UNITED STATES
                      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 quarterly period ended September 30, 1997

                          Commission file no. 0-28348


                               DBS INDUSTRIES, INC.
            (Exact name of registrant as specified in its charter)

          DELAWARE                                  84-1124675
(State or other jurisdiction of         (I.R.S. Employer Identification No.)
incorporation or organization)

      100 Shoreline Highway, Suite 190A
             MILL VALLEY, CA.                   94946        (415) 380-8055
  (Address of principal executive offices)     (Zip Code)    (Registrant's
                                                             telephone number)




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

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

Class of Securities                             Shares Outstanding
Common Stock, $.0004 Par Value                  as of September 30,1997
                                                     5,869,449


                Transitional Small  Business Disclosure Format:

                            YES: ______   NO:    X


<PAGE>
                                     INDEX



PART I - FINANCIAL INFORMATION

                                                                         PAGE
ITEM  1. Financial Statements

 Condensed  Consolidated Balance Sheets:
 As of  September 30, 1997 (unaudited) and December 31, 1996 (audited)    3

 Condensed Consolidated Statements of Operations (unaudited):
 For the Three Months Ended September 30, 1997 and September 30, 1996;
 for the Nine Months Ended September 30, 1997 and September 30, 1996;
 and for the period from April 25, 1990 (Inception)to September 30, 1997  4

 Condensed Consolidated Statements of Cash Flows (unaudited):
 For the Nine Months Ended September 30, 1997 and September 30, 1996
 and for  the  period  from  April 25, 1990 (Inception) to September 30,
 1997                                                                     5

 Notes to Condensed Consolidated Financial Statements                     6


ITEM  2. Management's Discussion and Analysis of Financial Condition
         and Results of Operations                                        9



PART II - OTHER INFORMATION


ITEM  1. Legal Proceedings                                               11

ITEM  2. Changes in Securities                                           11

ITEM  3. Defaults Upon Senior Securities                                 11

ITEM  4. Submission of Matters to a Vote of Security Holders             11

ITEM  5. Other Information                                               11

ITEM  6. Exhibits and Reports on Form 8-K                                11


SIGNATURES                                                               12


<PAGE>3
                                    DBS INDUSTRIES, INC. AND SUBSIDIARY
                                       (A Development Stage Company)
                              PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEETS


                                                  ASSETS
<TABLE>
<CAPTION>
                                                September 30, 1997     December 31,
                                                (Unaudited)            1996
<S>                                             <C>                    <C>
Current assets:
  Cash and cash equivalents                     $    876,327           $    402,588
  Restricted cash                                          0                300,000
  Prepaid and other current assets                   139,540                 68,944

    Total current assets                           1,015,867                771,532

Furniture and equipment (at cost)                     73,277                 73,277
Less accumulated depreciation                         43,354                 34,406

                                                      29,923                 38,871
Other assets:
  Investments in and advances to affiliated
companies                                          1,035,884              1,496,524
  Goodwill, net of accumulated amortization of        14,304                 29,841
$105,211 and $61,778, respectively
  Other assets                                             0              2,292,409

                                                   1,050,188              3,818,774

        Total assets                               2,095,978              4,629,177

                                          LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

Current liabilities:
  Accounts payable                              $    137,961           $    960,277
  Unearned revenue                                   400,000                400,000
  Line of Credit                                           0                295,000
  Accrued liabilities                                285,055                607,070
  Notes payable to stockholder                         2,000                      -
  Convertible debentures                                   0              4,640,000

    Total current liabilities                        825,016              6,902,347

Stockholders' equity (deficit):
  Preferred stock                                          -                      -
  Common stock                                         2,366                   2,351
  Capital in excess of par value                   4,661,669               4,605,026
  Warrants                                           112,500                 112,500
  Deficit accumulated during the 
     development stage                            (3,420,573)             (6,908,046)
  Treasury stock                                     (85,000)                (85,000)

    Total stockholders' equity (deficit)           1,270,962              (2,273,169)

       Total liabilities and stockholders'
         equity (deficit)                          2,095,978               4,629,177

</TABLE>

<PAGE>4

                                    DBS INDUSTRIES, INC. AND SUBSIDIARY
                                       (A Development Stage Company)
                              CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                                (Unaudited)

<TABLE>
<CAPTION>
                                 Three Months Ended          Nine Months Ended        April 25, 1990
                                 September 30,               September 30,            (Inception) to
                                 1997         1996           1997         1996        September 30, 1997
<S>                              <C>          <C>            <C>          <C>         <C>

