SECURITIES AND EXCHANGE COMMISSION

                        Washington, DC 20549


                              FORM 10-Q

             QUARTERLY REPORT UNDER SECTIONS 13 OR 15(d)

               OF THE SECURITIES EXCHANGE ACT OF 1934


 For the Quarter Ended March 31, 1999 Commission File Number 0-13071


                       INTERPHASE CORPORATION
       (Exact name of registrant as specified in its charter)

            Texas                            75-1549797
 (State of incorporation)         (IRS Employer Identification No.)


                  13800 Senlac, Dallas, Texas 75234
              (Address of principal executive offices)

                          (214)-654-5000
        (Registrant's telephone number, including area code)

__________________________________________________________________________
  Indicate by check mark whether the  registrant (1) has filed all  reports
  required by Section 13  or 15(d) of the  Securities Exchange Act of  1934
  during the preceding  12 months (or  for a much  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
__________________________________________________________________________
  Indicate the number of shares outstanding of each of the issuer's classes
  of common stock, as of the latest practicable date.

            Class                         Outstanding at April 29, 1999

  Common Stock, No par value                         5,471,591

<PAGE>


                           INTERPHASE CORPORATION

                                    INDEX


  Part I -Financial Information

       Item 1.   Consolidated Interim Financial Statements


                 Consolidated Balance Sheets as of March 31, 1999
                  and December 31, 1998                                3

                 Consolidated Statements of Operations for the
                  three months ended March 31, 1999 and 1998           4

                 Consolidated Statements of Cash Flows for the
                  three months ended March 31, 1999 and 1998           5

                 Notes to Consolidated Interim Financial Statements    6

       Item 2.   Management's Discussion and Analysis of
                 Financial Condition and Results of Operations         8


  Part II- Other Information


       Item 6.   Reports on Form 8-K and Exhibits                     12

                 Signature


<PAGE>
<TABLE>
  INTERPHASE CORPORATION

  CONSOLIDATED BALANCE SHEETS
  (in thousands)

<CAPTION>
                                                  (unaudited)
                                                   March 31,        Dec 31,
  ASSETS                                              1999           1998
                                                  -------------------------
  <S>                                            <C>             <C>
  Cash and cash equivalents                      $     1,416     $    4,531
  Marketable securities                                3,522          3,430
  Trade accounts receivable, less allowances
   for uncollectible accounts of $196 and
   $164, respectively                                 15,269         13,716
  Inventories, net                                    13,534         13,488
  Prepaid expenses and other current assets            1,202            856
  Deferred income taxes, net                             516            516
                                                  -------------------------
       Total current assets                           35,459         36,537
                                                  -------------------------
  Machinery and equipment                             10,414         10,135
  Leasehold improvements                               3,024          2,909
  Furniture and fixtures                                 533            515
                                                  -------------------------
                                                      13,971         13,559
  Less-accumulated depreciation and amortization     (10,433)       (10,339)
                                                  -------------------------
       Total property and equipment, net               3,538          3,220

  Capitalized software, net                              778            773
  Deferred income taxes, net                           1,376          1,376
  Acquired developed technology, net                   3,124          3,365
  Goodwill, net                                        3,010          3,070
  Other assets                                         2,025          1,947
                                                  -------------------------
       Total assets                              $    49,310     $   50,288
                                                  =========================

<PAGE>

  LIABILITIES AND SHAREHOLDERS' EQUITY
  Accounts payable                               $     4,068     $    2,883
  Accrued liabilities                                  1,044          1,639
  Accrued compensation                                 1,435          2,041
  Income taxes payable                                   865          1,408
  Current portion of debt                              2,233          2,252
                                                  -------------------------
       Total current liabilities                       9,645         10,223

  Other liabilities                                      776            873
  Long term debt                                       6,816          7,367
                                                  -------------------------
       Total liabilities                              17,237         18,463

