<PAGE> 1


                 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 March 31, 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 35,629,021 shares of common stock, par value $0.001, as of 
March 31, 1997.
PAGE
<PAGE> 2
    
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 March 31, 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 
periods ended March 31, 1997 and 1996, and the unaudited statement of 
stockholders' equity for the period from December 31, 1995 through March 31, 
1997, are attached hereto and incorporated herein by this reference. 

     Operating results for the quarter ended March 31, 1997, are not 
necessarily indicative of the results that can be expected for the year ending 
December 31, 1997.

PAGE
<PAGE> 3

                           DRY DAIRY INTERNATIONAL, INC.
                            CONSOLIDATED BALANCE SHEETS

                                                  MARCH 31,       DECEMBER 31,
                                                     1997            1996
                                                 (Unaudited)       (Audited)
                                                ------------     ------------
                                      ASSETS
Current Assets:
    Cash.......................................   $    4,032       $    
9,605       Accounts receivable, net of allowance.(Note 2)    73,661           
73,448
    Inventory.(Note 4).........................       84,540           
88,110       Deposits and other current assets.(Note 13)       
78,349            8,954 
                                                  ----------       ----------
         Total current assets..................      240,582          180,117
                                                  ----------       ----------
Property and Equipment, Net.(Note 5)...........       88,284           98,246
                                                  ----------       ----------
         Total Assets..........................   $  328,867       $  278,363
                                                  ==========       ==========

                       LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:
    Accounts payable ..........................   $   84,552       $   27,137
    Line of credit (Note 9)....................       70,268               -
    Notes payable - current.(Note 7)...........       12,809           16,889
    Taxes payable..............................        4,674            4,952
    Payable - related party (Note 10)..........       13,835           15,128
                                                  ----------       ----------
         Total current liabilities.............      186,138           64,106
                                                  ----------       ----------
    Notes payable - long term..................        5,616            7,478
                                                  ----------       ----------
         Total Liabilities.....................      191,754           71,584
                                                  ----------       ----------
Stockholders' Equity:
    Stock authorized 50,000,000 shares at
      $0.001 par value; 35,295,688 and
      35,629,021 shares issued and
      outstanding, respectively................       35,630           35,296
     Additional paid-in capital.................    1,732,463       1,707,797
     Accumulated deficit.......... .............   (1,630,980)     (1,536,314)
                                                   ----------      ----------
         Total Stockholders' Equity.............      137,113         206,779
                                                   ----------      ----------
         Total Liabilities and
          Stockholders' Equity..................   $  328,867      $  278,363
                                                   ==========      ==========

PAGE
<PAGE> 4

                             DRY DAIRY INTERNATIONAL, INC.
                        CONSOLIDATED STATEMENT OF OPERATIONS

                                                   FOR THE THREE MONTHS
                                                       ENDED MARCH 
31,                                                             
1997            1996                                                        
(Unaudited)     
(Unaudited)                                                     
-----------     -----------
Revenues:
     Sales.................................... $   60,654      $   
69,110      
     Cost of sales............................     54,154          
46,002                                                      ----------      
----------                 Gross profit........................      
6,520          23,108         
Operating Expenses:
     Selling, general, and administrative.....     90,425          
86,582            Depreciation.............................      
9,962           9,224                                                      
---------      ----------       
          Total operating expenses............    100,387          
95,806                                                      ----------     
-----------       
Net loss from operations......................    (93,867)       ( 72,698) 

Other income (expenses):
    Interest..................................     (2,575)         
(2,395)           Rental Income.............................      
1,899               -     
    Return of common stock....................          -               -
Other expenses................................       (123)           (356)
                                               ----------     -----------
          Total other income (expense)........       (799)         (2,751)
                                               ----------     
-----------        Net Income (Loss)............................. $  
(94,666)    $   (75,449)
                                               ==========     ===========
Net gain (loss) per share..................... $    (0.00)    $     (0.00)
                                               ==========     ===========

Weighted average number of
    shares outstanding........................ 35,295,688      30,173,791
                                               ==========      ==========
PAGE
<PAGE> 5

                              DRY DAIRY INTERNATIONAL, INC.
                   CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>                                                   
                                                                             
Additional Accumulated
                                                          Common Stock       
Paid-in    Development
                                                        Shares      Amount   
Capital    Stage      
                                                      ----------  ---------  
---------  -----------
<S>                                                 <C>         <C>        
<C>        <C>
                                                 ----------  ---------   
---------  ----------  Balance, December 31, 1995                            
27,381,058     27,381   1,334,543  (1,343,172)

Common stock returned from former 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 the exercise of warrants
 at $0.15 per share                                      148,680        
149      22,153        -

