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 September 30, 1998

[   ]    Transition Report under Section 13 or 15(d) of the Securities Exchange
ct 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 October 30, 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 Sheet
                           September 30, 1998 (Unaudited)

                           Statements of Earnings
                           Three and nine months ended
                           September 30, 1998 and 1997 (Unaudited)

                           Statements of Cash Flows
                           Nine months ended
                           September 30, 1998 and 1997 (Unaudited)

                           Notes to Condensed 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 SHEET

                                SEPTEMBER 30,1998
                                   (Unaudited)

ASSETS

CURRENT ASSETS
             Cash & cash equivalents                           $      757,280
             Accounts receivable, less
               allowance for doubtful accounts                        762,923
             Inventory                                              1,364,542
             Prepaid expenses                                          38,935
             Deferred income taxes                                     80,000
                                                          -------------------
             TOTAL CURRENT ASSETS                                   3,003,680

             PROPERTY, PLANT AND EQUIPMENT, less
               accumulated depreciation and amortization            1,080,028

             OTHER ASSETS                                             153,356
                                                          -------------------
                                                                $   4,237,064
                                                          ===================

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES
             Accounts payable                                  $      243,164
             Accrued expenses                                         186,623
             Current maturities of long-term debt                      52,412
                                                          -------------------
             TOTAL CURRENT LIABILITIES                                482,199

LONG-TERM DEBT, less current maturities                               891,368

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                                    187,914
             Less treasury stock, at cost, (154,800 shares)         (101,093)
                                                          -------------------
                                                                   2,863,497
                                                          -------------------
TOTAL LIABILITIES AND SHAREHOLDER'S' EQUITY                    $   4,237,064
                                                          ===================
    The accompanying notes are an integral part of these financial statement.


<PAGE>



                            TELEBYTE TECHNOLOGY, INC.
                             STATEMENTS OF EARNINGS
                                   (Unaudited)

                                 
                                                                  
                               
                               Three Months                Nine Months     
                            Ended September 30,        Ended September 30,   
                       --------------------------   -------------------------

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

NET SALES              $  1,551,228   $ 1,480,196    $ 4,178,147    $3,739,257

COST OF SALES               731,736       683,967      1,967,492     1,713,642
                       ------------   -----------   ------------    ----------
GROSS PROFIT                819,492       796,229      2,210,655     2,025,615
                       ------------   -----------   ------------    ----------

OPERATING EXPENSES
      R & D                 131,849        90,433        360,281       234,464
      Selling, G&A          519,301       532,028      1,541,389     1,601,610
                       ------------   -----------   ------------    ----------
                            651,150       622,461      1,901,670     1,836,074
                       ------------   -----------   ------------    ----------
Operating Income            168,342       173,768        308,985       189,541
                       ------------   -----------   ------------    ----------
OTHER INCOME (EXPENSE)
    Rental Income            12,048        12,048         36,146        36,146
    Interest Income           5,663         2,924         17,542         9,119
    Interest Expense        (23,537)      (29,911)       (76,653)      (84,523)
                       -------------  ------------  -------------   -----------

Income before income taxes  162,516       158,829        286,020       150,283

Provision for income taxes    2,500         2,500          4,500         2,500
                       -------------  ------------  -------------   -----------

      NET INCOME      $     160,016     $ 156,329    $   281,520     $ 147,783
                      ==============  ============  =============   ===========

Earnings per common share:
      Basic              $   0.11       $   0.11     $     0.19      $   0.10   
                      ==============  ============  =============   ===========
      Diluted            $   0.10       $   0.10     $     0.18      $   0.10
                      ==============  ============  =============   ===========

Shares used in computing earnings per common share:
      Basic               1,505,016     1,481,766     1,500,673      1,481,766
                      ==============  ============  =============   ===========
      Diluted             1,543,316     1,513,516     1,552,216      1,492,349
                      ==============  ============  =============   ===========

     The accompanying notes are an integral part of this financial statement



<PAGE>


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


                                                         Nine Months

                                                      Ended September 30,
                                         ---------------------------------------

