SECURITIES AND EXCHANGE COMMISSION
                             Washington, D. C. 20549

                                    FORM 10-Q



[  x  ]    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
           EXCHANGE ACT OF 1934

                For the quarterly period ended - January 31, 1998

                                       OR

[     ]    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 0-25312

                       STARTECH ENVIRONMENTAL CORPORATION
              ----------------------------------------------------
             (Exact name of registrant as specified in its charter)


State or other jurisdiction of                          (I.R.S. Employer
incorporation or organization                           Identification No.)
        Colorado                                          84-1286576

                             79 Old Ridgefield Road
                               Wilton, Connecticut               06897  
                     --------------------------------------     --------
                    (Address of principal executive offices)    Zip Code

                                 (203) 762-2499
               ---------------------------------------------------
              (Registrant's telephone number, including area code)

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,  and (2) has been subject to such filing  requirements
for the past 90 days.

                                 YES   X    NO
                                     -----     -----


Securities registered pursuant to Section 12(g) of the Act:

         Title of each class                 Outstanding at March 10, 1998
         -------------------                 -----------------------------

       Common Stock - No Par                          6,820,921






<PAGE>



                       STARTECH ENVIRONMENTAL CORPORATION

                                      INDEX

                                                                 PAGE NO.
                                                                 --------

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

Item 1.   Financial Statements

             Balance Sheet - January 31, 1998
             and 1997                                              3

             Statement of Operations for the quarters ended
             January 31, 1998 and 1997                             4

             Statement of Cash Flows for the quarters ended
             January 31, 1998 and 1997                             5

             Notes to Financial Statements                         6

Item 2.   Management's Discussion and Analysis of Financial
             Condition and Results of Operations                   7-8

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

             Item 1.  Legal Proceedings                            8
             Item 2.  Changes in Securities                        8
             Item 3.  Defaults Upon Senior Securities              9
             Item 4.  Submission of Matters to a Vote of
                        Security Holders                           9
             Item 5.  Other Information                            9
             Item 6.  Exhibits and Reports on Form 8-K             9

SIGNATURE                                                          9









                                        2

<PAGE>
<TABLE>
<CAPTION>
                                        PART I - FINANCIAL INFORMATION


ITEM 1.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.



                                        STARTECH ENVIRONMENTAL CORPORATION
                                                   BALANCE SHEET

                                                                   January 31,          January 31,
ASSETS                                                                1998                 1997
                                                                   -----------          -----------
<S>                                                                <C>                  <C>   
Current Assets:
         Cash and cash equivalents                                 $   833,547          $   789,462
         Inventory                                                     100,000
         Other current assets                                           71,333               16,136
                                                                   -----------          -----------

                  Total Current Assets                               1,004,880              805,598

         Other Assets                                                   48,497              100,000
                                                                   -----------          -----------
                                                                   $ 1,053,377          $   905,598
                                                                   ===========          ===========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
         Accounts payable                                          $    93,730          $    39,936
         Investor deposits                                             958,375
         Notes payable - short term                                    100,000              100,000

         Other accrued expenses                                         23,132               39,512
                                                                   -----------          -----------

                  Total Current Liabilities                            216,862            1,137,823

Stockholders' (deficit) equity:
         Preferred stock, no par value
         10,000,000 shares authorized,
         no shares issued or outstanding

         Common stock, no par value,
         800,000,000 shares authorized;
         shares issued and outstanding:
         7,013,552 at January 31, 1998 and
         6,142,863 at January 31, 1997                               2,598,606              653,834
         Additional paid-in capital                                        300                  300
         Accumulated deficit Net Income (loss)                      (1,762,391)            (886,359)
                                                                   -----------          -----------

                Total Stockholders' (deficit) equity                   836,515             (232,225)

                                                                   $ 1,053,377          $   905,598
                                                                   ===========          ===========




                                         See notes to financial statements

                                                          3
</TABLE>


<PAGE>
<TABLE>
<CAPTION>

                                  STARTECH ENVIRONMENTAL CORPORATION
                                       STATEMENT OF OPERATIONS


                                                    Quarter Ended        Quarter Ended
                                                   January 31, 1998     January 31, 1997
                                                   ----------------     ----------------

<S>                                                 <C>                    <C>        
Revenue                                             $         0            $         0