  Commitments and contingencies
  Common stock redeemable                              3,559          3,813
  SHAREHOLDER'S EQUITY
  Common stock, no par value                          31,351         31,221
  Retained deficit                                    (2,797)        (3,217)
    Cumulative other comprehensive income                (40)             8
                                                  -------------------------
       Total shareholders' equity                     28,514         28,012
                                                  -------------------------
  Total liabilities and shareholders' equity     $    49,310     $   50,288
                                                  =========================

  The accompanying notes are an integral part of these consolidated
  financial statements.
</TABLE>
<PAGE>
<TABLE>
 
  INTERPHASE CORPORATION

  CONSOLIDATED STATEMENTS OF OPERATIONS
  (in thousands except per share amounts)
  (unaudited)



                                                 Three Months Ended
                                              -------------------------
                                               31-Mar-99     31-Mar-98
                                              -------------------------
      <S>                                    <C>           <C>
      Revenues                               $     17,346  $     17,589
      Cost of sales                                 9,531         9,446
                                              -------------------------
      Gross profit                                  7,815         8,143
                                                                      
      Research and development                      2,961         2,866
      Sales and marketing                           2,665         2,386
      General and administrative                    1,200         1,329
                                              -------------------------
         Total operating expenses                   6,826         6,581
                                              -------------------------
      Operating income                                989         1,562
                                              -------------------------
      Interest income                                 132            83
      Interest expense                               (242)         (240)
      Other, net                                     (224)         (225)
                                              -------------------------
      Income before income taxes                      655         1,180
      Provision for income taxes                      231           472
                                              -------------------------
       Net income                            $        424  $        708
                                              =========================
      Net income per share
             Basic EPS                       $       0.08  $       0.13
                                              =========================
             Diluted EPS                     $       0.08  $       0.13
                                              =========================
      Weighted average common shares                5,438         5,516
                                              =========================
      Weighted average common and
      dilutive shares                               5,596         5,640
                                              =========================

  The accompanying notes are an integral part of these consolidated
  financial statements.
</TABLE>
<PAGE>
<TABLE>
  INTERPHASE CORPORATION
  CONSOLIDATED STATEMENTS OF CASH FLOWS
  (in thousands)
                                                        Three Months ended
                                                    -----------------------
                                                    30-Mar-99     30-Mar-98
                                                    -----------------------
  <S>                                              <C>             <C>
  Cash flow from operating activities:
    Net income                                     $    424        $    708
    Adjustment to reconcile net income
     (loss) to net cash provided (used)
     by operating activities:
    Depreciation and amortization                       930             989
    Change in assets and liabilities:
         Trade accounts receivable                   (1,553)          2,700
         Inventories                                    (46)            560
         Prepaid expenses and other current assets     (346)             50
         Accounts payable and accrued liabilities       590          (1,016)
         Accrued compensation                          (606)             (2)
         Income taxes payable                          (543)            470
                                                    -----------------------
     Net adjustments                                 (1,574)          3,751
                                                    -----------------------
         Net cash (used) provided by
          operating activities                       (1,150)          4,459
  Cash flows from investing activities:
     Additions to property, equipment
      and leasehold improvements                       (956)           (679)
     Decrease in other assets                           (78)              1
     (Increase) decrease in marketable securities       (92)           (403)
                                                    -----------------------
       Net cash used by investing activities         (1,126)         (1,081)
  Cash flows from financing activities:
     Payment on debt                                   (570)           (588)
     Other long term liabilities                        (97)           (160)
     Change in foreign currency translation             (48)            (44)
     Purchase of redeemable common stock               (254)              -
     Sale of common stock                               130               -
                                                    -----------------------
      Net cash (used) by financing activities          (839)           (792)
                                                   ------------------------
  Net increase in cash and cash equivalents          (3,115)          2,586
  Cash and cash equivalents at beginning of period    4,531           2,247
                                                    -----------------------
  Cash and cash equivalents at end of period       $  1,416       $   4,833
                                                    =======================
  Supplemental Disclosure of Cash Flow Information:
    Income taxes paid                                   774              10
    Income taxes refunded                                 -               -
    Interest paid                                       225             225

  The accompanying notes are an integral part of these consolidated
  financial statements.
</TABLE>
<PAGE>

             NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS


  1.   BASIS OF PRESENTATION

  The accompanying consolidated  interim financial  statements include  the
  accounts of Interphase Corporation and its wholly owned subsidiaries (the
  "Company").  Significant intercompany accounts and transactions have been
  eliminated.