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

Net Income                                $      281,520         $     147,783
Adjustments to reconcile net income to
  net cash used in operating activities:
             Depreciation and amortization        78,848                67,450
             Decrease (increase) in assets:
               Accounts receivable               (10,082)             (352,489)
               Inventories                      (142,774)              (79,015)
               Prepaid expenses and other         15,845              (166,128)
               Increase (decrease) 
                       in liabilities:
               Accounts payable                 (126,330)              186,820
               Accrued expenses                   (5,580)               25,924
                                          ---------------   --------------------
Net cash provided by (used in) 
operating activities                              91,447              (169,655)
                                          ---------------   --------------------

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              (38,441)              (27,049)
                                          ---------------   --------------------
Net cash used in investing activities            (30,119)              (27,049)
                                          ---------------   --------------------

CASH FLOWS FROM FINANCING ACTIVITIES
  Cash was used for:
             Principal payments of 
               long-term debt                    (34,332)              (49,789)
                                         ----------------   --------------------
Net cash used in financing activities            (34,332)              (49,789)
                                         ----------------   --------------------
Net increase (decrease) in cash 
          and cash equivalents                    26,996              (246,493)
Cash and cash equivalents at
  beginning of period                            730,284               583,721
                                         -----------------  --------------------
Cash and cash equivalents at
  end of period                           $      757,280       $       337,228
                                         =================   ===================

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



<PAGE>




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

1.       CONDENSED FINANCIAL STATEMENTS

The balance  sheet as of September  30, 1998,  the statement of earnings for the
three and nine months then ended and the  statements  of cash flows for the nine
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 September 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  September 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 and 
Results 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.


RESULTS OF OPERATIONS

Sales for the third quarter  increased to $1,551,228,  as compared to $1,480,196
for the comparable  period of 1997. For the nine months ended September 30, 1998
sales  increased to $4,178,147 as compared to $3,739,257  for the similar period
last year. This represents an increase of 11.6%.  There were marginal changes in
each product sector except for Lightning Protection, which benefited from a 325%
increase in sales in the  quarter.  Sales of fiber optic  products  increased by
7.6%.

Cost of sales for the third  quarter  of  $731,736  or 47.1% of sales  increased
compared  to  $683,967  or 46.2% 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 $519,301 for the third quarter
ended  September 30, 1998 decreased  slightly  compared to $532,028 for the same
quarter in 1997.  During the third quarter the Company  initiated an advertising
campaign for its fiber optic product line by placing full-page advertisements in
major trade publications.  These publications  include Lightwave and Fiber Optic
Product News. In addition,  the Company completed significant  modifications and
additions  of  its  website,   www.telebyteusa.com,   which  will  simplify  the
dissemination of the information on the Company's products.

Research and development  expenses increased to $131,849 in the third quarter of
1998, as compared to $90,433 for the third quarter of 1997.  The increase in the
third  quarter and nine months ended  September  30, 1998 was due to  additional
engineering  personnel required to undertake the backlog of engineering  efforts
that had  accumulated.  These  efforts  included  expansion of the fiber product
line, the industrial product line,  development of the Company's first LON Works
product,  the  development of the Company's  first MDSL modem and the continuing
engineering required to expand the xDSL test equipment line. In addition,  there
were several customer sponsored, custom product development efforts.

Interest income  increased to $5,663 for the third quarter of 1998,  compared to
$2,924 for the  comparable  period in 1997. The increase is due primarily to the
higher cash on deposit at Merrill Lynch during the quarter.

Net income of $160,016 for the third quarter of 1998 increased slightly compared
to $156,329 for the third  quarter of 1997.  Net income of $281,520 for the nine
months ended  September  30, 1998,  increased  compared to $147,783 for the same
period in 1997.  The  increase can be primarily  attributed  to higher  revenues
during the first nine months of 1998.

<PAGE>





LIQUIDITY AND CAPITAL RESOURCES

Net cash  provided  by  operating  activities  of $91,447 was due  primarily  to
increase in net income during the third quarter.  Working  capital  increased to
$2,521,481 at September 30, 1998, an increase of $311,281 from December 31 1997.
The current ratio at September 30, 1998 increased to 6.2 to 1 compared to 4.6 to
1 at December 31, 1997. The Company  renewed its $1,000,000  line of credit with
Merrill Lynch, effective July 1, 1997, for two years. 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)      Exhibit No. 27 - Financial Data Schedule

        (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:    October 30, 1998