United States
                       Securities and Exchange Commission
                             Washington, D.C. 20549

                                   FORM 10-QSB

[X] Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act of
1934

For the quarter ended   June 30, 1998

[   ] Transition Report Under Section 13 or 15(d) of the Securities Exchange Act
of 1934

For the transition period from                        to

Commission File Number:             0-11883

                           TELEBYTE TECHNOLOGY, INC.
         (Exact name of registrant as specified in its charter)

Nevada                                                             11-2510138
(State or other jurisdiction of                               (IRS Employer
incorporation or organization)                              Identification No.)

270 Pulaski Road, Greenlawn, New York                                      11740
(Address of principal executive offices)                              (Zip Code)

Registrant's Telephone Number, including Area Code:           (516) 423-3232

Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the  Securities  Exchange  Act  during the past 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

As of August 14, 1998 there were  outstanding  1,505,016 shares of Common Stock,
$.01 par value.

Transitional Small Business Disclosure Format (check one);

                           Yes                       No       X


<PAGE>




                            TELEBYTE TECHNOLOGY, INC.

                                      INDEX

Part I            Financial Information

         Item 1.           Financial Statements

                           Balance Sheets
                           June 30, 1998 (Unaudited)

                           Statements of Earnings
                           Three and six months ended
                           June 30, 1998 and 1997 (Unaudited)

                           Statements of Cash Flows
                           Six months ended
                           June 30, 1998 and 1997 (Unaudited)

                           Condensed Notes to Financial
                           Statements (Unaudited)

         Item 2.           Management's Discussion and Analysis of
                           Financial Condition and Results of Operation.



Part II                      Other Information


<PAGE>



                                     Part I
                              Financial Information
Item 1.      Financial Statements

                            TELEBYTE TECHNOLOGY, INC.
                                 BALANCE SHEETS

                                  JUNE 30,1998
                                  (unaudited)
ASSETS

             Cash & cash equivalents                       $      624,562
             Accounts receivable, less
               allowances for doubtful accounts                   646,051
             Inventory                                          1,485,149
             Prepaid expenses                                     113,736
             Deferred income taxes                                 80,000
                                                      -------------------
             TOTAL CURRENT ASSETS                               2,949,498

             PROPERTY, PLANT AND EQUIPMENT, less
               accumulated depreciation and amortization        1,093,716

             OTHER ASSETS                                         158,781
                                                      -------------------
                                                            $   4,201,995
                                                      ===================

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES
             Accounts payable                              $      351,373
             Accrued expenses                                     193,715
             Current maturities of long-term debt                  52,325
                                                      -------------------
             TOTAL CURRENT LIABILITIES                            597,413

LONG-TERM DEBT, less current maturities                           901,102

SHAREHOLDERS' EQUITY
             Common stock, par value $.01 per share
              1,659,816 issued and 1,505,016 outstanding           16,598
             Capital in excess of par value                     2,760,078
             Accumulated earnings                                  27,897
             Less treasury stock, at cost,
               (145,000 shares)                                 (101,093)
                                                      -------------------
                                                               2,703,480
                                                      -------------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                 $   4,201,995
                                                      ===================
         
 The accompanying notes are an integral part of this financial
                                   statement.
<PAGE>


                            TELEBYTE TECHNOLOGY, INC.
                             STATEMENTS OF EARNINGS
                                   (Unaudited)

                            Three Months                   Six Months
                         Ended June 30,                 Ended June 30,
                      -------------------             --------------------

                        1998          1997             1998            1997
                  ------------    -----------      -----------      -----------

NET SALES         $  1,406,103    $ 1,227,978      $ 2,626,919      $ 2,259,061

COST OF SALES          673,450        564,705        1,235,756        1,029,675
                  ------------    ------------     ------------     -----------
GROSS PROFIT           732,653        663,273        1,391,163        1,229,386
                  ------------    ------------     ------------     -----------

OPERATING EXPENSES
 R&D                   132,580         84,603          228,432          144,031
 Selling, G&A          622,437        476,036        1,022,088        1,069,582
                  ------------    ------------      -----------     -----------
                       755,017        560,639        1,250,520        1,213,613
                  ------------    ------------      -----------     -----------