Revenue                          $       -    $     11,420   $        -   $   11,420  $   161,420

Cost and operating expenses:
  Cost of revenue                        -              -             -            -      127,580
  General and administrative        374,033        506,408    1,078,219    1,653,415    6,069,045
  Research and development           85,474        109,329      294,836      846,208    2,254,292
                                    459,507        615,737    1,373,055    2,499,623    8,450,917

     Loss from operations          (459,507)      (604,317)  (1,373,055)  (2,488,203)  (8,289,497)

Other income (expense):
  Interest, net                     (52,304)       (85,119)    (317,054)    (295,215)    (750,840)
  Equity in loss of investees,      (39,974)             -      (39,974)           -     (371,776)
    net
  Gain on sale of investment              -              -            -            -      836,478
  Gain (loss) on marketable      (1,003,714)             -    5,217,556            -    5,217,556
    equity securities
  Other, net                              -              -            -            -      (56,634)

                                 (1,095,992)       (85,119)   4,860,528     (295,215)   4,874,784

     Income (loss) before        (1,555,499)      (689,436)   3,487,473   (2,783,418)  (3,414,713)
       provision for income
       taxes and minority
       interests

Provision for income taxes                -          2,250            -        6,750       14,435

     Loss before minority        (1,555,499)      (691,686)   3,487,473   (2,790,168)  (3,429,148)
      interests

Minority interests in income              -              -            -            -        8,575
(loss) of consolidated
subsidiaries

     Net income (loss)          ($1,555,499)     $(691,686)  $3,487,473  $(2,790,168) $(3,420,573)

Net loss per share                    (0.26)         (0.12)        0.59        (0.49)

Weighted average number of        5,891,747      5,806,935    5,872,416    5,722,050
shares of common stock
</TABLE>

<PAGE>5
                                    DBS INDUSTRIES, INC. AND SUBSIDIARY
                                       (A Development Stage Company)
                              CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                (Unaudited)

<TABLE>
<CAPTION>
                                                              Nine Months Ended                               April 25, 1990
                                                              September 30,                                   (Inception) to
                                                              1997                   1996                     September 30, 1997
<S>                                                           <C>                    <C>                      <C>

Net cash provided (used) in operating activities              $  2,353,675           $   (1,489,939)           $ (2,460,464)

Cash flows from investing activities:
  Proceeds from sale of investment                               2,753,049                        -               3,653,049
  Purchase of fixed assets                                               -                  (20,499)               (105,524)
  Organization costs                                                     -                        -                 (28,526)
  Investment to affiliates                                               -                        -                (896,811)
  Advances to affiliates                                                 -                        -                (214,511)
  Proceeds from affiliate advances                                       -                        -                 152,500
  Advances to officer                                                    -                        -                 (31,187)
  Purchase of investments                                                -               (2,453,347)             (2,292,409)
  Net assets of purchased subsidiaries                                   -                        -                (147,500)
  Cash transferred from Fi-Tek IV, Inc.                                  -                        -                 156,648
   pursuant to the merger and reorganization
  Cash of divested subsidiary                                            -                        -                    (277)
  Purchase of patents                                                    -                        -                 (18,251)

Net cash provided (used) by investing activities                 2,753,049               (2,473,846)                227,201

Cash flows from financial activities:
  Proceeds from credit line                                              0                  295,000                 295,000
  Restricted cash on credit line                                   300,000                        -                       0
  Payments on credit line                                         (295,000)                (300,000)               (295,000)
  Issuance of debentures                                                 -                3,000,000               4,710,000
  Issuance of common stock                                              15                  999,956               3,153,531
  Redemption of common stock warrants                                    -                        -                 (19,490)
  Stock issue costs                                                      -                        -                 (57,235)
  Purchase of shares                                                     -                        -                  (5,000)
  Payment of debentures                                         (4,640,000)                       -              (4,765,000)
  Proceeds from stockholders' loans                                  2,000                        -                 295,000
  Payment of stockholders' loans                                         -                        -                (202,216)

Net cash provided (used) by financing activities                (4,632,985)               3,994,956               3,109,590

Net increase (decrease) in cash                                    473,739                   31,171                 876,327

Cash and cash equivalents, beginning of period                     402,588                    3,743                       -

