SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q


|X|   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
      EXCHANGE ACT OF 1934

      For the quarterly period ended January 31, 1999

                                       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 0-12927

                        NATIONAL HOME HEALTH CARE CORP.
       ------------------------------------------------------------------
             (Exact name of Registrant as Specified in Its Charter)

            Delaware                                    22-2981141   
  -----------------------------               ------------------------------
(State or Other Jurisdiction of              (IRS Employer Identification No.)
 Incorporation or Organization)

                700 White Plains Road, Scarsdale, New York 10583
              ----------------------------------------------------
             (Address of Principal Executive Offices with Zip Code)

         Registrant's Telephone Number Including Area Code: 914-722-9000
                                                            ------------


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

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PRECEDING FIVE YEARS:

Indicate  by check mark  whether  the  registrant  has filed all  documents  and
reports  required by Section 12, 13 or 15(d) of the  Securities  Exchange Act of
1934 subsequent to the  distribution  of securities  under a plan confirmed by a
court.   Yes    No

APPLICABLE ONLY TO CORPORATE ISSUERS:

The  number  of  shares of common  stock  outstanding  as of March 16,  1999 was
5,152,950.

<PAGE>



                         NATIONAL HOME HEALTH CARE CORP.

                                    FORM 10-Q

                     FOR THE QUARTER ENDED JANUARY 31, 1999



PART I.   FINANCIAL INFORMATION                                             Page
                                                                            ----

Item 1.   Financial Statements


          Consolidated Balance Sheets as of January 31, 1999 and July 31,
            1998 (unaudited)                                                3-4

          Consolidated  Statements  of  Operations  for the three  months
            ended  January  31,  1999 and  January  31,  1998 and the six
            months   ended   January   31,  1999  and  January  31,  1998
            (unaudited)                                                        5

          Consolidated  Statements of Cash Flows for the six months ended
            January 31, 1999 and January 31, 1998 (unaudited)                  6
                                                                              

          Notes to Consolidated Financial Statements                         7-8


Item 2.   Management's Discussion and Analysis of Financial
          Condition and Results of Operations                               9-14

PART II.  OTHER INFORMATION

Item 4.   Submission of Matters to a Vote of Security Holders                 15


Item 6.   Exhibits and Reports on Form 8-K                                 15-16
                                                                             

                                                                           
SIGNATURES                                                                    17

                                      -2-

<PAGE>
<TABLE>
<CAPTION>


                NATIONAL HOME HEALTH CARE CORP. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                                    UNAUDITED


                                                                        January 31, 1999         July 31, 1998
                                                                        ----------------         -------------
                                                                                                          
<S>                                                                   <C>                       <C>        
ASSETS

Current assets:  
     Cash and cash equivalents                                           $6,537,000                $10,992,000
     Investments                                                            318,000                    488,000
     Accounts receivable -                                                                                     
         less allowance for doubtful accounts of                                                               
         $483,000 at January 31, 1999 and                                                                      
         $295,000 at July 31, 1998                                       10,648,000                  8,269,000
     Income taxes receivable                                                275,000                    123,000
     Prepaid expenses and other assets                                      275,000                    195,000
     Deferred taxes                                                         417,000                    289,000
                                                                        -----------                -----------

         Total current assets                                            18,470,000                 20,356,000

Furniture, equipment and leasehold                                                                             
     improvements, net                                                      453,000                    395,000
Excess of cost over fair value of net assets of                                                                
     businesses acquired, net                                             5,443,000                  3,179,000
Other intangible assets, net                                              1,377,000                    745,000
Deposits and other assets                                                   168,000                    154,000
Investment in unconsolidated investee                                        ------                    674,000
                                                                        -----------                -----------

          TOTAL                                                         $25,911,000                $25,503,000
                                                                        ===========                ===========

(continued)

</TABLE>
                                       -3-

<PAGE>

<TABLE>
<CAPTION>

                NATIONAL HOME HEALTH CARE CORP. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                                    UNAUDITED


                                                                               January 31, 1999             July 31, 1998
                                                                               ----------------             -------------