OPERATING INCOME (LOSS)(22,364)       102,634          140,643           15,773
                  ------------    ------------      -----------     -----------

OTHER INCOME (EXPENSE)
    Rental Income       12,049         12,049           24,098           24,098
    Interest Income      5,409          2,853           11,879            6,195
    Interest Expense   (24,610)       (27,487)         (53,116)         (54,612)
                  -------------   ------------       ----------     ------------

Income(Loss)
before income taxes    (29,516)        90,049          123,504           (8,546)

Provision for taxes        0              0              2,000              0
                  -------------   ------------       ----------   --------------

NET INCOME (LOSS)    $ (29,516)     $  90,049        $ 121,504       $   (8,546)
                  =============   ============       ==========   ==============

Earnings (Loss) per common share:

      Basic          $  (0.02)      $  0.06          $  0.08                -
                  ============     ===========       ==========   ==============
                   
      Diluted        $  (0.02)      $  0.06          $  0.08                -
                  ============     ===========       ==========   ==============

Shares used in computing earnings per common share:
   
      Basic          1,504,438       1,481,766       1,498,333        1,481,766
                   ===========     ===========       ==========   ==============
                                                           
      Diluted        1,504,438       1,511,266       1,549,983        1,481,766
                   ===========     ===========       ==========   ==============

     The accompanying notes are an integral part of this financial statement

                    
<PAGE>


                            TELEBYTE TECHNOLOGY, INC.
                            STATEMENTS OF CASH FLOWS
                                   (Unaudited)

                                                          Six Months
                                                        Ended June 30,
                                                   -----------   --------------

                                                   1998                  1997
                                                 ---------              -------
CASH FLOWS FROM OPERATING ACTIVITIES

Net Income (Loss)                          $      121,504      $         (8,546)
Adjustments to reconcile net loss to
  net cash used in operating activities:
             Depreciation and amortization         52,565                44,165
             Decrease (increase) in assets:
               Accounts receivable                106,790              (162,628)
               Inventories                       (263,381)              (32,207)
               Prepaid expenses and other         (64,381)             (121,115)
             Increase (decrease) in liabilities:
               Accounts payable                   (18,121)              186,069
               Accrued expenses                     1,512                12,673
                                                -----------          -----------
Net cash used in operating activities             (63,512)              (81,589)
                                                -----------          -----------

CASH FLOWS FROM INVESTING ACTIVITIES
  Cash was received from:
     proceeds from exercise of stock options        8,322                     0
  Cash was paid for:
     Property and equipment                        25,846                23,554
                                                -----------          -----------

Net cash used in investing activities             (17,524)              (23,554)
                                                -----------          -----------

CASH FLOWS FROM FINANCING ACTIVITIES

  Cash was used for:
        Principal payments of long-term debt       24,686                36,365

                                                -----------           ----------
Net cash used in financing activities             (24,686)              (35,755)
                                                -----------           ----------
Net decrease in cash and cash equivalents        (105,722)             (141,505)
Cash and cash equivalents at
  beginning of period                             730,284               583,721
                                                -----------           ----------
Cash and cash equivalents at
  end of period                            $      624,562         $     442,213
                                               =============          ==========

          The accompanying notes are an integral part of this financial
                                   statement.

<PAGE>



                            TELEBYTE TECHNOLOGY, INC.
                     NOTES TO CONDENSED FINANCIAL STATEMENTS
                                   (Unaudited)

1.       CONDENSED FINANCIAL STATEMENTS

The balance  sheet as of June 30, 1998,  the statement of earnings for the three
and six  months  then ended and the  statements  of cash flows for the six month
period  then ended have been  prepared  by the  Company  without  audit.  In the
opinion of management,  all  adjustments  (which  include only normal  recurring
accrual adjustments) necessary to present fairly the financial position, results
of operations and cash flows at June 30, 1998 have been made.

Certain  information  and footnote  disclosures  normally  included in financial
statements prepared in accordance with generally accepted accounting  principles
have been condensed or omitted. It is suggested that these financial  statements
are read in conjunction with the financial statements and notes thereto included
in the  Company's  annual  report to  shareholders  for the  fiscal  year  ended
December 31, 1997.  The results of operations for the period ended June 30, 1998
are not necessarily indicative of the operating results for the full year.