Common stock issued for cash at $0.03 per share          550,000        
550      15,950        -

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

Common stock issued for cash at $0.07 per share        2,590,900      
2,591     178,772        -

Common stock issued for equipment at $0.08 per share     125,050        
125       9,879        -

Net loss for the year ended
 December 31, 1996                                          -          
-           -       (193,142)
                                                      ----------  ---------   
---------  ----------  Balance, 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        -

Net loss for the three month period ended 
 March 31, 1997                                             -          
-           -        (94,666)
                                                      ----------  ---------   
---------  ----------
                                                      35,629,021 $   35,603  
$1,732,463 $(1,630,576)
                                                      ==========  =========   
=========  ========== 
</TABLE>

PAGE
<PAGE> 6
                                DRY DAIRY INTERNATIONAL, INC.
                             CONSOLIDATED STATEMENTS OF CASH FLOWS

                                                          FOR THE THREE MONTHS
                                                             ENDED MARCH 31,
                                                         1997              
1996
                                                      (Unaudited)      
(Unaudited)
                                                      -----------      
-----------  
Operating Activities:
Net gain (loss)...............................        $   (94,666)     $   
(75,449)   
Adjustments to reconcile net gain (loss) to
 net cash provided by operating activities:
  Depreciation................................              9,962            
9,224
  (Increase) decrease in accounts receivable..               (213)          
(2,350)
  (Increase) decrease in inventory............              3,570           
(2,978)
  (Increase) decrease in other current assets.            (69,395)           
1,834
  Increase (decrease) in accounts payable.....             56,123           
(5,027)
  Increase (decrease) in accrued taxes........               (278)             
215
                                                       ----------        
---------
     Net cash used by operating activities....            (94,897)         
(74,531)
                                                       ----------        
---------
Investing Activities:
 Purchase of property and equipment...........               -              
(9,511)
                                                       ----------        
---------
     Net cash used by investing activities....               -              
(9,511)
                                                       ----------        
---------
Financing Activities:
 Repayment of notes payable...................             (5,944)          
(5,384)
 Increase (decrease) in Loan from shareholder.             70,268           
90,685
 Issuance of common stock for cash............             25,000             
-
                                                       ----------        
---------
     Net cash provided by financing activities             89,324           
85,301
                                                       ----------        
---------
(Decrease) Increase in Cash...................             (5,573)           
1,259

Cash at beginning of period...................              9,605           
14,021
                                                       ----------        
---------
Cash at end of period.........................         $    4,032        $  
15,280
                                                       ==========        
=========
Supplemental cash flows information:
Cash paid for:
 Interest.....................................         $    2,580        $   
2,398
 Taxes........................................         $     -           $    
-

PAGE
<PAGE> 7
                            DRY DAIRY INTERNATIONAL, INC.
                     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                       MARCH 31, 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 subsidiary 
Lombardo's Pastaria, 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.

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 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.
<PAGE> 8

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

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

Concentrations of Risk:  The Company had a contract with the United States 
Government which was canceled for the convenience of the Government.  This 
cancellation has resulted in the recognition of $51,919 of additional revenue 
which is reflected in accounts receivable and in the sales from discontinued 
operations at 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 Phillip 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.

NOTE 4 - INVENTORIES

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

          Raw materials                       $14,713           $16,157
          Packaging & other                    56,556            41,189
          Finished goods                       13,271            30,764
                                                -------           -------
                                                $84,540           $88,110
                                                =======           =======

NOTE 5 - PROPERTY AND EQUIPMENT

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

          Machinery and equipment           $ 167,045         $ 167,045
          Vehicle                              27,715            27,715
          Furniture and fixtures               27,100            27,100
          Leasehold improvements               13,908            13,908
                                              ---------         ---------
                                                235,768           235,768
            Less accumulated depreciation      (147,485)         (137,522)
                                              ---------         ---------
            Property and equipment, net       $  88,283         $  98,246
                                              =========         =========
PAGE
<PAGE> 9

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 March 31, 1997 and 
December 31, 1996 respectively are:

     1997                                $ 35,019         $ 46,692
     1998                                  48,206           48,206
     1999                                  49,732           49,732
     2000                                   8,331            8,331
                                          --------         --------
                                          $141,288         $152,961
                                          ========         ========

NOTE 7 - NOTES PAYABLE

Long-term debt is comprised of the following:

                                          March 31, 1997     December 31, 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                  $ 7,279            $ 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                              $11,146            $ 12,862
                                                -------            --------
     Total notes payable                       $18,425            $ 24,367
     Less current maturities                    12,809              16,889
                                                -------            --------
      Total Long-term debt                      $ 5,616            $  7,478
                                                =======            ========

The scheduled maturities of long-term debt at March 31, 1997 and December 31, 
1996 are as follows:

     1997                                      $10,947            $16,889
     1998                                        5,992              5,992
     1999                                        1,486              1,486
                                                -------            -------
     Total long-term debt                      $18,425            $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> 10

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 $70,268 at March 31, 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 March 31, 1997 and 
December 31, 1996 respectively the balance due to the shareholders was $13,835 
and $15,128.

