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  March 31, 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 May 7, 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
                           March 31, 1998 (Unaudited)

                           Statements of Operations
                           Three months ended
                           March 31, 1998 and 1997 (Unaudited)

                           Statements of Cash Flows
                           Three months ended
                           March 31, 1998 and 1997 (Unaudited)

                           Condensed Notes to Financial
                           Statements (Unaudited)

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

Part II

         Other Information


<PAGE>



Part I   Financial Information
Item 1. Financial Statements

                            TELEBYTE TECHNOLOGY, INC.
                                  BALANCE SHEET

                                 MARCH 31, 1998
                                   (unaudited)
                                     ASSETS

CURRENT ASSETS
             Cash & cash equivalents                        $       825,088
             Accounts receivable, less
                 allowance for doubtful accounts                    564,796
             Inventory                                            1,398,221
             Prepaid expenses                                        71,080
             Deferred income taxes                                   80,000
                                                         --------------------
             TOTAL CURRENT ASSETS                                 2,939,185

PROPERTY, PLANT AND EQUIPMENT, less
  accumulated depreciation and amortization                       1,109,949

OTHER ASSETS                                                        164,207
                                                         --------------------
                                                             $    4,213,341
                                                         ====================

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES
             Accounts payable                               $       329,154
             Accrued expenses                                       184,740
             Current maturities of long-term debt                    52,654
                                                         --------------------
             TOTAL CURRENT LIABILITIES                              566,548

LONG-TERM DEBT, less current maturities                             915,046

SHAREHOLDERS' EQUITY
             Common stock, par value $.01 per share
               1,655,816 issued and 1,501,016 outstanding            16,558
             Capital in excess of par value                       2,758,868
             Accumulated earnings                                    57,414
             Less treasury stock, at cost, (154,800 shares)        (101,093)
                                                         --------------------
                                                                  2,731,747
                                                         --------------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                   $    4,213,341
                                                         ====================

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



<PAGE>


                            TELEBYTE TECHNOLOGY, INC.
                            STATEMENTS OF OPERATIONS
                                   (Unaudited)

                                                    Three Months
                                                   Ended March 31,
                                       
                                             1998                  1997
                                      -----------------    --------------------

NET SALES                               $1,220,816          $    1,031,083

COST OF SALES                              562,306                 464,970
                                      -----------------    --------------------
GROSS PROFIT                               658,510                 566,113
                                      -----------------    --------------------

OPERATING EXPENSES
      Research and development              95,852                  59,428
      Selling, G&A                         399,651                 593,546
                                      -----------------    --------------------
                                           495,503                 652,974
                                      -----------------    --------------------

Operating Income (Loss)                    163,007                (86,861)
                                      -----------------    --------------------

OTHER INCOME (EXPENSE)
    Rental Income                           12,049                  12,049
    Interest Income                          6,470                   3,342
    Interest Expense                       (28,506)                (27,125)
                                      -----------------    --------------------
  Earnings (Loss) before income taxes      153,020                (98,595)

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

      NET EARNINGS (LOSS)              $   151,020       $        (98,595)
                                      =================    ====================

Earnings (Loss) per common share:
  
      Basic                                  $0.10                 ($0.07)
                                      =================    ====================
      Diluted                                $0.10                 ($0.07)
                                      =================    ====================

Shares used in computing earnings per common share:
      
      Basic                              1,492,616               1,481,766
                                      =================    ====================
      Diluted                            1,543,516               1,481,766
                                      =================    ====================

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



<PAGE>

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

                                                      Three Months
                                                     Ended March 31,
                                            
                                                1998                  1997
                                           ---------------     -----------------
CASH FLOWS FROM OPERATING ACTIVITIES

Net Income                                   $  151,020        $        (98,595)
Adjustments to reconcile net income to
  net cash used in operating activities:
         Depreciation and amortization           26,283                  20,883
         Decrease (increase) in assets:
           Accounts receivable                  188,045                (112,251)
           Inventories                         (176,453)                (55,939)
           Prepaid expenses and other           (27,151)                (63,620)
           Increase (decrease) in liabilities:
           Accounts payable                     (40,340)                161,651
           Accrued expenses                      (7,463)                 17,973
                                           --------------       ----------------
Net cash provided by
   (used in) operating activities               113,941                (129,898)

CASH FLOWS FROM INVESTING ACTIVITIES
  Cash was received from:
       Proceeds from exercise of stock options    7,072                    -
  Cash was used for:
       Property and equipment                    15,797                  15,448
                                           --------------       ----------------

