U.S. Securities and Exchange Commission

                             Washington, D.C. 20549

                                   Form 10-QSB


(Mark One)

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

     For the quarterly period ended September 30, 1999.

|_|  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: 0-26525

                              BREDA TELEPHONE CORP.
        (Exact name of small business issuer as specified in its charter)


               Iowa                                              42-0895882
  (State or other jurisdiction                                 (IRS Employer
of incorporation or organization)                            Identification No.)

                Highway 217 East, P.O. Box 190, Breda, Iowa 51436
                    (Address of principal executive offices)

                                 (712) 673-2311
                         (Registrant's telephone number)


     Check  whether  the issuer (1) filed all  reports  required  to be filed by
Section 13 or 15(d) of the  Exchange  Act during the past 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___

     State the number of shares  outstanding of each of the issuer's  classes of
common equity, as of the latest practicable date: 37,722 shares of common stock,
no par value, at September 30, 1999.




<PAGE>



                              BREDA TELEPHONE CORP.
                                      INDEX


                                                                        Page No.
                                                                        --------
PART I.     FINANCIAL INFORMATION

  Item 1.   Financial Statements

            Condensed Consolidated Balance Sheets                         1 - 2

            Unaudited Condensed Consolidated Statements of Income           3

            Unaudited Condensed Consolidated Statements of
              Stockholders' Equity                                          4

            Unaudited Condensed Consolidated Statements of
              Cash Flows                                                  5 - 6

            Notes to Unaudited Condensed Consolidated
              Financial Statements                                        7 - 9

  Item 2.   Management's Discussion and Analysis of Financial
              Condition and Results of Operations                          10

PART II.    OTHER INFORMATION

  Item 1.   Legal Proceedings                                              17

  Item 2.   Changes in Securities and Use of Proceeds                      17

  Item 3.   Defaults Upon Senior Securities                                18

  Item 4.   Submission of Matters to a Vote of Security Holders            18

  Item 5.   Other Information                                              18

  Item 6.   Exhibits and Reports on Form 8-K                               19

            Signatures                                                     20

            EXHIBITS

            Exhibit 27 - Financial Data Schedule




<PAGE>




                         PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.
        --------------------

                           BREDA TELEPHONE CORPORATION
                                   BREDA, IOWA

                      Condensed Consolidated Balance Sheets


                                                     September 30,
                                                         1999       December 31,
         ASSETS                                       (Unaudited)      1998
                                                      -----------   -----------


CURRENT ASSETS
         Cash and cash equivalents                    $   549,768   $   782,959
         Current portion of investments                    90,092       114,550
         Accounts receivable                              507,502       649,044
         Interest receivable                               81,526        21,455
         Inventories                                       90,987        80,279
         Other                                            108,584        69,263
                                                      -----------   -----------
                                                        1,428,459     1,717,550
                                                      -----------   -----------


OTHER NONCURRENT ASSETS
         Investments, less current portion              5,588,616     1,530,045
         Other investments                              2,572,253     2,468,022
         Intangibles, net of accumulated amortization   1,081,105     1,753,447
         Other, net                                         6,232        21,390
                                                      -----------   -----------
                                                        9,248,206     5,772,904
                                                      -----------   -----------


PROPERTY, PLANT AND EQUIPMENT, NET                      6,438,004     6,185,874
                                                      -----------   -----------









TOTAL ASSETS                                          $17,114,669   $13,676,328
                                                      ===========   ===========


                   The accompanying notes are an integral part
              of these condensed consolidated financial statements.


<PAGE>

                           BREDA TELEPHONE CORPORATION
                                   BREDA, IOWA

                      Condensed Consolidated Balance Sheets

<TABLE>
<CAPTION>
                                                               September 30,
                                                                   1999       December 31,
     LIABILITIES AND STOCKHOLDERS' EQUITY                       (Unaudited)      1998
     ------------------------------------                       -----------   -----------
<S>                                                             <C>           <C>
CURRENT LIABILITIES
     Accounts payable                                           $   179,909   $   465,150
     Line of credit                                                      --       750,000
     Current portion of long-term debt                              655,072       655,072
     Accrued taxes                                                  233,243       177,033
     Other                                                          103,301        95,817
                                                                -----------   -----------
                                                                  1,171,525     2,143,072
                                                                -----------   -----------

LONG-TERM DEBT, less current portion                              6,717,982     7,156,342
                                                                -----------   -----------

DEFERRED INCOME TAXES                                               209,468       268,888
                                                                -----------   -----------

STOCKHOLDERS' EQUITY
     Common stock - no par value, 5,000,000 shares authorized
         37,722 shares issued and outstanding at $82 and $64
         stated value, respectively                               3,093,204     2,414,208
     Retained earnings                                            5,922,490     1,693,818
                                                                -----------   -----------
                                                                  9,015,694     4,108,026
                                                                -----------   -----------









TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                      $17,114,669   $13,676,328
                                                                ===========   ===========
</TABLE>



                   The accompanying notes are an integral part
              of these condensed consolidated financial statements.


                                        2

<PAGE>



                           BREDA TELEPHONE CORPORATION
                                   BREDA, IOWA

              Unaudited Condensed Consolidated Statements of Income
         For the Three and Nine Months Ended September 30, 1999 and 1998

<TABLE>
<CAPTION>
                                          For the Three Months Ended    For the Nine Months Ended
                                             1999           1998           1999           1998
                                          -----------    -----------    -----------    -----------
<S>                                       <C>            <C>            <C>            <C>
OPERATING REVENUES
     Local network services               $   126,120    $    96,894    $   367,498    $   296,275
     Network access services                  549,890        663,577      1,729,845      1,898,180
     Cable television services                267,613        256,135        791,556        724,100
     Telemarketing services                   106,030        166,598        326,951        446,706
     Internet services                         84,548         64,098        266,364        165,529
     Direct broadcast services (DBS)               --        331,482             --        998,288
     Billing and collection services           15,711         23,539         59,217         79,447
     Miscellaneous                            128,738        152,737        444,167        385,046
                                          -----------    -----------    -----------    -----------
                                            1,278,650      1,755,060      3,985,598      4,993,571
                                          -----------    -----------    -----------    -----------

