SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB

                QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
                    FOR THE QUARTER ENDED SEPTEMBER 30, 1997

                         Commission File Number 0-18094

                          PACKAGING PLUS SERVICES, INC
             (Exact name of Registrant as specified in its charter)

          NEVADA                                  11-2781803
-------------------------------          ------------------------------
(State or other jurisdiction of          I.R.S. Employer Ident Number)   
 incorporation or organization)


 20 SOUTH TERMINAL DRIVE, PLAINVIEW, NEW YORK        11803
---------------------------------------------        ------
(Address of principal executive offices)          (Zip Code)

Registrant's telephone number, including area code (516) 349-1300

Securities registered pursuant to Section 12 (g) of the Act:

                                  COMMON STOCK
                                (Title of Class)

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
                                          ---      ---

State the aggregate market value of the voting stock held by  non-affiliates  of
the registrant on SEPTEMBER 30, 1997: $3,830,252.

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

         CLASS                     OUTSTANDING AT SEPTEMBER 30, 1997
-------------------------          ---------------------------------
Common Stock, Class "A"                        6,041,168
              Class "B"                        1,280,000





<PAGE>








                          PACKAGING PLUS SERVICES, INC.
                          -----------------------------

                                      INDEX
                                      -----

                                                                     PAGE
                                                                    NUMBER
                                                                    ------

PART I -- FINANCIAL INFORMATION

Item 1.  Financial Statements

  Balance Sheet -- September 30, 1997                                 1

  Combined Statement of Operations -- Three months
          ended September 30, 1997                                    2
  Combined Statement of Cash Flows -- Three months
          ended September 30, 1997
 .                                                                     3

  Notes to Combined Financial Statements                              4

Item 2.  Management's Discussion and Analysis of
Financial Condition and Results of Operations                       5-14

PART II -- OTHER INFORMATION                                         15

SIGNATURE                                                            16



<PAGE>




PACKAGING PLUS SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET (UNAUDITED)
AS AT SEPTEMBER 30, 1997


                                     ASSETS
                                     ------



CURRENT ASSETS:
  Cash                                                        $        101,144
  Accounts receivable, net of allowance
    for doubtful accounts of $190,000 & $67,500 resp.                  322,251
  Inventory                                                             94,836
  Loans & Notes receivable, net of allowance of
      $161,000                                                       1,216,330
  Other, primarily prepaid expenses                                    333,519
                                                                --------------
                  TOTAL CURRENT ASSETS                               2,068,080
FURNITURE, EQUIPMENT AND LEASEHOLD
  IMPROVEMENTS, net                                                    397,317
REORGANIZATION VALUE, net of amortization                              528,441
GOODWILL, net                                                        1,120,986
Deferred Financing Costs & Other                                     1,570,177
                                                                --------------

TOTAL ASSETS                                                  $      5,685,001
                                                                ==============

     LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
  Accounts payable and accrued expenses                       $      1,294,063
  Payroll taxes payable                                                 41,213
  Other                                                                 31,236
  Loans / Notes Payable                                                444,099
  Convertible Debentures                                             2,158,015
  Current maturities of long-term liabilities                           94,884
                                                                --------------
                TOTAL CURRENT LIABILITIES                            4,063,510
LONG-TERM LIABILITIES                                                1,826,666
                                                                --------------

TOTAL LIABILITIES                                                    5,890,176
                                                                --------------

STOCKHOLDERS' EQUITY
  Common stock, Class "A", $0.06 par value; authorized
    47,000,000  shares;  6,041,168 issued and outstanding              362,469
  Common stock, Class "B", $0.005 par value; authorized
    3,000,000 shares; 1,280,000 issued and outstanding                   6,400
  Additional paid-in capital                                        11,324,526
  Deferred compensation related to stock iss. for svcs.             (1,030,738)
  Accumulated deficit                                              (10,867,832)
                                                                 --------------
               TOTAL STOCKHOLDER'S EQUITY                             (205,175)
                                                                 --------------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                    $      5,685,001
                                                                 ==============




                                                                               1
<PAGE>


PACKAGING PLUS SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATION (UNAUDITED)
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996



                                             1997           1996
                                             ----           ----
INCOME:
-------
  Merchandise and service income ....   $    60,511    $    21,955
  Royalty income ....................                        5,343
  Ticket Sales ......................       414,272           
  Delivery Services .................       216,488           
  Other income ......................                       60,000