<S>                                                                           <C>                   <C>       
LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
      Accounts payable and accrued expenses                                       $1,380,000                $1,013,000
      Estimated third-party payor settlements                                        116,000                   209,000
                                                                                  ----------                ----------
          Total current liabilities                                                1,496,000                 1,222,000
                                                                                  ----------                ----------

          Total liabilities                                                        1,496,000                 1,222,000
                                                                                  ----------                ----------

Stockholders' equity:                                                                                                  
      Common stock, $.001 par value: authorized                                                                        
      20,000,000 shares, issued 6,228,746 shares                                       6,000                     6,000
      Additional paid-in capital                                                  18,525,000                18,525,000
      Retained earnings                                                            7,316,000                 7,045,000
                                                                                 -----------               -----------

                                                                                  25,847,000                25,576,000

      Less treasury stock (1,057,236 and 1,028,879                                                                     
      shares) at cost                                                             (1,432,000)               (1,295,000)
                                                                                 ------------              ------------

          Total stockholders' equity                                              24,415,000                24,281,000
                                                                                 -----------               -----------

                    TOTAL                                                        $25,911,000               $25,503,000
                                                                                 ===========               ===========

</TABLE>

See accompanying notes to consolidated financial statements.

                                       -4-

<PAGE>

<TABLE>
<CAPTION>


                NATIONAL HOME HEALTH CARE CORP. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                    UNAUDITED


                                                For the three months ended               For the six months ended
                                                       January 31,                              January 31,
                                            ----------------------------------     -------------------------------------

                                                 1999                1998               1999                 1998
                                                 ----                ----               ----                 ----

<S>                                             <C>                 <C>                <C>                   <C>        
Net patient revenue                             $10,022,000         $8,802,000         $19,227,000           $17,903,000
                                                -----------         ----------         -----------           -----------

Operating expenses:
      Cost of revenue                             6,661,000          5,683,000          12,646,000            11,574,000
      General and administrative                  2,640,000          2,290,000           4,926,000             4,512,000
      Amortization of intangibles                   142,000             94,000             267,000               187,000
                                              -------------      -------------       -------------         -------------

          Total operating                                                                                                
          expenses                                9,443,000          8,067,000          17,839,000            16,273,000
                                               ------------        -----------         -----------           -----------

Income from operations                              579,000            735,000           1,388,000             1,630,000

Other income (loss):
      Interest income                                76,000            134,000             195,000               274,000
      (Loss) from equity investee                  (324,000)          (564,000)           (674,000)             (911,000)
                                               -------------       ------------       -------------        --------------

Income before taxes                                 331,000            305,000             909,000               993,000

Provision for income taxes                          246,000            135,000             638,000               444,000
                                              -------------       ------------        ------------         -------------

NET INCOME                                          $85,000           $170,000            $271,000              $549,000
                                              =============        ===========         ===========          ============

Net income per share:
   Basic                                              $0.02              $0.03               $0.05                 $0.10
                                                      =====              =====               =====                 =====

   Diluted                                            $0.02              $0.03               $0.05                 $0.10
                                                      =====              =====               =====                 =====

Weighted average shares outstanding:
  Basic                                           5,186,272          5,244,543           5,192,382             5,248,184

  Diluted                                         5,264,730          5,331,736           5,265,243             5,333,040


</TABLE>

See accompanying notes to consolidated financial statements.


                                       -5-

<PAGE>
<TABLE>
<CAPTION>



                NATIONAL HOME HEALTH CARE CORP. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                    UNAUDITED


                                                                                    For the six months ended January 31,
                                                                                    -----------------------------------
                                                                                       1999                       1998
                                                                                       ----                       ----

<S>                                                                               <C>                        <C>     
Cash flows from operating activities:
     Net income                                                                      $271,000                   $549,000
     Adjustments to reconcile net income to net cash                                                                     
     provided by operating activities:                                                                                   
        Depreciation and amortization                                                 329,000                    237,000
        Provisions for doubtful accounts                                               ------                     25,000
        Loss from equity investee                                                     674,000                    911,000
        Deferred tax                                                                   ------                   (310,000)
        Changes in:
           Accounts receivable                                                     (1,589,000)                (1,023,000)
           Income taxes receivable/payable                                           (157,000)                  (172,000)
           Prepaid expenses and other assets                                          (66,000)                    12,000
           Accounts payable, accrued expenses and other                                                                  
           liabilities                                                                240,000                   (262,000)
           Estimated third party payor settlements                                    (93,000)                   239,000
                                                                                -------------              -------------
                 Net cash (used in) provided by operating                                                                
                 activities                                                          (391,000)                   206,000
                                                                                -------------              -------------

