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                 UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, D.C.  20549
                                    FORM 10-QSB

[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES 
EXCHANGE
ACT OF 1934

For the quarterly period ended September 30, 1997

[  ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the transition period from ____________________ to ____________________.

Commission file number:  33-14065-D

                           DRY DAIRY INTERNATIONAL, INC.
             (Exact name of registrant as specified in its charter)

              UTAH                                                87-0476117
(State or other jurisdiction of                              (I.R.S. Employer
incorporation or organization)                               Identification 
No.)

  10105 AMBERWOOD ROAD, FT. MYERS, FL                                33913
(Address of principal executive offices)                           (Zip 
Code)   

                                  (941) 768-3555
                (Registrant's telephone number, including area code)

                                  NOT APPLICABLE
(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),  Yes [X]  No [  ]  and (2) has 
been subject to such filing requirements for the past 90 days.  Yes  [X]  No [ 
]

The number of shares outstanding of each of the issuer's classes of common
stock, was 44,195,688 shares of common stock, par value $0.001, as of 
September 30, 1997.













            
PART I - FINANCIAL INFORMATION

                            ITEM 1.  FINANCIAL STATEMENTS


     The accompanying unaudited financial statements have been prepared in
accordance with the instructions to Form 10-QSB pursuant to the rules and
regulations of the Securities and Exchange Commission and, therefore, do not
include all information and footnotes necessary for a complete presentation of
the financial position, results of operations, cash flows, and stockholders'
equity in conformity with generally accepted accounting principles.  In the
opinion of management, all adjustments considered necessary for a fair
presentation of the results of operations and financial position have been
included and all such adjustments are of a normal recurring nature.  

     The unaudited balance sheet of the Company as of September 30, 1997, and 
the related audited balance sheet of the Company as of December 31, 1996, and 
the related unaudited statements of operations, and cash flows for the three 
month and the nine month periods ended September 30, 1996 and 1997, and the 
unaudited statement of stockholders' equity for the period from December 31, 
1995 through September 30, 1997, are attached hereto and incorporated herein 
by this reference. 

     Operating results for the nine months ended September 30, 1997, are not 
necessarily indicative of the results that can be expected for the year ending 
December 31, 1997.





















<PAGE>
                           DRY DAIRY INTERNATIONAL, INC.
                                      CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>

                                                 SEPTEMBER 30,     DECEMBER 
31,
                                                      1997            1996
                                                  (Unaudited)       (Audited)
                                                 ------------     ------------
                                      ASSETS
<S>                                               <C>              <C>
Current Assets:
Cash                                          $        0       $    9,605
Accounts receivable, net of allowance.(Note 2)   192,341           73,448
Inventory.(Note 4)                               101,571           88,110
Deposits and other current assets.(Note 13)       13,940            8,954 
                                                     ----------       
----------
          Total current assets                          307,852          
180,117
                                                     ----------       
----------
Property and Equipment, Net.(Note 5)                    632,481           
98,246
                                                     ----------       
----------
          Total Assets                               $  940,333       $  
278,363
                                                     ==========       
==========

                       LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:
     Accounts payable                               $  186,389       $   
27,137
     Notes payable - current.(Note 7)                   35,851           
16,889
     Taxes payable                                       5,032            
4,952
     Payable - related party (Note 10)                  95,219           
15,128
                                                    ----------       ----------

          Total current liabilities                    322,491           
64,106

     Notes payable - long term                    3,080           7,478
     Line of credit (Note 9)                       159,441
                                                    ----------        
----------
          Total Liabilities                            485,012           
71,584                   
                                                    ----------       
----------
    
Stockholders' Equity:
     Stock authorized 50,000,000 shares at
      $0.001 par value; 44,195,688 and
      35,295,688 shares issued and
      outstanding, respectively                         44,197           
35,296
     Additional paid-in capital                      2,428,896        
1,707,797
     Accumulated deficit                            (2,017,772)      
(1,536,314)
                                                    ----------       
----------
         Total Stockholders' Equity                    455,321          
206,779
                                                    ----------       
----------
         Total Liabilities and
          Stockholders' Equity                      $  940,333       $  
278,363
                                                    ==========       
==========
</TABLE>

