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, 1999.

[]   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.)

6955 East Caballo Drive
Paradise Valley, 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 issuer 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  issuer's  classes of
common stock, as of the latest practicable date.

                                                        Outstanding as of
              Class                                       June 30, 1999
-------------------------------------         ---------------------------------
$.001 par value Class A Common Stock                  18,386,429 shares


                                        1

<PAGE>



                         PART 1 - 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, 1999 are not  necessarily  indicative  of the results that
can be expected for the year ending December 31,1999.

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

On March 30, 1999,  the Company  entered into a Capital  Contribution  Agreement
with ACS2, Inc. ("ACS") and Advanced Clinical Systems,  Inc.  ("Advanced") under
which  the  Company  contributed  its  operating  subsidiaries,  Genesis  Health
Management  Company  ("Genesis")  and  Geriatric  Care Centers of America,  Inc.
("GCCA"),  and ACS  contributed  its  subsidiary,  Advanced,  and the  operating
subsidiaries  of Advanced to a newly formed  Nevada  Limited  Liability  Company
known as  Advanced-Dynamic,  LLC ("LLC").  Further,  the  Company,  DAC, ACS and
Advanced  also  entered  into an  agreement  and  plan of  Merger  (the  "Merger
Agreement").  This  Merger  Agreement  contemplated  that upon  approval  by the
holders of a majority of the  outstanding  shares of common stock of the Company
at the  Annual  Meeting  of  shareholders  to be held on June 16,  1999 (and the
satisfaction  or waiver of the other  conditions of the Merger and  Contribution
Agreements), a merger will take place between DAC and ACS.

All of the terms and conditions upon which the Merger and associated  agreements
are to be effected are set-forth in the Merger and other agreements  attached to
the Form 8K filed with the Securities Exchange Commission(SEC) by the Company on
April 14, 1999 and more  particularly  discussed  in the  Company's  Preliminary
Proxy  Statement  (Form  14A) filed on May 18,  1999.  The proxy  statement  was
returned with comments from the SEC, requiring action by the Company. The Annual
Meeting of the  shareholders  originally  planned  for June 16, 1999 was delayed
until these comments have been cleared.

The business operations of the subsidiaries, Genesis and GCCA are being operated
through the LLC under the Contribution Agreement.

At the time of the filing of this document,  ACS,  Advanced and the Company have
preliminarily  agreed to dissolve the LLC and not to proceed with the Merger.  A
written  agreement  rescinding  the  Contribution,  Merger and other  agreements
connected  therewith  is  currently  being  drafted and  negotiated  between the
parties.

During the second quarter,  the Company  learned that one of its Directors,  Mr.
William H. Means had entered into a Plea  Agreement on January 15, 1993 in which
he pled guilty to a two-count  Bill of  Information  in United  States  District
Court, Western District of Louisiana,  Shreveport Division, CR. No. 93-500001-01
to  soliciting,  demanding and accepting  payments from certain  individuals  in
violation  of Title 18,  United  States  Code,  Section  215(a)(2).  [18  U.S.C.
ss215(a)(2)].  This information will appear in the Company's amended Form 10K to
be filed shortly with the Securities and Exchange Commission.


                                        2

<PAGE>



In June 1999, a settlement  was reached  between the Company and certain  former
management and officers of its subsidiaries.  On June 10, 1999, Director William
H. Means resigned from the Board of Directors of the Company,  and Ms. Grace Sim
was  appointed as a Director by the Board of Directors to fill the vacancy.  Ms.
Sim has been Secretary/Treasurer of the Company since 1997.

The Company and its  subsidiaries  were recently  named  defendants in a qui tam
provision under the False Claims Act, 31 U.S.C.  Sec 3730,  brought on by former
employees of Genesis on behalf of the United States of America,  which have been
unsealed  and served.  The actions  allege,  in general,  that its  subsidiaries
violated the False Claims Act, 31 U.S.C.  (S) 3730 et seq., for improper  claims
submitted  to the  government  for  reimbursement.  At this  time,  the  Federal
Government has decided not to participate in the claims.