Cash flows from investing activities:                                                                                    
Proceeds of investments                                                               170,000                     10,000
Purchase of property, plant and equipment                                             (32,000)                   (50,000)
Purchase of assets of business                                                     (1,943,000)                    ------
Purchase of Accredited Health Services, Inc. net of cash                                                                 
acquired                                                                           (1,701,000)                    ------
                                                                                -------------              -------------
                 Net cash (used in) investing activities                           (3,506,000)                   (40,000)
                                                                                -------------              -------------

Cash flows from financing activities:
     Proceeds from exercise of stock options                                           ------                     49,000
     Purchase of treasury shares                                                     (137,000)                  (198,000)
     Repayment of notes payable                                                      (421,000)                    ------
                                                                                 -------------             -------------
                 Net cash (used in) financing activities                             (558,000)                  (149,000)
                                                                               ---------------             -------------

NET INCREASE (DECREASE) IN CASH AND CASH                                                                                 
EQUIVALENTS                                                                        (4,455,000)                    17,000

Cash and cash equivalents - beginning of period                                    10,992,000                  9,324,000
                                                                                -------------              -------------

CASH AND CASH EQUIVALENTS-END OF    PERIOD                                         $6,537,000                 $9,341,000
                                                                                =============              =============

Supplemental  disclosures of cash flow information: 
  Cash paid during the period for:
        Taxes                                                                        $551,000                   $946,000
        Interest                                                                       ------                      1,000

</TABLE>

See accompanying notes to consolidated financial statements.

                                       -6-

<PAGE>



                NATIONAL HOME HEALTH CARE CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE 1 - BASIS OF PRESENTATION

         The accompanying  unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial  information and with the  instructions to Form 10-Q and Article 10 of
Regulation  S-X.  Accordingly,  they do not include all of the  information  and
footnotes  required by generally  accepted  accounting  principles  for complete
financial statements. In the opinion of management,  all adjustments (consisting
of normal recurring accruals)  considered necessary for a fair presentation have
been  included.  Operating  results  for the three and six month  periods  ended
January  31, 1999 are not  necessarily  indicative  of the  results  that may be
expected for the year ending July 31, 1999.  For further  information,  refer to
the  consolidated  financial  statements and footnotes  thereto  included in the
Company's annual report on Form 10-K for the year ended July 31, 1998.


NOTE 2 - INITIAL PUBLIC OFFERING OF SUNSTAR HEALTHCARE, INC.

         On May 21, 1996, the initial public offering of common stock by SunStar
Healthcare, Inc. ("SunStar") was consummated. Prior to the offering, SunStar had
been a  wholly  owned  subsidiary  of the  Company,  consisting  of its  Florida
outpatient medical center operations.  As a result of the offering,  the Company
currently owns 890,000 shares, or approximately  30.5%, of SunStar.  The Company
utilizes the equity method of accounting  for its  investment in SunStar.  As of
January 31, 1999,  the Company's  carrying value of its investment in SunStar is
$0.


NOTE 3 - ACQUISITIONS

         On August 10, 1998,  the Company,  through its wholly owned  subsidiary
Health Acquisition Corp.  ("Health  Acquisition"),  acquired,  for $1,943,000 in
cash, including acquisition costs of $8,000,  certain assets of Bryan Employment
Agency,  Inc.,  d/b/a/ Bryan Home Care Services  ("Bryan Home Care"), a New York
licensed  home  health  care  company  which  provides  home  care  services  in
Westchester  County,  New York. The  acquisition was accounted for as a purchase
and the cost was allocated as follows:  $285,000 to personnel files, $285,000 to
patient files,  $30,000 to furniture and equipment,  $200,000 to covenant not to
compete  and  $1,143,000  to excess of cost  over  fair  value of net  assets of
businesses  acquired.  The purchase price was generated from internal funds. The
acquisition  expanded the geographic  presence of the Company and enabled Health
Acquisition  to  become  a  participating  provider  in the  Westchester  County
Department of Social Services Medicaid  Program.  Annual revenues for Bryan Home
Care approximated $5,700,000 in calendar 1997.