                                        -----------    -----------
                      TOTAL INCOME ..       691,271         87,297
                                        -----------    -----------

COSTS AND EXPENSES:
-------------------
  Cost of goods and services ........       373,865         14,740
  Selling, General and administrative     1,368,013        329,442
  Depreciation and amortization .....        70,714         54,411
                                        -----------    -----------
                                          1,812,592        398,593
                                        -----------    -----------

LOSS BEFORE INTEREST ................    (1,121,321)      (311,296)
                                        -----------    -----------

INTEREST INCOME .....................                        1,002
INTEREST EXPENSE ....................        84,036          9,858
                                        -----------    -----------

LOSS FROM CONTINUING OPERATIONS .....   $(1,205,357)   $  (320,152)
LOSS FROM DISCONTINUED OPERATIONS ...             0         (7,620)
                                        -----------    -----------

NET LOSS ............................   $(1,205,357)   $  (327,772)
                                        ===========    ===========

LOSS PER COMMON SHARE
 Loss from continuing operations ....   ($     0.20)   ($     0.18)*
  Loss from discontinued operations .             0    ($     0.00)*

    Net Loss ........................   ($     0.20)   ($     0.18)*
Weighted average number of
  shares used in calculation ........     5,895,371      1,811,477 *
                                        ===========    ===========

*   adjusted retroactively for 1:12 reverse split 11/96


                See notes to consolidated
                  financial statements


                                                                               2
<PAGE>


PACKAGING PLUS SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996



                                                           1997          1996
                                                           ----          ----
CASH FLOWS PROVIDED BY OPERATIONS
  Net Loss                                             $(1,205,357)   $(327,772)
  Adjustment to reconcile net loss to net
   cash used by operating activities:
  Common stock issued for services rendered                668,478      297,500
  Depreciation & amortization                               70,714       54,411
                                                        ----------     -------- 
                                                          (466,165)      24,139
Change in assets and liabilities:
  (Increase)/Decrease in restricted cash                         0       54,000
  (Increase)/Decrease in accounts receivable               (15,022)    (122,734)
  (Increase)/Decrease in inventory                         (64,096)
  (Increase)/Decrease in loan to officer                   (69,857)     (50,000)
  (Increase)/Decrease in notes receivable                 (750,000)
  (Increase)/Decrease in deferred expenses and
    other assets                                          (189,562)    (147,701)
  Increase/(Decrease) in accounts payable and
    accrued expenses                                       (56,400)    (405,908)
  Increase/(Decrease) in payroll taxes payable              29,213          797
  Increase/(Decrease) in other liabilities                   4,841      264,308
                                                        ----------     -------- 

Cash provided (used) by operations                      (1,577,048)    (383,099)
                                                        ----------     -------- 

CASH USED IN INVESTING ACTIVITIES
  Acquisition of furniture, equipment, and
   leasehold improvements                                  (47,499)      20,000
                                                        ----------     -------- 

CASH PROVIDED BY FINANCING ACTIVITIES
  Issuance of common stock                                    --
  Net proceeds from issuance of convertible debt         2,062,252
  Proceeds from notes and loans payable                     25,000      100,000
  Repayment of notes and other liabilities                (459,299)    (271,164)
                                                        ----------     -------- 

NET INCREASE (DECREASE) IN CASH                              3,406     (534,263)

CASH - Beginning of period                                  97,738      538,942
                                                        ----------     -------- 

CASH - End of period                                   $   101,144    $   4,679
                                                       ===========    =========

                See notes to consolidated
                  financial statements




                                                                               3
<PAGE>


                 PACKAGING PLUS SERVICES, INC. AND SUBSIDIARIES

                          Notes To Financial Statements
                                   (Unaudited)

1. Basis of Presentation

Reference is made to the Company's  Consolidated financial statements as of June
30,  1997 and for the fiscal  year then  ended,  filed  with the  United  States
Securities and Exchange  Commission  for a complete  discussion of the Company's
significant accounting policies and other matters.

The accompanying unaudited consolidated interim financial statements reflect all
adjustments  that,  in  the  opinion  of  management  are  necessary  for a fair
presentation  of  financial  position as of September  30, 1997,  and results of
operations for the three months then ended.












