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 nine month period ended - July 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)

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

                             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 September 10, 1998
     -------------------                  ---------------------------------

    Common Stock - No Par                             6,846,465


<PAGE>




                                                             

STARTECH ENVIRONMENTAL CORPORATION

INDEX

                                                                    PAGE NO.
                                                                    --------

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

Item 1.   Unaudited Financial Statements

          Balance Sheet - July 31, 1998 (unaudited)
          and October 31, 1997 (audited)                                 3

          Statement of Operations for the quarters and nine months
            ended July 31, 1998 and 1997 ( unaudited)                    4

          Statement of Cash Flows for the nine months ended
          July 31, 1998 and 1997 (unaudited)                             5

          Statement of Cash Flows for the three months ended
          July 31, 1998 and 1997 (unaudited)                             5

          Notes to Financial Statements                                  6

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

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

          Item 1.  Legal Proceedings                                     9
          Item 2.  Changes in Securities                                 9
          Item 3.  Defaults Upon Senior Securities                      10
          Item 4.  Submission of Matters to a
                     Vote of Security Holders                           10
          Item 5.  Other Information                                    10
          Item 6.  Exhibits and Reports on Form 8-K                     10

SIGNATURE                                                               11
---------


                                       2
<PAGE>



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

ITEM 1.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

                       STARTECH ENVIRONMENTAL CORPORATION
                                  BALANCE SHEET

                                                       July 31,     October 31,
ASSETS                                                  1998           1997
                                                     ----------     -----------
Current Assets:
         Cash and cash equivalents                   $   282,957    $ 1,195,703
         Accounts receivable                             399,469
         Inventory                                       165,353
         Other current assets                             96,599         37,961
                                                     -----------    -----------

                  Total Current Assets                   944,378      1,233,664

Fixed Assets:
         Equipment                                        18,276
         Accumulated depreciation                         (2,345)
                                                     -----------
         Fixed assets - net                               15,930
                                                     -----------

Other Assets                                                            100,000
                                                                    -----------

                  Total assets                       $   960,308    $ 1,333,664
                                                     ===========    ===========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
         Accounts payable                            $   319,913    $    20,393
         Investor deposits                                              805,102
         Notes payable - short term                      100,000        100,000
         Other accrued expenses                           28,000         43,262
                                                     -----------    -----------

                  Total Current Liabilities              447,913        968,757
                                                     -----------    -----------

Stockholders' 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:
         6,844,465 at July 31, 1998 and
         6,889,193 at July 31, 1997                    2,598,606      1,634,962

         Additional paid-in capital                          300            300

         Deficit accumulated during the
         development stage                            (2,086,512)    (1,270,355)
                                                     -----------    -----------

         Total Stockholders' Equity                      512,394        364,907
                                                     -----------    -----------

         Total liabilities and
         stockholder's equity                        $   960,308    $ 1,333,664
                                                     ===========    ===========


                       See notes to financial statements

                                       3

<PAGE>


                                          STARTECH ENVIRONMENTAL CORPORATION
                                          STATEMENT OF OPERATIONS (unaudited)
<TABLE>
<CAPTION>

                                                                                      Nine Months       Nine Months
                                                   Quarter Ended    Quarter Ended       Ended             Ended
                                                   July 31, 1998    July 31, 1997    July 31, 1998     July 31, 1997
                                                   -------------    -------------    -------------     -------------

<S>                                                 <C>              <C>              <C>              <C>        
Revenue                                             $   448,972      $         0      $   485,972      $    10,000

Cost of sales                                           208,997                0          208,997                0
                                                    -----------      -----------      -----------      -----------
Gross profit                                            239,975                0          276,975           10,000
                                                    -----------      -----------      -----------      -----------

Operating expenses:
  Selling expense                                         5,807           26,406          126,646           83,542
  General and administrative expense                    236,146          188,982          665,566          506,106
                                                    -----------      -----------      -----------      -----------