                                       -7-

<PAGE>



         On October 30, 1998, the Company acquired all of the outstanding common
shares of  Accredited  Health  Services,  Inc.  ("Accredited").  Accredited is a
licensed  home health care company that  provides  home health aide  services in
Bergen, Hudson,  Passaic, Essex, Morris, Union, Somerset and Middlesex Counties,
New Jersey.  The purchase price of approximately  $1,914,000 in cash,  including
acquisition  costs of $49,000,  was  generated  from internal  funds.  The final
purchase  price  is  subject  to  a  post-closing   adjustment.   The  Company's
preliminary  allocation  of purchase  price is as follows:  $1,154,000  to total
current assets, $59,000 to furniture and equipment and $548,000 to total current
liabilities.  The  acquisition was accounted for as a purchase and the excess of
purchase price over the fair value of assets acquired, $1,249,000, was allocated
to goodwill.  Revenues from  Accredited  approximated  $5,300,000 for the fiscal
year ended March 31, 1998.


NOTE 4 - PER SHARE DATA

         The Company adopted Statement of Financial  Accounting Standard No. 128
("SFAS 128"),  "Earnings Per Share," during the fiscal quarter ended January 31,
1998.


                                       -8-

<PAGE>



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

         The following  discussion and analysis  provides  information which the
Company's  management believes is relevant to an assessment and understanding of
the Company's  results of operations and financial  condition.  This  discussion
should  be  read  in  conjunction  with  the  attached  consolidated   financial
statements  and  notes  thereto,   and  with  the  Company's  audited  financial
statements and notes thereto for the fiscal year ended July 31, 1998.

         This discussion contains forward-looking statements that are subject to
a number of known and  unknown  risks that,  in  addition  to general  economic,
competitive  and  other  business   conditions,   could  cause  actual  results,
performance  and  achievements  to differ  materially  from those  described  or
implied in the forward-looking statements.

         The  Company is  subject to  significant  external  factors  that could
significantly  impact its business,  including  changes in Medicare and Medicaid
reimbursement,  government  fraud and abuse  initiatives  and other such factors
that are beyond the control of the  Company.  These  factors,  as well as future
changes in  reimbursement,  could cause future results to differ materially from
historical results.

         The Balanced  Budget Act of 1997,  as amended  (the "Act"),  was signed
into law on August 5, 1997.  Under the Act,  for cost  reports  beginning  on or
after  October  1, 1997,  Medicare-  reimbursed  home  health  agencies  will be
reimbursed  under an interim  payment system ("IPS") for a two-year period prior
to the  implementation of a prospective  payment system.  Under IPS, home health
care  providers are  reimbursed  the lower of (i) their actual costs,  (ii) cost
limits based on 105% of median costs of freestanding  home health  agencies,  or
(iii) an  agency-specific  per patient  cost  limit,  based on 98% of 1994 costs
adjusted for inflation.  Prior to the implementation of IPS, Medicare reimbursed
providers on a reasonable cost basis subject to  program-imposed  cost per visit
limitations. The Act calls for payments to Medicare providers for cost reporting
periods  beginning on or after October 1, 2000 to be made in  accordance  with a
prospective  payment system to be established by the Secretary of the Department
of Health and Human Services. Without a prospective payment system by October 1,
2000, a 15% further cut in Medicare home health payments will take effect.

         The new IPS cost limits will apply to the  Company's  Connecticut-based
Medicare  certified  nursing agency for the cost reporting period beginning July
1, 1998.  The Company has  determined  that these new limits will reduce current
reimbursement  for the Medicare services it provides.  Accordingly,  in May 1998
the Company  combined  its  operations  in  Connecticut  by merging its Medicare
certified subsidiary with its licensed agency subsidiary to increase operational
efficiencies.  In addition,  the Company has been closely monitoring utilization
of Medicare services in an effort not to exceed per patient cost limits.

