DIGITRAN SYSTEMS, INCORPORATED AND SUBSIDIARIES

                          UNITED STATES
               SECURITIES AND EXCHANGE COMMISSION
                     Washington, D.C.  20549
                      _____________________
                           FORM 10-QSB
                      _____________________
                                
  [X]    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                 SECURITIES EXCHANGE ACT OF 1934
                                
             For the quarter ended October 31, 1997
                                
                               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 1-11034

                 DIGITRAN SYSTEMS, INCORPORATED
     (Exact name of registrant as specified in its charter)

          Delaware                           72-0861671
     (State of other jurisdiction of       (IRS employer
     incorporation or organization)        identification No.)

       2176 North Main,  North Logan,  UT 84341-1739
      (Address of principal executive offices and zip code)
                                
                       (435) 752-9067
      (Registrant's telephone number, including area code)
                                
                       Not applicable
        (Former name, former address, and former fiscal year, if
changed since last report)

 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 October 31, 1997
 ------------------------------------   -------------------------------
 Common stock, $.01 par value                     9,912,663
 Class B Common stock, $.01 par value             2,000,000
 
 Transitional Small Business Disclosure Format (Check one)
 
                     Yes ___   No   X
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                        TABLE OF CONTENTS



                                                                      PAGE

PART I. FINANCIAL INFORMATION


  Item 1. Financial Statements


          Unaudited Condensed Consolidated Balance Sheet                1
           as of October 31, 1997


          Unaudited Condensed Consolidated Statements of                2
           Operations, for the three and six month periods
           ended October 31, 1997 and 1996


          Unaudited Condensed Consolidated Statements of                3
           Cash Flows, for the three and six month periods
           ended October 31, 1997 and 1996


          Notes to Unaudited Condensed Consolidated Interim             4
           Financial Statements


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


PART II. OTHER INFORMATION                                              9







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                 DIGITRAN SYSTEMS, INCORPORATED AND SUBSIDIARIES



PART I.  FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

            DIGITRAN SYSTEMS, INCORPORATED and Subsidiaries
                 CONDENSED CONSOLIDATED BALANCE SHEET

                              (Unaudited)
                           October 31, 1997
                                ASSETS

Current assets
         Cash                                      $      12,000
         Accounts receivable                             347,000
         Inventories                                     264,000
         Costs and earnings in excess of billings        389,000
         Prepaid Expenses                                  6,000
                                                   --------------
            Total Current Assets                   $   1,018,000

Long term note receivable                          $     150,000
Property, plant and equipment, net                       791,000
                                                   --------------
            Total Assets                           $   1,959,000
                                                   ==============

               LIABILITIES AND STOCKHOLDERS EQUITY


Current liabilities
         Accounts payable and accrued expenses     $   2,102,000
         Notes payable                                 1,537,000
         Current portion of long-term debt               184,000
                                                   --------------
            Total current liabilities              $   3,823,000

Long-term Debt                                     $     749,000
                                                   --------------
Commitments and Contingencies                                -

Shareholder's Deficit
         Preferred stock                           $       3,000
         Common stock                                     99,000
         Class B Common stock                             20,000
         Additional Paid-in Capital                    7,094,000
         Accumulated Deficit                          (9,829,000)
                                                   --------------
            Total Shareholder's Deficit            $  (2,613,000)

            Total Liabilities and Shareholder's
              Deficit                              $   1,959,000
                                                   ==============

 The accompanying Notes are an integral part of these financial statements

                                      1
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                 DIGITRAN SYSTEMS, INCORPORATED AND SUBSIDIARIES

                 DIGITRAN SYSTEMS, INCORPORATED and Subsidiaries
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                               (Unaudited)

                                Three months Ended       Six months Ended
                                    October 31,              October 31,
                                 1997         1996        1997        1996
                              ---------------------- ------------------------
REVENUES                      $ 817,000  $ 1,190,000 $ 1,635,000 $ 1,580,000

COST OF GOODS                   453,000      684,000     928,000   1,237,000
                              ---------------------- ------------------------
GROSS PROFIT                    364,000      506,000     707,000     343,000

EXPENSES
  Depreciation and
    Amortization                 25,000      328,000      50,000     525,000
  Selling, general and
   administrative expenses      346,000      268,000     746,000     609,000

OPERATING LOSS                   (7,000)     (90,000)    (89,000)   (791,000)

