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 March 31, 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                                      March 31, 1999
------------------------------------         -----------------------------------
$.001 par value Class A Common Stock                 18,386,429 shares




<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 three
months ended March 31, 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

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

LIQUIDITY AND CAPITAL RESOURCES

As of March 31, 1999, the Company had $40,416 in cash and cash equivalents.  The
Company incurred an ordinary loss of $.07 per share after deducting $651,348 for
amortization  of goodwill and  depreciation.  The cost of goodwill and debt cost
amortization  is  approximately   $.04  per  share.  Cash  flow  generated  from
operations was approximately $.03 per share.

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 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  activities  of the Company,  Genesis and
GCCA.

During the three months ended March 31,  1999,  management  fees of $95,958 were
paid compared to $45,000 for the same period in 1998.  The  Company's  President
received   or  was   accrued   the   amount  of   $63,958   and  the   Company's
Secretary/Treasurer received or was accrued the amount of $32,000.

Net  ordinary  loss for the three  months  ended March 31,  1999 was  $1,811,553
compared to a loss of  $2,727,268  for the same period in 1998.  The net loss is
$.11 per share for the  quarter.  A charge  for  amortization  of  goodwill  and
depreciation  of $651,348 was incurred in the period which  represents  $.04 per
share.  The Company  generated from  operations a positive cash flow of $.03 per
share.  Net loss for the  period is due  largely  to bad debts that arose due to
reducing amounts due from management fees in exchange for earlier payment by the
contracted units.



<PAGE>



Management  fee income was  $2,484,166 for the three months ended March 31, 1999
compared to $3,722,506 for the same period in 1998.  This is a 33% decrease from
1998.

General and  administrative  expenses  for the three months ended March 31, 1999
were $1,854,082 compared to $3,112,905 for the same period in 1998.

Depreciation and amortization expenses for the three months ended March 31, 1999
were $15,028 and $636,320  respectively compared to $14,974 and $636,320 for the
same period in 1998.

Interest expense for the three months ended March 31, 1999 was $291,052 compared
to  $472,115  for the same period in 1998.  Interest  expense is incurred to the
Convertible  Note  Holders of the  Company.  During the quarter  ended March 31,
1999, the Company was able to lower the interest rate from 10.0% to 7.5% on most
of its debt.

During the quarter ended March 31, 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 $.49 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.

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"). In consideration of which, each of the
Company and ACS received a fifty percent  (50%) equity  interest in the LLC. The
Capital  Contribution  Agreement and the contributions to the LLC were completed
contemporaneously  on March 30,  1999 with the  parties  agreement  to the LLC's
Operating  Agreement.  The LLC's Operating Agreement sets forth the agreement of
the Company and ACS with respect to the ownership and management of the LLC, the
Dynamic  Subsidiaries and the Advanced  Subsidiaries  pending  consummation of a
proposed merger of ACS into Dynamic  Acquisition  Corporation  ("DAC"),  a newly
formed,  wholly owned subsidiary of Dynamic (the "Merger").  The LLC's Operating
Agreement  also sets forth the  agreement of the Company and ACS to dissolve the
LLC and return the subsidiaries to their respective  companies in the event that
the Merger (more fully described below) is not consummated by December 15, 1999.

On the same date (March 30,  1999),  the  Company,  DAC,  ACS and  Advance  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.  Upon  completion  of the  Merger,  DAC will be the
surviving company and will remain a wholly-owned  subsidiary of the Company. ACS
will cease to exist and the ACS  shareholders  will become  shareholders  of the
Company  based  on  an  exchange  of  shares  that  will  provide  existing  ACS
shareholders  with newly issued common stock  representing  approximately 55% of
the outstanding shares of the Company.



<PAGE>



Thereafter,  the Company will directly or  indirectly,  be the sole  controlling
shareholder of all the Advanced and Dynamic Subsidiaries.

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  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.  Said  documents  are
incorporated by reference herein.

                           PART II - OTHER INFORMATION

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 March 31, 1999,  Genesis had 23 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  March  31,  1999,  GCCA  had 2
operating units.

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

         (a)      Exhibits
                  99-1 Financial Statements as of March 31, 1999
                  27 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.

                            DYNAMIC ASSOCIATES, INC.


