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 September 30, 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 November 1, 1999
   Common Stock, No par value                       5,812,172

<PAGE>

                          INTERPHASE CORPORATION

                                   INDEX


  Part I -Financial Information

  Item 1.   Consolidated Interim Financial Statements

            Consolidated Balance Sheets as of September 30, 1999
            and December 31, 1998                                       3

            Consolidated Statements of Operations for the three months
            and nine months ended September 30, 1999 and 1998           4

            Consolidated Statements of Cash Flows for the nine months
            ended September 30, 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               9

  Part II- Other Information


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

            Signature                                                  13

<PAGE>
<TABLE>
  INTERPHASE CORPORATION
  CONSOLIDATED BALANCE SHEETS
  (in thousands)

<CAPTION>
                                                  (unaudited)
                                                    Sep 30,        Dec 31,
  ASSETS                                             1999           1998
                                                   ----------------------
  <S>                                             <C>            <C>
  Cash and cash equivalents                       $  7,052       $  4,531
  Marketable securities                              3,831          3,430
  Trade accounts receivable, less allowances
    for uncollectible accounts of $201 and
    $164, respectively                              14,456         13,716
  Inventories, net                                  14,988         13,488
  Prepaid expenses and other                           912            856
    current assets
  Deferred income taxes, net                           541            516
                                                   ----------------------
       Total current assets                         41,780         36,537
                                                   ----------------------

  Machinery and equipment                           10,089         10,135
  Leasehold improvements                             2,907          2,909
  Furniture and fixtures                               495            515
                                                   ----------------------
                                                    13,491         13,559
  Less-accumulated depreciation and amortization   (11,062)       (10,339)
                                                   ----------------------
  Total property and equipment, net                  2,429          3,220

  Capitalized software, net                            678            773
  Deferred income taxes, net                         1,376          1,376
  Acquired developed technology, net                 2,459          3,365
  Goodwill, net                                      2,890          3,070
  Other assets                                       1,874          1,947
                                                   ----------------------
       Total assets                               $ 53,486       $ 50,288
                                                   ======================
<PAGE>

  LIABILITIES AND SHAREHOLDERS' EQUITY
  Accounts payable                                $  1,797       $  2,883
  Accrued liabilities                                3,038          1,639
  Accrued compensation                               2,407          2,041
  Income taxes payable                               1,250          1,408
  Current portion of debt                            2,210          2,252
                                                   ----------------------
       Total current liabilities                    10,702         10,223

  Other liabilities                                    630            873
  Long term debt                                     5,716          7,367
                                                   ----------------------
       Total liabilities                            17,048         18,463

  Commitments and contingencies
  Common stock redeemable                            3,050          3,813
  SHAREHOLDERS' EQUITY
  Common stock, no par value                        34,479         31,221
  Retained deficit                                    (995)        (3,217)
  Cumulative other comprehensive income                (96)             8
                                                   ----------------------
       Total shareholders' equity                   33,388         28,012
                                                   ----------------------
       Total liabilities and shareholders' equity $ 53,486       $ 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)

<CAPTION>

   Three Months Ended                                    Nine Months Ended
    -----------------                                    ----------------
  30-Sep-99  30-Sep-98                                  30-Sep-99 30-Sep-98
    -----------------                                    ----------------
   <C>       <C>       <S>                              <C>      <C>
   $ 20,511  $ 17,042  Revenues                         $ 55,337 $ 50,718
     10,666     8,677  Cost of sales                      29,401   26,130
    -----------------                                    ----------------
      9,845     8,365  Gross profit                       25,936   24,588

      2,590     2,459  Research and development            7,892    7,965
      2,850     2,229  Sales and marketing                 7,814    7,232
      1,673     1,569  General and administrative          4,278    4,398
    -----------------                                    ----------------
      7,113     6,257     Total operating expenses        19,984   19,595
    -----------------                                    ----------------

      2,732     2,108  Operating income                    5,952    4,993
    -----------------                                    ----------------

        114       110  Interest income                       309      253
      (235)      (256) Interest expense                     (604)    (782)
      (224)      (202) Other, net                           (674)    (647)
    -----------------                                    ----------------
                       Income from continuing
      2,387     1,760   operations before income taxes      4,983   3,817

        997       729  Provision for income taxes           1,894   1,568
    -----------------                                    ----------------
      1,390     1,031  Income from continuing operations    3,089   2,249