  Total operating expense                               241,953          215,388          792,212          589,648      
                                                    -----------      -----------      -----------      -----------    

Loss from operations                                     (1,978)        (215,388)        (515,237)        (579,648)
                                                    -----------      -----------      -----------      -----------
Other income (expense):
  Interest income                                         5,985            9,574           21,325           22,734
  Interest expense                                       (2,250)          (1,500)          (7,500)          (6,000)       
                                                    -----------      -----------      -----------      -----------

  Total other income (expense)                            3,735            8,074           13,825           16,734   
                                                    -----------      -----------      -----------      -----------    

Income tax expense                                            0                0                0              550
                                                    -----------      -----------      -----------      -----------

Net income (loss)                                   $     1,757      ($  207,314)     ($  501,412)     ($  563,464)
                                                    ===========      ===========      ===========      ===========

Net income (loss) per share                         $      0.00      ($     0.03)     ($     0.07)     ($     0.09)
                                                    ===========      ===========      ===========      ===========

Weighted average common
   shares outstanding                                 6,846,465        6,889,193        6,903,994        6,859,256
                                                    ===========      ===========      ===========      ===========





                                             See notes to financial statements


                                                             4
</TABLE>

<PAGE>
<TABLE>
<CAPTION>

                                                           STARTECH ENVIRONMENTAL CORPORATION
                                                           STATEMENT OF CASH FLOWS (unaudited)

                                                                                                      Nine Months      Nine Months
                                                                  Quarter Ended     Quarter Ended       Ended             Ended
                                                                  July 31, 1998     July 31, 1997     July 31, 1998    July 31, 1997
                                                                  -------------     -------------     -------------    -------------
Cash flows from operating activities:
<S>                                                               <C>               <C>               <C>               <C>         
Net income (loss)                                                 $     1,757       ($  207,314)      ($  501,412)      ($  563,464)
Adjustments to reconcile net income to
  net cash provided by operating activities
Depreciation                                                            1,226                 0             2,345                 0
(Increase) decrease in accounts receivable                           (362,469)                0          (399,469)                0
Increase in inventory                                                 (65,353)                0           (65,353)                0
(Increase) decrease in other current assets                           (15,408)           (5,300)          (31,266)          (27,110)
Decrease in other assets                                               48,497                 0            48,497                 0
Increase (decrease) in current liabilities:
Accounts payable                                                      224,889            11,193           252,746            (7,012)
Accrued expenses                                                        2,250            (4,500)            7,105             6,000
                                                                  -----------       -----------       -----------       -----------

Net cash used in operating activities                                (164,611)         (205,921)         (686,807)         (591,586)
                                                                  -----------       -----------       -----------       -----------
Cash flows from investing activities:
Purchase of equipment                                                  (4,851)                0           (18,276)                0
                                                                  -----------       -----------       -----------       -----------
Net cash used by investing activities                                  (4,851)                0           (18,276)                0
                                                                  -----------       -----------       -----------       -----------

Cash flows from financing activities:
Subscription of common stock                                                0           105,000                 0           525,102
Proceeds from issuance of common stock, net                                 0             7,990                 0           981,418
                                                                  -----------       -----------       -----------       -----------
Net cash provided from financing activities                                 0           112,990                 0         1,506,520
                                                                  -----------       -----------       -----------       -----------

Net increase (decrease) in cash and cash equivalents                 (169,462)          (92,931)         (705,083)          914,934

Cash and cash equivalents at beginning of period                      452,419         1,288,634           988,040           280,769
                                                                  -----------       -----------       -----------       -----------

Cash and cash equivalents at end of period                        $   282,957       $ 1,195,703       $   282,957       $ 1,195,703
                                                                  ===========       ===========       ===========       ===========

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

Cash paid during the period for income taxes                      $     2,650       $         0       $     4,442       $         0
                                                                  ===========       ===========       ===========       ===========







                                                     See notes to financial statements

                                                                      5

</TABLE>


<PAGE>
                       STARTECH ENVIRONMENTAL CORPORATION
                          NOTES TO FINANCIAL STATEMENTS



Note 1.  Basis of Presentation

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

Net profit  (loss) per share is  determined  by dividing net loss by the 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 or warrants, have been excluded from the 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 profit  (loss) for the period ended
July 31, 1998.