OPERATING EXPENSES
     Plant specific operations                329,616        300,011        957,116        772,695
     Plant nonspecific operations              21,865         75,565         67,179        129,711
     Cost of programming                       45,330        305,506        180,581        864,519
     Depreciation and amortization            263,918        224,335        746,625        618,613
     Customer operations                      175,676        222,538        528,153        615,057
     Corporate operations                     183,627        151,416        648,735        451,798
     General taxes                             49,411         62,088        114,240        125,571
                                          -----------    -----------    -----------    -----------
                                            1,069,443      1,341,459      3,242,629      3,577,964
                                          -----------    -----------    -----------    -----------

OPERATING INCOME                              209,207        413,601        742,969      1,415,607
                                          -----------    -----------    -----------    -----------

NON-OPERATING INCOME (EXPENSE)
     Interest and dividend income              74,004         20,008        287,792         98,891
     Gain (loss) on sale of investments       (35,304)           369        (41,423)         3,821
     Gain on sale of DBS investment                --             --      7,436,415             --
     Loss on disposal of assets                    --        (68,918)       (23,287)       (68,918)
     Loss on extinguishment of debt                --             --             --        (66,913)
     Interest expense                        (127,072)      (138,943)      (374,866)      (344,582)
     Income from cellular partnership              --         34,873             --         34,873
     Income from cellular settlement               --        409,212             --        409,212
     Other income (expense)                    (1,547)         6,942          1,492         13,618
                                          -----------    -----------    -----------    -----------
                                              (89,919)       263,543      7,286,123         80,002
                                          -----------    -----------    -----------    -----------

INCOME BEFORE INCOME TAXES                    119,288        677,144      8,029,092      1,495,609
                                          -----------    -----------    -----------    -----------

INCOME TAXES                                   40,845        256,310      3,008,258        555,978
                                          -----------    -----------    -----------    -----------

NET INCOME                                $    78,443    $   420,834    $ 5,020,834    $   939,631
                                          ===========    ===========    ===========    ===========

NET INCOME PER SHARE (Note 3)             $      2.08    $     11.17    $    133.10    $     24.93
                                          ===========    ===========    ===========    ===========
</TABLE>

                   The accompanying notes are an integral part
              of these condensed consolidated financial statements.

                                        3

<PAGE>




                           BREDA TELEPHONE CORPORATION
                                   BREDA, IOWA

       Unaudited Condensed Consolidated Statements of Stockholders' Equity


<TABLE>
<CAPTION>
                                                            Common Stock                Retained
                                                       Shares           Amount           Earnings           Total
                                                    ------------     -------------     ------------      ------------
<S>                                                       <C>       <C>               <C>               <C>
Balance at December 31, 1997                              37,928    $    1,555,048    $   1,666,332     $   3,221,380

    Total comprehensive income:

        Net income                                                                          902,636           902,636

    Stock value adjustment                                                 875,150         (875,150)

    Common stock redeemed, net                              (206)          (15,990)                           (15,990)
                                                    ------------     -------------     ------------      ------------

Balance at December 31, 1998                              37,722         2,414,208        1,693,818         4,108,026

    Total comprehensive income:

        Net income                                                                        5,020,834         5,020,834

    Stock value adjustment                                                 678,996         (678,996)


    Dividends paid ($3/share)                                                              (113,166)         (113,166)
                                                    ------------     -------------     ------------      ------------

Balance at September 30, 1999                             37,722    $    3,093,204    $   5,922,490     $   9,015,694
                                                    ============     =============     ============      ============
</TABLE>







                   The accompanying notes are an integral part
             of these condensed consolidated financial statements.


                                        4

<PAGE>



                           BREDA TELEPHONE CORPORATION
                                   BREDA, IOWA

            Unaudited Condensed Consolidated Statements of Cash Flows
              For the Nine Months Ended September 30, 1999 and 1998


<TABLE>
<CAPTION>
                                                                   1999           1998
                                                               -----------    -----------
<S>                                                            <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES
     Net Income                                                $ 5,020,834    $   939,631
     Adjustments to reconcile net income to net cash
       provided by operating activities:
         Depreciation and amortization                             746,625        631,329
         Amortization of investment tax credits                     (7,327)        (7,326)
         Deferred income taxes                                     (52,093)            --
         Gain on sale of DBS investment                         (7,436,415)            --
         Changes in operating assets and liabilities:
              Decrease in assets                                    31,442         89,700
              Decrease in liabilities                             (221,547)      (287,047)
                                                               -----------    -----------
         Net cash provided by (used in) operating activities    (1,918,481)     1,366,287
                                                               -----------    -----------


CASH FLOWS FROM INVESTING ACTIVITIES
     Capital expenditures                                         (923,714)      (928,430)
     Salvage, net of cost of removal                                10,677        109,192
     Purchase of investments                                    (4,034,113)      (226,040)
     (Increase) decrease in other investments                     (104,231)        20,218
     Additions to start-up costs                                        --        (90,247)
     Proceeds from sale of DBS investment                        8,038,197             --
                                                               -----------    -----------
         Net cash provided by (used in) investing activities     2,986,816     (1,115,307)
                                                               -----------    -----------


CASH FLOWS FROM FINANCING ACTIVITIES
     Redemption of capital stock                                        --        (17,910)
     Proceeds from long-term debt                                       --      3,650,050
     Repayment of line of credit                                  (750,000)            --
     Repayment of long-term debt                                  (438,360)    (3,819,785)
     Dividends paid                                               (113,166)            --
                                                               -----------    -----------
         Net cash used in financing activities                  (1,301,526)      (187,645)
                                                               -----------    -----------


NET (DECREASE) INCREASE IN CASH AND
  CASH EQUIVALENTS                                                (233,191)        63,335
                                                               -----------    -----------

CASH AND CASH EQUIVALENTS AT BEGINNING OF
  PERIOD                                                           782,959        612,885
                                                               -----------    -----------

CASH AND CASH EQUIVALENTS AT END OF PERIOD                     $   549,768    $   676,220
                                                               ===========    ===========
</TABLE>

                   The accompanying notes are an integral part
              of these condensed consolidated financial statements.


                                        5

<PAGE>



                           BREDA TELEPHONE CORPORATION
                                   BREDA, IOWA

            Unaudited Condensed Consolidated Statements of Cash Flows
              For the Nine Months Ended September 30, 1999 and 1998



                                                            1999         1998
                                                         ----------   ----------
SUPPLEMENTAL DISCLOSURES OF CASH
  FLOW INFORMATION

     Cash paid during the year for:
         Interest                                        $  374,866   $  344,582
         Income taxes                                    $2,990,528   $  606,473

SUPPLEMENTAL DISCLOSURES OF NONCASH
  INVESTING AND FINANCING ACTIVITIES:

Other investments acquired through debt financing        $       --   $  191,321
                                                         ==========   ==========


During  1998,  the  Company  purchased  all of the  capital  stock  of  Westside
Independent Telephone Company and Westside Communications,  Inc. for $2,264,327.
The following is a summary of the purchase which was entirely debt financed.


