<PAGE>
 
                                 UNITED STATES

                      SECURITIES AND EXCHANGE COMMISSION

                            WASHINGTON, D.C. 20549

                                   FORM 10-Q

(Mark One)
             [X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                    OF THE SECURITIES EXCHANGE ACT OF 1934

               For the quarterly period ended September 30, 1996

                                      OR

            [_]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
                    OF THE SECURITIES EXCHANGE ACT OF 1934

                For the transition period from _____  to  _____

                       Commission file number   0-12050

                      SAFEGUARD HEALTH ENTERPRISES, INC.
            (Exact name of registrant as specified in its charter)



          DELAWARE                                    52-1528581
(State or other jurisdiction                      (I.R.S. Employer 
      of incorporation)                          Identification No.)

                            505 NORTH EUCLID STREET
                           ANAHEIM, CALIFORNIA 92801
                    (Address of principal executive offices)
                                   (Zip Code)

                                (714) 778-1005
             (Registrant's telephone number, including area code)

                                     NONE
  (Former name, former address and former fiscal year, if changed since last
                                    report)

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
                                 ------   ------

The number of shares outstanding of registrant's common stock, par value $.01
per share, at September 30, 1996, was 4,714,999 shares (not including 3,274,788
shares of common stock held in treasury).



                                  Page 1 of 11
<PAGE>
 
                      SAFEGUARD HEALTH ENTERPRISES, INC.
                               AND SUBSIDIARIES

                                   FORM 10-Q

                   FOR THE QUARTER ENDED SEPTEMBER 30, 1996

                        INFORMATION INCLUDED IN REPORT


<TABLE> 
<CAPTION> 
                                                                                                    Page
                                                                                                    ----
<S>                                                                                                 <C>
Part I.       FINANCIAL INFORMATION
Item 1.       Consolidated Financial Statements                                                        3
 
                Consolidated Statements of Financial Position                                          3
   
                Consolidated Statements of Income                                                      4
 
                Consolidated Statements of Cash Flows                                                  5

                Notes to Consolidated Financial Statements                                             6
 
Item 2.       Management's Discussion and Analysis of Financial Condition and Results of Operations    8
 
Part II.      OTHER INFORMATION
 
Item 1.       Legal Proceedings                                                                       10
 
Item 6.       Exhibits and Reports on Form 8-K                                                        10

SIGNATURES                                                                                            11
</TABLE>

                                  Page 2 of 11
<PAGE>
 
PART I.  FINANCIAL INFORMATION

ITEM 1.    CONSOLIDATED FINANCIAL STATEMENTS

                      SAFEGUARD HEALTH ENTERPRISES, INC.
                               AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
                      (000'S OMITTED, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
                                           September 30,    December 31,
                                                1996            1995
                                           --------------   -------------
                                            (Unaudited)
ASSETS
Current assets:
<S>                                        <C>              <C>
   Cash                                     $         239    $        506
   Investment securities available for            
    sale, at estimated fair value                   8,989          14,038
   Investment securities held to                      
    maturity, at cost                                 207             202
   Accounts and notes receivable, net
    of allowances of
       $394 in 1996 and $260 in 1995                4,119           3,258
   Income taxes receivable                             -              45
   Prepaid expenses and other                         515             519
   Deferred income taxes                              262             262
   Net assets of discontinued operations            2,901           1,748
                                           --------------   -------------
               Total current assets                17,232          20,578
                                           --------------   -------------
   Property and equipment, net                     14,918          13,055
   Investment securities held to                    
    maturity, at cost                               5,410           4,073
   Notes receivable - long-term                     2,000               -
   Other assets                                       229             226
   Intangibles, net of accumulated
    amortization of                                   
      $1,471 in 1996 and $1,384 in 1995               474             411   
   Goodwill                                        21,494               -
   Covenant not to compete                          3,576               -
                                           --------------   -------------
               Total assets                $       65,333   $      38,343
                                           ==============   =============
 
