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           June 30, 1997
                               ------------------------------------------

 (   )            Transition Report under Section 13 or 15(d) of the
                  Securities Exchange Act of 1934

For the transition period from                 to

Commission File Number                     1-11048
                            ---------------------------------------------

                 Dallas Gold and Silver Exchange, Inc.
                    (Name of small business issuer)


        Nevada                                    88-0097334
----------------------------       ----------------------------------------
(State or other jurisdiction        (I.R.S. Employer Identification No.)
of incorporation or
organization)

     2817 Forest Lane, Dallas, Texas                  75234
-----------------------------------------        -------------------
(Address of principal executive offices)            (Zip Code)

(Issuer's telephone number, including area code) (972) 484-3662


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days. Yes X No

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 July 10, 1997
--------------------------------            -----------------------------
Common Stock, $.01 per value                       4,366,544





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PART I.   FINANCIAL INFORMATION

      DALLAS GOLD AND SILVER EXCHANGE, INC. AND SUBSIDIARIES
                    CONSOLIDATED BALANCE SHEETS
                             (UNAUDITED)

                                         June 30,     December 31,
                     ASSETS                1997           1996
                                       -----------    ------------
Current assets:
  Cash                                  $  474,127    $  949,586
  Marketable securities - trading        2,098,829     1,913,656
  Trade receivables                        113,234       147,503
  Inventory                              1,245,061     1,111,485
  Prepaid expenses                          25,921        31,637
                                     -------------    ----------
   Total current assets                  3,957,172     4,143,154

Investments in marketable securities       401,415
Property and equipment                   1,104,971     1,123,948
Other assets                                37,327        31,637
  Total assets                          $5,500,885    $5,298,739
                                         =========     =========
                      LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
  Notes payable                         $  516,677    $  548,012
  Accounts payable                         252,257       498,181
  Accrued expenses                         130,415       256,645
  Customer deposits                         65,517        57,770
  Current maturities of long-term
    debt and lease obligations              47,667        45,864
                                         ---------     ---------
    Total current liabilities            1,012,533     1,406,472
Long-term debt and capital lease
    obligations, less current
    maturities                           1,745,103     1,766,342
                                         ---------     ---------
   Total liabilities                     2,756,636     3,172,814
                                         ---------     ---------

Shareholders'  equity:  
  Common  stock,  $.01 par  value; 
  authorized  10,000,000 shares; 
  issued and outstanding 4,366,544 
  shares at June 30, 1997 and
  4,618,193 at December 31, 1996            43,665        46,182
  Additional paid-in capital             3,898,322     4,126,451
  Accumulated deficit                   (1,439,587)   (2,046,708)
                                         ---------     ---------
                                         2,502,400     2,125,925
  Unrealized gain (loss) on securities     240,849
                                         ---------     ---------
   Total Shareholders' equity            2,743,249     2,125,925
                                         ---------     ---------
   Total liabilities and shareholders'
    equity                              $5,500,885    $5,298,739
                                         =========     =========





                                        2

<PAGE>




             DALLAS GOLD AND SILVER EXCHANGE, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)


                                               Three Months Ended
                                                    June 30,
                                                1997        1996
                                               ------------------
Revenues:
  Sales                                     $2,383,770   $2,858,906
  Pawn service fees                              6,930       12,680
  Travel agency income                          33,405      352,076
  Consulting service income
  Interest income                                5,946
  Realized gain on marketable securities       (64,697)     231,058
  Unrealized gain on trading securities         28,976      (18,403)
  Other income                                 573,752       24,048
                                             ---------    ---------

                                             2,968,082    3,460,365

Costs and expenses:
  Cost of sales (exclusive of
   items shown separately below)             2,012,639     2,462,744
  Travel agency costs                           32,449       342,411
  Consulting service costs                      93,934        23,333
  General and administrative
   expenses                                    414,944       419,761
  Depreciation and amortization                 16,752        20,751
  Interest expense                              57,750        40,425
                                             ---------     ---------

    Total costs and expenses                 2,628,468     3,309,425
                                             ---------     ---------

Net income                                $  339,614      $  150,940
                                             =========     =========


Income per share of common stock          $      .08      $      .03
                                             =========     =========












                                        3

<PAGE>





             DALLAS GOLD AND SILVER EXCHANGE, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)

                                                Six Months Ended
                                                    June 30,   
                                                1997        1996
                                               -----------------
Revenues:
  Sales                                    $5,125,619   $5,515,901
  Pawn service fees                            14,340       22,800
  Travel agency income                         64,338      696,014
  Consulting service income                   170,566
  Interest income                              11,392
  Realized gain on marketable securities      (27,539)     232,699
  Unrealized gain on trading securities       232,200       (18,403)
  Other income                                599,517        49,022
                                            ---------     ---------