                       Discontinued Operations (Note 6)
                       Gain on disposal of VOIP
        140         -   business, net of tax                  326       -
                       Operating losses from VOIP
      (252)      (308)  business, net of tax               (1,193)   (308)
    -----------------                                    ----------------
   $  1,278  $    723   Net income                      $   2,222 $ 1,941
    =================                                    ================
<PAGE>
                         Net income from continuing
                          operations per share
   $  0.24   $   0.19         Basic EPS                 $   0.56  $  0.41
    -----------------                                    ----------------
   $  0.22   $   0.18         Diluted EPS               $   0.52  $  0.40
    -----------------                                    ----------------

                         Net income per share
   $  0.22   $   0.13         Basic EPS                 $   0.40  $  0.35
    -----------------                                    ----------------
   $  0.20   $   0.13         Diluted EPS               $   0.37  $  0.34
    -----------------                                    ----------------
     5,709      5,518    Weighted average common shares    5,522    5,519
    -----------------                                    ----------------
                         Weighted average common and
     6,288      5,580     dilutive shares                  5,984    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)
  (unaudited)
                                                     Nine Months ended
                                                30-Sep-99          30-Sep-98
                                                   ----------------------
  <S>                                             <C>            <C>
  Cash flow from operating activities:
    Net income from continuing operations         $   3,089      $  2,249
    Operating loss from discontinued operations      (1,193)         (308)
    Gain on disposal of discontinued operations         326             -
    Adjustment to reconcile net income to
     net cash provided by operating activities:
      Depreciation and amortization                   2,940         2,907
      Change in assets and liabilities:
         Trade accounts receivable                     (740)         (718)
         Inventories                                 (1,500)        2,220
         Prepaid expenses and other current assets      (56)          227
         Accounts payable and accrued liabilities       313          (767)
         Accrued compensation                           366           217
         Income taxes payable                          (183)          498
                                                   ----------------------
     Net adjustments                                  1,140         4,584
                                                   ----------------------
         Net cash provided by operating activities    3,362         6,525
  Cash flows from investing activities:
     Additions to property, equipment, leasehold
      improvements and capitalized software          (1,748)       (1,486)
     Decrease in other assets                           253           112
     Cash received in Sale of VOIP                      600             -
     (Increase) decrease in marketable securities      (401)          120
                                                   ----------------------
         Net cash (used) by investing activities     (1,296)       (1,254)
  Cash flows from financing activities:
     Payments on debt                                (1,693)       (1,866)
     Other long term liabilities                       (243)          118
     Change in comprehensive income                     104)          105
     Purchase of redeemable common stock               (763)            -
     Proceeds from the exercise of stock options      3,258            18
                                                   ----------------------
          Net cash (used) by financing activities       455        (1,625)
                                                   ----------------------
  Net increase (decrease) in cash and cash
    equivalents                                       2,521         3,646
  Cash and cash equivalents at beginning of period    4,531         2,247
                                                   ----------------------
  Cash and cash equivalents at end of period      $   7,052      $  5,893

  Supplemental Disclosure of Cash Flow
  Information:
  Income taxes paid                               $      16      $    448
  Interest paid                                   $     531      $    782

    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.

  The Company has completed the sale of its Voice over Internet  Protocol
  ("VOIP") business as of September 30, 1999; accordingly, the  Company's
  Consolidated financial statements  and notes included  herein, for  all
  periods presented reflect the VOIP business as a discontinued operation
  in accordance with  Accounting Principles Board  Opinion No.  30.   See
  further discussion of sale in Footnote 6.

  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:   Nine months ended:
                           ----------------------------------------
                            Sep 30,    Sep 30,    Sep 30,   Sep 30,
                             1999       1998       1999       1998
                            -----      -----      -----      -----
  <S>                       <C>        <C>        <C>        <C>
  Weighted average
  shares outstanding        5,709      5,518      5,522      5,519
  Dilutive impact of
  stock options               579         62        462        121
                            -----      -----      -----      -----
  Total weighted
  average common and
  common equivalent
  shares outstanding        6,288      5,580      5,984      5,640
                            --------------------------------------
  Anti-dilutive
  weighted shares
  Excluded from shares
  outstanding                   -      1,282         48        958
</TABLE>
<PAGE>
  3.   CREDIT FACILITY

  The Company  maintains a  credit facility  with BankOne  Texas NA  that
  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,
  2001.  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 September 30, 1999, the Company had
  borrowings of $7,903,900 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 ended:         Nine months ended:
                        --------------------------  --------------------------
                        Sep 30, 1999  Sep 30, 1998  Sep 30, 1999  Sep 30, 1998
                        ------------  ------------  ------------  ------------
 <S>                        <C>           <C>          <C>           <C>
 Net income                 $1,278        $723         $2,222        $1,941
 Other comprehensive income
 Unrealized holding gains
   (losses arising during
   period, net of tax           12           -            (65)            -
 Foreign currencency
   translation adjustment       42          70            (39)          105
                             -----         ---          -----         -----
 Comprehensive income       $1,332        $793         $2,118        $2,046
                             =====         ===          =====         =====