Operating expenses
         Selling expense                                 14,955                 40,448
         General and administrative expense             169,711                141,512
                                                    -----------            -----------

                                                        184,666                181,960
                                                    -----------            -----------

Loss from operations                                   (184,666)              (181,960)

Other income (expense):
         Interest income                                  9,624                  5,042
         Interest expense                                (2,250)                (2,250)
                                                    -----------            -----------

         Total other income (expense)                     7,374                  2,792
                                                    -----------            -----------

Income tax expense                                            0                      0

Net loss                                            ($  177,292)           ($  179,168)
                                                    ===========            ===========


Net loss per share                                  $     (0.03)           $     (0.03)
                                                    ===========            ===========

Weighted average common
shares outstanding                                    7,013,552              6,045,367
                                                    ===========            ===========













                                         See notes to financial statements

                                                         4
</TABLE>

<PAGE>
<TABLE>
<CAPTION>

                                    STARTECH ENVIRONMENTAL CORPORATION
                                         STATEMENT OF CASH FLOWS


                                                       Quarter Ended         Quarter Ended
                                                      January 31, 1998      January 31, 1997
                                                      ----------------      ----------------

Cash flows from operating activities:
<S>                                                      <C>                   <C>       
Net loss                                                 ($177,292)            ($179,168)

(Increase) in other current assets                          (6,000)               (5,255)

Increase in accounts payable                                26,562                12,501

Increase in accrued expenses                                 2,237                 2,250
                                                         ---------             ---------

Net cash used in operating activities                     (154,493)             (169,672)
                                                         ---------             ---------

Cash flows from financing activities:
Proceeds from issuances of common stock                          0               678,375
                                                                               ---------
Net cash provided from financing activities                      0               678,375

Net increase (decrease) in cash                           (154,493)              508,703

Cash at beginning of period                                988,040               280,759

Cash and cash equivalents at end of period               $ 833,547             $ 789,462

Supplemental disclosure of cash flow information:
Cash paid during the period for interest                 $       0             $       0
                                                         =========             =========

Cash paid during the period for income taxes             $   1,489             $       0
                                                         =========             =========





















                                         See note to financial statements

                                                         5
</TABLE>

<PAGE>



                       STARTECH ENVIRONMENTAL CORPORATION
                          NOTES TO FINANCIAL STATEMENTS


Note 1.  Basis of Presentation

STARTECH   Environmental   Corporation   (the   "Company")  is  engaged  in  the
commercialization   and  continued   development  of  an  innovative  processing
technology for recycling industrial wastes.

Net loss per share is  determined  by dividing net loss by the weighted  average
number of common shares outstanding during the period. Common share equivalents,
which consist of stock which may be issuable upon exercise of outstanding  stock
options and warrants,  have been excluded  from the weighted  average  number of
common shares since their effect is anti-dilutive.

Certain  reclassifications  have  been  made for  consistent  presentation.  The
reclassifications  have no effect on the net loss for the period ending  January
31, 1998.

The information furnished is unaudited and reflects all adjustments  (consisting
of only normal recurring  adjustments) which, in the opinion of management,  are
necessary  for a fair  presentation  of the  financial  position  and results of
operations for the interim periods. The accompanying financial statements should
be read in  conjunction  with the  Company's  financial  statements  and related
footnotes  for the year  ended  October  31,  1997  which  are  included  in the
Company's  annual report on form 10-K for the period ended October 31, 1997. The
results of operations for the quarter ended January 31, 1998 are not necessarily
indicative of the results to be expected for the full year.


Note 2.  Equity Transactions

     At the end of the quarter ended January 31, 1998 there were 202,131  shares
of common stock retired as a result of the  successful  conclusion of litigation
with a major  stockholder  group.  During the quarter being  reported there were
9,500 shares of S-8 common shares issued.












                                        6

<PAGE>



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

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

The Registrant was  incorporated  under the laws of the State of Colorado in May
1991 and has been dormant since 1991. During fiscal 1995, the Registrant entered
into negotiations with Startech Incorporated which culminated in the acquisition
of Startech on November 17, 1995.

Due to the prior dormancy of the Registrant,  no revenues were realized and only
nominal operating  expenses,  principally  filing fees, bank service charges and
legal services, and some minor start up costs have been incurred through October
31, 1995. These trends have changed due to the Startech acquisition.  On January
16,  1996 the name of the  registrant  was  changed  from  Kapalua  Acquisitions
Incorporated to STARTECH Environmental Corporation.