                                            6,190,433     6,498,033

Costs and expenses:
  Cost of sales (exclusive of
   items shown separately below)            4,370,742     4,744,429
  Travel agency costs                          63,536       675,155
  Consulting service costs                    119,616        38,828
  General and administrative
   expenses                                   867,392       825,730
  Depreciation and amortization                48,176        41,102
  Interest expense                            113,850        80,875
                                            ---------     ---------

    Total costs and expenses                5,583,312     6,406,119
                                            ---------     ---------

Net income                                 $  607,121    $   91,914
                                            =========     =========


Income per share of common stock           $      .14    $      .02
                                            =========     =========













                                        4

<PAGE>






             DALLAS GOLD AND SILVER EXCHANGE, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)


                                                Six Months Ended
                                                    June 30,
                                                1997        1996
                                               ------------------
                                                   
Cash used for operating activities        $ (739,983)  $(323,047)

Cash flows from investing activities:
   Purchase of property, plant and
    equipment                                (29,199)    (54,458)
   Sale of marketable securities             750,040     354,284
   Purchase of marketable securities        (174,901)     (9,024)
   Net cash provided by (used
     for investing activities                545,940     289,400
                                         -----------    --------

Cash flows from financing activities:
   Purchase of common stock                 (230,645)    (21,753)
   Increase (decrease) in notes payable      (29,532)    207,458
   Increase (decrease) in long-term
    debt and capital lease obligations       (21,239)   (302,914)
                                          -----------  ---------

   Net cash used for financing
    activities                              (281,416)    (117,209)
                                           -----------   ---------

Decrease in cash and cash equivalents     $ (475,459)  $ (150,856)
                                          ===========  ==========




















                                        5

<PAGE>






             DALLAS GOLD AND SILVER EXCHANGE, INC. AND SUBSIDIARIES

          NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENT



June 30, 1997

(1)  Basis of Presentation:

         The accompanying  unaudited condensed consolidated financial statements
         of Dallas Gold and Silver Exchange,  Inc. and Subsidiaries  include the
         financial  statements of Dallas Gold and Silver Exchange,  Inc. and its
         wholly-owned  subsidiaries,  DGSE  Corporation,  Dallas Global  Travel,
         Inc., DLS Financial Services,  Inc. and Eye Media, Inc.. In the opinion
         of  management,   all  adjustments   (consisting  of  normal  recurring
         accruals)  considered  necessary  for a  fair  presentation  have  been
         included.

         The  Company's  operating  results for the periods ended June 30, 1997,
         are not necessarily  indicative of the results that may be expected for
         the year ended December 31, 1997. For further information, refer to the
         consolidated financial statements and footnotes thereto included in the
         Company's  annual report on Form 10-KSB for the year ended December 31,
         1997.
























                                        6

<PAGE>




MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

Results of Operations
---------------------
Quarter ended June 30, 1997 vs 1996:

Sales decreased by $ 475,136 (16.6%) during the three months ended June 30, 1997
due to a $ 344,508  decline in bullion sales and a $ 130,628  decline in jewelry
sales.  The decline in bullion  sales was the result of a world wide  decline in
precious  metal  prices.  The  decline  in  jewelry  sales  was the  result of a
management  decision to concentrate on higher margin higher priced jewelry. As a
result,  gross  margins  increased  from  13.9% in 1996 to  15.6% in 1997.  Pawn
service fees  decreased by $ 5,750 (45.3%) during the second quarter of 1997 due
to a decline in loans outstanding during the period. Management is attempting to
increase  pawn loan  volume by  directing  additional  advertising  toward  this
activity and by  extending  larger  loans on higher  value  merchandise.  Travel
agency  income  decreased by $ 318,671 due to a management  decision to decrease
the amount of low margin  business  generated by outside sales agents.  Interest
income was the result of interest  earned on money  market  accounts  during the
quarter.  Realized gains and losses on marketable  securities were the result of
securities  sold during the  quarters.  Unrealized  gains on trading  securities
during the  quarters  were the  result of  changes  in the  market  value of the
Company's  portfolio.  During the  quarter  ended  June 30,  1997,  the  Company
acquired the assets of Performance  Nutrition,  Inc. for cash in the amount of $
111,375.  These  assets  were  sold to  Naturade,  Inc.  for  202,500  shares of
Naturade,  Inc.'s common  stock.  Other income  increased $ 549,704  during 1997
primarily  as  the  result  of a $  546,750  gain  on the  sale  the  assets  of
Performance Nutrition, Inc.

Cost of sales decreased by $ 450,105 (18.3%) due to the decline in sales volume.
Travel  agency  costs  decreased  by $ 309,962  (90.5%)  due to the  decrease in
income.  Consulting  service cost increased by $ 70,601 during the first quarter
of 1997 due to cost  associated  with the  acquisition  and  subsequent  sale of
Performance Nutrition,  Inc.. Interest expense increased $ 17,325 primarily as a
result of the $ 875,000 note issued in December 1996.