Cash and cash equivalents, end of period                     $     876,327             $     34,914            $    876,327
</TABLE>

<PAGE>6

                     DBS INDUSTRIES, INC. AND SUBSIDIARY
                         (A Development Stage Company)
             NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS



NOTE 1  UNAUDITED INTERIM FINANCIAL STATEMENTS

        The  information  presented  in  these condensed consolidated financial
        statements of DBS Industries, Inc. (DBSI or the Company) and its wholly
        owned  subsidiary,  Global  Energy  Metering   Services,   Inc.,   (the
        subsidiary)  is  unaudited.   These  condensed  consolidated  financial
        statements have been prepared assuming the Company will continue  as  a
        going  concern.  Since inception, the Company has devoted substantially
        all of its  efforts  to  developing  its  business.   The  Company  has
        therefore  incurred  substantial  losses  and  negative cash flows from
        operating  activities.   To  address financing needs,  the  Company  is
        pursuing   various  financing  alternatives.    These   factors   raise
        substantial  doubt  about  the Company's ability to continue as a going
        concern.  These financial statements  do  not  reflect  any adjustments
        that might result from the outcome of this uncertainty.

        The  financial  statements include all adjustments consisting  of  only
        normal recurring  adjustments  which are, in the opinion of management,
        necessary  to  present  fairly  the  condensed  consolidated  financial
        position  of DBSI at September 30,  1997,  and  condensed  consolidated
        results of  operations and cash flows for the interim periods reported.
        The results of  operations  for  the  interim  period presented are not
        necessarily indicative of expected results for the full fiscal year.

        Certain  information  and  footnote disclosures normally  contained  in
        financial statements prepared  in  accordance  with  generally accepted
        accounting  principles have been condensed or omitted.   The  condensed
        consolidated  financial  statements  should be read in conjunction with
        the  financial statements and notes contained  in  DBSI's  1996  Annual
        Report to Shareholders.

NOTE 2  EQUITY IN INCOME & LOSSES OF INVESTEES

        The financial  statements  for  the  Company  for the nine months ended
        September 30, 1997, does not reflect the Company's  equity in income or
        losses  of  E-SAT.   The  net  equity in such income or losses  is  not
        material to the Company's financial  position at September 30, 1997, or
        its results of operations for the three and nine months then ended.

        On August 29, 1997, the Company received  from  EchoStar  a  letter  of
        intent  that  confirms the conditions upon which EchoStar will grant an
        option to the Company  to purchase shares of the common stock of E-SAT,
        Inc.  If the parties reach an agreement, the Company will own an option
        to purchase from EchoStar  sufficient  shares to increase its ownership
        percentage from 20% to 80.1% of the common stock of E-SAT.

        The financial statements for the Company  for the three and nine months
        ended September 30, 1997, reflect the Company's equity in the losses of
        Seimac Limited (Seimac) of $39,974 for the  six  months  ended June 30,
        1997.    The  Company  was  unable  to  obtain  from  Seimac  financial
        information  for  the  three  months ended September 30, 1997.  The net
        equity in such income or losses  for  the  three months ended September
        30, 1997, may not be material to the Company's  financial  position  at
        September 30, 1997, or its results of operations for the three and nine
        months  then ended.  The Company's investment in Seimac as of September
        30, 1997, was $578,072.

NOTE 3  OTHER ASSETS

        On January  12,  1996, the Company acquired 72,030 shares of the common
        stock   of  Continental   Satellite   Corporation   (Continental)   for
        approximately  $2.3  million from the seller of the shares.  On January
        22, 1996, a Continental  shareholder,  Loral  Aerospace  Holdings Inc.,
        filed  a lawsuit in the Superior Court in and for the County  of  Santa
        Clara, State  of  California,  alleging  that  the shares issued to the
        seller  and  acquired  by  the Company should be voided  as  they  were
        invalidly issued. On May 16, 1996, the court ruled that the Continental
        shares issued to the seller and purchased by the Company were invalidly
        issued.  However, the court  ruled  that  the  Company  was not without
        remedy  and  allowed  the  Company to commence an action against  Loral
        Aerospace Holdings Inc.

<PAGE>7

                     DBS INDUSTRIES, INC. AND SUBSIDIARY
                         (A Development Stage Company)
             NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS



NOTE 3  OTHER ASSETS, continued

        On April 21, 1997, the Superior Court of Santa Clara County awarded the
        Company damages of approximately  $4.1  million, plus 50 percent annual
        interest.  On August 17, 1997, the Company and Loral formally completed
        an  agreement  wherein  the  Company  received   a   cash   payment  of
        approximately  $3.5  million  from Loral in exchange for dismissals  of
        appeals by both parties.