Fair value of telephone plant                                       $   638,724
Fair value of CATV plant                                                212,560
Current Assets                                                           38,675
Other Investments                                                       404,472
Goodwill                                                              1,336,083
Current Liabilities                                                     (40,759)
Deferred Credits                                                       (325,428)
                                                                    -----------
                                                                    $ 2,264,327
                                                                    ===========















                   The accompanying notes are an integral part
              of these condensed consolidated financial statements.


                                        6

<PAGE>



                           BREDA TELEPHONE CORPORATION
                                   BREDA, IOWA

         Notes to Unaudited Condensed Consolidated Financial Statements


1.   CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
     -------------------------------------------

     In  the  opinion  of  management,   the  accompanying  unaudited  condensed
     consolidated  financial  statements contain all adjustments  (consisting of
     only normal  recurring  items)  necessary to present  fairly the  financial
     position as of September  30, 1999 and December 31, 1998 and the results of
     operations  and changes in cash flows for the three and nine  months  ended
     September 30, 1999 and 1998.

     Certain  information and footnote  disclosures  normally included in annual
     financial   statements  prepared  in  accordance  with  generally  accepted
     accounting  principles have been condensed or omitted. It is suggested that
     these  financial  statements  be read in  conjunction  with  the  financial
     statements  and notes thereto  included in the Company's  December 31, 1998
     audited  financial  statements.  The results of  operations  for the period
     ending  September 30, 1999 are not necessarily  indicative of the operating
     results of the entire year.

2.   OPERATING SEGMENTS
     ------------------

     Breda  Telephone  Corporation  organizes its business  into two  reportable
     segments: local exchange carrier (LEC) services and broadcast services. The
     LEC services segment  provides  telephone and data services to customers in
     local  exchanges  located in Central Iowa. The broadcast  services  segment
     provides  cable  television  to  customers  in  Iowa  and  Nebraska.  Breda
     Telephone  Corporation  also has  operations in internet and  telemarketing
     services  that do not  meet  the  quantitative  thresholds  for  reportable
     segments.

<TABLE>
<CAPTION>
                                                    Local
                                                   Exchange
                                                   Carriers        Broadcast           Other            Total
                                                 ------------     ------------     -------------     ------------
<S>                                             <C>              <C>              <C>               <C>
   Nine months ended September 30, 1999
   ------------------------------------

Revenues and sales
     External customers                         $   2,660,505    $     791,556    $      533,537    $   3,985,598
     Intersegment                                          --               --                --               --
Segment profit (loss)                                 413,299        4,630,223           (22,688)       5,020,834

   Nine months ended September 30, 1998
   ------------------------------------

Revenues and sales
     External customers                         $   2,658,948    $   1,722,388    $      612,235    $   4,993,571
     Intersegment                                          --               --                --               --
Segment profit (loss)                                 881,480           73,904           (15,753)         939,631
</TABLE>







                                        7

<PAGE>




                           BREDA TELEPHONE CORPORATION
                                   BREDA, IOWA

         Notes to Unaudited Condensed Consolidated Financial Statements


2.   OPERATING SEGMENTS, (Continued)
     -------------------------------

<TABLE>
<CAPTION>
                                                     Local
                                                    Exchange
                                                    Carriers        Broadcast          Other            Total
                                                  ------------     ------------     ------------     ------------
<S>                                              <C>              <C>              <C>              <C>
    Three months ended September 30, 1999
    -------------------------------------

Revenues and sales
     External customers                          $     829,769    $     267,613    $     181,268    $   1,278,650
     Intersegment                                           --               --               --               --
Segment profit (loss)                                   62,295            8,890            7,258           78,443

    Three months ended September 30, 1998
    -------------------------------------

Revenues and sales
     External customers                          $     903,703    $     587,617    $     263,740    $   1,755,060
     Intersegment                                           --               --               --               --
Segment profit (loss)                                  415,947           27,425          (22,538)         420,834
</TABLE>




<TABLE>
<CAPTION>
    Reconciliation of Segment Information
    -------------------------------------
                                              Three months ended         Nine months ended
                                             Sept 30,     Sept 30,     Sept 30,     Sept 30,
                                               1999         1998         1999         1998
                                            ----------   ----------   ----------   ----------
<S>                                         <C>          <C>          <C>          <C>
REVENUES AND SALES:
     Total revenues and sales for
       reportable segments                  $1,097,382   $1,491,320   $3,452,061   $4,381,336
     Other revenues                            181,268      263,740      533,537      612,235
     Elimination of intersegment
       revenues and sales                           --           --           --           --
                                            ----------   ----------   ----------   ----------
         Consolidated Revenues              $1,278,650   $1,755,060   $3,985,598   $4,993,571
                                            ==========   ==========   ==========   ==========

PROFIT:
     Total profit for reportable segments   $   78,443   $  420,834   $5,020,834   $  939,631
     Other profit (loss)                            --           --           --           --
     Non-operating segment                          --           --           --           --
     Minority interest                              --           --           --           --
                                            ----------   ----------   ----------   ----------
         Net Income                         $   78,443   $  420,834   $5,020,834   $  939,631
                                            ==========   ==========   ==========   ==========
</TABLE>




                                        8

<PAGE>





                           BREDA TELEPHONE CORPORATION
                                   BREDA, IOWA

         Notes to Unaudited Condensed Consolidated Financial Statements


3.   NET INCOME PER COMMON STOCK
     ---------------------------

     Net income per common  share for 1999 and 1998 was computed by dividing the
     weighted average number of shares of common stock  outstanding into the net
     income.  The weighted average number of shares of common stock  outstanding
     for the three and nine month periods ended  September 30, 1999 and 1998 are
     37,722 and 37,722 and 37,811 and 37,707, respectively.

4.   DISPOSITION OF DBS INVESTMENT
     -----------------------------

     On January 11, 1999, the Company sold  substantially  all of its assets and
     liabilities  of their Direct  Broadcast  Satellite  (DBS)  investment.  The
     Company  received  cash of  $8,274,689;  however,  $230,000  was  paid as a
     commission  and  $6,492  was held in an escrow  account  until  final  sale
     adjustments  were  completed.   The  transaction  resulted  in  a  gain  of
     $7,436,415,  which was included in  operations  during the first quarter of
     1999.