LIQUIDITY AND CAPITAL RESOURCES

As of June 30, 1999, the Company had $231,326 in cash and cash equivalents.  The
Company incurred an operating loss of $.08 per share after deducting  $1,302,694
for  amortization  of goodwill and  depreciation.  The cost of goodwill and debt
cost  amortization  is  approximately  $.08 per share.  Cash flow generated from
operations was approximately $.00 per share.

RESULTS OF OPERATIONS

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

During the three  months ended June 30,  1999,  management  fees of $0 were paid
compared  to  $68,399  for the same  period  in 1998.  The  Company's  President
received or was accrued the amount of $0 and the  Company's  Secretary/Treasurer
received  or was  accrued  the  amount  of $0.  The  officers  agreed to take no
compensation for the quarter ended June 30, 1999.

Net ordinary loss for the three months ended June 30, 1999 was $372,301 compared
to a loss of  $128,844  for the same  period  in 1998.  The net loss is $.02 per
share for the quarter. A charge for amortization of goodwill and depreciation of
$651,346 was incurred in the period which represents $.04 per share. The Company
generated from operations a positive cash flow of $.02 per share.  The increased
loss is, to a large extent, due to a reduction in management fee income from the
hospital units.

Management  fee income was  $2,029,246  for the three months ended June 30, 1999
compared to $4,041,724  for the same period in 1998. The revenues of Genesis and
GCCA are derived  from the Medicare  programs,  which are highly  regulated  and
subject to frequent and  substantial  changes.  In the last 2 years,  there have
been  fundamental  changes in the Medicare  programs,  including the prospective
payment system ("PPS"),  which Genesis and GCCA are dependent on for the billing
of its  services.  This has resulted in  limitations  on, and reduced  levels of
payment and reimbursement for the hospitals.

General and  administrative  expenses  for the three  months ended June 30, 1999
were $1,568,440  compared to $2,473,156 for the same period in 1998. The Company
was able to reduce cost by  restructuring  the  management  staff of Genesis and
GCCA. The contracts of several executive  management  personnel were not renewed
at the end of 1998.

Depreciation and amortization  expenses for the three months ended June 30, 1999
were  $15,026  and  $636,320,  respectively.  This was the same as in 1998 since
depreciation  and  amortization is calculated on a  straight-line  method over a
fixed number of years.

Interest expense for the three months ended June 30, 1999 was $192,772  compared
to  $475,190  for the same period in 1998.  Interest  expense is incurred to the
Convertible Note Holders of the Company. The

                                        3

<PAGE>



decline in interest payments was largely due to the refinancing of the Company's
debt to these Note Holders at the end of 1998.  This  refinancing  substantially
reduced the principal obligation of the Company as well as the interest rate due
thereon for most of its debt.

During the six months ended June 30, 1999,  management fees of $75,769 were paid
compared  to  $146,266  for the same  period in 1998.  The  Company's  President
received   or  was   accrued   the   amount  of   $45,375   and  the   Company's
Secretary/Treasurer received or was accrued the amount of $30,394. The Company's
President  and  Secretary/Treasurer  agreed to forego any fees  after  March 30,
1999,  when the  Company  contributed  the  subsidiaries  to the LLC  under  the
Contribution Agreement.

Net ordinary loss for the six months ended June 30, 1999 was $2,183,854 compared
to a loss of  $2,856,112  for the same period in 1998.  The net loss is $.13 per
share for the six months. A charge for amortization of goodwill and depreciation
of $1,302,694 was incurred in the period which  represents  $.08 per share.  The
Company  generated from  operations a positive cash flow of $.05 per share.  Net
loss for the period was due  largely to bad debt write offs  arising  out of the
Company's  agreement to reduce its management fees in exchange for early payment
by the contracting units.

Management  fee income was  $4,513,412  for the six months  ended June 30,  1999
compared to $7,764,230  for the same period in 1998.  Since the Balanced  Budget
Act of 1997,  Genesis and GCCA have had to reduce its  management  fee contracts
with its hospital units.

General and administrative  expenses for the six months ended June 30, 1999 were
$3,422,522  compared to $5,586,061  for the same period in 1998. The Company has
been  successful  in reducing its  administrative  expenses to  accommodate  its
reduced management fee income.

Depreciation  and  amortization  expenses for the six months ended June 30, 1999
were $30,054 and $1,272,640  respectively compared to $30,668 and $1,272,640 for
the same period in 1998.