                                                                               4
<PAGE>




                      MANAGEMENT DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

OVERVIEW:

The  business  of  Packaging  Plus has  undergone a major  transition  since its
emergence from reorganization on May 14, 1994.

Management  has developed  new  ancillary  businesses to support its former core
business of franchising.

Management  is now  concentrating  on the raising of new capital and focusing on
new ventures, including APAC, its multi-faceted association of packaging centers
nationwide connected through the World Wide Web.

Management  views this year as a period of  transition  and  anticipates  growth
based upon its decision to concentrate on core business development through APAC
in particular.

PKGP's principal subsidiaries and divisions include the Association of Packagers
and Carriers,  Inc., Packaging Plus Services Logistics,  Inc., Images Design and
Marketing, UniqueNet, Manhattan Concierge and Office Quick.

During  September  of 1997 PKGP  agreed to acquire  Office  Quick,  a postal and
service center including copying,  access to computers,  printing,  the Internet
and other related  communications.  Office Quick  President  Nick  Deleone,  was
formerly Mail Box Etc.'s  number one  franchisee in sales for seven of ten years
from 1984 to 1993, and in 1988 received the "Individual  Franchisee of the Year"
award. Mr. Deleone has become APAC's new President and CEO, and will assist APAC
store owners to increase their sales volume and APAC profitability.

In January of 1997,  the Company  purchased the  Entertainment  division of U.S.
Transportation  Systems, Inc. The division consisted mainly of: Downtown Theatre
Ticket  Agency,  Inc.,  or  Advance   Entertainment  (now  known  as  "Manhattan
Concierge"),  which  provide  theater,  sports and  special  events  tickets and
concierge  services.  The Company intends to incorporate  this division into its
expanding  list of services to the members of APAC.  These services are marketed
through    toll-free   phone   numbers    (1-888-NYSHOWS,    1-800-NYSHOWS   AND
1-800-THE-SHOW).

These  concierge  agencies are nationally  promoted  sources for high visibility
venues such as the Olympics,  U.S. Open,  Super Bowl and 

                                                                               5
<PAGE>




the World  Series.  They have been  serving  corporate  and  individual  clients
throughout the United States for over fifty-three  years.  PKGP will incorporate
this value-added  service into APAC's expanding menu of offerings to its members
stores while attempting to increase Manhattan  Concierge's own business presence
in the entertainment  industry.  Its most recent two (2) year contract with MBNA
credit card holders supports that direction.

In 1994, the Company acquired an advertising  agency,  Images Design & Marketing
(Images).  This agency is the in-house  marketing and promotional  department of
the Company while  simultaneously  serving third party  clients.  The service of
Images will be primarily  utilized to maximize the Packaging Plus and APAC names
and  trademarks.  Images is also expected to reduce  advertising  costs for APAC
members by eliminating the "agency commissions" paid to an advertising agency by
printers and other sources of media.

Also in November,  1997, the Company announced the signing of a letter of intent
to purchase Vallerie's  Transportation  Services,  Inc., a $30,000,000  regional
transportation company with 300 employees and in excess of $3,000,000 in assets,
including equipment.


     THE  ASSOCIATION  OF PACKAGERS  AND  CARRIERS  (APAC):  Private  postal and
business  service  centers  form a  highly  fragmented  cottage  industry.  This
industry  generates  over $5 billion in sales and  consists  of more than 15,000
independent operators.  PKGP believes that there is a market opportunity for the
development  of  an  association  with  the  goal  of  unifying  and  organizing
independent  and  franchised  postal  stores  nationwide.  APAC  members will be
connected  to  other  members  and  APAC  Headquarters  via the  APAC  Web  Site
(www.useapac.com) or by telephone at "1-888-USE-APAC". The APAC Web Site will be
utilized not only by members but also by the general public. Only one APAC store
per Zip Code will be accepted,  thus creating  competition and internal  quality
control standards.

     APAC  is an  association  formed  to  create  a  long  overdue  and  needed
profitable  partnership between packaging store owners and carriers,  similar in
theory to FTD. APAC will provide  store owners with a variety of  cost-effective
services and products to increase their profitability, WHILE THEY STILL MAINTAIN
THEIR LOCAL  IDENTITIES  OR FRANCHISE  LOYALTIES.  APAC will  provide  consumers
nationwide  with a feeling  of  quality  assurance  when they  frequent  an APAC
location.