DATED:  May 24, 1999         By:
                             Grace Sim, Secretary/Treasurer



<PAGE>



                    DYNAMIC ASSOCIATES, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS


<TABLE>
<CAPTION>
                                                                                  March 31,           December 31,
                                                                                     1999                1998
                                                                                  (Unaudited)          (Audited)
                                                                                -----------------  ------------------
ASSETS
   CURRENT ASSETS
<S>                                                                             <C>                <C>
       Cash and cash equivalents                                                $          40,416  $          478,418
       Accounts receivable (less allowance for doubtful accounts of
          $2,552,100 in 1998                                                                    0           3,741,260
       Loans receivable - related parties                                                  52,500              52,500
       Other receivables                                                                        0              86,662
       Prepaid expense and other current assets                                             2,800             109,950
       Deferred tax benefit                                                                     0             300,000
                                                                                -----------------  ------------------
                                                            TOTAL CURRENT ASSETS           95,716           4,768,790

   PROPERTY, PLANT & EQUIPMENT                                                                  0             228,733

   OTHER ASSETS
       Deferred debt issue costs (less amortization of $233,476)                          643,721           1,331,307
       Investment - restricted stock                                                        8,000              17,000
       Goodwill (less amortization of $5,899,320)                                      18,958,455          19,594,775
       Deposits                                                                                 0                 410
       Investment in LLC                                                                3,429,464                   0
                                                                                -----------------  ------------------
                                                                                       23,039,640          20,943,492
                                                                                -----------------  ------------------

                                                                                $      23,135,356  $       25,941,015
                                                                                =================  ==================

LIABILITIES & EQUITY
   CURRENT LIABILITIES
       Accounts payable                                                         $         106,759  $          596,812
       Accrued expenses                                                                   199,797             275,101
       Current portion of long-term debt                                                        0               3,978
       Accrued interest payable                                                           108,149             791,851
                                                                                -----------------  ------------------
                                                       TOTAL CURRENT LIABILITIES          414,705           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        9,091,205          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                                                                (5,120,709)        (11,264,987)
                                                                                -----------------  ------------------
                                                      TOTAL STOCKHOLDERS' EQUITY       14,044,151           7,261,567
                                                                                -----------------  ------------------

                                                                                $      23,135,356  $       25,941,015
                                                                                =================  ==================
</TABLE>



                                                 F - 1

<PAGE>



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

<TABLE>
<CAPTION>
                                                                                Three Months Ended March 31,
                                                                                  1999                1998
                                                                           ------------------  -----------------
<S>                                                                        <C>                 <C>
Management fees                                                            $        2,484,166  $       3,722,506
                                                                           ------------------  -----------------
                                                                                    2,484,166          3,722,506

General & administrative expenses                                                   1,854,082          3,112,905
Depreciation                                                                           15,028             14,974
Amortization of goodwill                                                              636,320            636,320
Bad debts                                                                           1,186,637            250,000
                                                                           ------------------  -----------------
                                                                                    3,692,067          4,014,199
                                                                           ------------------  -----------------

                                                   NET OPERATING (LOSS)            (1,207,901)          (291,693)

OTHER INCOME (EXPENSE)
     Interest income                                                                        0              9,653
     Interest expense                                                                (291,052)          (472,115)
     Miscellaneous income                                                                   0                  0
     Bad debts - former subsidiaries                                                        0         (2,169,806)
     Disposition of subsidiaries                                                            0            256,493
     Unrealized (decrease) in investment                                               (9,000)           (14,800)
                                                                           ------------------  -----------------
                                                                                     (300,052)        (2,390,575)

                                         NET (LOSS) BEFORE INCOME TAXES            (1,507,953)        (2,682,268)

INCOME TAX EXPENSE                                                                    303,600             45,000
                                                                           ------------------  -----------------

                                                      NET (LOSS) BEFORE
                                                     EXTRAORDINARY ITEM            (1,811,553)        (2,727,268)

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

                                                      NET INCOME (LOSS)    $        6,144,278  $      (2,727,268)
                                                                           ==================  =================

Net income (loss) per weighted average share:
     Operations                                                            $             (.11) $            (.19)
     Extraordinary item                                                                   .49                .00
                                                                           ------------------  -----------------