Interest expense for the six months ended June 30, 1999 was $483,824 compared to
$947,305  for the same  period in 1998.  Interest  expense  is  incurred  to the
Convertible  Note Holders of the Company.  The decline in interest  payments was
largely due to the  refinancing  of the Company's  debt to these Note Holders at
the end of 1998. This refinancing substantially reduced the principal obligation
of the Company as well as the interest rate due thereon for most of its debt.

During the six months ended June 30, 1999, the Company recorded an extraordinary
gain in the amount of $7,955,381 from  restructuring its convertible  notes. The
extraordinary gain represented income of $.47 per share.

Impact of the Year 2000 Issue
The "Year 2000 Problem" arose because many existing  computer  programs use only
the last two digits to refer to a year.  Therefore,  these computer  programs do
not  properly  recognize a year that begins  with "20"  instead of the  familiar
"19".  If not  corrected,  many  computer  applications  could  fail  or  create
erroneous  results.  The extent of the potential impact of the Year 2000 Problem
is not yet  known,  and if not  timely  corrected,  it could  affect  the global
economy.  The Company believes that its computer  programs are Y2K compliant and
does not expect to be  adversely  affected  by the issue,  however,  its revenue
source is directly related to certain  hospitals and other  government  agencies
that may have  computer  systems  with  Year  2000  problems.  The  Health  Care
Financing Administration (HCFA) announced in the Spring of 1998, that they would
begin preparing providers and suppliers for the requirement that they submit all
claims using 8-digit date fields.  On January 13, 1999,  HFCA notified  Medicare
contractors  that,  beginning  April 5, 1999,  claims not  submitted  in the Y2K
format must be returned to providers as unprocessable.  On February 1, 1999, the
Medicare  contractors issued bulletins to all providers  detailing this April 5,
1999, compliance deadline. Since the Company is dependent on each

                                        4

<PAGE>



individual  hospital's  submission  of  cost  reports  for  claims,  we  have no
assurances  that this will be done  correctly  or in a timely  manner and in the
Y2K-compliant  format so that  HCFA's  systems  can  continue to process and pay
bills promptly throughout the millennium transition.

                           PART II - OTHER INFORMATION

Item 5. Other Information

None

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

         (a)      Exhibits
                  99-1 Financial Statements as of June 30, 1999
                  27 Financial Data Schedule

         (b)      Reports on Form 8-K
                  An 8-K was filed on April 14, 1999 to  announce  the ACS items
                  discussed elsewhere in this document.

                                   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.

                         DYNAMIC ASSOCIATES, INC.


DATED: August 23, 1999   By:
                         Grace Sim, Secretary/Treasurer

                                        5

<PAGE>



                                 DYNAMIC ASSOCIATES, INC. AND SUBSIDIARIES
                                        CONSOLIDATED BALANCE SHEETS


<TABLE>
<CAPTION>
                                                                                     June 30,         December 31,
                                                                                      1999                1998
                                                                                   (Unaudited)         (Audited)
                                                                                -----------------  ------------------
ASSETS
   CURRENT ASSETS
<S>                                                                             <C>                <C>
       Cash and cash equivalents                                                $         231,326  $          478,418
       Accounts receivable (less allowance for doubtful accounts of
          $427,644 in 1999, $2,552,100 in 1998)                                         3,443,769           3,741,260
       Loans receivable - related parties                                                  52,500              52,500
       Other receivables                                                                  268,372              86,662
       Prepaid expense and other current assets                                            43,670             109,950
       Deferred tax benefit                                                                     0             300,000
                                                                                -----------------  ------------------
                                                            TOTAL CURRENT ASSETS        4,039,637           4,768,790

   PROPERTY, PLANT & EQUIPMENT                                                            132,319             228,733

   OTHER ASSETS
       Deferred debt issue costs (less amortization of $261,128)                          616,069           1,331,307
       Investment - restricted stock                                                        4,000              17,000
       Goodwill (less amortization of $6,535,640)                                      18,322,135          19,594,775
       Deposits                                                                                 0                 410
                                                                                -----------------  ------------------
                                                                                       18,942,204          20,943,492
                                                                                -----------------  ------------------

                                                                                $      23,114,160  $       25,941,015
                                                                                =================  ==================