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
   Current portion of long-term debt       $        2,442   $          -
   Accounts payable and accrued expenses            4,215           3,683
   Reserves for incurred but not                    
    reported claims                                 1,742           2,063  
   Income taxes payable                               404              -
   Deferred revenue                                   127             195
                                           --------------   -------------
              Total current liabilities             8,930           5,941
                                           --------------   -------------
Long-term debt                                     20,134              -
Deferred income taxes                               1,264             473
Stockholders' equity
   Common stock $.01 par value;
    30,000,000 shares authorized;
    4,715,000 and 4,695,000 shares
    outstanding, stated at                         21,303          21,092
      Preferred stock - $.01 par value;
       1,000,000 shares authorized;
       0 shares outstanding                            -               -
   Retained earnings                               31,916          29,113
   Net unrealized loss on investment                  
    securities available for sale                     (91)           (153)
   Treasury stock, at cost                        (18,123)        (18,123)
                                           --------------   -------------
               Total stockholders'                 35,005          31,929
                equity                     --------------   -------------
               Total liabilities and       $       65,333   $      38,343
                stockholders' equity       ==============   =============
</TABLE>
          See accompanying Notes to Consolidated Financial Statements.


                                  Page 3 of 11
<PAGE>
 
                       SAFEGUARD HEALTH ENTERPRISES, INC.
                                AND SUBSIDIARIES
                       CONSOLIDATED STATEMENTS OF INCOME
                                  (Unaudited)
                     (000's omitted, except per share data)
<TABLE>
<CAPTION>
 
 
                                            Three months ended     Nine months ended
                                               September 30          September 30
                                           --------------------   -------------------
 
                                             1996        1995       1996       1995
                                           ---------   --------   --------   --------
 
<S>                                        <C>         <C>        <C>        <C>
Health care revenues                        $19,543    $17,383    $57,122    $49,359
                                            -------    -------    -------    -------
 
Expenses:
   Health care services                      14,176     12,752     42,474     36,145
   Selling, general and administrative        3,869      3,476     10,924     10,072
                                            -------    -------    -------    -------
 
               Total expenses                18,045     16,228     53,398     46,217
                                            -------    -------    -------    -------
 
Operating income                              1,498      1,155      3,724      3,142
 
Other income, net                               170        403        708        846
                                            -------    -------    -------    -------
 
Income before income taxes                    1,668      1,558      4,432      3,988
 
Provision for income taxes                      651        561      1,718      1,510
                                            -------    -------    -------    -------
 
Income from continuing operations             1,017        997      2,714      2,478
                                            -------    -------    -------    -------
 
Discontinued operations, net of tax:
   Income (loss) from dental operations
    to be disposed of (net of income tax 
      benefits of $643 and $649 in 1996 
      and $222 and $507 in 1995)             (1,030)      (348)    (1,040)      (794)
 
   Gain on disposal of dental practices
    (net of income taxes of $721)             1,129          -      1,129          -
                                            -------    -------    -------    -------
 
      Income (loss) from discontinued
       operations                                99       (348)        89       (794)
                                            -------    -------    -------    -------
 
                Net income                  $ 1,116    $   649    $ 2,803    $ 1,684
                                            =======    =======    =======    =======
 
Earnings per share:
   Primary and fully diluted
      Income from continuing operations     $  0.21    $  0.21    $  0.55    $  0.52
 
      Income (loss) from discontinued
       operations                              0.02      (0.07)      0.02      (0.17)
                                            -------    -------    -------    -------
 
                 Net income                 $  0.23    $  0.14    $  0.57    $  0.35
                                            =======    =======    =======    =======
</TABLE>
          See accompanying Notes to Consolidated Financial Statements.

                                  Page 4 of 11
<PAGE>
 
                       SAFEGUARD HEALTH ENTERPRISES, INC.
                                AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                  (Unaudited)
                                (000's omitted)
<TABLE>
<CAPTION>
 
 
                                             Nine months ended
                                              September 30,
                                           -------------------
<S>                                        <C>         <C>
 
