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 September 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 September 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 nine
months ended September 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 September 30, 1998, the Company had $448,924 in cash and cash equivalents.
For the nine months ending  September  30, 1998 the Company  generated a loss of
$.22 per share after deducting  $2,104,870 for amortization of goodwill and debt
costs and  depreciation.  The Company also  generated a $.16 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 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.



<PAGE>



RESULTS OF OPERATIONS

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

During the nine months ended  September  30, 1998,  management  fees of $241,067
were paid  compared  to  $320,000  for the same  period in 1997.  The  Company's
President  received  $135,000  and the  Company's  Secretary/Treasurer  received
$81,067 and $25,000 was paid in management fees to an outside firm.

Net loss for the nine months ended  September  30, 1998 was  $1,000,401,  before
deducting  the debts  owed by its  former  subsidiaries,  compared  to a loss of
$1,395,005  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 $2,104,870 was incurred in the period which represents $.15
per share.

Management fee income was  $10,845,603  for the nine months ended  September 30,
1998  compared  to  $10,949,050  for the same  period  in  1997.  This is a 1.0%
decrease from 1997.

Selling and  general  and  administrative  expenses  for the nine  months  ended
September 30, 1998 were $7,846,232 compared to $7,711,081 for the same period in
1997.

Depreciation and  amortization  expenses for the nine months ended September 30,
1998 were $1,955,101 compared to $1,932,104 for the same period in 1997.

Interest  expense for the nine months ended  September  30, 1998 was  $1,426,695
compared to $1,526,780 for the same period in 1997. Interest expense is incurred
to the  Convertible  Note  Holders  of the  Company  and  includes  $149,769  of
amortized debt issue costs.

Net loss for the three months ended September 30, 1998 was $314,095  compared to
a loss of $627,877  for the same period in 1997.  The net loss is $.02 per share
for the  quarter.  A charge  for  amortization  of  goodwill  and debt  cost and
depreciation  of $701,716 was incurred in the period which  represents  $.05 per
share.

Management  fee  income  for the  three  months  ended  September  30,  1998 was
$3,081,373  compared to $3,839,650 for the same period in 1997.  This reflects a
19.7% decrease from 1997.

Selling and general  and  administrative  expenses  for the three  months  ended
September 30, 1998 were $2,260,171 compared to $2,689,965 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 September 30,
1998 were $651,793 compared to $649,589 for the same period in 1997.

Interest  expense for the three  months  ended  September  30, 1998 was $479,390
compared with $529,557 for the same period in 1997.  This decrease is due to the
conversion to stock of some of the convertible notes.





<PAGE>



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 September 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 September  30, 1998,  GCCA had 3
operating units.

                           PART II - OTHER INFORMATION

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

         (a)      Exhibits
                  99-1 Financial Statements as of September 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: November 13, 1998                 /S/Jan Wallace
                                            Jan Wallace, President, C.E.O.





<PAGE>



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

<TABLE>
<CAPTION>
                                                                                               September 30,
                                                                                                   1998         
                                                                                          ----------------------
ASSETS
     CURRENT ASSETS
<S>                                                                                       <C>                   
       Cash                                                                               $              448,924
       Accounts receivable (less allowance for doubtful accounts of $1,183,800)                        5,800,777
       Other receivables                                                                                 114,162
       Prepaid expense and other current assets                                                           48,693
       Deferred Tax Benefit                                                                              300,000
                                                                                          ----------------------
                                                                  TOTAL CURRENT ASSETS                 6,712,556

     PROPERTY, PLANT & EQUIPMENT                                                                         240,351

     OTHER ASSETS
       Deferred debt issue costs (less amortization of $337,627)                                       1,381,230
       Investment - restricted stock                                                                      25,000
       Goodwill (less amortization of $4,626,680)                                                     20,231,095
       Deposits                                                                                              410
                                                                                          ----------------------
                                                                                                      21,637,735
                                                                                          ----------------------

                                                                                          $           28,590,642
                                                                                          ======================

LIABILITIES & EQUITY
     CURRENT LIABILITIES
       Accounts payable                                                                   $              314,481
       Accrued expenses                                                                                  504,151
       Current portion of long-term debt                                                                  15,733
       Loan payable - related party                                                                      150,000
       Income taxes payable                                                                                    0
       Accrued interest payable                                                                          358,804
                                                                                          ----------------------
                                                             TOTAL CURRENT LIABILITIES                 1,343,169