         The  implementation  of IPS has resulted in a decrease in revenues from
the  Company's  Medicare  certified  agency from the previous  fiscal  year.  In
addition, the Company's operations in New York and New Jersey are dependent upon
referrals, primarily from Medicare certified home


                                       -9-

<PAGE>



health care  agencies,  whose future  reimbursement  may be adversely  affected.
Accordingly,  there can be no assurance that the Company's future referrals will
not result in reduced reimbursement rates or reduced volume of business.

Results of Operations and Effects of Inflation

Three Months Ended  January 31, 1999  Compared to Three Months Ended January 31,
1998

         For the three  months  ended  January 31,  1999,  net  patient  revenue
increased  $1,220,000,  or 13.9%,  to $10,022,000  from $8,802,000 for the three
months ended January 31, 1998. Net patient revenue from Health Acquisition,  the
subsidiary  providing  home  health care  services in the New York  metropolitan
area, increased $489,000, or 8.4%, to $6,313,000 from $5,824,000.  This increase
is attributable to the revenues generated from the purchase of certain assets of
Bryan Home Care of $1,491,000,  offset by the decline in same source revenues of
($1,002,000).  The  decline  in same  source  revenues  is  attributable  to the
continued decline in hours from the Medicare certified home health care agencies
that Health  Acquisition  contracts with, as a result of the  implementation  of
IPS. Net patient  revenue from New England Home Care,  Inc.  ("New  England Home
Care"),  the subsidiary that is Medicare  certified and licensed in the state of
Connecticut,  decreased  ($600,000),  or (20.1%), to $2,378,000 from $2,978,000.
This decrease is attributable  to the decline in Medicare  revenue of ($453,000)
and a decline  in  non-Medicare  revenue of  ($147,000).  The  decrease  in both
Medicare  and  non-Medicare  revenue  is the  result of the  change in  Medicare
reimbursement from cost reimbursement to the interim payment system. Net patient
revenue from Accredited,  the subsidiary  providing home health aide services in
the state of New Jersey,  were $1,331,000 for the three months ended January 31,
1999.

         Cost of revenue as a  percentage  of net patient  revenue  increased to
66.5% for the three  months  ended  January  31,  1999 from  64.6% for the three
months ended January 31, 1998.  The increase in cost of revenue is  attributable
to higher cost of revenues associated with the Company's recent acquisitions. In
addition, the Company has incurred decreases in certain reimbursement rates from
other  existing  Medicare  certified  home health care agencies that the Company
contracts with, as a result of the change in the Medicare reimbursement system.

         General and administrative  expenses increased  $350,000,  or 15.3%, to
$2,640,000  for the three months ended January 31, 1999 from  $2,290,000 for the
three  months ended  January 31,  1998.  This  increase is  attributable  to the
additional general and administrative expenses incurred from the acquisitions of
both  Bryan Home Care and  Accredited,  offset by the  decline  in  general  and
administrative  expenses of New England Home Care,  as a result of the combining
of the operations in Connecticut to offset the impact of the  implementation  of
IPS. As a percentage of net patient revenue, general and administrative expenses
increased to 26.3% for the three  months  ended  January 31, 1999 from 26.0% for
the three months ended January 31, 1998.

         Amortization of intangibles  increased to $142,000 for the three months
ended January 31, 1999 from $94,000 for the three months ended January 31, 1998.
This increase is attributable


                                      -10-

<PAGE>



to the  acquisition of certain assets of Bryan Home Care and the  acquisition of
the stock of Accredited.

         As  a  result  of  the  foregoing,  income  from  operations  decreased
($156,000),  or (21.2%), to $579,000 for the three months ended January 31, 1999
from $735,000 for the three months ended January 31, 1998.

         Interest income decreased (43.3%) to $76,000 for the three months ended
January 31, 1999 from $134,000 for the three months ended January 31, 1998. This
decrease is attributable to the cash used in investing activities resulting from
the  acquisition  of  certain  assets  of  Bryan  Home  Care  and the  stock  of
Accredited.

         The Company  recorded a loss from equity  investee of ($324,000) in the
three months ended January 31, 1999 as compared to a loss of ($564,000)  for the
comparable  period of 1998,  representing  the  Company's  share of the net loss
reported by SunStar for the same periods.  As of January 31, 1999, the Company's
carrying value of its investment in SunStar is $0.