                                                                               6

<PAGE>


               SERVICES OFFERED TO APAC MEMBERS & STRATEGIC GOALS

     APAC has been formed to create a value added  association  among  packaging
and shipping centers as well as the actual carriers of freight worldwide.

     In  return  for  a  low  monthly  membership  fee,  APAC  offers  a  unique
combination of value-added services. A list of immediate and future benefits for
association members will include:



IMMEDIATE BENEFITS:
              Savings on shipping prices through quantity discounts  
              Centralized billing to lower  certain  costs  
              Pre-paid  discounts  on shipping
              Professional theme coordinated  advertising programs 
              APAC Web Site linking all members with outside  customers  
              E-mail customer leads
              Scholarship  Programs for members'  children  
              Packaging  education programs 
              Organized  conventions 
              APAC health/ dental insurance 
              APAC shipping  insurance  
              Computer   software/hardware,  Sales and consulting  
              Shipping hot line and tracking for customers 
              Continual development of new profit centers  
              Quality  control for member and customer  benefits   
              Affordable legal representation   
              National customer service satisfaction department 
              Political lobbying 
              Stock option plan 
              Vacation of the month program
              Discounted air cargo/ next day worldwide rates  
              Discounted copier and/or fax, postal meter leasing programs 
              Discounted long distance rates 
              Discounted printing programs  
              Discounted van and equipment leasing program 
              Prepaid phone card 
              Centralized purchasing 
              Monthly Newsletter  
              Brand recognition of APAC Logo APAC advisory  council
              Store (design/modernization) program


                                                                               7
<PAGE>




FUTURE  BENEFITS  should include but not be limited to: mail order contracts for
individual stores, national moving preparation program, direct access to packing
supplies,  audio- visual training,  electronic car/ truck rental,  package x-ray
machines,  national  television  advertising,  auto  club,  video  conferencing,
advertising revenues directly from suppliers.

This  value-added  Association  is expected  to  revitalize  the private  postal
industry   and  position   itself  for   additional   acquisitions   within  the
transportation industry that benefit its members' collective strength.


             ADDITIONAL SUPPORT AND SERVICES OFFERED TO APAC MEMBERS

     The Company  provides  valuable  services to the APAC member to help ensure
its success. These include:

BUSINESS  DEVELOPMENT  SEMINARS:  The  Company  organizes  business  development
seminars for its members. These seminars cover the latest trends and products in
the  industry  and to assist  members in the  development  of new  products  and
services.  Through  the  APAC Web  Site,  members  are able to take  educational
courses during down time or after store hours.  Initial courses are Running Your
APAC Store,  APAC Customer  Relations,  How To Get Customers and Maximizing Your
Profit Center.  Complete  training  manuals are also available on their APAC Web
Site.

MARKETING  SUPPORT:  The members benefit from a multifaceted  marketing program.
Starting  with the  training  program,  Service  Center  owners are  continually
educated in a variety of ways to aggressively  promote their  business.  Ongoing
support programs take many forms.  Professionally designed advertising materials
are produced by the in-house  advertising  agency,  IMAGES DESIGN AND MARKETING,
and are supplied to the Service  Centers.  Additionally,  members may have their
own advertising  material  prepared by the Agency at considerably less cost than
would otherwise be available to them. The  advertising  agency is also available
to advise individual  Service Centers regarding their choice of media.  Periodic
company-wide  and regional  marketing  seminars are held to facilitate  the free
flow of marketing ideas from one center to
another as well as advancing new and different marketing techniques. Through the
use of a public  relations  firm,  Centers are aided in  achieving  local unpaid
media coverage.  Periodic matching  advertising  programs are employed to assist
the Service Center's ability to secure advertising, particularly during off peak
periods. 



                                                                               8
<PAGE>


TECHNICAL ASSISTANCE: The Company maintains a toll-free "Help Line" that members
can utilize to solve operational  problems.  Most Corporate  information will be
sent via E-Mail and  members can use this as a primary  means of  communication,
although traditional means are available.  The APAC Web Site will be cost saving
and time efficient.

PACKAGE  INSURANCE:  Management is in negotiation  with a major industry insurer
and expects to begin  offering  members the ability to insure  packages  sent by
common carrier rather than utilize the common carrier's  insurance  exclusively.
Currently,  shipping charges include  insurance for the first $100 in value of a
shipped  item.  Insurance  over this value is  purchased at the rate of $.30 per
$100 of value. The Company intends to create a self insurance  reserve and offer
package insurance to the members at a discount to common carrier rates.