5.   RECLASSIFICATION
     ----------------

     Certain  amounts   previously   reported  for  the  prior  year  have  been
     reclassified to conform to the 1999 presentation.

















                                        9

<PAGE>



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

          Nine Months  Ended  September  30, 1999  Compared to Nine Months Ended
          ----------------------------------------------------------------------
          September 30, 1998.
          -------------------

          There was a decrease in total  operating  revenues  for the nine month
          period ended  September 30, 1999,  when compared to the same period in
          1998, of $1,007,973, or 20.2%. One factor contributing to the decrease
          was the fact that no direct  broadcast  service revenues were received
          after the  January  11,  1999 sale of the direct  broadcast  satellite
          operation.  For example,  during the nine month period ended September
          30, 1998, direct broadcast service revenues represented 20.0% of total
          operating revenues, or $998,288. Two other important components of the
          decrease  in  total  operating  revenues  were  the  decreases  in the
          revenues   from   telemarketing   services  and  in  access   charges.
          Telemarketing  revenues  decreased by $119,755,  or 26.8%,  because of
          some  calling  number  unavailability,  which  resulted  in down time.
          Access charges revenues  decreased by $168,335,  or 8.9%, because of a
          reduction in the reimbursement  rate for interstate access charges and
          because  of a decline  in the  volume of  telemarketing  calls made by
          Breda's subsidiary,  Pacific Junction. The telemarketing calls made by
          Pacific Junction are a major source of access charges revenue.

          There was an increase in local network services revenue of $71,223, or
          24%,  during the nine month period  ended  September  30,  1999,  when
          compared to the same period in 1998.  This  increase was due primarily
          to two  factors.  One was an  increase of 340  telephone  subscribers,
          which  resulted  from the purchase of Westside  Independent  Telephone
          Company in June of 1998. The other factor was a rate  increase,  which
          went into effect in April,  1999.  There was also an increase in cable
          television  revenues  of  $67,456,  or 9.3%,  when  comparing  the two
          periods.  This increase resulted primarily from three factors. One was
          a rate increase  that was  effective on April 1, 1999.  The second was
          the addition of 90 cable subscribers from Auburn,  Iowa as of November
          1,  1998.  The  third  was  the  addition  of  301  additional   cable
          subscribers resulting from the acquisition of Westside Communications,
          Inc.  in June,  1998.  There was also an  increase  in  revenues  from
          internet  services  of  $100,835,  or 60.9%,  when  comparing  the two
          periods. This increase resulted from an increased customer base.

          There was a decrease in total operating expenses of $335,335, or 9.4%,
          for the nine month period ended  September 30, 1999,  when compared to
          the same  period in 1998.  Programming  expenses  declined by $683,938
          when  comparing  the two  periods  because  of the sale of the  direct
          broadcast satellite operation.  The remaining programming expenses are
          attributable to cable television operations. Plant operations expenses
          increased by $121,889,  or 13.5%, when comparing the two periods. This
          increase  primarily  reflects wage and price  increases and additional
          expenditures incurred with updating switches in three of the telephone
          exchange service areas.  There were also additional  expenses incurred
          during the nine month period ended  September 30, 1999 with  equipment
          updates  to add  cable  television  channels  in most of the 19  towns
          served.  Corporation  operations  expenses  increased by $196,937,  or
          43.6%,  when comparing the two periods.  This increase relates to wage
          increases,  additional staff, and legal, accounting and other expenses
          incurred  with  respect to Breda  becoming a reporting  company  under
          Securities   Exchange  Act  of  1934.   Customer  operations  expenses
          decreased  $86,904,  or 14.1%,  when  comparing  the two periods.  The
          decrease  resulted  from the fact that  Breda did not need to  provide
          customer services for the direct broadcast  satellite  operation after
          the sale of that  operation in January,  1999,  and from a decrease in
          staffing  hours for that area.  The upgrading of switch  equipment and
          other capital improvements resulted in

                                       10

<PAGE>



          an increase in depreciation expense of $128,012,  or 20.7%, again when
          comparing the two periods.

          Non-operating  income before income taxes increased by $7,206,121,  or
          9007.4%,  during the nine month period ended  September 30, 1999, when
          compared to the same  period in 1998.  Most of this  increase  was the
          result  of the  $7,436,415  gain on the sale of the  direct  broadcast
          satellite  operation and the additional  interest  income on the funds
          invested  from that sale.  The nine month period ended  September  30,
          1998,  however,   also  reflected  $34,873  in  income  from  cellular
          partnerships and $409,212 from non-recurring cellular settlements.  No
          similar  income  was  received  during  the nine  month  period  ended
          September 30, 1999.

          Income taxes  increased by $2,452,280  for the nine month period ended
          September  30,  1999,  when  compared to the same period in 1998.  The
          increase resulted  primarily from taxes on the gain on the sale of the
          direct broadcast satellite operation.

          Net income  increased  by  $4,081,203  for the nine month period ended
          September  30,  1999,  when  compared to the same period in 1998.  The
          increase was  attributable  mainly to the sale of the direct broadcast
          satellite operation.

          Liquidity and Capital Resources at Year Ended 1998.
          ---------------------------------------------------

          Breda's net working capital was a negative $425,522 as of the close of
          December 1998.  This  represents a decrease of $448,561 in net working
          capital  from  year-end  1997.  The  negative  net working  capital at
          year-end  1998 was due  primarily to timing on the movement of cash. A
          $750,000  line of credit  advance  was taken from the Rural  Telephone
          Finance  Cooperative in December of 1998, and paid back on January 12,
          1999.

          Liquidity  and Capital  Resources at Nine Months Ended  September  30,
          ----------------------------------------------------------------------
          1999.
          -----

          Breda had a decrease in cash and cash  equivalents of $233,191  during
          the nine month period ended  September 30, 1999,  when compared to the
          year ended  December 31, 1998.  This resulted in a balance of $549,768
          as of September 30, 1999. Breda's investments  increased,  however, by
          $4,034,113.  The increase in the overall cash and investments resulted
          primarily  from the  proceeds  received  from  the sale of the  direct
          broadcast satellite operation.

          Breda's  net working  capital was  $256,934  at  September  30,  1999.
          Estimated  income tax  payments  were funded from  non-current  assets
          during this time period.  Current  liabilities  during the  nine-month
          period  ended  September  30, 1999 were  therefore  reduced  without a
          corresponding reduction in current assets.

