UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549


                                   FORM 10-QSB

[X]  Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange
     Act of 1934

         For the quarterly period ended June 30, 1998

[    ] Transition Report pursuant to 13 or 15(d) of the Securities  Exchange Act
       of 1934

         For the transition period from                       to

Commission File Number 33-55254-03

                            DYNAMIC ASSOCIATES, INC.
        (Exact name of Small Business Issuer as specified in its charter)

              Nevada                               87-0473323
  (State or other jurisdiction of              (IRS Employer
          incorporation )                      Identification No.)

     7373 North Scottsdale Road, Suite B-169
                Scottsdale, Arizona                                     85253
    (Address of principal executive offices)                        (Zip Code)

Issuer's telephone number, including area code:  (602) 483-8700

Indicate by a check mark  whether the issuer (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 [X] Yes [ ] No

Indicate the number of shares outstanding of each of the registrant's classes of
common stock, as of the latest practicable date.

             Class                              Outstanding as of June 30, 1998
------------------------------------            -------------------------------
$.001 par value Class A Common Stock                     14,223,929 shares




<PAGE>



                         PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.

BASIS OF PRESENTATION

General

     The  accompanying  unaudited  financial  statements  have been  prepared in
accordance with the instructions to Form 10-QSB and,  therefore,  do not include
all information and footnotes necessary for a complete presentation of financial
position,  results  of  operations,  cash  flows,  and  stockholders'  equity in
conformity  with generally  accepted  accounting  principles.  In the opinion of
management,  all adjustments considered necessary for a fair presentation of the
results of  operations  and  financial  position have been included and all such
adjustments  are of a normal  recurring  nature.  Operating  results for the six
months ended June 30, 1998, are not  necessarily  indicative of the results that
can be expected for the year ending December 31, 1998.

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

                  The  Company  is  engaged  in  managing  the   operations   of
psychiatric/geriatric  units for various hospitals through Genesis and GCCA, its
wholly owned subsidiaries.

         The Company completed the spin-off of MW Medical, Inc. ("MW Medical" or
"MW") on March 11, 1998.  MW Medical is the owner of P&H and MMC,  each of which
were subsidiaries of the Company until completion of the spin-off. MW Medical is
a Nevada corporation  incorporated on December 4, 1997. The Company  distributed
to the shareholders, one common share of MW Medical for each common share of the
Company held by the  shareholder  as of the record date of February 25, 1998. No
consideration was paid by Dynamic shareholders for shares of MW Common Stock.

         In 1997, the Company issued Convertible Notes in Reliance on Regulation
S to non U.S. persons. Each note is for $18,500.00 and bears interest at 10% per
annum and is  convertible  into common  stock of the Company at $3.50 per share.
With the spin off of MMC and P&H March 11, 1998, the material asset value of the
Company  resulted in the conversion price to be lowered from $3.50 to $2.75. The
notes mature September 16, 2006.


LIQUIDITY AND CAPITAL RESOURCES

As of June 30, 1998,  the Company had  $1,391,374 in cash and cash  equivalents.
For the six months ending June 30, 1998 the Company generated a loss of $.20 per
share after deducting $1,403,154 for amortization of goodwill and debt costs and
depreciation.  The Company also  generated a $.10 per share profit on its income
from operations, excluding depreciation and amortization.

Genesis, a Louisiana corporation,  is a 100% owned subsidiary of the Company. It
provides  elderly  healthcare and  gero-psychology  services to small healthcare
facilities  unable to provide  these  services in house.  The Genesis  treatment
program  conforms  to the  guidelines  of the  JCAHO  Accreditation  Manual  for
Hospitals and Medical  Standards.  The program is reimbursed at cost by Medicare
when  established as a distinct part unit of a hospital  which  qualifies for an
exemption from the Medicare Prospective Payment System("PPS"). The PPS exemption
provides  for a cost plus  reimbursement  system for the unit,  which allows the
hospital to receive full reimbursement



<PAGE>



of  the  direct  operating  expenses,  plus  an  allocation  to  the  unit  of a
substantial  portion of the  hospital's  overall  overhead  and  capital  costs.
Genesis , together with GCCA, expects to generate a profit.

RESULTS OF OPERATIONS

The financial statements present the combined activities of the Company, Genesis
and GCCA.

During the six months ended June 30, 1998, management fees of $171,266 were paid
compared  to  $190,000  for the same  period in 1997.  The  Company's  President
received  $90,000 and the  Company's  Secretary/Treasurer  received  $56,266 and
$25,000 was paid in management fees to an outside firm.