HEALTH  INSURANCE:  The Company is in continued  discussions  with several major
insurance  companies  regarding the initiation of group policy  coverage for the
health insurance needs of members and their employees.  The Company is currently
waiting for formal  proposals from these carriers.  The Company expects to offer
this coverage  industry  wide.  Management  believes that this will be the first
inclusive program of its type offered in its industry.

GENERATION OF BUSINESS:  Management  is in the process of developing  businesses
that will  channel  packaging  and  distribution  business  to the  members.  If
successful  in this  effort,  the  Company  will have the ability to provide the
member with a minimum level of new business each month.

INDUSTRY CONSOLIDATION: Management believes that the private postal and business
service  center  industry  is  highly   fragmented  with  an  excess  of  15,000
independent  operators.  Management  believes that there is a significant growth
opportunity in pursuing these independent operators.  The Company's strategy for
attracting these independent or franchise  operators would focus on the national
name recognition and campaign for the APAC organization. The benefits of being a
member and utilizing  discounts on supplies and services  available through APAC
affiliation is critical for the stores' growth.

APAC APPAREL PROGRAM:  Members can choose from a variety of garments embroidered
with the APAC logo.  Individual store owners will be encouraged to wear the APAC
logo.  The  industry  needs a  consistent  symbol  that  customers  perceive  as
trustworthy, honest, and friendly, with excellent service. The Association would
like all members to exceed customer and industry expectations!




                                                                               9


<PAGE>



     CUSTOM CORRUGATED BUSINESS:
An  exciting  opportunity  has  presented  itself  to the  newly  formed  Custom
Corrugated  Business.  This  opportunity  is the  creation of a  complete,  full
service  corrugated box  manufacturing  operation.  This core business will lend
itself to expand our  customer  base and "trim out" a new and  enhanced  market.
Equipment has been identified and poised for its conception.

APAC stores use basic  corrugated,  and buy  individually  paying  above  market
prices.  Through the  Association  of Packagers and Carriers and Rapid  Delivery
Service, cost to these stores may be cut by volume purchasing,  and a new market
created for  customized  box making for smaller  orders.  APAC stores provide an
additional benefit to our corporation by each becoming a potential  salesperson.
With minimal  training,  APAC store owners can enhance their earnings by selling
customized  corrugated to their  customers,  creating a huge network sales force
with small sales overhead to Custom Corrugated.

     IMAGES DESIGN AND MARKETING:  In 1994,  management  acquired an advertising
agency,  Images  Design & Marketing.  This agency is the in-house  marketing and
promotional  department of the Company while simultaneously  serving third party
clients.  Images occupies space in the same building that the Company leases. By
utilizing  this  arrangement,  management  expects to achieve  substantial  cost
savings  on  its  promotional  programs  and  marketing  support  of  its  other
subsidiaries.  Management expects to reduce the cost of development of marketing
and  promotional  programs  for  the  Service  Centers,   thereby  inexpensively
maximizing promotion of the Packaging Plus and APAC names and trademarks.
     Management  expects to reduce  advertising  expenditures  for APAC  Members
through group buying discounts and eliminating the "agency  commissions" paid to
an  ad  agency  by  printers  and  sources  of  media.  Typically,  printers  of
promotional  material and media outlets such as newspapers,  magazines and radio
escalate costs more for infrequent users.

     UNIQUENET:  In 1996,  the Company  launched its venture  called  UniqueNet.
UniqueNet  is an  interactive,  specialty  gifts  Web  Site  on  the  Internet's
WorldWide Web (UnaiqueNet.Com). The Web Site will showcase the Company's line of
distinctive and "trendy" gifts. On-line visitors to the Web Site will be able to
view,  select and purchase  products  through their  personal  computer using an
on-line  order form or regular  mail.  The line of  products  will be  expanding
rapidly as new  products are  introduced.  A retail  partner is presently  being
examined.