<PAGE>

                                      DRY DAIRY INTERNATIONAL, INC.
                               CONSOLIDATED STATEMENT OF OPERATIONS

<TABLE>
<CAPTION>
                          FOR THE THREE MONTHS              FOR THE NINE 
MONTHS     
                                         ENDED SEPTEMBER 30,            ENDED 
SEPTEMBER 30,               
                                        1997          1996           
1997            1996              
                                    (Unaudited)   (Unaudited)    
(Unaudited)     (Unaudited)      
                                    -----------   -----------    
------------   ------------     
<S>                                <C>           <C>            <C>            
<C>
Revenues:
 Sales                              $ 442,133     $   70,517     $  
939,325      $  262,794      
 Cost of sales                        384,425         62,795        
771,759         211,555         
                                      -------       --------     
----------      ----------       
   Gross profit                        57,708          7,722        
167,566          51,239         

Operating Expenses:
 Selling, general, and              
  administrative                      222,281         96,775        
581,355       289,248
 Depreciation                          31,622          7,960         
50,749           27,011         
                                      -------       --------     
----------       ---------       
   Total operating expenses           253,913        104,735        
632,104         316,259         
                                     --------       --------     
----------       ---------       
Net loss from 
 operations                          (196,195)      ( 97,013)     ( 
464,538)      ( 265,020) 

Other income (expenses):
 Interest                            (  4,337)      (  4,343)     (  
12,632)      (  11,685)        
 Gain on sale of assets                                1,300 
 Rental Income                            538                         
2,438           1,305              
 Return of common stock                   -              -              
-           108,000                                 Other expenses             
(  6,068)      (    111)     (   6,726)      (   1,004)
                                     ---------      ---------     
----------       ---------- 
   Total other income (expense)      (  9,867)      (  3,154)     (  
16,920)         96,616 
                      ---------      ---------      ---------        
--------            

Net Income (Loss)                    (206,062)      (100,167)    $( 
481,458)      $( 168,404)      
                                     =========      =========      
=========        ========       
Net gain (loss) per share            $  (0.00)      $  (0.00)    $    
(0.01)      $   (0.01)      
                                     =========      =========      
=========        ========       

Weighted average 
 number of shares 
 outstanding.                       43,695,688     31,854,738     
41,720,688      29,680,398
                                    ==========     ==========     
==========      ==========
</TABLE>

<PAGE>
                              DRY DAIRY INTERNATIONAL, INC.
                   CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>                                                             
Additional
                                        Common Stock             
Paid-in        Accumulated
                                     Shares    Par Value         
Capital        Deficit
                                      ---------   ---------       
----------    -----------
<S>                              <C>         <C>             <C>           <C>
Balances,
December 31, 1995              27,381,058         $27,381           
$1,334,543    $(1,343,172)
Common stock returned from
 former Company President           (800,000)       (800)         
(107,200)        -

Common stock issued for cash
 at $0.05 per share                5,000,000       5,000           
245,000         -

Common stock issued for 
 exercise of warrants at
 $0.15 per share                     148,680         149            
22,153         -

Common stock issued for                  
  exercise of option at
  $0.03 per share                    250,000         250             
7,250         -

Common stock issued for 
  exercise of option at 
  $0.03 per share                    300,000         300             
8,700         -

Common stock issued for
equipment purchase                   125,050         125             
9,879         -

Common stock issued for 
debt at $0.03 per share              300,000         300             
8,700         -

Common stock issued for 
debt at $0.07 per share            2,590,900       2,591           
178,772         -
Net loss for the year 
ended December 31, 1996                  -           -                
-         (193,142)
                           ---------     --------         ---------   
-----------
Balances
 December 31, 1996                35,295,688      35,296         1,707,797    
(1,536,314)

Common stock issued for cash
at $0.075 per share                  333,333         334            
24,666         -

Common stock issued for
Equipment at $0.100 per share      2,800,000           2,800            
277,200         -

Common stock issued for cash
at $0.075 per share               3,466,667           3,467           
256,533         -

Common stock issued for cash
at $0.100 per share                 1,000,000           1,000            
99,000         -

Common stock issued for cash
at $0.050 per share                300,000             300            
14,700         -

Common stock issued for cash
at $0.050 per share               1,000,000           1,000             
49,000            -     

Net loss for the nine month
period ended September 30, 1997    _________     ________         ________   
(  481,458)

Balances September 30, 1997       44,195,688    $ 44,197        $2,428,896 $ 
(2,017,772)
                                             ==========    =========       
========== =============