          Other  investments  increased  by $104,231  for the nine month  period
          ending  September 30, 1999.  This increase  resulted from an increased
          investment in a cellular partnership.

          Other Activities
          ----------------

          A final balloon payment of $79,382 is due in October of 1999 under the
          real estate contract  entered into by  Tele-Services  for the building
          utilized  by  Breda  and  Prairie   Telephone   as  their  office  and
          headquarters.

          The sale of Breda's direct broadcast satellite operation in January of
          1999  generated  $8,200,000,  before  taxes.  The after tax  amount is
          estimated to be approximately $5,200,000.

                                       11

<PAGE>



          Breda and its subsidiaries  operate in  capital-intensive  industries.
          Their primary source of working capital  continues to be revenues from
          operating  activities.  The sale of Breda's direct broadcast satellite
          division  in January of 1999 also  provided  a  significant  source of
          working capital and funding for potential future expansions.

          Breda and its  subsidiaries  have and will  continue to incur  capital
          expenditures  in connection  with their two-year  project of upgrading
          their telephone,  cable, and other equipment and systems for Year 2000
          compliance and related FCC requirements.

          Breda  and  its  subsidiaries   have  broken  down  their  assessment,
          conversion and remediation,  and testing procedures and activities for
          Year 2000 compliance into the following three general categories:

          o    Network systems, which are those systems, components and software
               directly affecting telecommunications, transmission or reception.
               Network systems includes switching  equipment,  internet routers,
               generators,    fiber    terminals,     receivers,     modulators,
               de-scramblers,  dialers, amplifiers and other telephone and cable
               equipment and systems.

          o    Support systems,  which are operations and administrative support
               systems.  Support  systems  include  billing and  accounting  and
               related computer hardware and software.

          o    Auxiliary  systems,  which are internal processes such as payroll
               and  human  resources.   Auxiliary  systems  include   telephone,
               security and alarm control,  environmental control, and equipment
               such as postage machine, faxes and copiers.

          Breda and its  subsidiaries  estimate  that their  assessment of their
          Year  2000  risks  will  be  completed  by  November  30,  1999.   The
          approximate  percentage of assessment activities for each of the above
          categories  which had been completed at the time of the filing of this
          quarterly report were as follows:

         o  Breda                           o  Prairie Telephone

           o Network systems - 90% complete   o Network  systems - 90% complete
           o Support systems - 90% complete   o Support systems  - 90% complete
           o Auxiliary systems - 90% complete o Auxiliary systems - 90% complete

         o  Westside Independent            o  Tele-Services and  Westside
                                               Communications

           o Network systems - 90% complete   o Network systems - 90% complete
           o Support systems - 90% complete   o Support systems - 90% complete
           o Auxiliary systems - 90% complete o Auxiliary systems - 90% complete

         o  BTC                             o  Pacific Junction

           o Network systems - 90% complete   o Network systems - 90% complete
           o Support systems - 90% complete   o Support systems - 90% complete
           o Auxiliary systems - 90% complete o Auxiliary systems - 90% complete


                                       12

<PAGE>




          As shown by the above percentages,  the assessment  activities for the
          network,   support  and  auxiliary  systems  have  been  substantially
          completed.  As indicated  above,  Breda  estimates  that all remaining
          assessment activities will be completed by November 30, 1999.

          Breda's  and its  subsidiaries'  assessment  activities  also  include
          assessing the Year 2000  compliance and associated  risks of all third
          parties and  subscribers who are material to their  businesses.  Breda
          believes they have  identified all  applicable  third parties for this
          purpose. Breda has obtained written compliance statements from many of
          the  third  parties  and is  pursuing  obtaining  statements  from the
          others. Based on the compliance  statements already received from some
          of the  third  parties  and  from  discussions  with the  other  third
          parties,  Breda  believes that all material  third parties will timely
          achieve Year 2000 compliance with respect to matters affecting Breda's
          and its subsidiaries' businesses.

          Breda  and  its  subsidiaries  do  not  anticipate  any  loss  of  any
          subscribers  due to Year 2000  issues or  risks.  Breda  also does not
          believe that the loss of any particular subscriber, other than Pacific
          Junction,  would  have a  material  adverse  affect  on  Breda  or its
          subsidiaries. Pacific Junction's telemarketing services create a major
          source of access charges revenue.

          Breda  and its  subsidiaries  are in the  process  of  completing  all
          necessary conversion and remediation activities.  Breda estimates that
          all remaining conversion and remediation  activities will be completed
          by November 30, 1999.  The  approximate  percentage of conversion  and
          remediation  activities  which  had  been  completed  for the  network
          systems,  support  systems  and  auxiliary  systems at the time of the
          filing of this quarterly report were as follows:

          o Breda - 90% complete                 o Prairie Telephone - 90%
          o Westside Independent - 90% complete        complete
          o Pacific Junction - 90% complete      o Tele-Services and Westside
          o BTC - 90% complete                     Communications - 90% complete

          As indicated above, Breda estimates that all remaining  conversion and
          remediation activities will be completed by November 30, 1999.

          Breda does not believe  that any  detailed  testing of Breda's and its
          subsidiaries'  network  systems is possible  given the nature of those
          systems and their  interplay  with the systems of other third parties.
          Breda has, however,  been advised by the manufacturer of its telephone
          switches that the switches  that have been recently  installed are all
          Year 2000  compliant.  As of the time of the filing of this  quarterly
          report,  all switches have been replaced except for one. The remaining
          switch will be replaced on November 16, 1999.  Breda believes that all
          remaining assessment,  conversion and remediation activities regarding
          all network systems will be completed by November 30, 1999.

          The testing of the support systems is an ongoing process, with testing
          occurring as the various  conversion  and  remediation  processes  are
          completed.  Any  replacement  components  for the support  systems are
          tested  when  acquired.  The  results of all  testing  of the  support
          systems to date has been satisfactory to Breda.

          The remaining  testing on auxiliary systems will be done following the
          completion of the assessment,  conversion and  remediation  activities
          for the auxiliary systems.


                                       13

<PAGE>




          Breda  estimates  that  all  remaining  testing   activities  will  be
          completed by November 30, 1999.

          Breda  estimates that the aggregate cost for its and its  subsidiaries
          Year 2000 compliance activities will be approximately  $2,000,000 when
          completed.  It  has  incurred  approximately  $1,680,019  to  date  in
          conducting its Year 2000 activities.