Net loss for the six months ended June 30, 1998 was $686,306,  before  deducting
the debts owed by its former  subsidiaries,  compared to a loss of $767,128  for
the same period in 1997. With the spin off of its former subsidiaries, Microwave
Medical Corp.  and P&H  Laboratories,  Inc. on March 11, 1998,  the Company also
wrote- off debts of $2,169,806  incurred by these subsidiaries to the Company. A
charge for amortization of goodwill and debt cost and depreciation of $1,403,154
was incurred in the period which represents $.10 per share.

         Management  fee income was $7,764,230 for the six months ended June 30,
1998 compared to $7,109,400 for the same period in 1997. This is a 9.2% increase
from 1997.

         Net sales for the six months  ended June 30, 1998 were $0,  compared to
$1,767,803  for the same period in 1997.  Cost of sales for the six months ended
June 30, 1998 were $0 compared to $1,313,464 for the same period in 1997.  Since
the spin off of P&H  Laboratories  on March 11,  1998 to MW Medical,  Inc.,  the
Company's sole revenue is from management fee income.

         Selling  and  general and  administrative  expenses  for the six months
ended June 30, 1998 were  $5,586,061  compared to $5,399,845 for the same period
in 1997.

         Research and development  expenses incurred by the former subsidiaries,
Microwave Medical Corp. and Microwave Medical GmBH are no longer included in the
financials  of the Company,  since the spin off of March 11,  1998.  For the six
months ended June 30, 1997 these costs were $433,105.

         Depreciation  and  amortization  expenses for the six months ended June
30, 1998 were $1,303,308 compared to $1,328,576 for the same period in 1997.

         Interest  expense for the six months  ended June 30, 1998 was  $947,305
compared to $1,002,934 for the same period in 1997. Interest expense is incurred
to the Convertible Note Holders of the Company and includes $99,846 of amortized
debt issue costs.

Net loss for the three  months  ended June 30, 1998 was  $128,844  compared to a
loss of $431,290 for the same period in 1997. The net loss is $.01 per share for
the  quarter.   A  charge  for  amortization  of  goodwill  and  debt  cost  and
depreciation  of $701,937 was incurred in the period which  represents  $.05 per
share.

Management  fee income for the three months  ended June 30, 1998 was  $4,041,724
compared  to  $3,656,400  for the same  period in 1997.  This  reflects  a 10.5%
increase from 1997.  There was no sales income nor cost of sales for 1998 due to
the spin-off.




<PAGE>



Selling and general and administrative  expenses for the three months ended June
30, 1998 were $2,473,156 compared to $2,807,866 for the same period in 1997. The
decrease is due to the reduced number of subsidiaries owned in 1998.

Depreciation and amortization  expenses for the three months ended June 30, 1998
were $652,014 compared to $674,055 for the same period in 1997.

Interest expense for the three months ended June 30, 1998 was $475,190  compared
with  $513,657  for  the  same  period  in  1997.  This  decrease  is due to the
conversion to stock of some of the convertible notes.

Item 5. Other Information.

Genesis Health Management Corporation (Genesis)

In December 1996, the Company purchased 100% of the outstanding  common stock of
Genesis for $25,373,000.  Of the purchase price, $15,050,000 was paid in cash or
notes and accounts payable and $10,323,000 was paid by issuing  3,100,000 shares
of the  Common  Stock of the  Company  at a value of $3.33 per  share.  The note
issued in connection  with the  acquisition of Genesis was paid in full on March
3, 1997.  Genesis  had been  operating  in  Louisiana  for 3 years  prior to the
purchase by the Company.  Genesis is in the  business of managing and  operating
psychiatric/geriatric   units  in  various   hospitals   (both   in-patient  and
out-patient).  At June 30, 1998,  Genesis had 25 contracted  units.  Genesis has
contracts with hospitals in the states of Louisiana,  Arkansas,  Mississippi and
Tennessee.

Geriatric Care Centers of America, Inc. (GCCA)

On  March  13,  1997,  Geriatric  Care  Centers  of  America  ("Geriatric"),   a
corporation  organized  pursuant to the laws of the state of  Tennessee,  merged
with Geriatric Care Centers  Acquisition  Corporation,  for $500,000 in cash and
150,000  shares of Common Stock of the Company.  The  surviving  corporation  is
Geriatric Care Centers of America, Inc. ("GCCA"),  with its registered office at
1613 Jimmie Davis Highway, Bossier City, Louisiana, 71112. The Company owns 100%
of  GCCA.   GCCA  is  also  in  the   business   of   managing   and   operating
psychiatric/geriatric units in hospitals. At June 30, 1998, GCCA had 3 operating
units.