LIABILITIES & EQUITY
   CURRENT LIABILITIES
       Accounts payable                                                         $         164,897  $          596,812
       Accrued expenses                                                                   567,419             275,101
       Current portion of long-term debt                                                   11,907               3,978
       Accrued interest payable                                                            21,587             791,851
                                                                                -----------------  ------------------
                                                       TOTAL CURRENT LIABILITIES          765,810           1,667,742

   Long-term debt                                                                               0              10,206
   Convertible notes                                                                    8,676,500          17,001,500
                                                                                -----------------  ------------------
                                                                                        8,676,500          17,011,706
                                                                                -----------------  ------------------
                                                               TOTAL LIABILITIES        9,442,310          18,679,448

   STOCKHOLDERS' EQUITY
       Common Stock $.001 par value:
          Authorized - 25,000,000 shares
          Issued and outstanding 18,386,429 shares (14,223,929 in 1998)                    18,386              14,224
       Additional paid-in capital                                                      19,146,474          18,512,330
       Retained deficit                                                                (5,493,010)        (11,264,987)
                                                                                -----------------  ------------------
                                                      TOTAL STOCKHOLDERS' EQUITY       13,671,850           7,261,567
                                                                                -----------------  ------------------

                                                                                $      23,114,160  $       25,941,015
                                                                                =================  ==================
</TABLE>



                                      F - 1

<PAGE>



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

<TABLE>
<CAPTION>
                                                           Three Months Ended June 30,             Six Months Ended June 30,
                                                            1999                1998               1999                1998
                                                     ------------------  -----------------   -----------------  ------------------
<S>                                                  <C>                 <C>                 <C>                <C>
Management fees                                      $        2,029,246  $       4,041,724   $       4,513,412  $        7,764,230
                                                     ------------------  -----------------   -----------------  ------------------
                                                              2,029,246          4,041,724           4,513,412           7,764,230

General & administrative expenses                             1,568,440          2,473,156           3,422,522           5,586,061
Depreciation                                                     15,026             15,694              30,054              30,668
Amortization of goodwill                                        636,320            636,320           1,272,640           1,272,640
Bad debts (recovery)                                            (12,560)           485,000           1,174,077             735,000
                                                     ------------------  -----------------   -----------------  ------------------
                                                              2,207,226          3,610,170           5,899,293           7,624,369
                                                     ------------------  -----------------   -----------------  ------------------

                        NET OPERATING INCOME (LOSS)            (177,980)           431,554          (1,385,881)            139,861

OTHER INCOME (EXPENSE)
   Interest income                                                  651              4,342                 651              13,995
   Interest expense                                            (192,772)          (475,190)           (483,824)           (947,305)
   Bad debts - former subsidiaries                                    0                  0                   0          (2,169,806)
   Disposition of subsidiaries                                        0                  0                   0             256,493
   Unrealized (decrease) in investment                           (4,000)            12,000             (13,000)             (2,800)
                                                     ------------------  -----------------   -----------------  ------------------
                                                               (196,121)          (458,848)           (496,173)         (2,849,423)
                                                     ------------------  -----------------   -----------------  ------------------

                     NET (LOSS) BEFORE INCOME TAXES            (374,301)           (27,294)         (1,882,054)         (2,709,562)

INCOME TAX EXPENSE (BENEFIT)                                     (1,800)           101,550             301,800             146,550
                                                     ------------------  -----------------   -----------------  ------------------

                                  NET (LOSS) BEFORE
                                 EXTRAORDINARY ITEM            (372,301)          (128,844)         (2,183,854)         (2,856,112)

Extraordinary item - Gain on restructuring of debt
   (no applicable income taxes)                                       0                  0           7,955,831                   0
                                                     ------------------  -----------------   -----------------  ------------------

                                  NET INCOME (LOSS)  $         (372,301) $        (128,844)  $       5,771,977  $       (2,856,112)
                                                     ==================  =================   =================  ==================

Net income (loss) per weighted average share:
   Operations                                        $             (.02) $            (.01)  $            (.13) $             (.20)
   Extraordinary item                                               .00                .00                 .47                 .00
                                                     ------------------  -----------------   -----------------  ------------------