        The agreement provides that the  Company returned the Continental stock
        the Company acquired, that the Company acknowledge that all Continental
        stock held by the Company owned is invalid, and that the Company has no
        objection  to  the  cancellation of that  stock  by  Continental.   The
        parties to the agreement  released  one  another  from  all  present or
        future  claims  connected  with  the  allegations related to the action
        which  gave rise to the agreement.  The  agreement  provides  that  the
        Company  cooperate  with  Loral in its request for information from the
        Company  concerning   Continental.    The   Company  will  provide  the
        information requested without charge to Loral  unless  the  Company can
        establish that the cost of its reasonable cooperation, and other costs,
        exceed the settlement amount.

        The excess of the settlement payment over the Company's carrying  value
        for  its interest in Continental of $1.2 million was recorded as a gain
        on Marketable  Equity  Securities  for the three months ended September
        30, 1997.

        On December 21, 1995, DBSC and EchoStar  agreed to a merger, subject to
        government approval.  Under the terms of the merger agreement, (1) both
        parties  agreed  to  merge  DBSC  into  a wholly  owned  subsidiary  of
        EchoStar, and (2) DBSC shareholders were  entitled  to receive at their
        option,  $7.99  in cash or .67417 shares of EchoStar common  stock  for
        each of the 973,148  DBSC  shares  not  already  owned by EchoStar.  At
        December 31, 1996, the Company owned 401,107 shares of the common stock
        of  DBSC.   The requisite government approvals were  obtained  and  the
        merger consummated  on  January  8,  1997.   On  January  23, 1997, the
        Company elected to exchange all of its 401,107 DBSC shares  for 270,414
        shares of EchoStar Class A common stock which was valued at $25.00  per
        share  as  of  January  8,  1997, the effective date of the merger.  In
        connection  with this transaction,  the  Company  recorded  a  gain  of
        $6,221,270 in  the  three  month  period  ended  March  31,  1997.   In
        accordance  with  Statement  of  Financial Accounting Standards No. 115
        (Accounting For Certain Investments In Debt And Equity Securities), the
        Company  classified  this  investment  as  "available  for  sale,"  and
        therefore  recorded  the unrealized  loss  as  of  June  30,  1997,  of
        $2,535,131 as a separate component of stockholders' equity (deficit).

        On August 29, 1997, the Company completed an agreement with EchoStar to
        retire three convertible  debentures,  Series A, Series B and Series C,
        previously  issued to EchoStar, in the aggregate  principal  amount  of
        $4,640,000 together  with  accrued  interest of $722,810.69 and certain
        legal fees and other expenses related  to the transaction.  In exchange
        for EchoStar's retirement of the debt, the  Company transferred back to
        EchoStar 270,414 shares of EchoStar Class A common  stock  and  made  a
        cash  payment  of  approximately  $936,000  from  the  proceeds  of its
        settlement with Loral.  The value of the EchoStar shares was based on a
        per  share  price  of  $16.57 which represents the closing bid price on
        August 27, 1997, the date  the parties initially agreed to the terms of
        the transaction.

NOTE 4  UNEARNED REVENUE

        The Company's wholly owned subsidiary, Global Energy Metering Services,
        Inc. (GEMS), is party to a contract  to  deliver 10,000 satellite radio
        units.  The purchase order is for $1.2 million  and  under the terms of
        the purchase order, GEMS would receive a total of $500,000  in  advance
        payments  on  the  contract,  based  on certain milestone achievements.
        These milestone payments are refundable  if  the  contractee  does  not
        qualify  GEMS'  automatic  meter  reading  system.  As of September 30,
        1997,  the  $400,000  in milestone payments received  are  reported  as
        unearned revenue on the accompanying balance sheets.

<PAGE>8

                     DBS INDUSTRIES, INC. AND SUBSIDIARY
                         (A Development Stage Company)
             NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS



NOTE 5  CONVERTIBLE DEBENTURES

        On July 1, 1995, the Company issued Convertible Debenture 1995 Series A
        to the majority shareholder of E-SAT, EchoStar, and received $1,000,000
        in proceeds pursuant to  this issuance in August 1995.  Interest on the
        debt accrues, and is payable,  quarterly  at prime plus 2% for a period
        of  three years.  Collateral for the loan is  a  security  interest  in
        84,271 shares of EchoStar common stock and 2,000 shares of E-SAT common
        stock held by the Company.