</TABLE>

<PAGE>
                                    DRY DAIRY INTERNATIONAL, INC.
                             CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
                                              FOR THE THREE MONTHS              
    FOR THE NINE MONTHS
                                                 ENDED SEPTEMBER 
30                 ENDED SEPTEMBER 30                  
                                               1997          
1996                1997             1996
                                            (Unaudited)   (Unaudited)         
(Unaudited)      (Unaudited)                                                   
-----------   -----------         -----------     ------------  
<S>                                       <C>           <C>                 
<C>             <C>
Operating Activities:
Net gain (loss)                             $( 206,062)   $( 100,167)          
$( 481,458)       $( 168,404)   
Adjustments to reconcile net gain 
 (loss) to net cash provided 
 by operating activities:
  Depreciation                                  31,622        
7,960                50,749            27,011    
  Return of Stock                                   -           
-                       -         ( 108,000)
  (Increase) decrease in accounts 
    receivable                               (  29,847)       
6,183             ( 118,894)        (     804)    
  (Increase) decrease in 
    inventory                                   12,025     ( 
20,779)            (  13,461)        (  76,202)   
  (Increase) decrease in other 
    current assets                           (   2,506)       
9,021             (   4,986)              756      
  Increase (decrease) in accounts 
    payable                                    187,778     ( 
17,330)              239,343         (  23,756)    
  Increase (decrease) in accrued taxes              83     (    
233)                   80             2,578  
                                              --------     ---------           
----------        ---------  
    Net cash used by operating activities    (   6,907)    
(115,345)             (328,627)        ( 346,821)   
                                              --------     ---------           
----------        ---------  
Investing Activities:
 Purchase of property and equipment          (   3,258)    ( 
24,553)             (584,983)        (  41,755)       
                                              --------     
---------            ----------        ---------      
    Net cash used by investing
     activities                              (   3,258)    ( 
24,553)             (584,983)        (  41,755)       
                                              --------     
---------            ----------        ---------      
Financing Activities: 
 Increase in notes payable                   ( 113,827)    (  
7,105)               14,564         (  21,527)      
 Increase (decrease) in Loan from shareholder   52,290        
3,297               159,441           167,000      
 Issuance of common stock                       50,000        
7,500               730,000           279,802       
                                              --------      
---------            ----------       ---------     
    Net cash provided by financing  
     activities                              (  11,537)       
3,692               904,005           425,275       
                                              --------     
---------             ----------       ---------     
(Decrease) Increase in Cash                  (  21,702)    
(136,206)             (  9,605)           36,699     

Cash at beginning of period                     21,702      
186,926                 9,605            14,021          
                                              --------     
---------            ----------       ---------       
Cash at end of period                         $   0        $ 50,720           
$        0          $  50,720       
                                              ========     
=========            ==========        =========     
Supplemental cash flows information:
Cash paid for:
 Interest                                     $  4,360     $  4,909           
$    12,707         $  12,288      
 Taxes                                        $     -      $     -            
$        -          $      -         
</TABLE>
<PAGE>
                            DRY DAIRY INTERNATIONAL, INC.
                     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                       SEPTEMBER 30, 1997 AND DECEMBER 31, 1996

NOTE 1 - ORGANIZATION

Dry Dairy International, Inc. (The Company) was incorporated under the laws of 
the state of Utah on March 6,1987.  The Company was organized for the purpose 
of providing a vehicle which could be used to raise capital and seek business 
opportunities believed to hold a potential for profit.  The Company has 
decided to focus on specialty gourmet foods.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Accounting Method:  The Company's financial statements are prepared using the 
accrual method of accounting.  The Company has a calendar fiscal year end.

Principles of consolidation:  The accompanying financial statements include 
the accounts of Dry Dairy International, Inc. and its wholly owned 
subsidiaries Lombardo's Pastaria, Inc., Tulip Bakery, Inc. and NGU 
Distribution, Inc. All significant intercompany transactions have been 
eliminated.

Cash and cash equivalents: Cash equivalents include short-term, highly liquid 
investments with maturities of three months or less at the time of 
acquisition.

Gain or loss per share: The computations of gain or loss per share of common 
stock are based on the weighted average number of shares outstanding at the 
date of the financial statements.

Inventories:  Inventory are stated at the lower of cost or market.