                                             1996        1995
                                           --------    -------
Cash flows from operating activities:
   Net income                              $  2,803    $ 1,684
   Adjustments to reconcile net income
    to net cash provided
      by operating activities:
   Depreciation and amortization              1,458      1,194
   Deferred income taxes                        791        123
   Gain on sale of dental offices            (1,850)         -
   Changes in assets and liabilities:
               Accounts receivable, net      (2,014)    (1,318)
               Income taxes receivable           45        255
               Prepaid expenses and               
                other                             4        199
               Current portion of             
                long-term debt                2,442          -
               Accounts payable and             
                accrued expenses                532        217 
               Reserves for incurred           
                but not reported claims        (321)       224
               Income taxes payable             404        170
               Deferred revenue                 (68)      (150)
                                           --------    -------
                    Net cash provided        
                     by operating           
                     activities               4,226      2,598
                                           --------    -------
Cash flows from investing activities:
   Purchase of investments available         
    for sale                                (9,160)    (3,508)
   Proceeds from sales/maturity of           
    investments available for sale          12,488      2,652
   Purchase of investments held to           
    maturity                                (7,771)    (1,458)
   Proceeds from maturity of                 
    investments held to maturity             8,211        874
   Additions to property and equipment       (3,394)    (2,431)
   Purchase of goodwill                     (21,494)         -
   Purchase of covenant not to compete       (3,576)         -
   Other activity, net                         (142)       (43)
                                           --------    -------
                    Net cash provided       
                     by (used in)          
                     investing
                     activities             (24,838)    (3,914)
                                           --------
Cash flows from financing activities:
   Proceeds from exercise of stock              211        819
    options
   Proceeds from long-term debt              20,134          -
                                           --------    -------
                    Net cash provided        
                     by financing          
                     activities              20,345        819 
                                           --------    -------
Net decrease in cash                           (267)      (497)
Cash at beginning of period                     506        503
                                           --------    -------
Cash at end of period                      $    239    $     6
                                           ========    =======
 
 
</TABLE>
          See accompanying Notes to Consolidated Financial Statements.


                                  Page 5 of 11
<PAGE>
 
                      SAFEGUARD HEALTH ENTERPRISES, INC.
                               AND SUBSIDIARIES
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1:  BASIS OF REPORTING
---------------------------

The accompanying unaudited Consolidated Financial Statements of Safeguard Health
Enterprises, Inc. and subsidiaries (the "Company") for the quarter ended
September 30, 1996, have been prepared in accordance with generally accepted
accounting principles applicable to interim periods, and reflect all adjustments
which are, in the opinion of management, necessary for a fair presentation of
results for the interim periods.  The statements have been prepared in
accordance with the regulations of the Securities and Exchange Commission, but
omit certain information and footnote disclosures necessary to present the
statements in accordance with generally accepted accounting principles.  This
information should be read in conjunction with the Consolidated Financial
Statements and Notes including Significant Accounting Policies, contained in the
Company's Annual Report on Form 10-K for the year ended December 31, 1995.
Management believes that the disclosures herein are adequate to make the
information presented not misleading.

As described in Note 4 herein, the Operating Results for the Quarter ended
September 30, 1996 and the year ended December 31, 1995, have been restated to
reflect the effect of the discontinued operation of the General Practices.
Effective September 27, 1996, the Company completed the acquisition of all of
the outstanding shares of First American Dental Benefits, Inc., dba American
Dental Corporation ("First American"), a privately held managed dental care
company based in Dallas, Texas, and a related marketing entity for total
consideration of approximately $23.5 million, consisting of cash and bank debt.
First American provides managed dental care services to approximately 175,000
members in the State of Texas, through a network of approximately 490 dental
care providers.

The acquisition was accounted for using the purchase method of accounting with
the results of operations of the businesses acquired included from the effective
date of the acquisition.  The acquisition resulted in excess cost over fair
market value of net assets acquired of $21.5 million which is being amortized
over 40 years.  There is no impact on the results of operations during the nine
months ended September 30, 1996, however the acquisition was included as part of
the Company's consolidated financial statements, as applicable.

Unaudited pro forma results of operations of the Company for the nine months
ended September 30, 1996, and the year ended December 31, 1995, are included
below.  Such pro forma presentation, in millions, has been prepared assuming
that the  acquisitions had occurred as of January 1, of each period.

<TABLE>
<CAPTION>
 
                                           Nine Months Ended       Year Ended
                                           September 30, 1996   December 31, 1995
                                           ------------------   -----------------
 
<S>                                        <C>                  <C>
Revenues                                              $65,037             $79,826
Net income from continuing operations                   2,035               3,066
Net income from continuing operations                     
 per common share                                         .41                 .65
Net income per common share                               .43                 .48
</TABLE>

The pro forma results include the historical accounts of the Company, and
historical accounts of the acquired businesses and pro forma adjustments, as may
be required, including the amortization of the excess purchase price over the
fair value of the net assets acquired, the amortization for the noncompete
agreements entered into by the former owners of First American, and the
applicable income tax effects of these adjustments.  The 1996 pro forma results
include the effect of audit adjustments recorded subsequent to the purchase of
First American by the Company.  Substantially all of the adjustments are one-
time in nature and Management anticipates that the acquisition will be accretive
to net income for 1997.  Such audit adjustments will be applied to the
applicable holdback funds maintained by the Company in connection with its
acquisition.  The pro forma results of operations are not necessarily indicative
of actual results which may have occurred had the operations of the acquired
companies been combined in prior periods.