</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 its 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 September 30, 1999, 172,001 shares have been  repurchased
  for $1,075,006 and retired.
<PAGE>
  6.   DISPOSISTION OF ASSETS

  Effective June 30, 1999 the Company sold an 80% interest in part of its
  VOIP  business,  Quescom,  for  $1,172,000  to  the  former  owner   of
  Interphase's Paris Operation.  The sales proceeds consisted of $300,000
  due at closing with a $872,000 technology license fee.  The license fee
  is payable based on capital availability  of the purchaser or based  on
  5% of the  purchaser's revenues,  beginning July  1, 2000.   The  sales
  agreement also  contains purchasing  and manufacturing  rights for  the
  Purchaser of certain Interphase technology,  as well as certain  rights
  of first refusal  for Interphase  with respect  to executive  salaries,
  disposition of  assets,  and  merger and  acquisitions.    Due  to  the
  uncertainty of payment on the remaining  license fee, the Company  will
  recognize the  income as  payment is  received.   The Company  received
  $300,000 and has included  a gain of $186,000  net of $114,000 tax,  in
  Gain on disposal of VOIP business, on the Statement of Operations.  The
  Company will  account  for its  remaining  20% investment  in  the  new
  company using  the equity  method of  accounting.   This investment  is
  included in other assets.

  Effective September 27, 1999 the Company sold the remainder of its VOIP
  business, Zirca  Corporation  ("Zirca")  along  with  the  technologies
  developed by Zirca for  $300,000 cash and stock  valued at $517,680  to
  UniView Technologies, resulting in a gain  of $140,000, net of  $86,000
  tax.  The  UniView securities  received as  part of  the agreement  are
  included on the Balance Sheet in Other Assets.

  As of September  30, 1999, the  Company has completed  the sale of  its
  VOIP  business;  accordingly   the  Company's  consolidated   financial
  statements and notes included herein, for all periods presented reflect
  the VOIP  business  as  a discontinued  operation  in  accordance  with
  Accounting Principle  Board Opinion  No. 30.    The following  are  the
  results of  operations  for the  discontinuted  losses for  the  period
  presented: (Amounts in thousands $)
<TABLE>
                             Three Months ended:         Nine Months ended:
                        --------------------------- ---------------------------
                        Sep. 30, 1999 Sep. 30, 1998 Sep. 30, 1999 Sep. 30, 1998
                        ------------- ------------- ------------- -------------
 <S>                         <C>          <C>         <C>            <C>
 Loss from discontinued
  operations before tax      $(406)       $(496)      $(1,924)       $(496)
 Income tax benefit            154          188           731          188
                               ---          ---         -----          ---
 Net loss from
  discontinued operations    $(252)       $(308)      $(1,193)       $(308)

</TABLE>
  As of  December  31, 1998,  the  Company's VOIP  business  segment  had
  $752,000 of Fixed Assets.

<PAGE>
  7.   SEGMENT DATA

  Revenue related to North  America and other  foreign countries for  the
  three month and nine-month period ended September 30, 1999 and 1998 are
  as follows. (Amounts in thousands $)
<TABLE>
                       Three months ended:          Nine months ended:
                   --------------------------   --------------------------
  Revenue          Sep 30, 1999  Sep 30, 1998   Sep 30, 1999  Sep 30, 1998
                   ------------  ------------   ------------  ------------
  <S>                 <C>           <C>           <C>            <C>
  North America       $ 17,990      $ 13,570      $ 45,211       $ 39,150
  Europe                 1,426         3,296         8,551         10,342
  Pac Rim                1,095           176         1,575          1,226
                       -------       -------       -------        -------
  Total               $ 20,511      $ 17,042      $ 55,337       $ 50,718
                       =======       =======       =======        =======

  Long lived assets related to North America and other foreign  countries
  as of  September  30,  1999  and December  31,  1998  are  as  follows.
  (Amounts in thousands $)

  Long lived assets       Sep 30, 1999  Dec 31, 1998
                          ------------  ------------
  <S>                         <C>           <C>
  North America               $ 2,896       $ 3,701
  Europe                          211           292
  Pac Rim                           0             0
                               ------        ------
  Total                       $ 3,107       $ 3,993
                               ======        ======
</TABLE>
<PAGE>
  Item 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
            AND RESULTS OF OPERATIONS

  RESULTS OF OPERATIONS

  As of September  30, 1999, the  Company has completed  the sale of  its
  VOIP  business;  accordingly   the  Company's  consolidated   financial
  statements and notes included herein, for all periods presented reflect
  the VOIP  business  as  a discontinued  operation  in  accordance  with
  Accounting Principle Board Opinion No. 30.