                                  NET INCOME (LOSS)  $             (.02) $            (.01)  $             .34  $             (.20)
                                                     ==================  =================   =================  ==================

Weighted average number of common shares
   used to compute net income (loss) per weighted
   average share                                             18,386,429         14,223,929          16,998,929          14,146,581
                                                     ==================  =================   =================  ==================

</TABLE>


                                      F - 2

<PAGE>



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

<TABLE>
<CAPTION>
                                                Common Stock                   Additional
                                               Par Value $.001                   Paid-In            Retained
                                         Shares              Amount              Capital             Deficit
                                    -----------------  ------------------  ------------------  -----------------
<S>                                 <C>                <C>                 <C>                 <C>
Balances at 12/31/98                       14,223,929  $           14,224  $       18,512,330  $     (11,264,987)
   Issuance of common stock
     to restructure debt                    4,162,500               4,162             634,144
Net income for period                                                                                  5,771,977
                                    -----------------  ------------------  ------------------  -----------------

Balances at 6/30/99                        18,386,429  $           18,386  $       19,146,474  $      (5,493,010)
                                    =================  ==================  ==================  =================
</TABLE>




                                      F - 3

<PAGE>



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

<TABLE>
<CAPTION>
                                                                                  Six months ended June 30,
                                                                                  1999                1998
                                                                           ------------------  -----------------
OPERATING ACTIVITIES
<S>                                                                        <C>                 <C>
   Net income (loss)                                                       $        5,771,977  $      (2,856,112)
   Adjustments to reconcile net income (loss) to cash used by
     operating activities:
       Depreciation and amortization                                                1,374,189          1,403,154
       Non-cash debt restructuring                                                 (7,955,831)                 0
       Book value of spun-off subsidiaries                                                  0          1,743,312
       Book value of disposed assets                                                   66,360                  0
       Bad debts                                                                    1,174,077            735,000
       Unrealized change in investment                                                 13,000              2,800
       Deferred taxes                                                                 300,000                  0
   Changes in assets and liabilities:
       Accounts receivable                                                         (1,058,296)        (1,947,820)
       Prepaid expenses and other                                                      66,280              5,626
       Accounts payable and accrued expenses                                            3,019             96,980
       Income taxes payable                                                                 0           (226,528)
                                                                           ------------------  -----------------

                                NET CASH USED BY OPERATING ACTIVITIES                (245,225)        (1,043,588)

INVESTING ACTIVITIES
   Loan - other                                                                             0             (9,892)
   Purchase of equipment                                                                    0             (6,766)
   Deposits                                                                               410            (11,496)
                                                                           ------------------  -----------------

                     NET CASH PROVIDED (USED) BY INVESTING ACTIVITIES                     410            (28,154)

FINANCING ACTIVITIES
   Cash from (to) subsidiaries                                                              0           (387,982)
   Principal payments on debt                                                          (2,277)           (15,076)
   Proceeds from sale of common stock                                                       0            250,000
                                                                           ------------------  -----------------


                                                   NET CASH (USED) BY
                                                 FINANCING ACTIVITIES                  (2,277)          (153,058)
                                                                           ------------------  -----------------

                                DECREASE IN CASH AND CASH EQUIVALENTS                (247,092)        (1,224,800)

Cash and cash equivalents at beginning of period                                      478,418          2,616,174
                                                                           ------------------  -----------------

                           CASH AND CASH EQUIVALENTS AT END OF PERIOD      $          231,326  $       1,391,374
                                                                           ==================  =================

SUPPLEMENTAL INFORMATION
   Cash paid for interest                                                  $          274,431  $         866,089
   Cash paid for income taxes                                                          23,931            253,878
</TABLE>

During 1999, the Company issued 4,162,500 shares of its restricted  common stock
and 8,325,000  warrants to purchase  stock at $1.50 per share until December 31,
2000 to retire debt of $8,325,000 and accrued interest of $912,881.

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
                SELECTED NOTES TO UNAUDITED FINANCIAL STATEMENTS

NOTE 1: SEGMENT INFORMATION

Pre-consolidation net income (loss) is as follows:

                           Dynamic            $     6,284,909
                           Genesis                   (685,047)
                           GCCA                       172,115
                                              ---------------

                                              $     5,771,977
                                              ===============


                                      F - 5