OTHER INCOME  (EXPENSE)
  Interest                      (96,000)     (91,000)   (177,000)   (113,000)
  Equity in loss from joint
    venture                                  (18,000)                (47,000)
  Expense of stock issued for
    services and Litigation
    Settlement                 (105,000)                (268,000)
  Gain on litigation
    settlement and other         41,000                   52,000
                              ---------------------- ------------------------
LOSS BEFORE INCOME TAXES       (167,000)    (199,000)   (482,000)   (951,000)

INCOME TAXES                        -            -           -           -
                              ---------------------- ------------------------
NET LOSS                      $(167,000)  $ (199,000) $ (482,000) $ (951,000)

LESS CURRENT UNPAID DIVIDENDS
   on PREFERRED STOCK
                              ---------------------- ------------------------
NET LOSS APPLICABLE TO
   COMMON SHARES              $(167,000)  $ (199,000) $ (482,000) $ (951,000)
                              ====================== ========================

LOSS APPLICABLE TO COMMON
   STOCK                      $   (0.02)  $    (0.02) $    (0.05) $    (0.09)
                              ====================== ========================
WEIGHTED AVERAGE COMMON STOCK
  AND COMMON STOCK
  EQUIVALENTS OUTSTANDING    11,104,000   10,282,000  11,104,000  10,282,000
                             ======================= ========================

  The accompanying Notes are an integral part of these financial statements

                                       2 
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                 DIGITRAN SYSTEMS, INCORPORATED AND SUBSIDIARIES


                 DIGITRAN SYSTEMS, INCORPORATED and Subsidiaries
                 CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
                                 (Unaudited)


                                                       For the Six Months Ended
                                                              October 31,
                                                           1997         1996
                                                     --------------------------
Cash Flows From Operating Activities
   Net Loss                                          $  (482,000)  $  (951,000)
   Adjustments to reconcile net loss to net cash
     provided by (used in) operating activities:
       Depreciation and Amortization                      50,000       525,000
       Loss in equity in joint venture                                  47,000
       Issuance of common stock for services and
         litigation settlement                           268,000           -
       Gain on litigation settlements                    (52,000)          -
       (Increase) Decrease in:
         Accounts receivable                            (119,000)      131,000
         Inventory                                       251,000       536,000
         Costs and earnings in excess of billings       (389,000)       66,000
         Other current assets                              5,000           -
        Increase (Decrease) in:
         Accounts Payable and other current
           liabilities                                  (552,000)       26,000
         Billings in excess of costs                    (267,000)      215,000
                                                     --------------------------
         Net Cash (Used in) provided by Operating
           Activities                                 (1,287,000)      595,000

Cash Flows Used in Investing Activities

   Purchase of Property, plant & equipment                (4,000)      (20,000)
   Increase in capitalized simulator costs                   -        (144,000)
   Purchase of truck demo unit                               -        (502,000)
                                                     --------------------------
         Net Cash used in Investing Activities            (4,000)     (666,000)

Cash Flows from Financing Activities
   Proceeds from short term borrowing                    932,000         6,000
   Payments on short term borrowing                     (115,000)     (219,000)
   Proceeds from long term borrowing                         -         640,000
   Payments on long term borrowing                       (78,000)     (325,000)
   Issuance of Common Stock                              525,000           -
   Conversion of Preferred Stock
                                                     --------------------------
         Net Cash Provided by Financing Activities     1,264,000       102,000

Net Increase (Decrease) in Cash                          (27,000)       31,000

Cash at Beginning of Period                               39,000        72,000
                                                     --------------------------
Cash at End of Period                                $    12,000   $   103,000
                                                     ==========================

  The accompanying Notes are an integral part of these financial statements
<PAGE>
                DIGITRAN SYSTEMS, INCORPORATED AND SUBSIDIARIES
                                     

NOTE 1 - CONDENSED FINANCIAL STATEMENTS
  
  Digitran Systems, Incorporated (the "Registrant") files herewith
  unaudited condensed balance sheets of the Registrant as of October 31,
  1997, unaudited condensed statements of operations for the three months
  and six months ended October 31, 1997 and 1996 and unaudited condensed
  statements of cash flows for the six months ended October 31, 1997 and
  1996 together with unaudited condensed notes thereto.  In the opinion of
  management of the Registrant, the financial statements reflect all
  adjustments, all of which are normal recurring adjustments, necessary to
  fairly present the financial condition of the Registrant for the interim
  periods presented.
  