LONG-TERM DEBT                                                                                            12,760
CONVERTIBLE NOTES                                                                                     17,001,500
                                                                                          ----------------------
                                                                                                      17,014,260
                                                                                          ----------------------
                                                                     TOTAL LIABILITIES                18,357,429

     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                                                                               (8,293,341)
                                                                                          ----------------------
                                                            TOTAL STOCKHOLDERS' EQUITY                10,233,213
                                                                                          ----------------------

                                                                                          $           28,590,642
                                                                                          ======================
</TABLE>


                                       F-1

<PAGE>



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


<TABLE>
<CAPTION>
                                                                   Three Months Ended              Nine Months Ended
                                                                      September 30,                  September 30,       
                                                                   1998           1997           1998            1997    
                                                              -------------  -------------   -------------  -------------
<S>                                                           <C>            <C>             <C>            <C>          
Management fees                                               $   3,081,373  $   3,839,650   $  10,845,603  $  10,949,050
                                                              -------------  -------------   -------------  -------------
                                                                  3,081,373      3,839,650      10,845,603     10,949,050

Selling and General administrative expenses                       2,260,171      2,689,965       7,846,232      7,711,081
Depreciation and amortization                                       651,793        649,589       1,955,101      1,932,104
Bad debts                                                                 0              0         735,000              0
                                                              -------------  -------------   -------------  -------------
                                                                  2,911,964      3,339,554      10,536,333      9,643,185
                                                              -------------  -------------   -------------  -------------
                                      NET OPERATING INCOME          169,409        500,096         309,270      1,305,865

OTHER INCOME (EXPENSE)
     Interest income                                                  2,882        (19,490)         16,877         39,538
     Interest expense                                              (479,390)      (529,557)     (1,426,695)    (1,526,780)
     Miscellaneous income                                                 0          1,172               0          1,172
     Miscellaneous expense                                                0         (2,367)              0         (2,367)
     Bad debts - former subsidiaries                                      0              0      (2,169,806)             0
     Disposition of subsidiaries                                          0              0         256,493              0
     Unrealized change in investment                                 (2,000)      (367,972)         (4,800)      (385,947)
     Loss on disposition                                            (16,996)             0         (16,996)        (2,138)
                                                              -------------  -------------   -------------  -------------
                                                                   (495,504)      (918,214)     (3,344,927)    (1,876,522)
                                                              -------------  -------------   -------------  -------------

                                                  NET LOSS
                            BEFORE DISCONTINUED OPERATIONS         (326,095)      (418,118)     (3,035,657)      (570,657)

     Discontinued operations:
       Operations of former subsidiaries                                  0       (143,000)              0       (570,203)
                                                              -------------  -------------   -------------  -------------

                            NET (LOSS) BEFORE INCOME TAXES         (326,095)      (561,118)     (3,035,657)    (1,140,860)

INCOME TAX EXPENSE (BENEFIT)                                        (12,000)        66,759         134,550        254,145
                                                              -------------- -------------   -------------  -------------

                                                NET (LOSS)    $    (314,095) $    (627,877)  $  (3,170,207) $  (1,395,005)
                                                              =============  =============   =============  =============

Net (loss) per weighted average share                         $        (.02) $        (.05)  $        (.22) $        (.11)
                                                              =============  =============   =============  =============

Weighted average number of common shares used to
     compute net (loss) per weighted average share               14,223,929     13,710,328      14,172,647     12,763,274
                                                              =============  =============   =============  =============
</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                                                                                   (3,170,207)
                                    -----------------  ------------------  ------------------  -----------------

Balances at 9/30/98                        14,223,929  $           14,224  $       18,512,330  $      (8,293,341)
                                    =================  ==================  ==================  =================
</TABLE>





                                       F-3

<PAGE>



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



<TABLE>
<CAPTION>
                                                                                             Nine Months Ended
                                                                                               September 30,             
                                                                                        1998                  1997       
                                                                                  -----------------     -----------------
OPERATING ACTIVITIES
<S>                                                                               <C>                   <C>               
   Net (loss)                                                                     $      (3,170,207)    $      (1,395,005)
   Adjustments to reconcile net (loss) to cash (used) by operating activities:
       Depreciation & amortization                                                        2,104,870             2,142,236
       Net book value of assets sold`                                                        53,017                 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               (15,000)
       Unrealized change in investment                                                        4,800               385,947
       Deferred income tax                                                                        0                 5,000
   Changes in assets and liabilities:
       Accounts receivable                                                               (2,903,710)           (1,745,890)
       Inventories                                                                                0                46,492
       Prepaid expenses                                                                      (9,265)               39,758
       Accounts payable and accrued expenses                                               (424,075)             (440,331)
       Income taxes payable                                                                (253,328)              129,544
       Deposits                                                                             (11,496)               20,000
                                                                                  -----------------     -----------------
                                      NET CASH (USED) BY OPERATING ACTIVITIES            (2,131,082)             (825,111)