                                  Page 6 of 11
<PAGE>
 
Note 2:  Stockholders' Equity and Earnings Per Share
----------------------------------------------------

Since October 1986, the Company's Board of Directors has, at various times,
authorized the repurchase of up to 4,510,888 shares of its common stock through
open market or private transactions.  As of September 30, 1996, a total of
3,819,088 shares had been acquired at an average cost of $5.54 per share.  All
shares acquired prior to August 24, 1987, have been retired as required by
California law.  All shares acquired after the August 24, 1987 reincorporation
in Delaware are being held as treasury stock.  Earnings per share for the
periods ended September 30, 1996 and 1995 were computed by dividing net income
by 4,958,456 and 4,777,262 shares, respectively, which was the weighted average
number of outstanding common shares and common share equivalents (stock options)
during the respective periods.

Note 3:  Recent Accounting Pronouncements
-----------------------------------------

In October 1995, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards (SFAS) No. 123, "Accounting for Stock-Based
Compensation," which will be effective for the Company beginning January 1,
1996.  SFAS No. 123 requires expanded disclosures of stock-based compensation
arrangements with employees and encourages (but does not require) compensation
cost to be measured based on the fair value of the equity instrument awarded.
Companies are permitted, however, to continue to apply APB Opinion No. 25, which
recognizes compensation cost based on the intrinsic value of the equity
instrument awarded.  The Company will continue to apply APB Opinion No. 25 to
its stock-based compensation awards to employees and will disclose the required
pro forma effect on net income and earnings per share.

Note 4.  Operating Results For the Quarter Ended December 30, 1996 and the year
-------------------------------------------------------------------------------
ended December 31, 1995
-----------------------

On October 21, 1996, the Company implemented a strategic plan to sell all of the
general dental practice owned by the Company ("General Practices").  Two of the
General Practices were sold during the third quarter.  The Company anticipates
that the remaining General Practices should be sold by September 30, 1997.

One of the General Practices that was sold during the third quarter, was sold to
Boyd Professional Dental Corporation, a California corporation ("Boyd
Corporation").  Steven J. Baileys, D.D.S., an Officer and Director of the
Company and Bradford M. Boyd, D.D.S., a Director of the Company are the owners
of Boyd Corporation.  The sale of such General Practice to Boyd Corporation was
unanimously approved by the Disinterested and Independent Members of the Board
of Directors of the Company, after a review by such Disinterested and
Independent Directors found the transaction to be fair to all parties involved.

The assets of the General Practices to be sold, pursuant to the Company's plan,
consist primarily of accounts receivable and supply inventories.  Each General
Practice sold will also enter into a long-term contract with the Company's newly
formed practice management subsidiary, whereby the Company will provide ongoing
services to support the dentists in the operation of their practices, including
marketing and administrative support.  The Company will retain the orthodontic
practice in each of the General Practices, and intends to operate the
orthodontic practice in the other dental offices as they are sold.

The Company projects a substantial gain on the disposal of the discontinued
operations, more than offsetting the net assets to be disposed of, as well as
any expected operating losses of the General Practices during the phase-out
period from October 1, 1996 through September 30, 1997.  Due to the estimated
gain on the sale of these offices, actual gains will be recorded at the time of
such sales.

Operating results of the General Practices for the nine months ended September
30, 1996, are shown separately in the accompanying income statement, under the
term "Discontinued Operations".  The income statement for 1995 has been restated
and operating results of the General Practices are also shown separately.

Net sales of the General Practices for the nine months ended September 30, 1995
and 1996, were $10,094 and $8,703, respectively.  These amounts are not included
in the net sales in the accompanying income statements.