  Revenues for the three months ended September 30, 1999  ("third quarter
  1999") were  $20,511,000.    Revenues  for  the  same  period  in  1998
  ("comparative period") were $17,042,000.     The 20% increase in  total
  revenue from the  third quarter  of 1999  to the  comparable period  is
  attributable to increases in Fibre Channel product revenues,  partially
  offset by decreases in ATM, FDDI, SCSI, Ethernet, Fast Ethernet and WAN
  product revenues.

  LAN product  revenues,  consisting  of FDDI,  Ethernet,  ATM  and  Fast
  Ethernet, represented 33% of total revenues for the third quarter 1999,
  as compared to 62% for the  comparative period.  FDDI product  revenues
  declined 34%,  Ethernet  product  revenues increased  8%,  ATM  product
  revenues declined 6% and Fast Ethernet product revenues declined 54% as
  compared to the  comparative period.     FDDI, Ethernet,  ATM and  Fast
  Ethernet product  revenues represented  11%, 2%,  8% and  11% of  total
  revenues, respectively for the third quarter 1999.

  Mass storage product  revenues, consisting  of SCSI  and Fibre  Channel
  adapter cards, represented 62% of total revenues for the third  quarter
  1999, as compared  to 27%  for the  comparative period.   SCSI  product
  revenues declined 76%  while Fibre Channel  product revenues  increased
  368% over the comparative period.

  WAN  product  revenues comprised 4% of revenues for  the third  quarter
  1999, as  compared to  9%  for the  comparative  period.   WAN  product
  revenues decreased 46% as compared to the comparative period.

  Revenues for  the  nine month  period  ended September  30,  1999  were
  $55,337,000 as compared to $50,718,000 for the nine month period  ended
  September 30, 1998.  Revenues from  LAN, Mass Storage and WAN  products
  were 42%, 47% and 9% of total revenues respectively, for the nine month
  period ended September 30 1999.

  The  Company's  current  marketing  strategy  is  to  increase   market
  penetration through  sales  to  major OEM  customers.    One  of  these
  customers accounted for approximately 56% of the Company's revenue  for
  the third quarter of 1999 and 43% in the comparable period.

  The gross margin percentage for the third quarter 1999 was 48% and  49%
  for the comparable period.  The  gross margin percentage for the  nine-
  month period  ended  September  30,  1999 and  1998  was  47%  and  48%
  respectively.  The decrease in  gross margin is due  to a shift in  the
  product sales mix.
<PAGE>
  Operating expenses  for  the  third quarter  1999  were  $7,113,000  as
  compared to  $6,257,000 for  the comparable  period.   The increase  in
  operating expenses is primarily due to increases in sales and marketing
  activities.   Operating  expenses  for  the  nine  month  period  ended
  September 30, 1999 were $19,984,000 as compared to $19,595,000 for  the
  nine-month period ended September 30, 1998.

  LIQUIDITY AND CAPITAL RESOURCES

  The  Company's  cash,  cash   equivalents  and  marketable   securities
  aggregated  $10,883,000  at  September  30,  1999,  and  $7,961,000  at
  December 31, 1998.  The Company's increased cash position is  primarily
  due to the  proceeds for the  exercise of stock  options offset by  the
  purchase of fixed assets,  payment on debt  and other liabilities,  tax
  payments and purchase  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 September 30, 1999, 172,001 shares have been  repurchased
  for $1,075,006 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.


  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.
<PAGE>
  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.   The Company's  internal reporting system  is
  being replaced with a Y2K compliant Enterprise Reporting Planning (ERP)
  system that was implemented in August  1999.  In addition, the  Company
  is communicating with its  suppliers, customers, vendors and  financial
  service organizations  regarding  their  Year  2000  compliance.    The
  Company's Year 2000 review, new information system implementation,  and
  other necessary remediation actions are substantially complete.  Direct
  expenditures in 1999 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.  Based on the Company's review of Non-IT systems they  are
  judged to be compliant.

  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:  November 15, 1999

                                          /s/ Steven P. Kovac
                                          -------------------
                                          Steven P. Kovac
                                          Chief Financial Officer,
                                          Vice President of Finance and
                                          Treasurer
                                          (Principal Financial and
                                          Accounting officer)