                                                                              10


<PAGE>



                                   COMPETITION

     The Company, when it only franchised,  previously viewed its competition to
be chains of  neighborhood  packaging and business  service  centers,  the U. S.
Postal  Service and even at times,  carriers such as United  Parcel  Service and
Federal Express; however, with the establishment of APAC, it now works to assist
its previous "competitors". Although these "competitors" do not provide the full
breadth of services that APAC Membership provides,  they all offer services that
APAC stores sell to the public.
     The Company  further  believes that the maturation of APAC will  strengthen
the  profitable  atmosphere  in the cottage  private  postal  industry.  Lack of
financial   strength  and  market  penetration  have  prevented  some  excellent
franchisors and independents from properly promoting their services.  Individual
store  failures  are far too great in this  industry  without a  cohesive  trade
association.  The ability of APAC to create a nationally accepted private postal
industry  that the  American  public will  embrace and trust  should make this a
viable  industry.  
     The  Company  feels  it  can  convince  the   independent   and  nationwide
franchisors that they must self- regulate for consumer acceptance and seize this
opportunity to become part of this new cooperative partnership.

                               INDUSTRY BACKGROUND

     The future of the industry lies predominately in the international business
community and domestic acceptance of a private postal stores. As the world moves
towards a Global  Economy and trade  tariffs  begin to break down,  new shipping
markets and opportunities  will be developed and the key ingredients  underlying
these  developments will be  transportation  and outlets for carriers as well as
fulfillment for direct marketing products.

     The   transportation   industry  has  already   developed   the   necessary
infrastructure  and continues to grow.  The missing  ingredients  needed to make
this industry improve are packaging, logistics and residential locations. United
Parcel Service, Federal Express, American Airlines Cargo and all other carriers,
are primarily in the shipping business, not concentrating on packaging, business
support services, and consumer outlets.

     A  nationwide  organized  packaging  network can become a key player in the
Global  Economy.  The Company has positioned  itself to be that public player in
this lucrative market.  Control of the outlets' shipping choices and residential
pick-up capability increases company presence and importance.



                                                                              11

<PAGE>

     From 1980 to 1996,  U.S.  Postal  Service mail volume  increased  over 40%.
During the same period,  the U.S.  Postmaster General reports that the number of
U.S. Post Offices,  branches and stations  registered a 4.6% decline from 30,326
to 26,210.  Due to high labor costs of staffing  additional  facilities  and the
continuing pressure on the U.S. Congress to reduce government subsidies, such as
those provided to the U.S. Postal Service,  the Company  believes it is unlikely
that the number of U.S.  Post  Offices,  branches  and  stations  will  increase
substantially  in the  foreseeable  future.  APAC stores  could  contract  their
services to the Post Office or any International  carrier.  The Company believes
that long waiting lines and limited  shipping  options are  commonplace  in most
U.S.  Post  Offices,  and that in many areas  there is a shortage of post office
boxes. Members of APAC provide the public with a complement to U.S. Post Offices
for many retail postal services. In addition,  Service Centers offer individuals
and  business  customers  a variety of  personal,  business  and  communications
services and merchandise.

     FUTURE PROJECTS:
     ----------------

              WAREHOUSE DISTRIBUTION
              APAC stores control their  individual ZIP CODE.  Direct  marketers
and product  suppliers such as Home Shopping Network presently operate their own
fulfillment centers. APAC then offers individual warehouses for EACH ZIP CODE in
United States for catalogue and Internet shoppers.  This futuristic  expectation
is one of APAC's longer term goals.

              SUITCASE MOVEMENT
              APAC stores could provide bar-coded  suitcase movement in the same
manner as we routinely now overnight small packages today.

              APAC GLOBAL EXPRESS (TM)
              APAC Global Express is an  international  delivery  system planned
for  the  exclusive  use of APAC  members  and  APAC  Internet  customers.  This
international  discounted  service will be, on average,  30% less expensive than
traditional carriers. This program is scheduled for December of 1998.

              CO-BRANDING with major suppliers, i.e. Kodak, USPS and others.

              NATIONAL TRADE SHOW & CONVENTION


                                                                              12

<PAGE>



RESULTS OF OPERATIONS -- THREE MONTHS
-------------------------------------

Three months  ended  September  30, 1997,  as compared to the three months ended
September 30, 1996:

                                                   Three Months Ended
                                                       September 30,
REVENUES                                       1997                 1996
--------                                       ----                 ----
Royalty                                       $ -0-              $  5,343
Merchandise and services                     691,271               21,955
Other                                           -0-                60,000
                                             -------               ------

                                           $ 691,271            $  87,298
                                           =========            =========

COST OF REVENUES
----------------
Merchandise and services                   $ 373,865            $  14,740
                                           =========            =========

Packaging  Plus  Services,  Inc.  (PKGP),  is  an  integrated  business  service
conglomerate.  Its' principal subsidiaries and divisions include the Association
of Packagers and Carriers,  Inc., Manhattan Concierge,  Office Quick,  Packaging
Plus Services Logistics, Inc., Images Design and Marketing, and UniqueNet.

