of employees exercising outstanding stock options.

NOTE 5.           NET INCOME (LOSS) PER SHARE

Net income per share is computed based on the weighted  average number of common
stock and, if dilutive,  common stock equivalent shares  outstanding  during the
period.  Common  stock shares  result from the assumed  exercise of common stock
options using the treasury stock method. Net loss per share is computed based on
the weighted average number of common stock shares outstanding.


                                        6

<PAGE>




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

The  following  discussion  should  be read in  conjunction  with the  Financial
Statements and Notes set forth elsewhere in this Report.

Results of  Operations  - Three  months  ended June 30,  1995 as compared to the
three months ended June 30, 1994.

Total   revenues  for  the  first  quarter  of  Fiscal  1996  increased  52%  to
approximately  $6,716,000 as compared to  approximately  $4,418,000 for the same
period of the preceding year (Fiscal 1995).  Network service  commission income,
which  represents  fees  earned by the  Company in its  capacity as an agent for
various  local  and  long  distance  telephone   companies,   increased  46%  to
approximately  $5,667,000 as compared to approximately  $3,872,000 for the first
quarter of Fiscal 1995. Long distance usage income,  which  represents the gross
billings  to  mid-sized  commercial  accounts  on the  Company's  long  distance
network,  increased 92% to approximately $1,049,000 as compared to approximately
$546,000 for the same period of the preceding year.

The increase in revenues is primarily attributable to a growing base of business
in the Northeast,  where the Company is paid a residual fee to actively manage a
substantial group of customers on behalf of NYNEX- New England, NYNEX- New York,
and Southern New England  Telephone.  The Company  added  account  executives to
secure  additional  customers  under these  programs,  and continued to leverage
these relationships by adding collateral products,  such as prepaid debit cards,
conference  calling,  and  broadcast  faxing,  in addition to our long  distance
products.

Selling,  general,  and administrative  expenses increased  approximately 26% to
$4,768,000  for the first quarter of Fiscal 1996 as compared to  $3,774,000  for
the first quarter of Fiscal 1995.  This increase is attributable to the increase
in variable sales commission and bonus expenses  incurred in connection with the
substantial  increase in revenues.  As a percentage of revenues,  these expenses
were  approximately  71% for Fiscal 1996, as compared to  approximately  85% for
Fiscal 1995,  reflecting  continuing efforts by the Company to control operating
expenses.

Operating income for the first quarter of Fiscal 1996 increased to approximately
$1,121,000,  as compared to approximately $195,000 for the same period of Fiscal
1995.  Net  income for the  quarter  increased  to  approximately  $689,000,  as
compared to  approximately  $137,000.  The Company will utilize an effective tax
rate of approximately 40% for Fiscal 1996.

The period ended June 30, 1995 marks the eighth  consecutive  quarter of profits
for the Company.  Management  believes  that its strategy of building  long term
relationships and leveraging  customer  opportunities,  combined with continuing
efforts  to  control  costs,  should  result  in a  continuation  of this  trend
throughout Fiscal 1996.

                                        7

<PAGE>

Liquidity and Capital Resources

Working  capital at June 30,  1995  amounted  to  approximately  $4,948,000,  as
compared to  $4,219,000  at March 31, 1995, an increase of 17%. Cash balances at
June 30, 1995 totaled approximately $2,336,000.

On April 28, 1995, the Company  amended its revolving  line of credit  agreement
with Fleet Bank, which is available under certain conditions,  to provide for an
increase  in the credit line to  $3,000,000  from  $1,000,000  and to reduce the
interest rate to the prime rate from prime plus one-half percent.

In  addition,  the  Company  entered  into an  agreement  with  Fleet Bank which
provides up to $500,000 of term financing for capital  expenditures at the prime
rate of interest plus one percent.

The Company  presently  has no bank debt and expects that the  revolving  credit
line,  together with cash flows from operations,  will be sufficient to meet the
cash requirements of the Company for the foreseeable future.

                                        8