NOTE 11 - SUBSEQUENT EVENT 

The Company has made the decision to enter into the specialty breads market.  
The Company has signed an intent to purchase the specialty bread making 
equipment and the distribution rights of an existing specialty bread making 
company. The Company expects the terms of the purchase to be finalized in the 
first half of 1997. In conjunction with this purchase, the Company has created 
two new subsidiaries: Tulip Bakery, Inc. and NGU Distribution, Inc.
PAGE
<PAGE> 11

NOTE 12 - 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           -              -
                        =========      =========      =========      =========
 

NOTE 13 - 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.

                                      March 31, 1997        December 31, 1996
                                      --------------        -----------------
Rent Deposit                            $  7,291              $  7,291
Florida Power & Light Deposit              1,420                 1,420
Deposit on purchase of sealing machine       242                   242
Deposit on Pita Bread Equipment           69,395                  -
                                        --------              --------
                                        $ 78,349              $  8,953
                                        ========              ========

<PAGE> 12

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


Plan of Operation

     The Company develops, manufactures, and markets specialty pasta products 
to gourmet restaurants and wholesale food service distributors. Although the 
Company is producing product for sale, it does not at this time have 
substantial assets to support significant future development, manufacturing, 
and marketing of these products without additional working capital.  Due to 
the lack of assets and working capital, the Company 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.

     In October 1995, the Company completed the sale of a controlling interest 
in the Company to Mr. Phil Lacerte of Dallas, Texas.  Mr. Lacerte is a 
principal owner and executive vice president of Lacerte Software Corporation, 
Dallas, Texas, a manufacturer of computer software for tax professionals.  The 
terms of the purchase agreement provided that the Company issue to Mr. Lacerte 
13,827,500 shares of the Company's restricted common stock, constituting 50.5% 
of the Company's total issued and outstanding shares, in exchange for a cash 
payment of $110,000 and the extension of a line of credit for up to $250,000, 
to meet the Company's current operational needs.  Interest on the line of 
credit is eight percent (8%) per annum.  A total of $70,268, including accrued 
interest, has been advanced to the Company against this line of credit as of 
March 31, 1997.  

     The Company is attempting to increase the market base for its pasta 
products in the southwestern Florida area, as well as continue its expansion 
efforts into the southern and eastern United States.  

     The Company has plans to enter the specialty bread business with its 
purchase of certain assets and distribution routes of the Florida based Tulip 
Pita Bread Center.  This purchase should be completed in the second quarter of 
1997. (Also see Note 13)

     The Company has received its initial purchase order on its new 98% Fat 
Free microwavable pasta "Ultimate Dinners for Two".  The order was from BJ's 
Wholesale Club and was sold by U.S. Marketing, a national sales-marketing 
organization with business contacts with  major food retail outlets 
throughout  the United States.  The Company's Fat Free "Ultimate Dinners for 
Two" program consists of five different dinners, including: Cheese Ravioli, 
Seafood Ravioli, Vegetable Ravioli, Seafood Jumbo Shells, and Cheese Jumbo 
Shells. 

Liquidity and Capital Resources

     At March 31, 1997, the Company had current assets of $240,583, and 
current liabilities of $186,138, resulting in working capital of $54,445. 

During the first quarter of 1997, the Company increased the borrowing against 
its line of credit, including interest, by $70,268. interest.  The company 
also received $25,000 from the issue of  333,000 shares of its' common stock. 
PAGE
<PAGE> 13

     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.

Results of Operations

     In the first quarter of 1997, the Company recorded sales of $60,653, 
compared to sales of $69,110 for the same prior year period, a decrease of 
12%. 

     The Company continues to  show reductions of its operating expenses 
during the first quarter of 1997.  The operating expenses currently being 
incurred are focused primarily on sales and marketing efforts and programs in 
an attempt to attract new buyers for the Company's food service products and 
its new 98% Fat Free microwavable "Ultimate Dinners for Two" program.


                          PART II - OTHER INFORMATION

                           ITEM 1.  LEGAL PROCEEDINGS


     None.


                         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
<PAGE> 14

                 ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K


(a) EXHIBITS.

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


(b)  REPORTS ON FORM 8-K. 

     None.


                                   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:  May 7, 1997
                                         /S/ Robert L. Matzig, President