Property and Equipment:  Property and equipment are stated at cost, less 
accumulated depreciation.  Depreciation is provided on the straight-line basis 
over the estimated useful lives of the related assets.  Major improvements and 
betterments of property are capitalized.  Maintenance, repairs and minor 
improvements are charged to expense in the period incurred.  Upon the sale or 
other disposition of property, the cost and related accumulated depreciation 
are removed from the accounts and any gain or loss is reflected in income.
<PAGE>


Note 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Provision for taxes on income:  At December 31, 1996, the Company had net 
operating loss carry forwards totaling approximately $1,500,000 that may be 
offset against future taxable income through the year 2011.  No tax benefit 
has been reported in the financial statements, as the Company believes there 
is a 50% or greater chance the carry forwards will expire unused.  
Accordingly, the potential tax benefits of the loss carry forwards are offset 
by a valuation account of the same amount.


Estimates:  The preparation of financial statements in conformity with 
generally accepted accounting principles requires management to make estimates 
and assumptions that affect the reported amounts of assets and liabilities and 
disclosure of contingent assets and liabilities at the date of the financial 
statements and the reported amounts of revenues and expenses during the 
reporting period.  Actual results could differ from those estimates.

Loss from Discontinued Operations:  The Company has discontinued all yogurt 
operations and is now focusing on the pasta and bakery operations.  The loss 
from discontinued operations for the year ended December 31, 1996, including 
sales of $116,131 as well as costs of $160,136 resulting in a net loss from 
discontinued operations of $44,005 for the year ended December 31, 1996.


Accounts Receivable:  Accounts receivable are shown net of the allowance for 
doubtful accounts of $500 and $500 at September 30, 1997 and December 31, 
1996.

NOTE 3 - GOING CONCERN

The Company's financial statements are prepared using the generally accepted
accounting principles applicable to a going concern which contemplates the
realization of assets and liquidation of liabilities in the normal course of
business.  However, the Company has little cash and has experienced losses 
from
inception.  On October 20, 1995, the Company announced that it had completed 
the sale of a controlling interest in the Company to Philip Lacerte of Dallas, 
Texas.  The terms of the purchase agreement provided that the Company issue to 
Lacerte 13,827,500 shares of the Company's restricted common stock, which 
constitute 50.5% of the Company's outstanding shares, in exchange for cash of 
$110,000 and the extension of a line of credit for up to $250,000 to meet the 
Company's current operating needs.

<PAGE>


NOTE 4 - INVENTORIES

Inventories are comprised of the following at September 30, 1997 and December 
31, 1996 respectively:

          Raw materials                    $19,107          $16,157
          Packaging & other                27,770           41,189
          Work in Process                      4,726     
          Finished goods                     49,968          30,764
                                        $101,571          $88,110
                                           ========         =======

NOTE 5 - PROPERTY AND EQUIPMENT

Property and equipment consisted of the following at September 30, 1997 and 
December 31, 1996 respectively:

          Machinery and equipment          $606,588          $167,045
          Vehicle                           27,715            27,715
          Furniture and fixtures            35,234            27,100
          Leasehold improvements           151,215            13,908
                                           820,752           235,768
            Less accumulated depreciation     (188,271)          (137,522)
            Property and equipment, net     $632,481          $ 98,246
                                            ========        ========

NOTE 6 - LEASES

The Company has a five year lease on the 7,200 square foot facility where it 
produces its products, with two one-year options after that period.  The lease 
requires the Company to maintain normal wear and tear maintenance on the 
premises.  The Company will also pay for its pro-rated share of any and all 
increases in real estate taxes and building insurance.

Future minimum lease payments under this lease as of September 30, 1997 and 
December 31, 1996 respectively are:

     1997                                  $11,673          $46,692
     1998                                    48,206           48,206
     1999                                   49,732           49,732
     2000                                    8,331            8,331
                                       $117,942          $152,961 
                                          ========          ========
<PAGE>



NOTE 7 - NOTES PAYABLE

Long-term debt is comprised of the following at September 30, 1997 and 
December 31, 1996 respectively:
                                          September 30     December 31
                                                   1997           1996 
Installment note payable to a financial
 institution, collateralized by equipment,
 interest at 11.00%, monthly payments of 
$1,500.43 including interest, final
 payment due August 1997                          $ 1,503          $11,505

Installment note payable to a financial 
institution, collateralized by vehicle,
 interest at 10.75%, monthly payments of
 $538 including interest, final payment
 due February 1999.                               $ 7,411           12,862

Installment note payable to a financial 
  institution, collateralized by bakery 
  equipment, interest at 10.50%, six month
  demand note due September 15, 1997                 30,017