<PAGE>



                           PART II - OTHER INFORMATION

Item 6.           Exhibits and Reports on Form 8-K.

         (a)      Exhibits
                  99-1 Financial Statements as of June 30, 1998
                  Financial Data Schedule

         (b)      Reports on Form 8-K

                  None.


                                   SIGNATURES

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



DATED: 17 August 1998                       /S/Jan Wallace
                                            Jan Wallace, President, C.E.O.





<PAGE>



                    DYNAMIC ASSOCIATES, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEET
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                                                 June 30,
                                                                                                   1998
                                                                                          ----------------------
ASSETS
     CURRENT ASSETS
<S>                                                                                       <C>                   
       Cash                                                                               $            1,391,374
       Accounts receivable (less allowance for doubtful accounts of $2,065,050)                        4,844,887
       Other receivables                                                                                 114,193
       Prepaid expense and other current assets                                                           33,802
       Deferred Tax Benefit                                                                              300,000
                                                                                          ----------------------
                                                                  TOTAL CURRENT ASSETS                 6,684,256

     PROPERTY, PLANT & EQUIPMENT                                                                         300,656

     OTHER ASSETS
       Deferred debt issue costs (less amortization of $287,704)                                       1,431,153
       Investment - restricted stock                                                                      27,000
       Goodwill (less amortization of $3,990,360)                                                     20,867,415
       Deposits                                                                                              410
                                                                                          ----------------------
                                                                                                      22,325,978
                                                                                          ----------------------

                                                                                          $           29,310,890
                                                                                          ======================

LIABILITIES & EQUITY
     CURRENT LIABILITIES
       Accounts payable                                                                   $              309,495
       Accrued expenses                                                                                  615,635
       Current portion of long-term debt                                                                  20,090
       Income taxes payable                                                                               26,800
       Accrued interest payable                                                                          773,361
                                                                                          ----------------------
                                                             TOTAL CURRENT LIABILITIES                 1,745,381

LONG-TERM DEBT                                                                                            16,701
CONVERTIBLE NOTES                                                                                     17,001,500
                                                                                                      17,018,201
                                                                                          ----------------------
                                                                     TOTAL LIABILITIES                18,763,582

     STOCKHOLDERS' EQUITY 
       Common stock $.001 par value:
         Authorized - 25,000,000 shares
         Issued and outstanding 14,223,929 shares                                                         14,224
       Additional paid-in capital                                                                     18,512,330
       Retained deficit                                                                               (7,979,246)
                                                                                          ----------------------
                                                            TOTAL STOCKHOLDERS' EQUITY                10,547,308
                                                                                          ----------------------

                                                                                          $           29,310,890
                                                                                          ======================
</TABLE>


                                       F-1

<PAGE>



                    DYNAMIC ASSOCIATES, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)


<TABLE>
<CAPTION>
                                                                   Three Months Ended              Six Months Ended
                                                                        June 30,                       June 30,
                                                              ----------------------------   ----------------------------
                                                                   1998           1997           1998            1997
                                                              -------------  -------------   -------------  -------------
<S>                                                           <C>            <C>             <C>            <C>          
Net Sales                                                     $           0  $     867,570   $           0  $   1,767,803
Management fees                                                   4,041,724      3,656,400       7,764,230      7,109,400
Cost of sales                                                             0        655,317               0      1,313,464
                                                              -------------  -------------   -------------  -------------
                                              GROSS PROFIT        4,041,724      3,868,653       7,764,230      7,563,739

Selling and General administrative expenses                       2,473,156      2,807,866       5,586,061      5,399,845
Depreciation and amortization                                       652,014        674,055       1,303,308      1,328,576
Research and development                                                  0        229,485               0        433,105
Bad debts                                                           485,000              0         735,000              0
                                                              -------------  -------------   -------------  -------------
                                                                  3,610,170      3,711,406       7,624,369      7,161,526
                                                              -------------  -------------   -------------  -------------
                                      NET OPERATING INCOME          431,554        157,247         139,861        402,213