                                                      NET INCOME (LOSS)    $              .38  $            (.19)
                                                                           ==================  =================

Weighted average number of common shares used to compute
     net (loss) per weighted average share                                         16,305,179         14,068,373
                                                                           ==================  =================
</TABLE>


                                                 F - 2

<PAGE>



                    DYNAMIC ASSOCIATES, INC. AND SUBSIDIARIES
            CONSOLIDATED STATEMENT 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 quarter                                                                                 6,144,278
                                    -----------------  ------------------  ------------------  -----------------

Balances at 3/31/99                        18,386,429  $           18,386  $       19,146,474  $      (5,120,709)
                                    =================  ==================  ==================  =================
</TABLE>




                                                 F - 3

<PAGE>



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

<TABLE>
<CAPTION>
                                                                                Three months ended March 31,
                                                                                  1999                1998
                                                                           ------------------  -----------------
OPERATING ACTIVITIES
<S>                                                                        <C>                 <C>
   Net income (loss)                                                       $        6,144,278  $      (2,727,268)
   Adjustments to reconcile net income (loss) to cash used by
     operating activities:
       Depreciation and amortization                                                  695,191            701,217
       Non-cash debt restructuring                                                 (7,955,831)                 0
       Book value of spun-off subsidiaries                                                  0          1,743,312
       Bad debts                                                                    1,186,637                  0
       Unrealized change in investment                                                  9,000             14,800
       Deferred taxes                                                                 300,000                  0
   Changes in assets and liabilities:
       Accounts receivable                                                           (746,435)          (707,697)
       Prepaid expenses and other                                                     (16,425)             5,983
       Accounts payable and accrued expenses                                          167,067           (356,467)
       Income taxes payable                                                                 0           (208,328)
                                                                           ------------------  -----------------

                                NET CASH USED BY OPERATING ACTIVITIES                (216,518)        (1,534,448)

INVESTING ACTIVITIES
   Loan - other                                                                             0             (9,014)
   Purchase of equipment                                                                    0             (4,980)
   Deposits                                                                                 0            (11,496)
                                                                           ------------------  -----------------

                                NET CASH USED BY INVESTING ACTIVITIES                       0            (25,490)

FINANCING ACTIVITIES
   Cash from (to) subsidiaries / LLC                                                 (220,522)          (387,982)
   Principal payments on debt                                                            (962)            (7,093)
   Proceeds from sale of common stock                                                       0            250,000
                                                                           ------------------  -----------------


                                                   NET CASH (USED) BY
                                                 FINANCING ACTIVITIES                (221,484)          (145,075)
                                                                           ------------------  -----------------

                                DECREASE IN CASH AND CASH EQUIVALENTS                (438,002)        (1,705,013)

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

                           CASH AND CASH EQUIVALENTS AT END OF PERIOD      $           40,416  $         911,161
                                                                           ==================  =================

SUPPLEMENTAL INFORMATION
   Cash paid for interest                                                  $           18,029  $         864,838
   Cash paid for income taxes                                                               0            253,768
</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: INVESTMENT IN LLC

On March 30, 1999, the Company contributed its subsidiaries  Genesis and GCCA to
the  Advanced  Dynamic,  LLC.  The Company  owns 50% of the LLC.  The  Company's
investment in the LLC consists of the following at March 31, 1999:

<TABLE>
<CAPTION>
<S>                                                                        <C>
     Cash                                                                  $          220,522
     Accounts receivable (net of allowance of $291,647)                             3,342,720
     Other receivables                                                                 45,000
     Prepaid expenses                                                                 123,575
     Property, plant and equipment                                                    210,242
                                                                           ------------------

                                                             Net Assets             3,942,059

     Accounts payable                                                                 247,328
     Accrued expenses                                                                 248,445
     Income taxes payable                                                               3,600
     Note payable                                                                      13,222
                                                                           ------------------

                                                        Net Liabilities               512,595
                                                                           ------------------

                                                         Net Investment    $        3,429,464
                                                                           ==================
</TABLE>

NOTE 2: SEGMENT INFORMATION

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

                           Dynamic          $     6,835,941
                           Genesis                 (747,139)
                           GCCA                      55,476
                                            ---------------

                                            $     6,144,278
                                            ===============

                                      F - 5