        On  January  12,  1996,  the  Company  issued  a  three-year  Series  B
        Convertible Debenture to EchoStar for proceeds of $3,000,000.  Interest
        terms  are  similar  to  those  of  the  Series A Convertible Debenture
        discussed above.  Collateral for the loan  is  a  security  interest in
        72,030  shares  of  common  stock of Continental and 134,834 shares  of
        common stock of EchoStar held by the Company.

        On  December  5,  1996,  the  Company  issued  a  three-year  Series  C
        Convertible Debenture to EchoStar  for  proceeds of $640,000.  Interest
        terms  are  similar  to those of the Series  A  Convertible  Debentures
        discussed above.  Collateral for the loan is a security interest in the
        remaining 51,309 shares  of  common  stock  of  EchoStar  held  by  the
        Company.

        On August 29, 1997, the Company entered into an agreement with EchoStar
        to  liquidate the Company's convertible debentures payable to EchoStar.
        The agreement called for the Company to pay the aggregate principal and
        accrued   interest   that   amounted  to  $4,640,000  and  $722,810.69,
        respectively.  Payment was made  by  the  Company  when  it transferred
        270,414  shares of EchoStar Class A Common Stock.  The deemed  transfer
        price was  $16.57  per  share.   The balance of the payment was made in
        cash.  This transaction resulted in a loss of $2,535,131 in the quarter
        ended September 30, 1997.

        On  April 1, 1997, the Company issued  one-year  Series  D  Convertible
        Debentures  to  private  investors  for  proceeds of $32,501.  Interest
        terms  are  similar  to  those of the Series A  Convertible  Debentures
        discussed above.  Approximately  18,572  shares of Company common stock
        are being used as collateral.  On September  30,  1997,  the  Series  D
        Convertible Debentures, plus accrued interest, were paid in full.

        On  May  8,  1997,  the  Company issued a one-year Series E Convertible
        Debenture to a private investor  for  proceeds  of  $75,000.   Interest
        terms  are  similar  to  those  of the Series A Convertible Debentures.
        Collateral for the loan was a security  interest  of  75,000  shares of
        Company  common stock.  On September 30, 1997, the Series E Convertible
        Debenture, plus accrued interest, was paid in full.

        The Company  classified  all  borrowings  under  the  above convertible
        debentures  as  current  liabilities  due to the Company's  default  in
        connection with the required quarterly payment of accrued interest.

NOTE 6  RELATED PARTY TRANSACTIONS

        On April 28, 1997, the Company's president  made  a  bridge loan to the
        Company for $47,750 which was a personal guarantee to  Pacific Bank for
        the  Company's  bank  overdraft.   As of September 30, 1997,  the  bank
        overdraft has been repaid, and the bridge  loan is no longer necessary.
        On  May  5, 1997, the Company's president loaned  the  Company  another
        $2,000.  The loan is classified on the balance sheet as note payable to
        stockholder.

NOTE 7  RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

        In March 1997,  Statement  of  Financial  Accounting Standards No. 129,
        "Disclosure of Information about Capital Structure"  was  issued and is
        effective  for  the Company's year ending December 31, 1997.   In  June
        1997, Statement of  Financial  Accounting Standards No. 130, "Reporting
        Comprehensive Income" and Statement  of  Financial Accounting Standards
        No.  131,  "Disclosures  About Segments of An  Enterprise  and  Related
        Information" were issued and are effective for the year ending December
        31,  1998.   The  Company  has   not   determined  the  impact  of  the
        implementation of these pronouncements.

<PAGE>9

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


GENERAL

        On  August  17, 1997, the Company and Loral  Aerospace  Holdings,  Inc.
("Loral")  formally  executed   an   agreement  wherein  the  Company  received
approximately $3.5 million from Loral  in exchange for dismissals of appeals by
both parties in the litigation concerning  Continental  Satellite  Corporation.
(See Part II, Item 1, "Legal Proceedings")

        On  August  29,  1997  the Company completed an agreement with EchoStar
Communications Corporation ("EchoStar") to retire three convertible debentures,
Series  A,  Series  B and Series C,  previously  issued  to  EchoStar,  in  the
aggregate principal amount  of  $4,640,000  together  with  accrued interest of
$722,810.69  and  certain  legal  fees  and  other  expenses  related   to  the
transaction.   In  exchange  for EchoStar's retirement of the debt, the Company
transferred back to EchoStar 270,414  shares  of  EchoStar Class A common stock
(the "EchoStar Shares") and made a cash payment of  approximately $936,000 from
the proceeds of its settlement with Loral.  The value  of  the  EchoStar shares
was based on a per share price of $16.57 which represents the closing bid price
on August 27, 1997, the date the parties initially agreed to the  terms  of the
transaction.