  Certain information and footnote disclosures normally included in
  financial statements prepared in accordance with generally accepted
  accounting principles have been condensed or omitted.  It is suggested
  that these condensed financial statements be read in conjunction with
  the financial statements and notes thereto included in the Company's
  April 30, 1997 audited financial statements.  The results of operations
  for the periods ended October 31, 1997 and 1996 are not necessarily
  indicative of the operating results for the respective full years.
  
  The simulator products which are marketed by the Company sell at a very
  high price in comparison to the total annual sales of the Company.  This
  relationship leads to individual sales having a disproportionately large
  effect on total sales.  Therefore, sales within a quarter can lead to
  highly volatile results of operations for individual quarters.  The
  results for individual quarters may not be indicative of annual results.
  All quarterly information should be considered in light of the last
  fiscal year and the current year to date operations of the Company.
  
  
NOTE 2 - COMMITMENTS AND CONTINGENCIES
  
  
  Shareholder Litigation
  
  On April 1, 1993, the Securities and Exchange Commission initiated an
  investigation of the company.  This in turn precipitated litigation by
  certain shareholders.   The full and complete details of these actions
  have been previously reported in prior 10-KSB and 10-QSB filings.   As
  of July 15, 1997, all actions had been resolved and cash settlement
  offer was approved by the court.   The cash settlement to the
  shareholders is in the amount of $1,000,000 payable in installments of
  $300,000 due August 1997,  $300,000 due September 1997,  $200,000 due
  January 1998, and $200,000 due July 1998.   As of the date of this
  filing the company had paid the first three installments and fully
  expects to meet the last installment.
  
  In the normal course of business, there may be various other legal
  actions and proceedings pending which seek damages against the Company.
  In the opinion of management the ultimate resolution of these matters
  will not have a material adverse impact upon the Company, its business
  or property.
  
                                       4
<PAGE>
                DIGITRAN SYSTEMS, INCORPORATED AND SUBSIDIARIES  
  
  Going Concern
  
  The accompanying financial statements have been presented on a going
  concern basis which contemplates the realization of assets and the
  satisfaction of liabilities in the normal course of business.   The
  Company has incurred recurring operating losses,  has a deficit in
  working capital, and has an accumulated earnings deficit.
  
  The Company has been unable to resume trading and has been denied access
  to its traditional lines of credit.  However, the Company has been able
  to obtain short term borrowings and lines of credit from related
  parties, a local government agency, and a financial institution which
  have been backed by certain Company receivables and contracts.
  
  The Company's continued existence is dependent upon its ability to focus
  on operational considerations in order to maintain the growth in sales
  opportunities and continue bringing to fruition a number of the sales
  proposals currently outstanding to potential customers.  Management
  plans to continue focusing its time, attention and financial resources
  on operational considerations.

  In August 1997, the Company initiated a $3,000,000 private offering of
  its common stock.   The offering consists of 1,500,000 units, each of
  which consists of two shares of common stock and one warrant entitling
  the holder to acquire one additional share of common stock for $1.50 on
  or before February 28, 1999.    Each unit sells for $2.00 cash.
  Certain broker-dealers will be entitled to a commission of 10% to 13%.


  
NOTE 3 - CONCENTRATIONS OF CREDIT RISK
  
  Most of the Company's business activity is with oil companies, port
  authorities, training institutions and various other entities, often
  outside the United States.  Normally, the Company attempts to secure
  shipments outside the United States through letters of credit and/or
  progress payments.
  
  In cases for which shipments are made on open accounts, the Company
  retains title or ownership claims to the equipment shipped by terms of
  its contracts or agreements until significant payment has been secured.


NOTE 4 - CAPITAL STOCK
  
  The Company's capital stock consists of common stock, Class B common
  stock, and preferred stock.  The common stock provides for a
  noncumulative, $.05 per share annual dividend and a $.01 per share
  liquidation preference over Class B common.  In addition, the Company
  must pay the holders of the common stock a dividend per share at least
  equal to any dividend paid to the holders of Class B common.  Holders of
  the common stock are entitled to one-tenth of a vote for each share
  held.

                                       5
<PAGE>
                DIGITRAN SYSTEMS, INCORPORATED AND SUBSIDIARIES

  Class B common may not receive a dividend until an annual dividend of at
  least $.05 is paid on the common stock.  Holders of Class B common have
  preemptive rights with respect to the Class B common stock and may
  convert each share of Class B common into one share of the common stock
  at any time.  Holders of Class B common are entitled to one vote per
  share held.
  