         The  Company's  effective  tax rate  increased  to 74.3%  for the three
months ended  January 31, 1998 from 44.2% for the three months ended January 31,
1998.  This increase is  attributable  to the  Company's  share of SunStar's net
loss,  in which no income tax benefit was  recorded  for the three  months ended
January 31, 1999, as compared to ($192,000)  recorded for the three months ended
January 31, 1998.  Excluding  the tax effect of loss from equity  investee,  the
effective tax rate remained at 37.6% for both the three months ended January 31,
1999 and January 31, 1998.

Six Months Ended January 31, 1999 Compared to Six Months Ended January 31, 1998.

         For  the six  months  ended  January  31,  1999,  net  patient  revenue
increased  $1,324,000,  or 7.4%, to  $19,227,000  from  $17,903,000  for the six
months ended  January 31,  1998.  Net patient  revenue  from Health  Acquisition
increased $1,146,000, or 9.8%, to $12,877,000 from $11,731,000. This increase is
attributable  to the revenues  generated  from the purchase of certain assets of
Bryan Home Care of $2,963,000,  offset by the decline in same source revenues of
($1,817,000).  This decrease is explained in the above  three-month  discussion.
Net  patient  revenue  from New England  Home Care  decreased  ($1,153,000),  or
(18.7%), to $5,019,000 from $6,172,000.  This decrease is explained in the above
three-month discussion.  Net patient revenue from Accredited were $1,331,000 for
both the three and six months ended January 31, 1999.

         Cost of revenue as a  percentage  of net patient  revenue  increased to
65.8% for the six months  ended  January  31, 1999 from 64.6% for the six months
ended  January 31, 1998.  This  increase is  explained in the above  three-month
discussion.

         General and  administrative  expenses increased  $414,000,  or 9.2%, to
$4,926,000 for the six months ended January 31, 1999 from $4,512,000 for the six
months ended January 31, 1998.


                                      -11-

<PAGE>

This  increase is  attributable  to the  additional  general and  administrative
expenses  incurred from the acquisitions of both Bryan Home Care and Accredited,
offset by the decline in general and administrative expenses in New England Home
Care, as a result of the combining of the  operations in  Connecticut  to offset
the impact of the implementation of IPS. As a percentage of net patient revenue,
general  and  administrative  expenses  increased  slightly to 25.6% for the six
months ended  January 31, 1999 from 25.2% for the six months  ended  January 31,
1998.

         Amortization  of  intangibles  increased to $267,000 for the six months
ended  January 31, 1999 from $187,000 for the six months ended January 31, 1998.
This increase is attributable to the acquisition of certain assets of Bryan Home
Care and the acquisition of the stock of Accredited.

         As  a  result  of  the  foregoing,  income  from  operations  decreased
($242,000),  or (14.8%), to $1,388,000 for the six months ended January 31, 1999
from $1,630,000 for the six months ended January 31, 1998.

         Interest income decreased  (28.8%) to $195,000 for the six months ended
January 31, 1999 from $274,000 for the six months ended  January 31, 1998.  This
decrease is attributable to the cash used in investing activities resulting from
the  acquisition  of  certain  assets  of  Bryan  Home  Care  and the  stock  of
Accredited.

         The Company  recorded a loss from equity  investee of ($674,000) in the
six months ended  January 31, 1999 as compared to a loss of  ($911,000)  for the
comparable  period of 1998,  representing  the  Company's  share of the net loss
reported by SunStar for the same periods.  As of January 31, 1999, the Company's
carrying value of its investment in SunStar is $0.

         The Company's  effective tax rate increased to 70.2% for the six months
ended  January 31, 1999 from 44.7% for the six months  ended  January 31,  1998.
This  increase is  attributable  to no income tax benefit  recorded  for the six
months ended January 31, 1999,  as compared to  ($310,000)  recorded for the six
months ended  January 31, 1998 related to the  Company's  share of SunStar's net
loss.  Excluding the tax effect of loss from equity investee,  the effective tax
rate  increased  slightly to 40.3% for the six months ended  January 31, 1999 as
compared to 39.6% for the comparable period of 1998.