OTHER INCOME (EXPENSE)
     Interest income                                                  4,342         51,486          13,995         75,073
     Interest expense                                              (475,190)      (513,657)       (947,305)    (1,002,934)
     Miscellaneous income                                                 0            974               0          4,046
     Bad debts - former subsidiaries                                      0              0      (2,169,806)             0
     Disposition of subsidiaries                                          0              0         256,493              0
     Unrealized change in investment                                 12,000        (49,375)         (2,800)       (17,975)
     Loss on disposition                                                  0         (2,138)              0         (2,138)
                                                              -------------  -------------   -------------  -------------
                                                                   (458,848)      (512,710)     (2,849,423)      (943,928)
                                                              -------------  -------------   -------------  -------------
                     NET INCOME (LOSS) BEFORE INCOME TAXES
                                     AND MINORITY INTEREST          (27,294)      (355,463)     (2,709,562)      (541,715)

INCOME TAX EXPENSE                                                  101,550         64,001         146,550        201,786
                                                              -------------  -------------   -------------  -------------

                                  NET INCOME (LOSS) BEFORE
                                         MINORITY INTEREST         (128,844)      (419,464)     (2,856,112)      (743,501)

MINORITY INTEREST                                                         0         11,826               0         23,627
                                                              -------------  -------------   -------------  -------------

                                         NET INCOME (LOSS)    $    (128,844) $    (431,290)  $  (2,856,112) $    (767,128)
                                                              =============  =============   =============  =============

Net income (loss) per weighted
     average share                                            $        (.01) $        (.03)  $        (.20) $        (.06)
                                                              =============  =============   =============  =============

Weighted average number of common
     shares used to compute net income
     (loss) per weighted average share                           14,223,929     12,747,312      14,146,581     12,551,444
                                                              =============  =============   =============  =============
</TABLE>





                                       F-2

<PAGE>



                    DYNAMIC ASSOCIATES, INC. AND SUBSIDIARIES
       CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                Common Stock                   Additional
                                               Par Value $.001                   Paid-In            Retained
                                         Shares              Amount              Capital             Deficit
                                    -----------------  ------------------  ------------------  -----------------
<S>                                 <C>                <C>                 <C>                 <C>               
Balances at 12/31/97                       13,973,929  $           13,974  $       18,262,580  $      (5,123,134)
   Sale of common stock (S-8)
     at $1.00 per share                       250,000                 250             249,750
Net loss for period                                                                                   (2,856,112)
                                    -----------------  ------------------  ------------------  -----------------

Balances at 6/30/98                        14,223,929  $           14,224  $       18,512,330  $      (7,979,246)
                                    =================  ==================  ==================  =================
</TABLE>





                                       F-3

<PAGE>



                    DYNAMIC ASSOCIATES, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)



<TABLE>
<CAPTION>
                                                                                             Six Months Ended
                                                                                                 June 30,
                                                                                        1998                  1997
                                                                                  -----------------     -----------------
OPERATING ACTIVITIES
<S>                                                                               <C>                   <C>               
   Net (loss)                                                                     $      (2,856,112)    $        (767,128)
   Adjustments to reconcile net (loss) to cash (used) by operating activities:
       Depreciation & amortization                                                        1,403,154             1,424,995
       Net book value of assets sold`                                                             0                 2,138
       Book value of spun-off subsidiaries                                                1,743,312                     0
       Bad debts                                                                            735,000                     0
       Adjustment for investment received as interest income                                      0               (35,000)
       Unrealized change in investment                                                        2,800                37,975
       Minority interest                                                                          0                23,627
       Deferred income tax                                                                        0                  (500)
   Changes in assets and liabilities:
       Accounts receivable                                                               (1,947,820)             (725,562)
       Inventories                                                                                0               (27,345)
       Prepaid expenses                                                                       5,626                (4,869)
       Accounts payable and accrued expenses                                                 96,980              (252,093)
       Income taxes payable                                                                (226,528)               70,863
       Deposits                                                                                   0                20,000
                                                                                  -----------------     -----------------
                                      NET CASH (USED) BY OPERATING ACTIVITIES            (1,043,588)             (232,899)

INVESTING ACTIVITIES
   Loans to related party and accrued interest                                                    0                60,980
   Loan - other                                                                              (9,892)                    0
   Purchase of equipment                                                                     (6,766)             (236,437)
   Deposits                                                                                 (11,496)              (80,598)
   Goodwill                                                                                       0              (500,000)
   Deferred debt issue costs                                                                      0              (340,356)
   Refund of option                                                                               0                     0
   Purchase of subsidiary                                                                         0                     0
                                                                                  -----------------     -----------------
                                      NET CASH (USED) BY INVESTING ACTIVITIES               (28,154)           (1,096,411)

