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     March 31, 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 businessissuer)


        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 April 7, 1997
-------------------------------              ---------------------------------
Common Stock, $.01 per value                               4,420,244


<PAGE>


PART I.   FINANCIAL INFORMATION
-------------------------------

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

<TABLE>
<CAPTION>
<S>                                                                                  <C>
                                                                       March 31,      December 31,
                                                 ASSETS                  1997            1996  
                                                                        ------          ------
  Current assets:
  Cash                                                               $  782,024       $  949,586
  Marketable securities - trading                                     1,628,781        1,913,656
  Trade receivables                                                     136,753          147,503
  Inventory                                                           1,105,184        1,111,485
  Prepaid expenses                                                       42,372           20,924
   Total current assets                                               3,695,114        4,143,154

Investments in marketable securities                                    642,264
Property and equipment                                                1,126,069        1,123,948
Other assets                                                             39,412           31,637
  Total assets                                                       $5,502,859       $5,298,739
                                                                      =========        =========
                           LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
  Notes payable                                                      $  531,579       $  548,012    
  Accounts payable                                                      213,664          498,181
  Accrued expenses                                                      160,878          256,645
  Customer deposits                                                      65,932           57,770
  Current maturities of long-term
    debt and lease obligations                                           47,446           45,864
                                                                      ---------        ---------
    Total current liabilities                                         1,019,499        1,406,472
Long-term debt and capital lease
    obligations, less current
    maturities                                                        1,756,702        1,766,342
                                                                      ---------        ---------
   Total liabilities                                                  2,776,201        3,172,814
                                                                      ---------        ---------

Shareholders'  equity: 
  Common  stock,  $.01 par  value;
  authorized  10,000,000 shares;
  issued and outstanding 4,420,244
  shares at March 31, 1997 and
  4,618,193 at December 31, 1996                                         44,203           46,182
  Additional paid-in capital                                          3,979,958        4,126,451
  Accumulated deficit                                                (1,779,201)      (2,046,708)
                                                                      ---------        ---------
                                                                      2,244,960        2,125,925
  Unrealized gain on securities                                         481,698
                                                                      ---------
   Total shareholders' equity                                         2,726,658        2,125,925
   Total liabilities and shareholders'
    equity                                                           $5,502,859       $5,298,739
                                                                      =========        =========
</TABLE>


                                        2
<PAGE>                                                                      

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


                                                          Three Months Ended
                                                               March 31,
                                                        1997            1996
                                                    --------------------------

Revenues:
  Sales                                             $2,741,849      $2,656,995
  Pawn service fees                                      7,410          10,120
  Travel agency income                                  30,933         343,938
  Consulting service income                            170,566
  Interest income                                        5,446
  Realized gain on marketable securities                37,158           1,641
  Unrealized gain on trading securities                203,224
  Other income                                          25,765          24,974
                                                     ---------       ---------
                                                     3,222,351       3,037,668

Costs and expenses:
  Cost of sales (exclusive of
   items shown separately below)                     2,358,103       2,281,685
  Travel agency costs                                   31,087         332,744
  Consulting service costs                              25,682          15,495
  General and administrative
   expenses                                            452,448         405,969
  Depreciation and amortization                         31,424          20,351
  Interest expense                                      56,100          40,450
                                                     ---------       ---------

    Total costs and expenses                         2,954,844       3,096,694
                                                     ---------       ---------

Net income (loss)                                   $  267,507      $  (59,026)
                                                     =========       =========
Net Income (loss) per common share                  $      .06      $     (.01)
                                                     =========       =========

                                       3
<PAGE>

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


                                             Three Months Ended
                                                  March 31,
                                                1997         1996
                                           --------------------------


Cash used for operating activities         $ (491,757)    $ (243,559)

Cash flows from investing activities:
  (Increase) Decrease in loans, net             3,060         (2,000)
   Purchase of property, plant and
    equipment                                 (33,545)       (29,875)
   Sale of marketable securities              534,159          1,641
   Purchase of marketable securities           (6,516)        (4,648)      
                                            ---------      ---------
   Net cash provided by (used
     for investing activities                 497,158        (34,882)
                                            ---------      ---------

Cash flows from financing activities:
   Purchase of common stock                  (148,472)
   Principal payments on notes payable        (16,433)  
   Principal payments on long-term
    debt and capital lease obligations         (8,058)       (59,378)      
                                            ---------      ---------
   Net cash used for financing 
    activities                               (172,963)       (59,378)
                                            ---------      ---------

Decrease in cash and cash equivalents      $ (167,562)    $ (337,819)
                                            =========      =========

                                       4
<PAGE>


             DALLAS GOLD AND SILVER EXCHANGE, INC. AND SUBSIDIARIES
      
          NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENT



March 31, 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 three month period ended March
         31, 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, 1996.



                                       5

<PAGE>

           MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

Results of Operations
---------------------

Quarter ended March 31, 1997 vs 1996:

Sales for the first quarter of 1997  increased  $84,854 or 3.2% when compared to
the  corresponding  quarter of 1996. The increase was primarily the result of an
increase in precious  metals  sales in the amount of $85,698.  Pawn service fees
decreased  by 26.8% due to a decline in pawn loans  outstanding.  Travel  agency
income  decreased  by  $313,005  due to the  retirement  of the  Company's  most
productive outside sales agent.  Consulting service income increased by $170,566
due to a fee earned relating to the  recapitalization  of an new client.  During
the first  quarter of 1997 the Company sold  $534,159 of  marketable  securities
realizing  a gain of  $37,158.  Unrealized  gains on trading  securities  in the
amount of $203,224 in 1997 was the result of an increase in the market  value of
the Company's investment in marketable securities. Interest income in the amount
of  $5,446  during  1997 was the  result  of  interest  earned  on money  market
accounts.  Cost of sales  increased by $76,418  primarily due to the increase in
sales. Travel agency costs decreased by $301,657 due to the $313,005 decrease in
income. Consulting service cost increased by $10,187 during the first quarter of
1996 due to an increase in travel cost.

General and  administration  expenses increased by $46,479 primarily due to cost
related  to Eye Media,  Inc..  Interest  expense  increased  by  $15,650  due to
interest on the $875,000 note issued in December, 1996.

                                       6
<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 quarter of 1996, cash and cash
equivalents decreased by $167,562 primarily as a result of decreases in accounts
payable  ($284,517),  a decrease in accrued expenses  ($95,767) and purchases of
common treasury stock  ($148,472).  Theses uses of cash were partially offset by
the sale of $534,1589 in marketable securities.

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 position.

From time to time,  management  has adjusted the Company's  inventory  levels to
meet  seasonal  demand  or  in  order  to  meet  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 portion 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

                                       7
<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: April 8, 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: April 8, 1997
         -------------------------
         L. S. Smith
         Chairman of the Board,
         Chief Executive Officer and
         Secretary


By:      /s/ W. H. Oyster                   Dated: April 8, 1997
         -------------------------
         W. H. Oyster
         Director, President and
         Chief Operating Officer


By:      /s/ John Benson                    Dated: April 8, 1997
         -------------------------
         John Benson
         Chief Financial Officer
         (Principal Accounting Officer)



                                       8