<PAGE>


Item 2.  Management's Discussion and Analysis of Financial Condition or Plan 
of Operation.


(Statements in this Form 10-QSB that are not descriptions of historical fact are
forward-looking  statements that are subject to risks and uncertainties.  Actual
results could differ materially from those currently anticipated due to a number
of factors, including risks relating to competition; and other factors impacting
the data communications industry.)


Sales for the second  quarter  ended June 30, 1998  increased  15% to $1,406,103
compared to sales of $1,227,978  for the same period in 1997.  Sales for the six
months ended June 30, 1998  increased 16% to  $2,626,919  compared to $2,259,061
for the  comparable  period of 1997.  The increased  sales can be attributed the
success of increased  promotional  activities  initiated during the past several
quarters.

Cost of sales for the  second  quarter  of  $673,450  or 48% of sales  increased
compared  to  $464,705  or 46% of sales  during  the same  period  in 1997.  The
decrease  in the  Company's  gross  profit  margin was  primarily  a function of
product mix.

Selling,  general and administrative expenses of $622,437 for the second quarter
ended June 30, 1998 increased  compared to $476,036 for the same period in 1997.
During the second  quarter,  the  Company  continued  its  aggressive  marketing
campaign  including the  distribution of  approximately  200,000  catalogs in an
effort to stimulate sales.

Research and development  expenses increased 57% to $132,580 compared to $84,603
for the second quarter of 1997. During the second quarter, the Company continued
its development of several advanced data communications products. Products under
development  during the second  quarter  include a  Multi-rate  DSL (MDSL) modem
which transmits data at speeds up to 768Kbs  utilizing two wires;  enhancing the
Company's DSL test equipment  product line and the  introduction  of several new
fiber optic products utilizing single mode optics.

Interest  income  increased to $5,409 during the second quarter of 1998 compared
to $2,853 for the same  period of 1997.  The  increase is due  primarily  to the
higher cash on deposit and higher yields at Merrill Lynch.

 During the second  quarter of 1998,  the Company had rental  income of $12,049,
which was in line with the comparable  quarter in 1997. Net income  increased to
$121,504  for the six months  ended  June 30,  1998,  compared  to a net loss of
$8,546 for the same period in 1997. The net loss of $29,516 for the three months
ended June 30,  1998  contrasts  with the net income of $90,049  during the same
period in 1997.  The  increase  in net income for the six months  ended June 30,
1997 is due  primarily  to the  increase in revenues  and the loss of during the
second  quarter  is a result of the  increased  promotional  expenses  mentioned
above.



<PAGE>


LIQUIDITY AND CAPITAL RESOURCES

Net cash used in operating activities for the six months ended June 30, 1998 was
$65,512  compared to net cash used of $81,589  for the same period in 1997.  The
decrease  in cash used in  operating  activities  is due  primarily  to improved
profitability and decrease in accounts receivable.  Working capital increased to
$2,352,085 at June 30, 1998, an increase of $141,885 from December 31 1997.  The
current  ratio at June 30,  1998  increased  to 4.6 to 1 compared to 4.6 to 1 at
December 31, 1997. The Company has a revolving line of credit of $1,000,000 with
Merrill  Lynch  that  expires  on June 30,  1999.  The  Company  has no  amounts
outstanding  under the line of credit at this time.  The Company  considers  its
working  capital to be adequate to fund presently  foreseeable  working  capital
requirements.


<PAGE>

PART II -- OTHER INFORMATION


Item 1.  Legal Proceedings

         Not applicable.

Item 2.  Changes in Securities

         Not applicable.

Item 3.  Defaults Upon Senior Securities

         Not applicable.

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

         Not applicable.

Item 5.  Other Information

         Not applicable.

Item 6.  Exhibits and Reports on Form 8-K

                           (a)      Exhibits - None

                           (b)      Reports on Form 8-K - None


<PAGE>



                                   SIGNATURES

         In accordance with the requirements of the Exchange Act, the Registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.


TELEBYTE TECHNOLOGY, INC.



By:      __________\s\_________________
         Joel A. Kramer, President and
         Chairman of the Board
         (Principal Executive Officer)


By:      ___________\s\________________
         Michael Breneisen, Vice President of Finance
         (Principal Financial and Accounting Officer)


Date:  August 14, 1998



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