The information furnished is unaudited and reflects all adjustments  (consisting
of only normal recurring and insignificant 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. The results of operations for the nine
months  ended  July 31,  1998 do not  necessarily  indicate  the  results  to be
expected for the full year.


Note 2.  Equity Transactions

During the quarter  ended July 31,  1998,  there were a total of 2,000 shares of
S-8 stock issued to vendors for services rendered.


                                       6
<PAGE>


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



Results of Operations
---------------------
1998 vs 1997
------------

For the first nine months of 1998 the Company  earned  $485,972 and for the same
period in 1997 the Company  earned $10,000 in revenue.  Operating  expenses were
$241,953 in the quarter  ended July 31, 1998 and  $792,212 for nine months ended
July 31, 1998  compared  with  $215,388 in the quarter and $589,648 for the nine
months a year ago. The nature of the operating expenses continue to be primarily
for selling, demonstration and general and administrative purposes.

The Registrant was  incorporated  under the laws of the State of Colorado in May
1991. During fiscal 1996, the Registrant entered into negotiations with Startech
Corporation  ("Startech")which  culminated  in the  acquisition  of  Startech on
November 17, 1995.


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

The Registrant is and will continue to be dependent  upon capital  contributions
from  shareholders  or  outside  investors  for  its  operating   capital.   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 and the sales backlog



Background
----------

The Registrant's activities during the past three fiscal years (November 1, 1992
to November 16, 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 17, 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  manufacturing  equipment  that
recovers,  recycles,  reduces and remediates  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.


                                       8
<PAGE>


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



ITEM 1.  LEGAL PROCEEDINGS.

The company and it's Officers,  individually  and personally,  except Leonard V.
Knap,  are  defendants in litigation  brought in  Bridgeport,  Connecticut,  USA
Federal Court, in February 1998 by John Easton of Canada.  The complaint demands
payment for commissions  and/or fees for services  rendered to acquire the funds
needed to  consummate  the reverse  acquisition,  that  occurred on November 17,
1995,  of Startech  Corporation  by Kapalua  Acquisitions,  Incorporated  (since
renamed to Startech  Environmental  Corporation).  The  proceedings are in their
preliminary stages. The company does not believe there is any merit to the claim
and will  vigorously  contest the matter.  The company will file a counter claim
against Mr. Easton.

The  company  is a  defendant  in  litigation  brought in the  Ontario  Court of
Justice, Ontario, Canada, and was served notification of the complaint in August
1997.  The  complaint  is a result of a third  party  action  against one of the
company's  shareholders.  The third party, a stock  brokerage,  failed to follow
standard  practice to verify a  restrictive  legend on the  shareholder's  stock
certificate;  thus sold the shares and had to purchase them back at a loss.  The
brokerage firm is seeking  retribution for the loss from the shareholder and the
shareholder is seeking indemnification and/or contribution from the company. The
company  does not  believe  there is any merit to the claim and will  vigorously
contest the matter.

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.


                                        9
<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 not 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  nine  months 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.


     (a) Exhibits.

          None


     (b) Reports.

          No reports on Form 8-K were filed for the quarter ended July 31, 1998.


                                       10
<PAGE>


                                    SIGNATURE


Pursuant to the requirements of the Securities Exchange Act of 1933, as amended,
the  Registrant  has duly  caused  this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                                         STARTECH ENVIRONMENTAL CORPORATION



Date:  September 15, 1998                By: /S/ John D. Watts
       ------------------                   ------------------------------------
                                            John D. Watts
                                            Executive Vice President of Finance
                                            and Administration



                                       11