     Total notes payable                           38,931           24,367
       Less current maturities                     35,851           16,889
          Long-term debt                          $ 3,080          $ 7,478
                                                   ======         ======
The scheduled maturities 
of long-term debt at June 30, 1997
 and December 31, 1996 are as follows:

     1997             $35,851     $16,889
                                   1998               3,080       5,992
               1999                            1,486
      Total long-term debt                       $38,931     $24,367
                                                    =======       =======




NOTE 8 - STOCK TRANSACTIONS

On March 15,1997 the Company issued 333,333 shares of stock valued at $0.075 
per share for cash.
<PAGE>

In April of 1997 the company sold 3,466,667 shares of stock at $.075 per share 
to complete a transaction begun in the 1st quarter of 1997.  The total amount 
of shares sold in the transaction was 3,800,000 shares.  The proceeds were 
used to fund the costs incurred in the asset purchase of Tulip Bakery 
equipment.

In April of 1997 the Company paid 2,800,000 shares of its restricted common 
stock to the Owners of Tulip Pita Bread Center II for the purchase of certain 
assets of the company (see note 13).

In May of 1997 the company sold 1,000,000 shares of stock for $.10 per share. 
The proceeds were used to fund operations.

In May of 1997 the company sold 300,000 shares at $.05 for cash to fund 
operations.

In August of 1997 the company sold 1,000,000 shares of stock for $.05 per 
share. The proceeds were used to fund operations.

NOTE 9 - LINE OF CREDIT - RELATED PARTY

A shareholder of the Company has agreed to provide a line of credit to the 
Company of up to $250,000 for the purpose of purchasing raw material inventory 
and the direct costs related thereto.  The line of credit bears interest a 8% 
per annum on the average monthly balance.  The balance owed on the line of 
credit is $159,441 at September 30, 1997 and $-0- at December 31, 1996.


NOTE 10 - RELATED PARTY TRANSACTIONS

In addition to the shares issued to acquire Lombardo's the Company assumed a 
payable to the former shareholders of Lombardo's.  The payable is unsecured, 
and is properly classified as a current liability.  At September 30, 1997 and 
December 31, 1996 respectively the balance due to the shareholders was $95,219 
and $15,128. Also see note 13 regarding asset purchase.
<PAGE>

NOTE 11 - STOCK OPTION PLANS

The Company has granted stock options pursuant to the various stock options 
plans referred to in the table below:

                                  1995                         1996
                       -------------------------     -------------------------
                       Non-Qualified  Incentive      Non-Qualified  Incentive
                       Stock Option   Stock Option   Stock Option   Stock 
Option
                       Plan           Plan           Plan           Plan
                       -------------  ------------   -------------  
------------
Outstanding, December
31, 1994                       -              -              -              -

Options Authorized        1,500,000      1,500,000           -              -
Options Issued During
Fiscal Year 1995           (955,000)           -              -              -
                          ---------      ---------      ---------      
---------
Unissued at December
31, 1995                    545,000      1,500,000           -              -

Options Canceled
April 1996                  800,000          -              -              -

Options Issued April
1996 net of non 
performance cancellations   560,000           -         2,500,000      
5,050,000
                          
Options Exercised 
July, August and 
September 1996             (250,000)            -               -              
-      

Options Exercised
October through 
December, 1996             (300,000)      _  -____         _-           
___-____      

Unissued at March
 31,1997                    785,000      1,500,000          -              -
                          =========      =========      =========      
=========
 

<PAGE>

NOTE 12 - DEPOSITS

The company incurred expenses in regard to the purchase of certain assets and 
distribution routes of the Florida based Tulip Pita Bread Center.  The 
purchase will be completed in the second quarter of 1997.

                         September 30, 1997     December 31, 1996
Rent Deposit                      $ 7,291               $7,291
Florida Power & Light Deposit       1,420                1,420
New Freezer shipping                1,980
Hill & Assoc.                       2,507 
Misc.                              500
Deposit, sealing machine               242                  242               
                                  $13,940              $8,953          


NOTE 13 - ASSET PURCHASE

In April of 1997, the Company closed an asset purchase transaction with 
privately held Tulip Pita Bread Center II to purchase a production line for 
the manufacturing of pita bread and sweet bread loaves. The equipment is 
located in Ft. Myers, FL. In addition, the Company has purchased the 
distribution rights and assumed control of the direct store distribution 
system in place for "Tulip" bakery products. The Company has created two new 
subsidiaries, Tulip Bakery, Inc. to produce fresh baked goods for distribution 
and NGU Distribution, Inc. to manage the distribution of Tulip Bakery 
products. 