  While the accompanying interim  financial statements are unaudited,  they
  have been prepared by the Company  pursuant to the rules and  regulations
  of the Securities and Exchange Commission. In the opinion of the Company,
  all material adjustments and disclosures necessary to fairly present  the
  results of such periods 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  pursuant  to the  rules  and  regulations  of  the
  Securities and Exchange Commission.  These financial statements should be
  read in conjunction with the consolidated financial statements and  notes
  thereto for the year ended December 31, 1998.


  2.   NET INCOME PER COMMON AND COMMON DILUTIVE SHARE

  The following  table shows  the calculations  of the  Company's  weighted
  average common and dilutive equivalent shares outstanding (in thousands):

<TABLE>

                                                   Three Months ended:
                                               Mar 31, 1999   Mar 31, 1998
                                               ------------   ------------
  <S>                                              <C>            <C>
  Weighted average shares outstanding              5,438          5,516
  Dilutive impact of stock options                   158            124
                                                   -----          -----
  Total weighted average common and common
  equivalent shares outstanding                    5,596          5,640
                                                   =====          =====
</TABLE>

  Anti-dilutive options of  705,601 and  1,164,300 were  excluded from  the
  dilutive calculations for  the quarters ended  March 31,  1999 and  1998,
  respectively.
<PAGE>

  3.       CREDIT FACILITY

  The Compnay  maintains a  credit facility  with  BankOne Texas  NA  which
  consists of an $8,500,000 acquisition  term loan, a $2,500,000  equipment
  financing facility  and a  $5,000,000 revolving  credit facility.     The
  facility is a  two-year facility with  an annual  renewal provision,  and
  bears interest at the bank's base  rate (currently 8.5%).  The term  loan
  is payable  in  equal quarterly  installments  of $548,000  plus  accrued
  interest  with final payment due November 30, 2001.  The Company has  the
  ability to  satisfy the  quarterly payments  on  the term  notes  through
  borrowings under the revolving credit  component of the credit  facility.
  The revolving portion of the  loan has been renewed  and is due June  30,
  2000.  The  credit facility is  collateralized by marketable  securities,
  assignment of accounts  receivable and  equipment.   The credit  facility
  includes certain restrictive financial covenants including, among others,
  tangible net worth,  total liabilities  to tangible  net worth,  interest
  coverage, quick  ratio,  debt  service coverage,  and  is  subject  to  a
  borrowing base calculation. At March 31, 1999, the Company had borrowings
  of $9,000,100  and  remaining  availability under  the  revolving  credit
  facility was $1,500,000.


  4.       COMPREHENSIVE INCOME

  The  following  table  shows  the  Company's  comprehensive  income   (in
  thousands):
<TABLE>

                                            Three months        Three months
                                               ended               ended
                                            Mar 31, 1999        Mar 31, 1998
                                            ------------        ------------
  <S>                                           <C>                 <C>
  Net income                                    $ 424               $ 708
  Other comprehensive income,
   Unrealized holding gains (losses) arising         
   During period , net of tax                       0                   0
   Foreign currency translation adjustment        (48)                (44)
                                                 ----                ----
  Comprehensive iome                            $ 376               $ 664
                                                 ====                ====
</TABLE>