                                 Page 7 of 11
<PAGE>
 
Assets and liabilities of the General Practices, shown at their book values, to
be disposed of consisted of the following:

<TABLE>
<CAPTION>
                                    September 30, 1996   December 31, 1995
                                    ------------------   -----------------
<S>                                 <C>                  <C>
Accounts Receivable                       $2,239              $1,086
Supplies Inventories                         662                 662
                                          ------              ------
            Total Assets                  $2,901              $1,748
</TABLE>

Net assets to be disposed of, at their book values, have been separately
classified in the accompanying balance sheet at September 30, 1996.  The
December 31, 1995 balance sheet has been restated to conform with the current
year's presentation.

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

The following information should be read in conjunction with the attached
consolidated financial statements and notes thereto.

<TABLE>
<CAPTION>
                                                     1996 versus 1995
                                                     Nine months ended
                                                       September 30,
                                           -------------------------------------
<S>                                        <C>                 <C>
                                              Increase/             Percent
Results of operations (000's omitted)         (Decrease)            Change
--------------------------------------------------------------------------------
Health Care Revenues
   Managed care revenues                       $6,740                 15.3
   Indemnity revenues                             404                 88.2
   Orthodontic revenues                           619                 12.8
                                               ------                -----

Total Health Care Revenues                     $7,763                 15.7
--------------------------------------------------------------------------------
Health Care Expenses
   Managed care expenses                       $5,443                 16.8
   Indemnity expenses                             405                113.4
   Orthodontic expenses                           481                 14.5
                                               ------                -----

Total Health Care Expenses                     $6,329                 17.5
--------------------------------------------------------------------------------
Total Selling, General and                     $  852                  8.5
 Administrative Expenses

--------------------------------------------------------------------------------
Other Income, Net                              $ (138)               (16.3)

--------------------------------------------------------------------------------
Net Income                                     $1,119                 66.4
--------------------------------------------------------------------------------
</TABLE>

1996 Versus 1995
----------------

After restating the Company's financial statements to reflect the
discontinuation of the Company's dental practices (see Note 4 of the
Consolidated Financial Statements), the Company's revenues for the nine months
ended September 30, 1996, were $57,122, or a 15.7% increase on a 7.6% membership
increase over the corresponding period a year ago. This increase excluded the
membership increase due to the acquisition of First American completed on
September 27, 1996. These increases were a result from sales to new small and
mid-size clients and moderate price increases to renewing clients. The increases
in revenue also resulted from the growth in the Company's indemnity revenues of
88.2% over the comparable period a year ago.


                                  Page 8 of 11
<PAGE>
 
Health care expenses for the nine months increased 17.5% primarily due to the
increased indemnity and preferred provider organization benefits paid and
incurred.  These costs are directly related to increased premium revenue.
Management continued the selected purging of less profitable clients based on
actuarial reviews of plan designs and utilization.  Overall selling, general and
administrative cots grew at 8.5% for the nine months, approximately half the
rate of revenue increases, bringing these costs to 19.1% of health care revenue
compared to 20.4% for the same period in 1995.  Other income decreased due to
lower balances in investment securities as a result of the purchase of the
outstanding stock of First American, and other capital expenditures.  Net income
increased due to the above factors.

Business Segment Information
----------------------------

The Company is engaged primarily in three distinct businesses; the operation of
managed care dental programs, the operation of dental indemnity insurance
programs, and the operation of orthodontic practices.
<TABLE>
<CAPTION>
 
                                                              1996 versus 1995
                                                               Nine months ended
                                                                 September 30
                                          ----------------------------------------------------
                                              1996       Percent of       1995      Percent of
Results of operations (000's omitted)        Amount        Revenue       Amount       Revenue
----------------------------------------------------------------------------------------------
<S>                                       <C>          <C>              <C>        <C>
Health Care Revenues
----------------------------------------------------------------------------------------------
 Managed care revenues                     $50,813         89.0          $44,073       89.3
 Indemnity revenues                            862          1.5              458        0.9
 Orthodontic revenues                        5,447          9.5            4,828        9.8
                                           -------      -------          -------    -------
Total Health Care Revenues                 $57,122        100.0          $49,359      100.0
----------------------------------------------------------------------------------------------
Health Care Expenses
 Managed care expenses                     $37,917         74.6          $32,474       73.7
 Indemnity expenses                            762         88.4              357       77.9
 Orthodontic revenues                        3,795         69.7            3,314       68.6
                                           -------      -------          -------    -------
Total Health Care Expenses                 $42,474         74.4          $36,145       73.2
----------------------------------------------------------------------------------------------
Total Selling, General and            
 Administrative Expenses                   $10,924         19.1          $10,072       20.4
----------------------------------------------------------------------------------------------
</TABLE>

Liquidity and Capital Resources
-------------------------------

The Company's business has not been capital intensive.  The Company's
operational cash requirements have been met principally from operating cash flow
and this is expected to continue.

