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 June 30, 1998
                      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 August 1, 1998
  Common Stock, No par value                                  5,520,618

<PAGE>

                          INTERPHASE CORPORATION

                                   INDEX

  Part I - Financial Information

  Item 1.   Consolidated Interim Financial Statements

            Consolidated Balance Sheets as of June 30, 1998
            and December 31, 1997                                         3

            Consolidated Statements of Operations for the three months
            and six months ended June 30, 1998 and 1997                   4

            Consolidated Statements of Cash Flows for the six months
            ended June 30, 1998 and 1997                                  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

            Signature                                                   11

<PAGE>
<TABLE>
  INTERPHASE CORPORATION
  CONSOLIDATED BALANCE SHEETS
  (in thousands)
                                               Jun 30,    Dec 31,
  ASSETS                                        1998       1997
                                             (Unaudited)
  <S>                                            <C>      <C>
  Cash and cash equivalents                      $ 3,610   $ 2,247
  Marketable securities                            3,181     3,272
  Trade accounts receivable, less allowances
   for uncollectible
   accounts of $532 and $544, respectively        13,028    13,030
  Inventories, net                                13,465    14,895
  Prepaid expenses and other current assets          693       798
  Deferred income taxes, net                         686       686
       Total current assets                       34,663    34,928

  Machinery and equipment                         12,381    12,079
  Leasehold improvements                           2,890     2,890
  Furniture and fixtures                             462       417
                                                  15,733    15,386
  Less-accumulated depreciation and              (12,907)  (11,817)
  amortization
       Total property and equipment, net           2,826     3,569

  Capitalized software, net                          469       225
  Deferred income taxes, net                         862       862
  Acquired developed technology, net               3,953     4,400
  Goodwill, net                                    3,190     3,310
  Other assets                                     2,143     2,153
       Total assets                              $48,106   $49,447

  LIABILITIES AND SHAREHOLDERS' EQUITY
  Accounts payable                                 1,962     2,636
  Accrued liabilities                              1,421     2,484
  Accrued compensation                             1,895     1,910
  Income taxes payable                               602       197
  Current portion of debt                          2,435     2,457
       Total current liabilities                   8,315     9,684

  Other liabilities                                  534       600
  Long term debt                                   8,453     9,620
       Total liabilities                          17,302    19,904

  Common stock, no par value                      35,334    35,326
  Retained deficit                                (4,712)   (5,930)
  Accumulated other comprehensive income (loss):
    Cumulative foreign currency translation          213       178
      adjustment
    Unrealized holding period loss                   (31)      (31)
       Total shareholders' equity                 30,804    29,543
       Total liabilities and shareholders'       $48,106   $49,447
        equity

        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                                  Six Months Ended
  30-Jun-98 30-Jun-97                                30-Jun-98 30-Jun-97
    <C>       <C>     <S>                              <C>       <C>
    $16,087   $18,379 Revenues                         $33,676   $35,237
      8,007     9,217 Cost of sales                     17,453    17,989

      8,080     9,162 Gross profit                      16,223    17,248

      2,640     3,524 Research and development           5,506     6,742
      2,617     2,947 Sales and marketing                5,003     5,828
      1,500     1,518 General and administrative         2,829     2,963

      6,757     7,989    Total operating expenses       13,338    15,533


      1,323     1,173 Operating income                   2,885     1,715

         60       129 Interest income                      143       212
       (286)     (276)Interest expense                    (526)     (567)
       (220)     (212)Other, net                          (445)     (408)
       
        877       814 Income before income taxes         2,057       952

        367       377 Provision for income taxes           839       418

       $510      $437  Net income                      $ 1,218   $   534

                      Net income  per share
      $0.09     $0.08        Basic EPS                   $0.22     $0.10

      $0.09     $0.08        Diluted EPS                 $0.21     $0.09


      5,517     5,492 Weighted average common shares     5,517     5,493

                      Weighted average common and common
      5,682     5,626      equivalent shares             5,674     5,649


                 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)                                        Six Months ended
                                                   30-Jun-98 30-Jun-97
  <S>                                                  <C>      <C>
  Cash flow from operating activities:
    Net income                                         $1,218   $  534
    Adjustment to reconcile net income to
     net cash provided
  (used) by operating activities:
     Depreciation and amortization                      1,909    2,415
     Change in assets and liabilities;
         Trade accounts receivable                          2    2,094
         Inventories                                    1,430   (1,498)
         Prepaid expenses and other current assets        105       94
         Accounts payable and accrued liabilities      (1,707)      42
         Accrued compensation                             (15)    (868)
         Income taxes payable                             405       44

     Net adjustments                                    2,129    2,323

         Net cash provided by operating activities      3,347    2,857
  Cash flows from investing activities:
     Additions to property, equipment and leasehold      (482)    (576)
  improvements
     Additions to capitalized software                   (391)     (85)
     Decrease in other assets                              10      219
     Decrease in marketable securities                     91      426