  5.       STOCK REPURCHASE
  
  Effective October 1998, the Company approved a stock repurchase agreement
  with Motorola, Inc. to purchase all  of the shares owned by Motorola  for
  $4,125,000, ratably from October 1998 to  July 2002.  Under the terms  of
  the agreement, Motorola  retains the  right as  an equity  owner and  has
  assigned it voting rights  to the Company.   The Company plans to  cancel
  the stock  upon each  repurchase.   Prior  to the  repurchase  agreement,
  Motorola owned  approximately 12%  of  the Company's  outstanding  common
  stock.  The future scheduled payments are classified as redeemable common
  stock in the accompanying  consolidated Balance Sheet.   As of March  31,
  1999, 90,667 shares have been repurchased for $566,668 and retired.
<PAGE>

  6.       SEGMENT DATA

  The Company manages  its business  segments on  an industry  basis.   The
  Company's  reportable   segments  are   composed  of   high   performance
  networking/storage adapters  and  voice  over  Internet  Protocol  (VOIP)
  products and  services.   The Company  evaluates the  performance of  its
  segments based on revenue and operating profits. Segment operating income
  (loss)  excludes  general  and  administrative  expenses.    (Amounts  in
  thousands):

<TABLE>
                  Quarter ended Mar. 31, 1999   Quarter ended Mar. 31, 1998
                  Networking    VOIP    Total   Networking   VOIP     Total
                  ---------------------------------------------------------
  <S>                <C>       <C>     <C>        <C>       <C>      <C>
  Revenues           17,169      177   17,346     17,589       -     17,589

  Operating Income    3,016    (827)    3,016      2,891       -      2,891

  Fixed Assets        2,497    1,041    3,538      3,794       -      3,794


  Reconciliation of Segment Operating Income to Consolidated Operating Income:

                                            Quarter ended
                                       31-Mar-99       31-Mar-98
                                       -------------------------
  <S>                                    <C>             <C>
  Networking                              3,016           2,891
  VOIP                                     (827)              -
  General and Administrative             (1,200)         (1,329)
                                          -----           -----
  Consolidated Operating Income             989            1562

</TABLE>

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

  RESULTS OF OPERATIONS

  Revenues for  the three  months ended  March 31,  1999   ("first  quarter
  1999")  were  $17,346,000.    Revenues  for  the  same  period  in   1998
  ("comparative period") were $17,589,000.    The decrease in revenues from
  the comparative period was attributable to  decreases in ATM, SCSI,  Fast
  Ethernet,  FDDI  and  Ethernet  product  revenues,  partially  offset  by
  increases in WAN and Fibre Channel product revenues.

  LAN  product  revenues,  consisting  of  FDDI,  Ethernet,  ATM  and  Fast
  Ethernet, represented 46% of total revenues  for the first quarter  1999,
  as compared to  72% for the  comparative period.   FDDI product  revenues
  declined  41%,  Ethernet  product  revenues  declined  98%,  ATM  product
  revenues declined 35% and Fast Ethernet product revenues declined 26%  as
  compared to  the comparative  period.     FDDI,  Ethernet, ATM  and  Fast
  Ethernet product  revenues  represented 12%,  0%,  6% and  28%  of  total
  revenues, respectively for the first quarter 1999.
<PAGE>
  Mass storage  product  revenues, consisting  of  SCSI and  Fibre  Channel
  adapter cards, represented 31%  of total revenues  for the first  quarter
  1999, as  compared to  19%  for the  comparative  period.   SCSI  product
  revenues declined 64% while Fibre Channel product revenues increased 231%
  over the comparative period.

  WAN product  revenues comprised  20% of  revenues for  the first  quarter
  1999, as compared to 7% for the comparative period.  WAN product revenues
  increased 168% as compared to the comparative period.

  Geographically, North  America  revenues comprised  75%  of  consolidated
  revenues in the  first quarter 1999  compared to 70%  in the  comparative
  period.  European revenues comprised 24% of consolidated revenues in  the
  first quarter  1999  and  25% in  the  comparative  period.  Pacific  Rim
  revenues comprised 1% of consolidated revenues in the first quarter  1999
  and 5% in the comparative period.