INVESTING ACTIVITIES
   Loans to related party and accrued interest                                                    0                90,246
   Loan - other                                                                              (9,861)                    0
   Purchase of equipment                                                                    (14,951)             (496,999)
   Deposits                                                                                       0              (113,467)
   Goodwill                                                                                       0              (500,000)
   Deferred debt issue costs                                                                      0              (340,356)
                                                                                  -----------------     -----------------

                                      NET CASH (USED) BY INVESTING ACTIVITIES               (24,812)           (1,360,576)

FINANCING ACTIVITIES
   Cash from (to) subsidiaries                                                             (387,982)               41,518
   Principal payments on debt                                                               (23,374)           (3,279,952)
   Capital raising costs                                                                          0                (3,000)
   Convertible note proceeds                                                                      0             3,996,000
   Loans - related parties                                                                  150,000                     0
   Loan proceeds                                                                                  0               132,021
   Proceeds from sale of common stock                                                       250,000               924,600
                                                                                  -----------------     -----------------
                             NET CASH PROVIDED (USED) BY FINANCING ACTIVITIES               (11,356)            1,811,187
                                                                                  -----------------     -----------------

                                      (DECREASE) IN CASH AND CASH EQUIVALENTS            (2,167,250)             (374,500)

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

                                   CASH AND CASH EQUIVALENTS AT END OF PERIOD     $         448,924     $       3,072,519
                                                                                  =================     =================

SUPPLEMENTAL INFORMATION Cash paid for:
     Interest                                                                     $       1,710,114     $       1,163,802
     Income taxes                                                                           256,595               132,210
</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
                      Nine months ended September 30, 1997

<TABLE>
<CAPTION>
                                                                                                     Pro Forma      Consolidated
                                                                   Dynamic       Geriatric (1)      Adjustments       Pro Forma   
                                                              ---------------   ---------------  ---------------   ---------------
<S>                                                           <C>               <C>              <C>                              
Management fee income                                         $    10,949,050   $       244,125  $                 $    11,193,175
                                                              ---------------   ---------------  ---------------   ---------------
                                                                   10,949,050           244,125                         11,193,175

Selling and general and administrative expenses                     7,711,081            26,792                          7,737,873
Depreciation and amortization                                       1,932,104                 0                          1,932,104
                                                              ---------------   ---------------  ---------------   ---------------
                                                                    9,643,185            26,792                          9,669,977
                                                              ---------------   ---------------  ---------------   ---------------
                                        NET OPERATING INCOME        1,305,865           217,333                          1,523,198

OTHER INCOME (EXPENSE)
   Interest income                                                     39,538                 0                             39,538
   Interest expense                                                (1,526,780)                0                         (1,526,780)
   Miscellaneous income                                                 1,172                 0                              1,172
   Miscellaneous expense                                               (2,367)                0                             (2,367)
   Unrealized decline in investment                                  (385,947)                0                           (385,947)
   Loss on disposition                                                 (2,138)                0                             (2,138)
                                                              ---------------   ---------------  ---------------   ---------------
                                                                   (1,876,522)                0                         (1,876,522)
                                                              ---------------   ---------------  ---------------   ---------------

NET LOSS BEFORE DISCONTINUED OPERATIONS                              (570,657)          217,333                           (353,324)

Discontinued operations:
   Operations of former subsidiaries                                 (570,203)                0                           (570,203)
                                                              ---------------   ---------------  ---------------   ---------------

                       NET INCOME (LOSS) BEFORE INCOME TAXES       (1,140,860)          217,333                           (923,527)

INCOME TAX EXPENSE                                                    254,145            13,000                            267,145
                                                              ---------------   ---------------  ---------------   ---------------

                                           NET INCOME (LOSS)  $    (1,395,005)  $       204,333  $                 $    (1,190,672)
                                                              ===============   ===============  ===============   ===============

Net income (loss) per weighted average share                  $          (.11)                                     $          (.09)
                                                              ===============                                      ===============

Weighted average number of common shares
   used to compute net income (loss) per weighted
   average share                                                   12,763,274                                           12,763,274
                                                              ===============                                      ===============
</TABLE>

   (1) First quarter activity




                                       F-5