          Neither Breda nor any of its subsidiaries have any written contingency
          plans  regarding  any Year  2000  issues or  problems  that may not be
          properly   remediated.   They  are  in  the  process  of   formulating
          contingency  plans,  but they had not been finalized as of the time of
          the filing of this quarterly report.

          Based on the above  information,  however,  Breda does not  anticipate
          that Year 2000  issues will have a material  adverse  effect on Breda,
          its subsidiaries or their consolidated financial position,  results of
          operations  or  cash  flows  because  it  believes  that  its  and its
          subsidiaries' equipment, software and other internal computer systems,
          and those of the third parties with which they have material dealings,
          will achieve Year 2000  compliance  before Year 2000 issues will begin
          to  potentially  have an adverse  effect.  There can be no  assurance,
          however,  that  Breda's  or its  subsidiaries'  Year 2000  remediation
          efforts,  or those of any third parties with which they may deal, will
          be properly  and timely  completed.  The failure to do so could have a
          material adverse effect on Breda and its subsidiaries.

          Breda's primary capital investment activity will currently continue to
          be additions  to property,  plant and  equipment.  For example,  Breda
          continues to make investments in state-of-the-art  technology in order
          to try  to  offer  subscribers  the  best  possible  service.  Capital
          expenditures for 1999 are expected to be over $1,061,000.

          Breda  believes  that the funds from the sale of its direct  broadcast
          satellite  division,  along  with  its  anticipated  normal  operating
          revenues,  will generate  sufficient working capital for Breda and its
          subsidiaries  to meet  their  current  operating  needs  and  maintain
          historical fixed asset addition levels.

          Breda also plans to continue to consider  expanding  its core business
          of providing  telephone services by looking at any opportunities which
          may arise to acquire  additional  telephone lines. For example,  Breda
          considered and pursued the acquisition of the telephone lines recently
          sold by GTE and US West. Those telephone lines were, however, acquired
          by other  telephone  companies.  One of the  purchasers of some of the
          telephone  lines of US West was Iowa  Network  Services.  Iowa Network
          Services provides various services to telephone  companies,  including
          Breda,  Prairie  Telephone  and  Westside  Independent.   Although  no
          definite  plans exist,  it is possible that Iowa Network  Services may
          consider selling some of those telephone lines in the next two to five
          years.  If  that  occurs,   Breda,   Prairie  Telephone  and  Westside
          Independent will consider  pursuing the acquisition of those telephone
          lines. There is no assurance, however, that Iowa Network Services will
          ever  sell any of the  telephone  lines,  or if it does,  that  Breda,
          Prairie  Telephone or Westside  Independent  will  determine to pursue
          those  acquisitions  or will be successful in acquiring any lines even
          if they determine to pursue them. Breda also has an interest in Alpine
          Communications,   L.C.,  which  was  formed  by  several   independent
          telephone companies. Alpine Communications,  L.C. has purchased former
          US West telephone properties in Iowa. Given the recent acquisitions of
          the GTE and US West  telephone  lines  by other  telephone  companies,
          Breda currently does not foresee the possibility of the acquisition of
          any additional  telephone lines,  other than perhaps from Iowa Network
          Services as discussed above.


                                       14

<PAGE>



          Breda,  Prairie Telephone and Westside  Independent  currently have no
          definite plans to provide any material additional or improved services
          to their subscribers.  This determination may change quickly, however,
          given the rapidly changing  technology in the  telecommunications  and
          cable industries.

          There are also no current plans to expand the cable services areas of,
          or  the  cable  services  provided  by,   Tele-Services  and  Westside
          Communications.

          Three Months Ended  September  30, 1999 Compared to Three Months Ended
          ----------------------------------------------------------------------
          September 30, 1998.
          -------------------

          There was a decrease in total  operating  revenues for the three month
          period ended  September 30, 1999,  when compared to the same period in
          1998, of $476,410,  or 27.1%. The decrease resulted primarily from the
          fact that  Breda no  longer  received  any  revenues  from its  direct
          broadcast  satellite operation after the January 11, 1999 sale of that
          operation. The three-month period ended September 30, 1999 showed zero
          direct broadcast satellite revenues, while the same three-month period
          in 1998 showed $331,482.  Another important  component of the decrease
          in  total  operating   revenues  was  the  $60,568   decrease  in  the
          telemarketing  revenues.  Telemarketing  revenues were down because of
          some calling number unavailability, which resulted in some down time.

          There was an increase in local network services revenue of $29,226, or
          30.2%,  during the three month period ended  September 30, 1999,  when
          compared to the same period in 1998.  This  increase was due primarily
          to an  increase in  customers  requesting  a second line for  internet
          services and to a rate increase,  which was effective in April,  1999.
          There was a decrease in network  access  services  revenue of $113,687
          for the three month period ended  September 30, 1999, when compared to
          the same  period in 1998.  This  decrease  resulted  primarily  from a
          decrease in the number of calls made by the  telemarketing  operation.
          The  telemarketing  calls made by the  telemarketing  operation  are a
          major source of access  revenues.  Access revenue was also affected by
          an access rate reimbursement decrease, which went into effect in July,
          1999. There was an increase in cable  television  revenues of $11,478,
          or 4.5%,  when  comparing  the two  periods.  This  increase  resulted
          primarily from two factors. One was a rate increase that was effective
          April 1, 1999.  The other was the addition of 90 cable  customers from
          Auburn,  Iowa,  as of November 1, 1998.  The  revenues  from  Internet
          services  increased  $20,450,  or 31.9%, over the three-month period a
          year ago because of an increased customer base.

          There was a decrease in total  operating  expenses for the three month
          period ended  September 30, 1999,  when compared to the same period in
          1998, of $272,016, or 20.3%. Programming expenses declined by $260,176
          when  comparing  these two  periods  because of the sale of the direct
          broadcast satellite operation.  Plant operations expenses decreased by
          $24,095,  or 6.4%,  when  comparing  the two  periods.  This  decrease
          primarily  reflects some staffing  changes and timing  differences  on
          repair and maintenance  expenditures.  Corporate  operations  expenses
          increased by $32,211,  or 21.3%, when comparing the two periods.  This
          increase  reflects  wage  increases,   additional  staff,  and  legal,
          accounting and other expenses  related to the need for Breda to become
          a  reporting  company  under  the  Securities  Exchange  Act of  1934.
          Customer   operations   expenses  decreased  $46,862,  or  21.1%  when
          comparing the two periods. This decrease was primarily due to the fact
          that Breda was no longer required to provide  customer service for the
          direct broadcast  satellite operation after the sale of that operation
          in January,  1999,  and from a decrease in the  staffing in that area.
          The  upgrading  of switch  equipment  and other  capital  improvements
          resulted in an increase in depreciation  expense of $39,583, or 17.6%,
          again when comparing the two periods.