  The  Company's  current   marketing  strategy  is   to  increase   market
  penetration through sales to major OEM customers.  One of these customers
  accounted for approximately 51%  of the Company's  revenue for the  first
  quarter of 1999, and 44% in the first quarter of 1998.  Another  customer
  accounted for 12% of the Company's revenue for the first quarter of 1999,
  and 5% in the first quarter of 1998.

  The gross margin percentage  for the three month  period ended March  31,
  1999 and 1998 was 45% and 46%, respectively.

  Operating expenses for the three month  period ended March 31, 1999  were
  $6,826,000 as  compared to  $6,581,000 for  the comparable  period.   The
  increase in  operating  expenses is  dues  to expenses  relating  to  the
  Company's  new subsidiaries Zirca.com and Quescom.


  LIQUIDITY AND CAPITAL RESOURCES

  The Company's cash, cash equivalents and marketable securities aggregated
  $4,938,000 at March 31, 1999, and  $7,961,000 at December 31, 1998.   The
  Company's decreased cash position is primarily due to the purchase of  in
  fixed assets, increased accounts receivable, payment on debt, tax payment
  and repurchase of  common stock.   In the next  twelve months,  scheduled
  debt  payments  on  the  Company's  credit  facility  are   approximately
  $2,192,000.

  Effective October 1998, the Company approved a stock repurchase agreement
  with Motorola, Inc. to purchase all  of the shares owned by Motorola  for
  $4,125,000, ratably from October 1998 to  July 2002.  Under the terms  of
  the agreement, Motorola  retains the  right as  an equity  owner and  has
  assigned it voting rights  to the Company.   The Company plans to  cancel
  the stock  upon each  repurchase.   Prior  to the  repurchase  agreement,
  Motorola owned  approximately 12%  of  the Company's  outstanding  common
  stock.  The future scheduled payments are classified as redeemable common
  stock in the accompanying  consolidated Balance Sheet.   As of March  31,
  1999, 90,667 shares have been repurchased for $566,668 and retired.

  The  Company  expects  that   its  cash,  cash  equivalents,   marketable
  securities and proceeds from its credit facility will be adequate to meet
  foreseeable cash needs for the next 12 months.
<PAGE>
  Year 2000

  The Company has  recognized the need  to ensure that  its operations  and
  relationships with vendors and other third parties will not be  adversely
  impacted by  software processing  errors  arising from  the  calculations
  using the Year 2000 ("Y2K") and beyond.

  The Company has created a company-wide  Y2K team to identify and  resolve
  Y2K issues associated  with the Company's  internal information  systems,
  internal non-information systems, the products  sold by the Company,  and
  its major suppliers of products and  services. The Company established  a
  Y2K program coordinator to ensure  these programs are implemented  across
  the Company. The coordinator provides a  single point of reference,  both
  internal, and external, for the Company.   The products that the  Company
  sells are Y2K  compliant, or will  be compliant by  mid year  1999.   The
  Company's  internal  reporting  system  is  being  replaced  with  a  Y2K
  compliant Enterprise Reporting Planning  (ERP) system which is  scheduled
  to go live in  mid-year 1999.  In addition, the Company is  communicating
  with  all  its  suppliers,  customers,  vendors  and  financial   service
  organizations  regarding  their  Year  2000  compliance.    The   Company
  anticipates that  its  full  Year 2000  review,  new  information  system
  implementation,  and  other   necessary  remediation   actions  will   be
  substantially complete by mid 1999.  Direct expenditures are expected  to
  be  between  $850,000   and  $900,000.  The   Company  will  fund   these
  expenditures through  its normal  operating budget,  and as  required  by
  generally accepted accounting principles, these costs are being  expensed
  as incurred, excluding the capitalization  of application software.   The
  capitalization for software will be approximately $300,000.  The  Company
  does not believe that the costs associated with such actions will have  a
  material adverse  effect  on  the  Company's  results  of  operations  or
  financial condition.   However the costs  of such actions  may vary  from
  quarter to quarter, and there  is no assurance that  there will not be  a
  delay in the Company's implementation or increased costs associated  with
  the implementation of such changes.  Failure to achieve Y2K readiness for
  the Company could delay its ability to manufacture and ship products  and
  deliver services.   The Company's  inability to  perform these  functions
  could have an adverse effect on future results of operations or financial
  condition.