During this  period,  Images  Design and  Marketing  continues  to operate as an
"in-house"  advertising arm for Packaging Plus Services,  Inc., in preparing for
and setting up advertising related to the Company's new ventures.

During the three  months ended  September  30, 1997,  the  Company's  operations
generated total revenues of $691,271 from the abovementioned operations. Cost of
revenues was $373,865.  Accordingly,  gross operating  income for the period was
$317,406.

Selling,  general and administrative expenses were approximately  $1,368,000 for
the three  months  ended  September  30,  1997,  including in excess of $600,000
directly related to costs involving convertible debt.

In October, 1997 the business of Rapid Delivery Services was discontinued.  This
discontinuance  is the subject of litigation  involving the subsidiary's  former
president and others.

On January 16, 1998, the Company,  in a press release,  announced the suspension
of conversions with respect to its "offshore" convertible debentures,  since the
Company  believes  several  debenture  holders  had  breached  the  terms of the
Subscription Agreements relating to the debentures. The Company is investigating
this matter with outside counsel.


                                                                              13
<PAGE>



LIQUIDITY AND CAPITAL RESOURCES
-------------------------------

During the three months ended  September 30, 1997,  the Company's  cash position
increased  by  approximately   $3400.  The  net  proceeds  from  new  loans  and
convertible debt was approximately $2,087,000. Approximately $1,577,000 was used
in its  operating  activities,  and  approximately  $460,000 to reduce notes and
other  liabilities.  Common  stock in the amount of  approximately  $668,000 was
issued for services rendered.

Until APAC is fully operational,  the Company faces a situation whereby it needs
to raise additional cash in the near future. Management is continuing efforts to
raise  cash by  arranging  lines of  credit,  and  obtaining  additional  equity
capital.  The  Company's  future  business  operations  will require  additional
capital.

Management  continues to explore  methods to increase  working  capital  through
convertible  subordinated  debt  and  additional  equity  infusions,  as well as
possible acquisitions.






                                                                              14

<PAGE>





PART II -- OTHER INFORMATION

Item 1.LEGAL PROCEEDINGS

    The Company has commenced  litigation  against seventeen former  franchisees
for  non-payment  of  royalties  over a number of years and for  failure to file
monthly  reports  upon which  royalties  were based.  It is  anticipated  that a
portion of the total amount claimed will be eventually recovered.

    Litigation has been commenced against the former president of Rapid Delivery
Services  and  others  for  converting  to their  own use the  business  of this
subsidiary.  The amount sought in damages is $6,000,000,  among other claims and
counterclaims.

    The Company settled in April, 1997, a litigation involving the business of a
former  subsidiary.  The  settlement  calls for monthly  payments by the Company
totaling $270,000,  of which $190,000 has been paid, with three monthly payments
remaining totaling $80,000 .

The Company is involved in a few small  lawsuits  with vendors and suppliers and
claims for fees of certain  professionals.  These claims are all disputed by the
Company.  The Company  believes that the  disposition  of these matters will not
have a material adverse effect on the Company's financial position .


Item 2. CHANGES IN SECURITIES -- NONE

Item 3. DEFAULTS ON SENIOR SECURITIES -- NONE

Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS --
               NONE

Item 5. OTHER INFORMATION -- NONE

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

        Current report filed on Form 8-K dated July 9, 1997.

        Current report filed on Form 8-K dated July 11, 1997.

        Current report filed on Form 8'K dated July 28, 1997.

        Current report filed on Form 8-K dated September 17, 1997.


                                                                              15
<PAGE>

                                   SIGNATURES

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

                                                 PACKAGING PLUS SERVICES, INC.


                                                 /s/ RICHARD A. ALTOMARE
                                                 --------------------------
                                                 Richard A. Altomare,President
                                                 as Registrant's duly authorized
                                                 Chairman of the Board.


Dated: January 20, 1998


                                                                              16