         The rate of inflation had no material  effect on operations for the six
months ended January 31, 1999.


Financial Condition and Capital Resources

         Current  assets  decreased  to  $18,470,000  and  current   liabilities
increased to $1,496,000,  respectively,  at January 31, 1999. This resulted in a
decrease in working capital by ($2,160,000) from $19,134,000 at July 31, 1998 to
$16,974,000 at January 31, 1999. Cash and cash


                                      -12-

<PAGE>



equivalents  decreased  ($4,455,000)  to  $6,537,000  at January  31,  1999 from
$10,992,000  at July 31, 1998.  The  decrease in both  working  capital and cash
resulted from the completed acquisitions during the six months ended January 31,
1999. The combined acquisition costs were $3,857,000.

         Net cash used in operating  activities for the six months ended January
31, 1999 was ($391,000) as compared to net cash provided by operating activities
of $206,000 for the six months ended January 31, 1998. The decrease in operating
cash flow of ($597,000) is primarily  attributable  to the decline in net income
and an  increase  in  accounts  receivable,  offset by the  increase in accounts
payable and accrued  expenses over the comparable  period of 1998. Net cash used
in investing  activities  for the six months ended January 31, 1999 reflects the
proceeds of  investments,  acquisitions  made by the Company and the purchase of
equipment.  Net cash  used in  investing  activities  for the six  months  ended
January 31, 1998 reflects the purchase of equipment.  Net cash used in financing
activities  for the six months ended  January 31, 1999  reflects the purchase of
treasury  shares and the  repayment of notes  payable to the former  officers of
Accredited.  Net cash used in  financing  activities  for the six  months  ended
January 31, 1998 reflects the purchase of treasury shares offset by the proceeds
from the exercise of stock options.

         The Company has available a $2,000,000  secured line of credit with its
bank. In addition, a subsidiary of the Company has a secured line of credit. The
maximum  amount  that can be borrowed  under the secured  line of credit may not
exceed the lesser of eligible  accounts  receivable or  $2,000,000.  Both credit
facilities  bear interest at the alternate base  commercial  lending rate of the
bank and expire January 31, 2000. At January 31, 1999,  there was no outstanding
balance under either line of credit.

         The  Company  intends to meet its short and long term  liquidity  needs
with its current cash  balances and its available  lines of credit.  The Company
believes  that  its  cash  balances  also  will  allow  it to  continue  to make
acquisitions  in the home  health care field  without  affecting  its  liquidity
needs.

         In  August  1998,  the  Board of  Directors  extended  for one year its
program to repurchase its Common Stock.  Purchases in the aggregate amount of up
to $1,000,000 in purchase price during the one-year extension would be made from
time to time in the open market and through privately  negotiated  transactions,
subject to general  market and other  conditions.  The buyback  program  will be
financed out of existing cash or cash equivalents.

Year 2000 Compliance

         The Year 2000  issue is the  result of  computer  programs  which  were
written using two digits rather than four to define the applicable year. Certain
purchased  systems  used by the  Company,  and for  which the  Company  does not
control the  programming  code, use two digits for the year. The current systems
used by Health  Acquisition  and  Accredited  are  relatively  old and have been
slated for replacement  with new systems that better meet the information  needs
as they  expand and deal with the  current  operating  environment.  The Company
anticipates that these conversions will be


                                      -13-

<PAGE>



completed to provide  compliance  with the  requirements to handle the year 2000
issue with no significant  operational concerns.  The current system utilized by
New England Home Care is a relatively new operating system. The Company has been
advised by the system vendor that all required changes necessary to be compliant
with  the  year  2000  issue  have  been  substantially  completed  and  will be
implemented  prior to the year  2000.  Management  currently  believes  that the
financial  resources  necessary to accomplish  year 2000  compliance will not be
material  to  the  Company's  financial  condition,   liquidity  or  results  of
operations.  However,  there is no guarantee that the Company's expected results
will be achieved. In addition, actual results could differ materially from those
expected results.