At September 30, 1996, the current ratio was 1.93 to 1.00.  The Company's net
worth was $35.0 million compared to $31.9 million a year earlier.  The Company
had $14.8 million of cash and investments as of September 30, 1996 compared to
$16.3 million a year earlier.  The Company also established a $30 million bank
loan during the period ended September 30, 1996, of which $19 million was used
to fund the acquisition of First American.  The Company believes that income
from operations, together with the existing cash and investments on hand, its
bank loan, and other available sources of financing, should be adequate to meet
operating capital needs for the foreseeable future.

Impact of Inflation
-------------------

Management believes that the Company's operations are not materially affected by
inflation.  The Company believes that a majority of its costs are capitated or
fixed in nature and are directly related to membership levels, and therefore
related to premium levels.



                                  Page 9 of 11
<PAGE>
 
Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995
--------------------------------------------------------------------------------

The statements contained in this Management's Discussion and Analysis of
Financial Condition and Results of Operations concerning any future premium
pricing levels, future dental health care expense levels, the Company's ability
to control health care, selling, general and administrative expenses, and all
other statements that are not historical facts, are forward looking statements.
Actual results may differ materially from those projected in the forward looking
statements, if any, which statements involve risks and uncertainties.  The
Company's ability to expand is affected by competition not only in benefit
program choices, but also the number of dental plan competitors in the markets
in which the Company operates.  Certain large employer groups and other
purchasers of commercial dental health care services, continue to demand minimal
premium rate increases, while limiting the number of choices offered to
employees.  In addition, securing cost effective contracts with dentists may
become more difficult in part due to the increased competition among dental
plans for dentist contracts.  The Company's profitability depends, in part, on
its ability to maintain effective control over health care costs, while
providing members with quality dental care.  Factors such as levels of
utilization of dental health care services, new technologies, specialists costs,
and numerous other external influences may effect the Company's operating
results.  The Company's expectations for the future are based on current
information and evaluation of external influences.  Changes in any one factor
could materially impact the Company's expectations relating to premium rates,
benefit plans offered, membership growth, the percentage of health care
expenses, and as a result, profitability and therefore, effect the forward
looking statements which may be included in these reports.  In addition, past
financial performance is not necessarily a reliable indicator of future
performance.  An investor should not use historical performance alone to
anticipate future results or future period trends.

PART II.   OTHER INFORMATION

ITEM 1.    LEGAL PROCEEDINGS
 
           The Company is a defendant in litigation arising in the normal course
           of business. In the opinion of management, the defense costs and/or
           ultimate outcome of such litigation is covered by insurance or will
           not have material effect on the Company's financial position or
           results of operations.

ITEM 6.    EXHIBITS AND REPORTS ON FORM 8-K

           (b)  Reports on Form 8-K

                Reports on Form 8-K were filed with the Securities and Exchange
                Commission on August 26, 1996 and October 9, 1996, respectively.
                The Reports on Form 8-K mentioned in this Item 6, are hereby
                incorporated herein to this Quarterly Report on Form 10Q for the
                period ended September 30, 1996, as if set forth in full herein.


                                 Page 10 of 11
<PAGE>
 
                                   SIGNATURES

        Pursuant to the requirements of Section 13 or 15(d) or the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized, in the City of
Anaheim, State of California, on the 19th of November, 1996.


                             SAFEGUARD HEALTH ENTERPRISES, INC.
        

                             By: /s/ STEVEN J. BAILEYS, D.D.S.
                                 ------------------------------------------
                                 STEVEN J. BAILEYS, D.D.S.,
                                 Chairman, President and
                                 Chief Executive Officer


                             By: /s/ THOMAS C. TEKULVE
                                 ------------------------------------------
                                 THOMAS C. TEKULVE,
                                 Vice President and Chief Financial Officer


                                 Page 11 of 11