  
  The Series 1 Class A 8% Cumulative Convertible Preferred Stock has a par
  value of $.01 per share.  As of October 31, 1997 there were 263,137
  shares outstanding.  Holders of preferred shares are entitled to
  cumulative dividends of 8% per annum on the stated value of the stock,
  designated as $7 per share.  Holders of Preferred Stock are entitled to
  receive cumulative dividends at the annual rate of $.56 per share,
  payable semi-annually on September 15 and March 15.    The Company paid
  dividends of $27,362 for September 15, 1992 and $136,682 for March 15,
  1993.  No dividends have been paid since March 15, 1993 resulting in
  dividends in arrears of approximately $663,000.  The future payment of
  dividends on the Preferred Stock is dependent on cash flow from
  operations and potential reduction in dividend liability through
  conversion of preferred shares for common shares.  There may be legal
  restrictions on the payment of dividends for periods in which losses are
  incurred and/or the Company has an accumulated deficit.  Dividends are
  not payable on any other class of stock ranking junior to the preferred
  stock until the full cumulative dividend requirements of the preferred
  stock have been satisfied.  The preferred stock carries a liquidation
  preference equal to its stated value plus any unpaid dividends.  Subject
  to certain registration requirements, convertibility of any preferred
  stock issued may be exercised at the option of the holder thereof at two
  shares of common stock for each preferred share converted.  Holders of
  the preferred stock are entitled to one tenth of a vote for each share
  of preferred stock held.  The Company may, at its option, redeem at any
  time all shares of the preferred stock or some of them on notice to each
  holder of preferred stock at a per share price equal to the stated value
  ($7.00) plus all accrued and unpaid dividends thereon (whether or not
  declared) to the date fixed for redemption, subject to certain other
  provisions and requirements.
  










                                       6
<PAGE>
                DIGITRAN SYSTEMS, INCORPORATED AND SUBSIDIARIES

PART I FINANCIAL INFORMATION

ITEM 2 Management's Discussion and Analysis of Financial Condition and Results
       of Operations.
  
  Liquidity and Capital Resources
  
  The Company relied almost exclusively on proceeds from sales and short term
  borrowings on sales contracts for operating capital during the first and
  second quarter of 1997. The Company continued to be without access to
  traditional lines of credit with the Company's bank; however, as of October
  31, 1997, the Company was able to raise $525,000 through a Private Offering
  Memorandum.
  
  The Company has substantially reduced the inventory levels in the past
  year and thus will need to rely almost exclusively on proceeds from sales
  to finance the cost of those sales.  The ability of management to obtain
  favorable terms with customers which will facilitate the payment of the
  materials for the simulators during the construction phase will be
  important in cash utilization.
  
  Accounts payable decreased by approximately $552,000 during the first two
  quarters of 1997.  This decrease is reflective of management's focus on
  reducing its debt and restoring strength to the Company's balance sheet.
  
  The Company currently has no material commitments for capital expenditures.

  Cash used by operations for the six months ended October 31, 1997 was
  approximately $1,287,000 as compared to a provision of $595,000  during the
  same period last year.  The decrease over the last year is attributable
  primarily to the timing of cash invested in sales contracts and their
  construction costs relative to collections thereon, as well as a
  significant commitment to pay suppliers for past due amounts.
  
  Results of Operations
  
  Quarter ended October 31, 1997 vs. quarter ended October 31, 1996
  
  Net sales decreased by approximately $373,000 (approximately 31%) for the
  current quarter over the same period last year.  Due to the nature of the
  Company's product and market, and because a relatively small number of
  large individual sales comprise the majority of the Company's revenues,
  results of operations for any one quarter may vary significantly from other
  quarters based on even a small change in the number of units sold in any
  given quarter.
  
  Gross profits as a percentage of net sales increased from 43% last year to
  45% this year.  The absence of amortization of capitalized software and
  depreciation of demonstration units accounts for a significant portion of
  the reduction in the cost of goods sold ratio.   Also due to the fact that
  margins inherent in contracts may vary from customer to customer and as
  recognition of revenue on significant contracts varies from period to
  period, variations of several percentage points between periods can be
  expected.
  