                                        7

<PAGE>



Six months ended June 30, 1997 vs 1996:

Sales  decreased by $ 390,282  (7.1%)  during the six months ended June 30, 1997
due to a $ 290,364  decline in bullion  sales and a $ 99,918  decline in jewelry
sales.  The decline in bullion  sales was the result of a world wide  decline in
precious  metal  prices.  The  decline  in  jewelry  sales  was the  result of a
management  decision to concentrate on higher margin higher priced jewelry. As a
result,  gross  margins  increased  from  14.0% in 1996 to  14.9% in 1997.  Pawn
service fees decreased by $ 8,460 (37.1%) during the 1997 first half of 1997 due
to a decline in loans outstanding during the period. Management is attempting to
increase  pawn loan  volume by  directing  additional  advertising  toward  this
activity and by  extending  larger  loans on higher  value  merchandise.  Travel
agency  income  decreased by $ 631,626 due to a management  decision to decrease
the amount of low margin business generated by outside sales agents.  Consulting
service  income  increased  by $ 170,566  due to a fee  earned  relating  to the
recapitalization  of a new  client.  Interestincome  was the result of  interest
earned on money market accounts during the period.  Realized gains and losses on
marketable  securities  were the result of  securities  sold during the periods.
Unrealized  gains on trading  securities  during the periods  were the result of
changes in the market value of the Company's portfolio. During the quarter ended
June 30, 1997, the Company  acquired the assets of Performance  Nutrition,  Inc.
for cash in the amount of $ 111,375.  These assets were sold to  Naturade,  Inc.
for 202,500 shares of Naturade,  Inc.'s common stock.  Other income  increased $
550,495  during 1997 primarily as the result of a $ 546,750 gain on the sale the
assets of Performance Nutrition, Inc.

Cost of sales  decreased by $ 373,687 (7.9%) due to the decline in sales volume.
Travel  agency  costs  decreased  by $ 611,619  (90.6%)  due to the  decrease in
income.  Consulting  service cost increased by $ 80,788 during the first half of
1997  due to  cost  associated  with  the  acquisition  and  subsequent  sale of
Performance Nutrition,  Inc.. Interest expense increased $ 32,975 primarily as a
result of the $ 875,000 note issued in December 1996.

















                                        8

<PAGE>



Liquidity and Capital Resources
-------------------------------
Due to the somewhat seasonal nature of the Company's jewelry business, inventory
and trade  receivables  are at their lowest  levels on December 31 of each year.
During the first half of each year jewelry  inventory is  replenished  and trade
receivables  begin to  increase.  During the first  half of 1997,  cash and cash
equivalents  decreased  by $  475,459  primarily  as a result  of  increases  in
inventory ($ 133,576),  a decrease in accounts  payable and accrued  expenses ($
245,924) and principal payments on long-term debt and notes payable ($ 50,771).

During  the  first  half of 1997,  the  Company  sold $  750,040  of  marketable
securities. These resources were used to purchase and retire common stock of the
Company in the amount of $ 230,645, purchase additional marketable securities in
the amount of $ 174,040 and for general corporate working capital.

Management of the Company expects capital  expenditures to total approximately $
75,000 during 1997. It is  anticipated  that these  expenditures  will be funded
from the Company's  current working capital  requirements.  Management is of the
opinion  that  if  additional  working  capital  is  required  by  the  Company,
additional loans can be obtained from  individuals or from commercial  banks. If
necessary,  inventory  levels  may be  adjusted  or a protion  of the  Company's
investments  in  marketable  securities  may be  liquidated  in  order  to  meet
unforseen working capital requirement.



PART II.   OTHER INFORMATION
----------------------------

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

         Exhibits - None

         Reports on Form 8-K - None





                                        9

<PAGE>





                                   SIGNATURES


     In accordance with Section 13 and 15(d) of the Exchange Act, the Registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

Dallas Gold and Silver Exchange, Inc.



By:  /s/ L.S. Smith                      Dated:  July 15, 1997
     ----------------------------
     L.S. Smith
     Chairman of the Board,
     Chief Executive Officer and
     Secretary


     In accordance with the Exchange Act, this report has been signed below by
the following persons on behalf of the Registrant and in the capacities and on
the date indicated.



By:  /s/ L.S. Smith                      Dated:  July 15, 1997
     ---------------------------
     L.S. Smith
     Chairman of the Board,
     Chief Executive Officer and
     Secretary



By:  /s/ W.H. Oyster                     Dated:  July 15, 1997
     ---------------------------
     W.H. Oyster
     Director, President and
     Chief Operating Officer



By:  /s/ John Benson                     Dated:  July 15, 1997
     ---------------------------
     John Benson
     Chief Financial Officer
     (Principal Accounting Officer)





                                       I0

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