         Net cash  used by investing activities          (772)     (16)
  Cash flows from financing activities:
     Payment on debt                                   (1,189)    (540)
     Proceeds from debt                                     0       41
     Other long term liabilities                          (66)     859
     Change in cumulative foreign currency                 35     (167)
  translation
     Increase in common stock                               8        5

         Net cash provided (used) by financing         (1,212)     198
  activities

  Net increase in cash and cash equivalents             1,363    3,039
  Cash and cash equivalents at beginning of period      2,247    2,271

  Cash and cash equivalents at end of period           $3,610   $5,310

  Supplemental Disclosure of Cash Flow Information:
  Income taxes paid                                       432      299
  Income taxes refunded                                     0        2
  Interest paid                                           494      499


   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,
  1997.

  2.   ACQUISITIONS

  SYNAPTEL

  In 1996 the Company acquired all  the capital stock of Synaptel,  S.A.,
  ("Synaptel"), a French  company, for approximately  $19,000,000.   This
  acquisition was  accounted for using the purchase method of  accounting
  from the  effective  date  of the  acquisition.    The  total  purchase
  consideration  in  excess  of  the  fair  value  of  the  tangible  and
  identified  intangible  assets  acquired   is  included  in   goodwill.
  Identified intangibles acquired  included approximately $11,600,000  of
  in-process research and development, $4,230,000 of developed technology
  and $415,000 related  to Synaptel's assembled  workforce. Acquired  in-
  process research and development  activities had no alternative  future
  use and had not achieved technological feasibility and were expensed in
  June 1996.

  In addition to the purchase consideration discussed above, the purchase
  agreement  included   provisions   for  additional   consideration   of
  $3,500,000 cash and  450,000 options to  purchase the Company's  common
  stock at an  exercise price  of $18.50  per share  if Synaptel  attains
  certain revenue and operating income targets through 1998.  The  actual
  cash earn-out  and number  of employee  stock options  may increase  or
  decrease depending upon performance against targets.  The cash payments
  pursuant to  these  provisions  will be  accounted  for  as  additional
  purchase consideration  when payment  is  probable.   The  compensatory
  elements, if any,  for these stock  options will be  expensed over  the
  exercise periods.
<PAGE>
  ACQUIRED PRODUCT RIGHTS

  In June 1996, the Company acquired the rights to manufacture, market,
  and sell certain FDDI products from Cisco for a purchase price of
  $2,500,000.   The acquired product rights are included in acquired
  developed technology in the accompanying consolidated balance sheets.


  3.   NET INCOME (LOSS) PER COMMON AND COMMON EQUIVALENT
       SHARE

  The  Company  adopted  Statement  of  Financial  Accounting   Standards
  ("SFAS") No.  128, "Earnings  per Share,"  for  its December  31,  1997
  consolidated financial statements.  As a result, the Company's reported
  earnings per share for the three month and six month periods ended June
  30, 1997 are restated.  Under  SFAS NO. 128, basic earnings per  common
  share is computed by dividing net income by the weighted average number
  of shares  of common  stock outstanding  during  the period.    Diluted
  earnings per common  share is computed  by dividing net  income by  the
  weighted  average  of  common   stock  and  common  stock   equivalents
  outstanding during the period.  (Amounts in thousands)

                           Three Months ended:      Six Months ended:
                           June 30,   June 30,    June 30,   June 30,
                           1998       1997        1998       1997
  Weighted average
  shares outstanding         5,517      5,492      5,517       5,493
  Dilutive impact of
  stock options                165        134        157         156
  Total  weighted            
  average common and
  common equivalent
  shares outstanding         5,682      5,626      5,674       5,649


  Excluded from the calculation of diluted earnings per share are 960 and
  1,007  options  for  the  quarters  ended  June  30,  1998  and   1997,
  respectively, and 956 and 995 options for the six months ended June 30,
  1998, and 1997, respectively, as such options were anti-dilutive.

<PAGE>
  4.   CREDIT FACILITY

  Prior to and in conjunction with the Synaptel acquisition discussed  in
  Note 2, the Company entered into  a credit facility with BankOne  Texas
  NA.  The  credit facility 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 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  June  30,  1998,   the  Company  had  borrowings   of
  $10,644,000 and  remaining  availability  under  the  revolving  credit
  facility was $1,500,000.

  5.   COMPREHENSIVE INCOME

  Statement  of  Financial  Accounting   Standards  No.  130,   Reporting
  Comprehensive  Income,   establishes   standards  for   reporting   and
  displaying comprehensive income, and  its components in  a full set  of
  general-purpose financial statements.   The statement is effective  for
  fiscal years beginning after December 15, 1997 and the Company  adopted
  the statement effective January 1, 1998 (in thousands).