                                       7
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                DIGITRAN SYSTEMS, INCORPORATED AND SUBSIDIARIES

  Selling, general and administrative expenses increased 29% ($78,000) over
  last year.  The increase was due in large part to concerted efforts on
  management's part to focus more attention on the marketing and sales. The
  majority of the remaining selling, general and administrative expenses
  stayed at a relatively stable level for the second quarter 1997 compared to
  second quarter 1996.
  
  Interest expense increased by $5,000. The increase is obviously due to
  unfavorable increases in  interest rates, primarily through utilization of
  a quasi-government lending agency lending against sales contracts at an
  interest rate of 24% per annum, offset by some conversions of debt to
  equity.
  
  Due to the need for the Company to operate in large part from its own
  capital resources, it has been forced to adjust its disbursements relative
  to marketing and property and equipment purchases.  Management has
  attempted to prioritize the expenditures and to maximize the benefits from
  the expenditures being made.  The current low levels of expenditures on
  property and equipment may also lead to inefficiencies within the Company,
  which would not otherwise occur, if the current trend continues into the
  future.
  
  Due to the somewhat lengthy period of time required between the generation
  of a sales lead with a potential customer and the completion of a contract
  with that customer, results of efforts taken in the past few periods will
  likely start to be realized during the next few quarters.
  
  
  Six Month Period Ended October 31,1997     -vs-
  Six Month Period Ended October 31, 1996.
  --------------------------------------------------------------------------

  Revenues for the six months ended October 31, 1997 have increased slightly,
  but costs of goods sold were reduced by $309,000, (25%). Operating costs
  were reduced significantly by the absence of amortization of capitalized
  software costs and depreciation of certain items previously written off.
  The Company continues to increase its investment in selling and marketing
  expenses in order to attract sales contracts.
  
  The Company continues to incur costs relative to the settlement of its
  debts from the litigation period.  The Company expects these expenses to
  continue, though on a smaller scale.
  
  The Company has shown significant overall improvement in its operations by
  controlling its costs and selectively directing its available resources.
  The results of operations also reflect the effect of certain reductions in
  costs and personnel, made at the beginning of the second quarter of fiscal
  1997.
  
                                       8
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                DIGITRAN SYSTEMS, INCORPORATED AND SUBSIDIARIES

  Management's Plans for Near Term Operations
  
  In late June 1997 the company significantly reduced managerial and other
  staff for reasons associated with cash flow and personal contribution.
  Some replacements have been made but the company continues to operate at
  bare bone minimum.   At the same time the company has expended funds on
  managerial consultants and technical consultants.    This effort is
  expected to result in more efficient operations and a significantly
  improved product line.   Management believes its product lines continue to
  be the state of the art in the industry.   It plans to maintain this
  advantage.



PART II OTHER INFORMATION


ITEM 1 Legal Proceedings

     See "Note 2 - Commitments and Contingencies, Shareholder Litigation".

ITEM 2 Changes in Securities

     525,000 shares of common stock were issued as part of the Private
Offering Memorandum. 154,820 shares of common stock were issued to
consultants, suppliers and employees, for services rendered.


ITEM 3 Defaults on Senior Securities

     Holders of Series 1 Class A 8% Cumulative Convertible Preferred Stock
are entitled to receive cumulative dividends at the annual rate of $.56 per
share, payable semi-annually on September 15 and March 15, beginning
September 15, 1992.  No preferred stock dividends have been paid since
September 15, 1993. Certain holders of Preferred Stock converted 95,658
shares into 286,974 shares of Common Stock.  After the conversion the
aggregate dividends in arrears are $663,000.
     

ITEM 4 Submission of Matters to a Vote of Security Holders

     None


ITEM 5 Other

     None


ITEM 6 Exhibits and Reports on Form 8-K


(a)       Exhibits:  Part I

     
(b)       Reports on Form 8-K:


          None

                                       9
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                DIGITRAN SYSTEMS, INCORPORATED AND SUBSIDIARIES


                                   SIGNATURES
                                     
                                     

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






                                 Digitran Systems, Incorporated
                                 ------------------------------
                                           Registrant



Dated   Jan. 28  , 19 98         By: /s/  Loretta Trevers
      ----------      --             ---------------------------
                                     By: Loretta Trevers
                                    (President, Chairman & Chief Executive
                                     Officer)


Dated   Jan. 28  , 19 98         By: /s/  S. Emerson Lybbert
      -----------     --             ---------------------------
                                     By:  S. Emerson Lybbert
                                    (Chief Financial Officer)













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