LIQUIDITY AND CAPITAL RESOURCES

     The  Company has been in the development stage since its inception and has
not recognized  any significant revenues or capital resources other  than   the
receipt,  of  (i)  a  minimal  amount  of  inside  capitalization  funds at its
inception,   (ii)   net  proceeds  in  the  amount  of $166,175 from its public
offering,  (iii) gross proceeds of $70,000  from  a sale  of  debentures,  (iv)
subscriptions  representing   gross  proceeds  of $2,024,588 in connection with
five private placements of common stock, (v) gross  proceeds  of  $342,750 from
bridge   loans  made  by the Company's president  and  two  shareholders,  (vi)
gross proceeds  of  $1,056,500  from  the sale of the Company's interest in the
stock of a company holding a DBS  license, (vii)  gross  proceeds of $4,747,501
from  the  sale  of  seven convertible debentures,  (viii)  $100,000  from  the
issuance of a note and  (ix)  gross  proceeds  of approximately $3.5 million in
settlement  of  litigation  concerning the Company's  interest  in  Continental
Satellite Corporation.  Additionally,  the  Company had an established line  of
credit  for  $300,000 from Pacific  Bank of  Burlingame,   California.   As  of
September 30,1997,  the  line of credit has been repaid and the credit facility
with Pacific Bank canceled.

     Stockholders' equity  at  September  30,1997  was  $1,270,962  compared to
stockholders'  deficit of $2,273,169  at  December 31, 1996.  This increase  is
attributed primarily  to  a  net  gain  of  approximately $3.7 million when the
Company completed an exchange of its DBSC shares for the EchoStar Shares in the
first  quarter  of 1997 (as reported in the statement  of  operations  for  the
quarter ended March 31, 1997) and subsequently divested (for approximately $4.4
million) as part  of  an  August  29, 1997 agreement to repay all principal and
interest accrued on debentures held  by  EchoStar. During the nine months ended
September  30,  1997  the Company incurred approximately  $200,000  of  monthly
operating costs which further  reduced  stockholders' equity. Current operating
costs  have been reduced significantly with  the  repayment  of  the  Company's
debentures  as  well  as  the  settlement  of  the  Loral litigation. Operating
expenses  for  the remainder of the year are expected to  average  $90,000  per
month, which will continually act to reduce stockholders' equity in the absence
of the sale of additional equity.

     The  consolidated   balance  sheet  as  of  September  30,  1997  reflects
$876,327  of  cash and cash equivalents compared  to  $402,588  as  of December
31, 1996.  This  increase  is due to the receipt of proceeds from the Company's
settlement with Loral. While  the Company has sufficient cash to meet its needs
in  the  near  term, further resources  will  be  needed  to  continue  ongoing
development  of   the Company's wholly owned subsidiary, GEMS', automatic meter
reading  ("AMR")  business   and   the   Company's  operating  activities.  The
Company  anticipates  monthly expenses of approximately $90,000 to continue for
the balance of 1997.    This  includes  approximately  $55,000  per  month  for
operating  expenses,  $15,000  per month for legal and consulting expenses, and
$20,000 per month for GEMS' and  E-SAT  research  &  development.  Accordingly,
while  cash  resources  presently  available  to the Company are sufficient  to
continue  operations  at  their  projected  level  through  the  end  of  1997,
additional capital will be necessary to expand operations  or  continue current
operations  into  1998.    No  assurances can be given that additional  capital
financing will be available when  required  or if it will be on terms favorable
to  the  Company.  The  Company  does not expect its  automated  meter  reading
operations to produce any significant  revenue  in  1997  or  become profitable
until 1999 at the earliest, and no assurance can be given as to  this estimate.
Beginning  in July 1996, the Company began to receive milestone payments  under
the terms of  a  $1.2  million purchase order for 10,000 satellite radio units.
Under this agreement,  the  Company  is  eligible  to  receive  up  to $500,000
towards  development  costs  upon  meeting  the  milestone requirements of  the
contract.   The Company has met the first four milestones  of  the contract and
has received $400,000 in cash. These funds are classified as unearned  revenue,
and  all such milestone payments are subject to refund if the Company fails  to
meet certain development and delivery milestones.  Unless and until the Company
is  able   to  raise  additional  capital  or  become  profitable  through  its