Liquidity and Capital Resources
-------------------------------

Liquidity  for the  quarter  has been  provided by  previous  stock  sales.  The
Registrant is and will continue to be dependent upon sales,  contract  deposits,
loans and capital  contributions  from  shareholders or outside  investors.  The
Registrant's capital resource  requirements for future periods will increase due
to increased  manufacturing,  marketing and administrative  demands. These needs
are  anticipated to be met from operations of the  Registrant's  normal business
activity.


Background
----------

The Registrant's activities (under its former name - Kapalua Acquisitions, Inc.)
during the two fiscal years  (November  1, 1993 to October 31,  1995)  consisted
primarily of  investigating  possible  business  opportunities.  On November 17,
1995, the Company completed the acquisition of all of the issued and outstanding
shares of common stock of Startech  Corporation,  a corporation  organized under
the laws of the State of Connecticut which engineers,  manufacturers and markets
Plasma  Waste  ConverterTM  ("PWC")  systems  to  recover,  recycle,  reduce and
remediate hazardous and nonhazardous waste materials.

On November 18, 1995, the Board of Directors of the Company unanimously approved
a change of  business  purpose of the Company  from one  seeking an  acquisition
candidate to one engaged in the business of recovering, recycling, reduction and
remediation of hazardous and nonhazardous waste materials.



                                        7

<PAGE>



General
-------

Startech   is  an   environmental   technology   corporation   engaged   in  the
commercialization  and  continued  development  of its Plasma Waste  ConverterTM
("PWC") systems for the recycling,  resource recovery, reduction and remediation
of  hazardous  and  nonhazardous  organic  and  inorganic  materials  and wastes
including radioactive wastes.

The Startech  Plasma  Waste  Converter is a  closed-loop  recycling  system that
converts  materials  formerly regarded as hazardous wastes into useful commodity
products.  The hazardous  waste can be organic and  inorganic,  in the form of a
gas,  liquid,  and solids or any combination  thereof.  Waste volume  reductions
higher than 300 to 1 have been  demonstrated.  Depending on the waste processed,
the principal  commodities produced by the system are a synthetic gas called PCG
(Plasma Converted Gas)TM, metals, and an obsidian-like inert silicate stone. The
PCG can be used as a chemical  feed stock to produce  polymers  and other common
industrial products, as a fuel to produce electricity, as a fuel source for fuel
cells,  as a heating plant fuel to reduce the cost and reliance on fossil fuels,
and in  desalinization  applications  to produce fresh water for  irrigation and
drinking.  The metals can be employed in the metallurgical  industry.  The stone
silicates  can  be  employed  in the  abrasives  industry,  and as an  aggregate
material for construction industry applications.



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


ITEM 1.  LEGAL PROCEEDINGS.

The company was not involved in any significant  legal proceedings at the end of
the  quarter  being  reported  herein.  No  legal  proceedings  are  known to be
contemplated by governmental authorities.

ITEM 2.  CHANGE IN SECURITIES.

No  constituent  instruments  defining the rights of the holders of any class of
registered securities of the Registrant have been materially modified. No rights
evidenced by any class of registered  securities have been materially limited or
qualified  by the  issuance or  modification  of any other class of  securities.
There are no working capital  restrictions or other limitations upon the payment
of dividends except as reported in the Registrant's FORM 10.




                                        8

<PAGE>


ITEM 3.  DEFAULTS UPON SENIOR SECURITIES.

There have been no defaults in the payment of principal  interest,  a sinking or
purchase  fund  installments,  or any other default no cured within thirty days,
with respect to any  indebtedness  of the  Registrant or any of its  significant
subsidiaries  exceeding  five percent (5%) of the total assets of the Registrant
and its consolidated subsidiaries.


ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

No matters were submitted during the first quarter of the fiscal year covered by
this report to a vote of security holders.


ITEM 5.  OTHER INFORMATION.

None.


ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K.

None were filed for the quarter ended January 31, 1998.





                                    SIGNATURE

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.

                                     STARTECH ENVIRONMENTAL CORPORATION



Date:  March 10, 1998                By:  /S/ John D. Watts
       --------------                     --------------------------------------
                                          John D. Watts
                                          Vice President, Chief Finance Officer

                                        9