                                        Three months  Three months
                                           ended          ended
                                       June 30, 1998  June 30, 1997
  Net income                                 $ 510         $ 437
  Other comprehensive income,
    Unrealized holding gains
  (losses) arising
    during period , net of tax                   0             0
    Foreign currency translation               
     adjustment                                 79            17

  Comprehensive income                       $ 589         $ 454
            
                                    Six months ended  Six months ended
                                     June 30, 1998      June 30, 1997
  Net income                               $ 1,218         $ 534
  Other comprehensive income,
    Unrealized holding gains
  (losses) arising
    during period , net of tax                   0             0
    Foreign currency translation          
     adjustment                                 35         (167)

  Comprehensive income                     $ 1,253         $ 367
<PAGE>


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

  RESULTS OF OPERATIONS

  Revenues for the  three months ended  June 30, 1998   ("second  quarter
  1998") were  $16,087,000.    Revenues  for  the  same  period  in  1997
  ("comparative period") were $18,379,000.      The decrease in  revenues
  from the comparative period was attributable to declines in FDDI, SCSI,
  and Ethernet product revenues, partially offset by an approximate  800%
  increase in Fibre Channel product revenues.

  LAN product  revenues,  consisting  of FDDI,  Ethernet,  ATM  and  Fast
  Ethernet, represented  69% of  total revenues  for the  second  quarter
  1998, as compared  to 77%  for the  comparative period.   FDDI  product
  revenues declined  45%, Ethernet  product  revenues declined  51%,  ATM
  product revenues  declined  16%  and  Fast  Ethernet  product  revenues
  declined 17% as compared to the  comparative period.   FDDI,  Ethernet,
  ATM and Fast Ethernet product revenues represented 19%, 4%, 6% and  32%
  of total revenues, respectively for the second quarter 1998.

  Mass storage product  revenues, consisting  of SCSI  and Fibre  Channel
  adapter cards, represented 20% of total revenues for the second quarter
  1998, as compared  to 10%  for the  comparative period.   SCSI  product
  revenues declined 42%  while Fibre Channel  product revenues  increased
  approximately 800% over the comparative period.

  WAN product revenues comprised  9% of revenues  for the second  quarter
  1998, as  compared to  10% for  the comparative  period.   WAN  product
  revenues declined 18% as compared to the comparative period.

  Geographically, North America  revenues comprised  82% of  consolidated
  revenues in the second quarter 1998 compared to 79% in the  comparative
  period.  European  revenues comprised 16%  of consolidated revenues  in
  the second quarter 1998 and 18% in the comparative period. Pacific  Rim
  revenues comprised 2%  of consolidated revenues  in the second  quarter
  1998 and  3%  in the comparative period .

  Revenues for the six month period ended June 30, 1998 were  $33,676,000
  as compared to $35,237,000 for the  comparative period.  Revenues  from
  LAN, Mass  Storage and  WAN products  were  71%, 20%  and 8%  of  total
  revenues respectively, for the six month period ended June 30, 1998.

  The  Company's  current  marketing  strategy  is  to  increase   market
  penetration through  sales  to  major OEM  customers.    One  of  these
  customers accounted for approximately 39% of the Company's revenue  for
  the second quarter of 1998.

  The gross margin percentage for the three month periods ended June  30,
  1998 and 1997  was approximately 50%.  The gross margin percentages for
  the six month  period ended June  30, 1998 and  1997 were  48% and  49%
  respectively.
<PAGE>
  Operating expenses for the three month period ended June 30, 1998  were
  $6,757,000  as  compared  to  $7,989,000  for  the  comparable  period.
  Operating expenses for the  six month period ended  June 30, 1998  were
  $13,338,000 as compared to $15,533,000  for the comparable period.  The
  reduction in operating expenses  is due management's disciplined  focus
  to control  expenses  and improve  efficiencies  in all  areas  of  the
  Company.


  LIQUIDITY AND CAPITAL RESOURCES

  The  Company's  cash,  cash   equivalents  and  marketable   securities
  aggregated $6,791,000 at June 30, 1998, and $5,519,000 at December  31,
  1997.   The  Company's  improved cash  position  is  primarily  due  to
  profitable operations and reduction in inventory, partially off-set  by
  reductions in accounts  payable, payment for  machinery, equipment  and
  capitalized software, and payment of debt.  In the next twelve  months,
  scheduled  debt  payments   on  the  Company's   credit  facility   are
  approximately $2,192,000.

  The  Company  expects  that  its  cash,  cash  equivalents,  marketable
  securities and proceeds from  its credit facility  will be adequate  to
  meet foreseeable needs for the next 12 months.
<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:  August 13, 1998

                                          /s/ Gregory B. Kalush

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