  Non-IT systems include,  but are not  limited to, telephone/PBX  systems;
  fax machines; facilities systems  regulating alarms, building access  and
  sprinklers; manufacturing, assembly and distribution equipment; and other
  miscellaneous systems  and processes.  Y2K readiness  for these  internal
  non-IT systems is the responsibility of the Company's Y2K coordinator, it
  is anticipated that all Non-IT systems will be compliant if they are  not
  already compliant by mid 1999.

  The Company regularly reviews and  monitors the suppliers' Y2K  readiness
  plans and performance. Based on the Company's risk assessment,  selective
  on-site reviews may be performed.  In some cases, to meet Y2K  readiness,
  the  Company  has  replaced   suppliers  or  eliminated  suppliers   from
  consideration for  new business.  The Company  has also  contracted  with
  multiple   transportation   companies   to   provide   product   delivery
  alternatives.
<PAGE>
  While the Company has contingency plans  in place to address most  issues
  under its control, an infrastructure problem outside of its control could
  result in  a delay  in  product shipments  depending  on the  nature  and
  severity of the problems.  The Company would  expect that most  utilities
  and service  providers  would be  able  to restore  service  within  days
  although more  pervasive  system problems  involving  multiple  providers
  could last two to four weeks or  more depending on the complexity of  the
  systems and the  effectiveness of their  contingency plans. Although  the
  Company  is  dedicating  substantial  resources  towards  attaining   Y2K
  readiness, there is no assurance it will be successful in its efforts  to
  identify and address all Y2K issues. Even if the Company acts in a timely
  manner to  complete  all of  its  assessments; identifies,  develops  and
  implements remediation  plans  believed  to  be  adequate;  and  develops
  contingency plans  believed  to be  adequate  some problems  may  not  be
  identified or corrected in time to prevent material adverse  consequences
  to the  Company.  The  discussion above  regarding  estimated  completion
  dates, costs, risks and other forward-looking statements regarding Y2K is
  based on the Company's best estimates given information that is currently
  available and is subject to change. As the Company continues to  progress
  with its Y2K initiatives, it may discover that actual results will differ
  materially from these estimates.

  Use of Forward-Looking Statements:   Certain statements contained in MD&A
  are forward-looking, including  statements concerning expected  expenses,
  Year 2000 readiness, and the adequacy of the Company's sources of cash to
  finance its current  and future operations.   Factors  which could  cause
  actual  results  to  materially  differ  from  management's  expectations
  include the following:   general economic  conditions and  growth in  the
  high tech industry; competitive factors and pricing pressures; changes in
  product mix;  the  timely development  and  acceptance of  new  products;
  inventory risks due to  shifts in market domain;  Year 2000 readiness  of
  the Company's suppliers, and the risks described from time to time in the
  Company's SEC filings.


<PAGE>

                                   PART II

  OTHER INFORMATION

  Item 6.        Reports on form 8-K

                 None

                 Exhibits

  Exhibit 27     Financial Data Schedule

<PAGE>
  SIGNATURE

  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.


                                          INTERPHASE CORPORATION
                                          (Registrant)
  Date:  May 12, 1999

                                          /s/ Gregory B. Kalush

                                          Gregory B. Kalush
                                          Chief Executive Officer and
                                          President
                                          (Principal Financial and 
                                          Accounting officer)