<PAGE>10

subsidiary's  automated  meter  reading operations, the Company's liquidity and
capital resources will continue to be depleted.   Historically, the Company has
funded its operations and obligations  through  the private placement of equity
securities and convertible debentures.  The Company  may  continue  to fund its
commitments  through  these financing methods.  However, no assurances  can  be
given that the Company  will be able to raise the necessary capital to meet its
commitments.  In the event  the  Company  is  unable  to  raise  the  necessary
capital, its business objectives will be adversely affected.

      Total assets at September 30, 1997 were $2,095,978 compared to $4,629,177
at December  31, 1996.  This decrease in assets is attributed to elimination of
the Company's  interest  in  Continental  Satellite  Corporation  based  on the
settlement  with  Loral,  as  well  as the return of 270,414 shares of EchoStar
Class A Common Stock as part of an agreement  to  redeem  all  of the Company's
debentures  held  by  EchoStar.  The  largest  components  of  total assets  at
September  30,  1997  represent  investments  in  and  advances  to  affiliated
companies  of  $1,035,884  and  cash of $876,327. This compares to December  31
,1996  when  the largest components  of  total  assets  were  Other  Assets  of
$2,292,409 (Continental  Satellite  Corporation)and Investments in and advances
to  affiliated  companies  of  $1,496,524.  Advances  to  affiliated  companies
decreased due to the elimination  of  the  Company's interest in DBSC valued at
approximately $539,080 after a merger between  EchoStar  and  DBSC  in  January
1997. (see the Company's 10-Q dated March 31, 1997.)

      Net  cash  used  in  operating activities for the nine month period ended
September 30, 1997 was $2,063,438  compared  to net cash used of $1,489,939 and
$6,877,577  since  inception.   There  was  net  cash   provided  by  investing
activities of $3,573,678 during the nine month period ended September 30, 1997,
compared to net cash used by investing activities of $2,473,846  for  the  nine
month  period  ended  September  30,  1996,  and net cash provided by investing
activities  of  $1,047,830  since  inception.   Net   cash  used  by  financing
activities was $1,036,501 for the nine months ended September 30, 1997 compared
to net cash provided by financing activities of $3,994,956  for  the nine month
period ended September 30, 1996, and $6,706,074 since inception.   The net cash
used  by  financing  activities  for  the nine months ended September 30,  1997
resulted from cash repayment of debentures  totaling  $1,043,501,  offset  by a
loan to the Company.

RESULTS OF OPERATIONS

      The  Company  remains  in  the development stage and did not generate any
significant revenues  or  net  interest  earnings  in either the three month or
nine month periods ended September 30, 1997, or September  30,  1996.  Revenues
from inception through September 30, 1997 were $161,420.

     The Company's net loss for the three month period ended September 30, 1997
was $1,555,499, compared to $691,686 for the three month period ended September
30,1996; a net profit of $3,487,473 for the nine month period  ended  September
30,  1997 compared to a net loss of $2,790,168 for the nine month period  ended
September  30,1996;  and   net   loss   of $3,420,573 since inception. The nine
month net profit was due to the net gain  on  marketable  equity  securities of
approximately  $5.2 million offset by a $1.3 million loss from operations,  and
$317,054  net  interest   expense for the nine month period ended September 30,
1997.  Loss from operations  was  $459,507  for  the three month  period  ended
September 30,1997, compared to a loss  of $604,317  for  the  same  three month
period  ending   September  30,1996,  and  $1,373,055 for the nine month period
ended September 30, 1997 compared to $2,488,203 for the nine month period ended
September 30, 1996.  Total loss from operations  from inception was $8,289,497.
General and administrative  costs ("G&A") were $374,033  for  the  three  month
period ended September 30,1997, compared to $506,408 in the  same  three  month
period  ended September 30,1996, and $1,078,219 for the nine month period ended
September  30,  1997  compared  to  $1,653,415  for the nine month period ended
September 30, 1996.  Total G&A from inception  through  September 30, 1997  was
$6,069,045.  Research and development costs associated  with  GEMS  was $85,474
for the three month period ended September 30,1997 compared to $109,329 for the
three  month  period  ended September 30,1996, and $294,836 for the nine  month
period ended September  30, 1997 compared to $846,208 for the nine month period
ended September 30, 1996 and $2,254,292, since inception.