         The Company  depends on receipt of payment for services  from its payor
sources, most of which utilize computer software to process those payments.  The
Company's  primary  payors  include  Medicare and Medicaid  programs,  insurance
companies,  other Medicare  certified home health agencies and long-term  health
care provider programs.  The Company currently is unable to predict what effect,
if any,  the year 2000 issue may have on the computer  systems of those  payors,
or, in turn, on the Company.


                                      -14-

<PAGE>



PART II.  OTHER INFORMATION


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

         The annual meeting of  shareholders  of the Company (the "Meeting") was
held on December 8, 1998.  Proxies for the Meeting  were  solicited  pursuant to
Rule 14A of the  Securities  Exchange Act of 1934, as amended,  and there was no
solicitation in opposition.

         At the Meeting,  Frederick H. Fialkow,  Bernard  Levine,  M.D.,  Steven
Fialkow,  Ira Greifer,  M.D. and Robert C. Pordy, M.D. were elected as directors
of the Company to serve until the Company's next annual meeting of  shareholders
and until their respective  successors are elected and qualified.  The votes for
each director were as follows:

                                                 For                Withheld
                                                 ---                --------

        Frederick H. Fialkow                   4,746,119               6,083
        Bernard Levine, M.D.                   4,746,119               6,083
        Steven Fialkow                         4,746,119               6,083
        Ira Greifer, M.D.                      4,746,119               6,083
        Robert C. Pordy, M.D.                  4,746,119               6,083


Item 6.  Exhibits and reports on Form 8-K

         (a)    Exhibits:

                10.1     Letter  Agreement  dated  February 20, 1999 providing a
                         Secured  Advised  Line of  Credit  from The Bank of New
                         York to National Home Health Care Corp.

                10.2     Letter  Agreement  dated  February 20, 1999 providing a
                         Secured  Advised  Line of  Credit  from The Bank of New
                         York to New England Home Care, Inc.

                10.3     Form of Amended and Restated Employment Agreement dated
                         as  of  December  1,  1998   between  the  Company  and
                         Frederick H. Fialkow.

                10.4     Form of First  Amendment to Employment  Agreement dated
                         as of December  1, 1998  between the Company and Steven
                         Fialkow.

                10.5     Form of First  Amendment to Employment  Agreement dated
                         as of December 1, 1998  between the Company and Richard
                         Garofalo.

                10.6     Form of First  Amendment to Employment  Agreement dated
                         as of December  1, 1998  between the Company and Robert
                         P. Heller.

                27.1     Financial Data Schedule


                                      -15-

<PAGE>



         (b)    Reports on Form 8-K

                The Company has not filed  any reports  on Form  8-K during  the
quarterly period ended January 31, 1999.



                                      -16-

<PAGE>



                                   SIGNATURES

                  Pursuant to the requirements of 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.


                                      National Home Health Care Corp.



Date:  March 16, 1999                    /s/ Robert P. Heller                  
                                      ------------------------------------------
                                      Robert P. Heller
                                      Vice President of Finance (chief financial
                                      and accounting officer)




                                      -17-

<PAGE>


                                  EXHIBIT INDEX
                                  -------------


Exhibit
Number                              Description
-------                             -----------



 10.1                    Letter  Agreement  dated  February 20, 1999 providing a
                         Secured  Advised  Line of  Credit  from The Bank of New
                         York to National Home Health Care Corp.
                                                                    
 10.2                    Letter  Agreement  dated  February 20, 1999 providing a
                         Secured  Advised  Line of  Credit  from The Bank of New
                         York to New England Home Care, Inc.
                                                                    
 10.3                    Form of Amended and Restated Employment Agreement dated
                         as  of  December  1,  1998   between  the  Company  and
                         Frederick H. Fialkow.
                                                                    
 10.4                    Form of First  Amendment to Employment  Agreement dated
                         as of December  1, 1998  between the Company and Steven
                         Fialkow.
                                                                    
 10.5                    Form of First  Amendment to Employment  Agreement dated
                         as of December 1, 1998  between the Company and Richard
                         Garofalo.
                                                                    
 10.6                    Form of First  Amendment to Employment  Agreement dated
                         as of December  1, 1998  between the Company and Robert
                         P. Heller.

 27.1                    Financial Data Schedule
        
                                                                    
                                    -18-