                                       15

<PAGE>



          Non-operating  income  before income taxes  increased by $353,462,  or
          134.1%,  during the three month period ended  September 30, 1999, when
          compared to the same period in 1998.  In the three month  period ended
          September 30, 1998,  however,  Breda had received $444,085 in cellular
          partnership income and non-recurring cellular settlements.  No similar
          income was received in the similar period in 1999.  Losses on the sale
          of  investments  and additional  interest  expenses were offset by the
          increase in dividend  and interest  income from the proceeds  invested
          from the sale of the direct broadcast satellite operation.

          Income  taxes  decreased  by $215,465 for the three month period ended
          September  30, 1999,  when  compared to the same period in 1998.  This
          resulted primarily from the $557,856 decrease in overall income before
          income taxes.

          As a result,  net income  decreased  $342,391  during the  three-month
          period ended  September 30, 1999,  when compared to the same period in
          1998.

          Forward Looking Statements.
          ---------------------------

          This item and other items in this quarterly report may contain certain
          forward  looking  statements  that  involve and are subject to various
          risks,  uncertainties  and  assumptions.  Forward  looking  statements
          include,   but  are  not  limited  to,   statements  with  respect  to
          anticipated  future  trends in revenues  and net  income,  projections
          concerning   operations   and  cash  flow,   growth  and   acquisition
          opportunities,  management's  plans and intentions for the future, and
          other similar  forecasts and statements of expectation.  Words such as
          "expects,"   "estimates,"  "plans,"   "anticipates,"   "contemplates,"
          "predicts," "intends," "believes," "seeks," "should" and other similar
          expressions  or  variations  thereof are intended to identify  forward
          looking  statements.  Forward looking statements made by Breda and its
          management   are  based  on   estimates,   projections,   beliefs  and
          assumptions  made or existing at the time of such  statements  and are
          not guarantees of future results or  performance.  Breda disclaims any
          obligation to update or revise any forward looking statements based on
          the occurrence of future events,  the receipt of new  information,  or
          otherwise.

          Actual future performance,  outcomes and results may differ materially
          from those  expressed in forward  looking  statements as a result of a
          number  of  risks,   uncertainties   and   assumptions.   The   risks,
          uncertainties  and assumptions  affecting  forward looking  statements
          include, but are not limited to:

          o    the possible adverse effects to Breda and its subsidiaries  which
               may arise under the regulations  which will be promulgated  under
               the   Telecommunications   Act  of  1996,   including   increased
               competition;

          o    adverse changes by the Federal  Communications  Commission in the
               rates of the access  charges that can be charged by Breda and its
               subsidiaries to long distance carriers;

          o    technological   advances  in  the  telecommunications  and  cable
               industries  which may replace or otherwise  adversely affect in a
               material way the existing  technologies utilized by Breda and its
               subsidiaries;

          o    potential  adverse  effects  resulting from Year 2000  compliance
               issues;

          o    general industry and economic conditions;

          o    acts or omissions of third  parties  which are beyond the control
               of Breda;


                                       16

<PAGE>



          o    changes in or further governmental regulations and policies; and

          o    continued availability of financing, and on favorable terms.

          The  discussion  of  Breda's   financial   condition  and  results  of
          operations  should  also be read in  conjunction  with  the  financial
          statements  and  related  notes  included  in  Item 1  above  in  this
          quarterly report.


                           PART II - OTHER INFORMATION

Item 1.   Legal Proceedings.
          ------------------

          Breda currently is not aware of any pending legal  proceeding to which
          Breda is a party or to which any of Breda's property is subject, other
          than routine  litigation  that is incidental  to its  business.  Breda
          currently  is also  not  aware  that  any  governmental  authority  is
          contemplating  any  legal  proceeding  against  Breda  or  any  of its
          property.

Item 2.   Changes in Securities and Use of Proceeds.
          ------------------------------------------

          Each  shareholder of Breda is entitled to only one vote on each matter
          presented  for the vote of  shareholders,  regardless of the number of
          shares of common stock held by the shareholder.  There were,  however,
          two exceptions.

          One exception is that each  shareholder  who  previously  held Class A
          stock of Breda  has one vote for each  share of Class A stock  held by
          the  shareholder  on February 28, 1995, and until one of the following
          events occurs:

          o    the shareholder no longer receives services from Breda,

          o    the  shareholder  no longer  resides  in the Breda or  Lidderdale
               telephone exchange areas served by Breda,

          o    the shareholder dies, or

          o    the  shareholder  transfers the  shareholder's  shares to someone
               else.

          This exception has not been changed.

          The  other  exception  was that  shareholders  who were not  receiving
          services  from Breda did not have any voting  rights.  On October  11,
          1999,   the  Board  of  Directors   of  Breda   adopted  a  resolution
          discontinuing  this  exception,  and from and as of October 11,  1999,
          shareholders  who were not receiving  services from Breda had the same
          voting rights as the other  shareholders.  In other words, they became
          entitled  to one  vote on each  matter  presented  for the vote of the
          shareholders,  regardless of the number of shares of common stock held
          by them.

          As of September 30, 1999,  there were 118  shareholders who previously
          had no voting  rights  because  of the fact  they  were not  receiving
          services from Breda. The Board of Directors' action therefore resulted
          in  an  additional  118  shareholders  having  voting  rights.  As  of
          September  30,  1999,  there  were 550  shareholders  in Breda who had
          voting  rights,  so after the Board of  Directors'  action there was a
          total of 668 shareholders with voting rights.

          Breda has not issued any shares of its common  stock in 1999,  through
          September 30, 1999.

                                       17

<PAGE>



Item 3.   Defaults Upon Senior Securities.
          --------------------------------

          There  has been no  material  default  or any  material  arrearage  or
          delinquency  by Breda of the type  required to be reported  under this
          item.

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

          No matters have been submitted to a vote of the  shareholders of Breda
          during the period of July 1, 1999 through September 30, 1999.