The agreement to purchase the equipment line calls for  the Company to pay 
$165,000 and 1,600,000 shares of it's restricted common stock to the owners of 
the equipment line. In a separate purchase agreement, "Tulip's" distribution 
rights and delivery system were purchased for 1,200,000 restricted shares. In 
addition, the Company will assume up to $45,000 of existing Tulip debt. 

Currently, the Tulip products are distributed via direct store delivery to 
approximately 300 supermarkets in Florida with plans to expand into Georgia in 
1997.

<PAGE>

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

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


Plan of Operation

     The Company is in the specialty food manufacturing and distribution 
business in the East and Southeast United States. The Company develops, 
manufactures and markets a line of specialty frozen pasta items and fresh 
baked pita and specialty bread items. In addition, the Company distributes 
fresh baked goods in the Southeastern United States.

     Although the Company is producing product for sale, it does not at this 
time have substantial assets to support future development, manufacturing and 
marketing of these products without additional working capital.  Due to the 
lack of assets and working capital, the Company's financial statements contain 
a "going concern" modification that places into question the Company's ability 
to continue without substantial increases in revenue or additional equity 
capital.

     The Company has entered the specialty bread business as a manufacturer 
and distributor with its purchase of certain assets and distribution routes of 
the Florida based Tulip Pita Bread Center II. (see note 13)  The purchase has 
significantly increased 2nd quarter sales over prior periods for the Company.

Liquidity and Capital Resources

     At September 30, 1997, the Company had current assets of $307,852, and 
current liabilities of $322,491, resulting in working capital deficit
of $ 14,639. 

During the third quarter of 1997, the Company increased the borrowing against 
its line of credit, including interest, by $52,290.  The company also received 
$50,000 from the issue of 1,000,000 shares of its' common stock. 

     Although management anticipates improvement in revenue during the 
remainder of the year, the Company will continue to rely on both debt and 
equity financing of the Company's operations.  The Company is hopeful that the 
extension of the line of credit with Mr. Lacerte, will allow the Company to 
increase marketing efforts, thus resulting in increased sales revenues.

     The Company will continue to seek other sources of financing in addition 
to its existing arrangements. However, due to the Company's overall financial 
condition, the Company does not anticipate substantial, if any, additional 
debt financing.

<PAGE>
Results of Operations

      During the three months ended September 30, 1997, the Company recorded 
sales of $442,133, compared to sales of $ 70,517 for the same three month 
period ended September 30, 1996.  For the nine months ended September 30, 1997 
the Company had sales of $939,325, compared to $262,794 for the same nine 
month period ended September 30, 1996.  The increases in sales are in large 
part due to the expansion of the Company's business into the pita bread and 
sweet bread bakery business.  Despite the increases in sales during the 
period, the Company had increased operating expenses, $125,506 for the three 
month period and $292,107 for the nine month period ended September 30, 1997, 
a majority of which was associated with the Company's expansion into the 
bakery products line and expenses currently being incurred on sales and 
marketing efforts and programs in an attempt to attract new buyers for the 
Company's products.

                         PART II - OTHER INFORMATION
--------------------------------------------------------------------------------

                           ITEM 1.  LEGAL PROCEEDINGS
--------------------------------------------------------------------------------


     None.

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                         ITEM 2.  CHANGES IN SECURITIES
--------------------------------------------------------------------------------


     None.

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

                    ITEM 3.  DEFAULTS UPON SENIOR SECURITIES
--------------------------------------------------------------------------------


     None.

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

          ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
--------------------------------------------------------------------------------


     None.

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

                            ITEM 5.  OTHER INFORMATION
--------------------------------------------------------------------------------


     None.

<PAGE>
--------------------------------------------------------------------------------

                 ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K
--------------------------------------------------------------------------------


(a) EXHIBITS.

EXHIBIT
  NO.           DESCRIPTION
-------         -----------
  27            Financial Data Schedule



(b)  REPORTS ON FORM 8-K. 

     The Company file reports on Form 8-K dated April 7, 1997 and May 9, 1997 
reporting sales of equity securities in reliance on Regulation S promulgated 
under the Securities Act of 1933, as amended.

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

                                   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.

                                         DRY DAIRY INTERNATIONAL, INC.
                                         [Registrant]


Dated:  November 7, 1997                    
                                         /S/Robert L. Matzig
                                      President