     The  Company's  accumulated   deficit at September 30, 1997 was $3,420,573
compared to $6,908,046 at December 31, 1996. This decrease was due to a onetime
gain on marketable  securities  of approximately $5.2 million and offset by the
loss from operations  and interest expense  of approximately $2.8 million.  The
accumulated deficit will continue to increase  unless   and  until  the Company
generates revenues from the operations of GEMS in such amounts so as  to  cover
the  Company's  expenses.  Revenues  substantial  enough  to  make  the Company
profitable  are not expected to be generated until 1999, and no assurances  can
be given as to  that  estimate.  The  Company  has  been devoting a substantial
amount of its financial and personnel resources toward developing the Company's
AMR business.

<PAGE>11

PART II.  OTHER INFORMATION

Item 1.   Legal Proceedings.

      On August 17, 1997 the Company formally completed  a settlement agreement
with  Loral  Aerospace  Holding,  Inc. ("Loral").  Pursuant to  the  settlement
agreement, the Company received a cash settlement of approximately $3.5 million
from Loral in exchange for dismissals  of  any  rights  of  appeal, by both the
Company  and Loral, in connection with litigation concerning the  ownership  of
certain shares  of Continental Satellite Corporation held by the Company.  (See
the Company's Form 10-KSB for the year ended 12/31/96.)

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.

"SAFE HARBOR" STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT
OF 1995.

With the exception  of historical facts stated herein, the matters discussed in
this  report  are  "forward   looking"   statements   that  involve  risks  and
uncertainties  that  could  cause  actual  results  to differ  materially  from
projected  results.  Such "forward looking" statements  include,  but  are  not
necessarily limited to, statements regarding anticipated levels of future
revenue and  earning  from  the operations of the Company, and its wholly owned
subsidiary Global Energy Metering  Service,  Inc. (collectively the "Company"),
projected costs and expenditures relating to the  Company's  interest in direct
broadcasting  satellite  ("DBS")  technology  and development of its  automated
meter reading ("AMR") business, the availability  of  future  debt  and  equity
capital on commercially reasonable terms, legal costs related to the litigation
with  Loral  and  consulting costs in connection with FCC licenses and permits.
Factors that could  cause  actual  results  to  differ  materially, include, in
addition  to  other  factors  identified  in this report, the  availability  of
capital  on commercially acceptable terms, the  completion  of  a  commercially
viable AMR  service,  the  dependence  and uncertainty of utility  companies to
utilize such an AMR service, the reliance  on third parties for the advancement
of the design, manufacturing and marketing of  the  service, the fulfillment of
contract obligations by suppliers and other third parties,  challenges  to  the
Company's  investments  in  DBS  licensees  and  permitees, the availability of
qualified  personnel  and equipment, delays in the receipt  of  or  failure  to
receive necessary governmental  approvals,  permits  and  licenses  or renewals
thereof,  risks  and  uncertainties  relating to general economic and political
conditions,  both domestically and internationally,  changes  in  the  law  and
regulations governing  the Company's activities in both AMR and DBS technology,
results of the Company's  financing efforts and marketing conditions, and other
risk  factors  related to the  Company's  AMR  business  and  DBS  investments.
Readers of this  report  are  cautioned  not  to put undue reliance on "forward
looking"  statements  which  are,  by  their  nature,   uncertain  as  reliable
indicators  of  future  performance.   The  Company  disclaims  any  intent  or
obligation to publicly update these "forward looking"  statements, whether as a
result of new information, future events, or otherwise.

Item 6.   Exhibits and Reports on Form 8-k

      The Company filed a report on Form 8-K on September  12, 1997 to announce
the  Company's agreement with EchoStar Communications Corporation  ("EchoStar")
redeeming all three convertible debentures held by EchoStar.



<PAGE>12

                            SIGNATURES

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


                                   DBS INDUSTRIES, INC.

DATE:    November 14, 1997         BY:  FRED W. THOMPSON
                                   Fred W. Thompson, President,
                                   Chief Executive Officer and
                                   Chief Financial Officer
                                   (Principal Executive Officer)