FINANCING ACTIVITIES
   Cash from (to) subsidiaries                                                             (387,982)               41,518
   Principal payments on debt                                                               (15,076)           (3,262,904)
   Capital raising costs                                                                          0                (3,000)
   Convertible note proceeds                                                                      0             3,996,000
   Proceeds from sale of common stock                                                       250,000               546,500
                                                                                  -----------------     -----------------
                             NET CASH PROVIDED (USED) BY FINANCING ACTIVITIES              (153,058)            1,318,114
                                                                                  -----------------     -----------------

                                      (DECREASE) IN CASH AND CASH EQUIVALENTS            (1,224,800)              (11,196)

Cash and cash equivalents at beginning of year                                            2,616,174             3,447,019
                                                                                  -----------------     -----------------

                                   CASH AND CASH EQUIVALENTS AT END OF PERIOD     $       1,391,374     $       3,435,823
                                                                                  =================     =================

SUPPLEMENTAL INFORMATION Cash paid for:
     Interest                                                                     $         866,089     $         302,735
     Income taxes                                                                           253,878               131,452
</TABLE>

During 1997, the Company issued 150,000 shares of its restricted common stock as
part of the acquisition of GCCA. The transaction has been recorded at $300,000.

During  1998,  the  Company  purchased  a vehicle  in the  amount of  $16,943 by
incurring a loan in the same amount.



                                       F-4

<PAGE>



                    DYNAMIC ASSOCIATES, INC. AND SUBSIDIARIES
                   UNAUDITED PRO FORMA CONSOLIDATED CONDENSED
                             STATEMENT OF OPERATIONS
                         Six months ended June 30, 1997

<TABLE>
<CAPTION>
                                                                                                     Pro Forma      Consolidated
                                                                   Dynamic       Geriatric (1)      Adjustments       Pro Forma
                                                              ---------------   ---------------  ---------------   ---------------
<S>                                                           <C>               <C>              <C>                              
Net Sales                                                     $     1,767,803   $             0  $                 $     1,767,803
Management fee income                                               7,109,400           244,125                          7,353,525
Cost of sales                                                       1,313,464                 0                          1,313,464
                                                              ---------------   ---------------  ---------------   ---------------

                                                GROSS PROFIT        7,563,739           244,125                          7,807,864

Selling and general and administrative expenses                     5,399,845            26,792                          5,426,637
Depreciation and amortization                                       1,328,576                 0                          1,328,576
Research and development                                              433,105                 0                            433,105
                                                              ---------------   ---------------  ---------------   ---------------
                                                                    7,161,526            26,792                          7,188,318
                                                              ---------------   ---------------                    ---------------
                                        NET OPERATING INCOME          402,213           217,333                            619,546

OTHER INCOME (EXPENSE)
   Interest income                                                     75,073                 0                             75,073
   Interest expense                                                (1,002,934)                0                         (1,002,934)
   Miscellaneous income                                                 4,046                 0                              4,046
   Unrealized decline in investment                                   (17,975)                0                            (17,975)
   Loss on disposition                                                 (2,138)                0                             (2,138)
                                                              ---------------   ---------------  ---------------   ---------------
                                                                     (943,928)                0                           (943,928)
                                                              ---------------   ---------------                    ---------------
                             NET INCOME (LOSS) BEFORE INCOME
                                 TAXES AND MINORITY INTEREST         (541,715)          217,333                           (324,382)

INCOME TAX EXPENSE                                                    201,786            13,000                            214,786
                                                              ---------------   ---------------  ---------------   ---------------

                                    NET INCOME (LOSS) BEFORE
                                           MINORITY INTEREST         (743,501)          204,333                           (539,168)

MINORITY INTEREST                                                      23,627                 0                             23,627
                                                              ---------------   ---------------  ---------------   ---------------

                                           NET INCOME (LOSS)  $      (767,128)  $       204,333  $                 $      (562,795)
                                                              ===============   ===============  ===============   ===============

Net income (loss) per weighted average share                  $          (.06)                                     $          (.04)
                                                              ===============                                      ===============

Weighted average number of common shares
   used to compute net income (loss) per weighted
   average share                                                   12,551,444                                           12,551,444
                                                              ===============                                      ===============
</TABLE>

   (1) First quarter activity




                                      F-5