Item 5.   Other Information.
          ------------------

          Tele-Services,  Ltd.  is a  wholly-owned  subsidiary  of  Breda  which
          provides  cable  television  services to sixteen towns in Iowa and one
          town in  Nebraska.  Westside  Communications,  Inc. is a  wholly-owned
          subsidiary of Tele-Services  which provides cable television  services
          to two Iowa towns.  On October 11,  1999,  the board of  directors  of
          Westside Communications, and Tele-Services, as the sole shareholder of
          Westside  Communications,  voted to dissolve  and  liquidate  Westside
          Communications.  Articles of  Dissolution  will be filed with the Iowa
          Secretary of State  before the close of  November.  After that filing,
          all of Westside Communications' assets will be transferred to, and all
          of its liabilities will be assumed by, Tele-Services.  The dissolution
          of  Westside   Communications  and  the  transfer  of  its  assets  to
          Tele-Services  and the assumption of its liabilities by  Tele-Services
          will  not  have any  material  adverse  effect  on the  operations  or
          financial  condition  of  Tele-Services.   The  dissolution  is  being
          effectuated primarily for administrative convenience.

          An auction was held on October 24, 1999, where  shareholders  desiring
          to  sell  their  shares  of  Breda's   common  stock  were  given  the
          opportunity to sell those shares to other Breda shareholders  desiring
          to  purchase   additional  shares  of  Breda's  common  stock.   Breda
          facilitated and paid the costs of the auction, except that the sellers
          paid the auction fees and clerking fees related to their  shares.  The
          auction was provided for the convenience of Breda's shareholders,  and
          no shares were repurchased or issued by Breda pursuant to the auction.
          A total of 1,924  shares of  common  stock  were sold by 32  different
          shareholders to 25 other  shareholders  of Breda,  for purchase prices
          ranging  from $145 per share to $180 per  share.  Breda had a right of
          first  refusal to purchase all of the shares sold in the auction,  but
          elected not to exercise  its right.  No officers or directors of Breda
          sold or purchased  any shares in the auction.  Breda does not have any
          plans to arrange any other auctions in the future.

          Breda's board of directors  determines  the purchase price payable for
          newly-issued  shares  of  Breda's  common  stock.   Breda's  board  of
          directors also  determines  the redemption  price that will be paid by
          Breda if it  elects  to  redeem a  shareholder's  shares in any of the
          circumstances  in which Breda has the right to purchase  those shares.
          Breda has that right if:

          o    the  shareholder  is no longer  receiving  services  from  Breda,
               unless the  shareholder  already was not receiving  services from
               Breda on February 28, 1995;

          o    the  shareholder  no longer  resides  in the Breda or  Lidderdale
               telephone exchange areas served by Breda,  unless the shareholder
               already resided outside those areas on February 28, 1995; or

          o    the  shareholder  dies,  unless the heir of the shares of Breda's
               stock meets the eligibility requirements for ownership of Breda's
               stock.


                                       18

<PAGE>



          The board of directors has historically established the issuance price
          and the  redemption  price at  approximately  75% of the book value of
          Breda. The board of directors has historically made this determination
          at or around the annual meeting of the board,  which is generally held
          in April,  based  upon  Breda's  then most  recent  year- end  audited
          financial  statements.  The issuance price and the redemption price as
          so determined by the board of directors then  generally  applies until
          the board of directors makes a new determination at or around the next
          annual meeting of the board. The board of directors departed from this
          historical  practice,  however,  on  November  2, 1999,  by adopting a
          resolution  fixing the issuance price for newly- issued shares and the
          redemption  price to be $149 per  share.  The $149  amount is  roughly
          based upon the average sales price per share in the auction of $150.58
          per  share.  It is not  based on  Breda's  book  value.  The  board of
          directors  took this action  because it believed the  above-referenced
          auction provided it with a basis to make a more current  determination
          on this issue.  The board of directors  intends to  otherwise  address
          this  issue  on  an  annual  basis,   however,   consistent  with  the
          above-described historical practices of the board of directors.

          The  board  of  directors  of  Breda  has  also  determined  to  allow
          shareholders  to advise Breda of the fact that they desire to sell any
          or all of their shares of Breda's common stock to any qualified buyer,
          and to allow  qualified  buyers to advise  Breda of the fact that they
          desire  to  purchase   shares  of  Breda's  common  stock  from  other
          shareholders  of Breda.  Breda will keep a list of those  shareholders
          and  qualified  buyers,  and  make the  list  available  to all of the
          shareholders  and qualified buyers on the list. A qualified buyer is a
          person who is a resident of the Breda or Lidderdale telephone exchange
          areas served by Breda who subscribes to Breda's telephone services, or
          an entity  which has its  principal  place of business in the Breda or
          Lidderdale   telephone  exchange  areas  served  by  Breda  and  which
          subscribes to Breda's telephone  services.  A person or entity cannot,
          however,  be a qualified  buyer if the person or entity  already  owns
          more than 1% of the  total  issued  and  outstanding  common  stock of
          Breda.  Also,  a  qualified  buyer  cannot  purchase  shares  from any
          shareholder  of Breda to the extent that the shares  purchased  by the
          qualified buyer would cause the qualified buyer to own more than 1% of
          the total issued and  outstanding  common stock of Breda.  If a person
          owns 5% or more of the  ownership  interests  of an entity  which owns
          shares of Breda's  common  stock,  the shares of Breda's  common stock
          held by that  entity  and by the  person  will be added  together  for
          determining  whether the 1% limitation is exceeded.  The 1% limitation
          is set forth in the Amended and Restated  Articles of Incorporation of
          Breda.  The terms of any sale  between a  shareholder  and a qualified
          buyer will be negotiated by them,  and no one will be required to sell
          or buy any  shares  because  their  name is on the  list.  Breda  also
          retains its right to purchase any shares being sold by any shareholder
          to any  qualified  buyer under the right of first  refusal  granted to
          Breda in its Amended and Restated Articles of Incorporation.


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

          The only  exhibit  being filed along with this  quarterly  report is a
          Financial Data Schedule, at Exhibit 27.

          Breda did not file any  reports  on Form 8-K during the period of July
          1, 1999 through September 30, 1999.


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<PAGE>



                                   SIGNATURES

     In accordance  with the  requirements  of the Exchange Act, the  registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                                              BREDA TELEPHONE CORP.



Date:   November 10, 1999.                   By: /s/ Dean Schettler
                                                  -----------------------------
                                              Dean Schettler, President



Date:   November 10, 1999.                   By: /s/ Scott Bailey
                                                  -----------------------------
                                              Scott Bailey, Treasurer




                                       20