Net cash used in investing activities            (8,725)                (15,448)
                                           --------------       ----------------

CASH FLOWS FROM FINANCING ACTIVITIES
  Cash was used for:
       Principal payments of L/T debt            10,412                  20,010
                                           --------------       ----------------
Net cash used in financing activities           (10,412)                (20,010)
                                           --------------       ----------------
Net increase (decrease) in cash 
    and cash equivalents                         94,804                (165,356)

Cash and cash equivalents at
  beginning of period                           730,284                 583,721
                                           --------------       ----------------
Cash and cash equivalents at
  end of period                             $   825,088         $       418,365
                                           ==============       ================

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



<PAGE>


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

1.       CONDENSED FINANCIAL STATEMENTS

The balance sheet as of March 31, 1998,  the statement of earnings for the three
months then ended and the  statements  of cash flows for the three month  period
then ended have been prepared by the Company  without  audit.  In the opinion of
management,  all adjustments  (which include only normal recurring  adjustments)
necessary to present  fairly the financial  position,  results of operations and
cash flows at March 31, 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
be 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 March 31, 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.)


RESULTS OF OPERATIONS

Sales  during  the  first  quarter  ended  March  31,  1998  increased  18.4% to
$1,220,816  compared to sales of  $1,031,083  for the same  period in 1997.  The
increased sales can be primarily  attributed to the success in responding to new
opportunities for the Company's  products.  These opportunities have arisen as a
result of the  increased  marketing  efforts of the  Company  begun in 1997.  In
addition,  the Company's  increased  emphasis on international  business is also
ahead of the similar period of 1997.  Simultaneously  the Company's  engineering
efforts have produced new products, which are finding enthusiastic acceptance in
the Company's expanding market.

Cost of sales for the first  quarter  of  $562,306  or 46.1% of sales  increased
compared to the $464,970 or 45.1% of sales  during the same period in 1997.  The
decreased  profit  margin  during the first  quarter of 1998 is due primarily to
product mix.

Selling,  general and administrative  costs of $399,651 decreased as compared to
$593,546  during the first quarter of 1997. The decrease of $193,895  during the
first  quarter  was due  primarily  to the  delayed  printing  of the  Company's
catalog.  The catalog is normally  printed during the first quarter of the year.
During  the  first  quarter  the  Company  continued  its  program  of  visiting
significant   existing  and  potential  customers  in  order  to  uncover  sales
opportunities and validate market awareness.

Research  and  development  expenses  of $95,852  increased  61.3%,  compared to
$59,428 during the same quarter in 1997.  During the first quarter,  the Company
continued its  development  of several  advanced data  communications  products,
including  the  Company's  first  LONWORKS  product  for the  HVAC  and  factory
automation  market.  Also  under  development  during  the first  quarter  was a
Multi-Rate  DSL modem  which is  targeted at the  emerging  high speed  Internet
market.  The Company expects to introduce this product during the second half of
1998.  Potential  customers for this product include Internet Service  Providers
(ISP's) and Competitive Local Exchange Carriers  (CLEC's).  The Company has also
spent considerable effort in improving its wireline simulator product line so as
to firm and increase its dominating  position for  manufacturing  test equipment
with XDSL modem manufacturers.

Interest income increased to $6,470 during the first quarter of 1998 compared to
$3,342 for the same period in 1997.  The  increase  in  interest  income was due
primarily to higher levels of cash on deposit at Merrill Lynch. During the first
quarter of 1998 the Company had rental  income of $12,049 which was in line with
the comparable quarter of 1997.

The net  income of  $151,020  or $.10 per share  for the first  quarter  of 1998
increased  compared  to the net loss of  $98,595  or $.07 per  share in the same
quarter in 1997. The increase in profitability is due primarily to the decreased
selling expenditures as discussed above and the increased level of sales.


<PAGE>

LIQUIDITY AND CAPITAL RESOURCES

Net cash provided by operating  activities was $113,941 for the first quarter of
1998  compared to $129,898  net cash in the same period of 1997.  This change is
due  primarily  to higher net income and the  decrease in  accounts  receivable.
Working  capital  increased  to  $2,372,637  at March 31,  1998,  an increase of
$162,437 from December 31, 1997.  The current ratio at March 31, 1998  increased
to 5.2:1  compared to 4.6:1 at December  31,  1997.  The Company has a revolving
line of credit of $1,000,000  with Merrill Lynch that expires June 30, 1999. The
Company  considers  it's  working  capital to be adequate to fund its  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:    May 7, 1998