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, 1996

[  ] 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 Registrant as specified in its charter)

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

7373 North Scottsdale Road, Suite B-150
         Scottsdale, Arizona                                    85253
(Address of principal executive offices)                      (Zip Code)

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

Indicate  by a check  mark  whether  the  registrant  (1) has filed all  reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days [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 November 7, 1996
-----------------------------------      -------------------------------------
$.001 par value Class A Common Stock              8,913,420 shares

                                        1

<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, 1996, are not  necessarily  indicative of the results
that can be expected for the year ending December 31, 1996.

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

LIQUIDITY AND CAPITAL RESOURCES

     As of  September  30,  1996,  the  Company  had  $853,083  in cash and cash
equivalents.

     The Company through its 50% owned subsidiary, P&H Laboratories, operates in
the  industry  of  manufacturing  highly   technologically   advanced  microwave
components and subsystems for the communications and aerospace  industries.  The
Company  also  is  engaged  in the  acquisition  and  development  of  microwave
technologies for medical purposes through its subsidiary Microwave Medical Corp.
This subsidiary has not yet had any sales.

Item 5. Other Information.

MICROWAVE

     During the nine months ended September 30, 1996, the Company's wholly owned
subsidiary Microwave Medical Corp. ("MMC"),  formerly  Microthermia  Acquisition
Corporation, entered into a license agreement with Microthermia Technology, Inc.
(of  California),  whereby  MMC  obtained  an  exclusive  license to develop and
manufacture  medical  device  products  related to the treatment of spider veins
(telangiectasia).  The  license  is for an  initial  period  of two  years  with
automatic one year renewals for the next eight years, at no cost, (total license
period of 10 years).  The license is prepaid for the first two years, and, after
January 16,  1998,  MMC will pay a royalty of two percent  (2%) of the Net Sales
Revenues on all licensed  products sold. MMC expended $425,039 on development of
the license product during the nine months ended September 30, 1996.



                                        2

<PAGE>



P & H LABORATORIES, INC. ("P & H")

     The agreement  (dated  December 18, 1995) with P & H which provides for the
acquisition  of P&H by the Company was extended to April 23, 1996. The agreement
provides  for the Company to acquire up to 100% of P&H in two stages.  The first
stage is the acquisition of 50% of P&H for  $1,000,000.  The second stage (which
is optional)  provides for the Company to acquire the  additional  50% for up to
two years after the first 50% is acquired.  On April 23, 1996, $300,000 was paid
and a check  dated May 4, 1996 in the amount of  $700,000  was given to finalize
the P&H acquisition.  Regulation S stock was sold to raise the money to complete
the transaction. P&H is now a 50% owned subsidiary of the Company.

MICROTHERMIA TECHNOLOGY, INC. ("MTI")

     The agreement with MTI, (as previously  reported),  which has been approved
by the majority of MTI  shareholders,  requires  the approval of the  California
Department  of  Corporations  which to date has not been  forthcoming.  Minority
shareholders of MTI have complained to the California Department of Corporations
as they do not want the transaction to proceed,  and it remains  uncertain as to
whether this agreement can or will be completed or not. Only $1,000 was advanced
to MTI during the period,  and the Company's  subsidiary  entered into a license
agreement with MTI, (see above).

GENESIS HEALTH MANAGEMENT CORPORATION ("Genesis")

     During the quarter ended September 30, 1996, the Company paid $500,000 cash
as a deposit as part of its plan to acquire Genesis. The deposit will be applied
to the total cash  purchase  price of  $15,000,000  which is due by  December 2,
1996. The Genesis shareholders are also to receive 3,000,000 shares of Dynamic's
restricted  common stock and 50% of the taxable income of Genesis at the date of
closing. Genesis has established healthcare services to the elderly specializing
in Gero-psych.  Genesis has developed a program to provide psychiatric diagnosis
and at the same time treat the secondary medical problems of the elderly.

RESULTS OF OPERATIONS

     The Company has not had operations (other than operations of P&H) that have
generated income since its inception. The only source of funds has been from the
sale of its common stock which has been used to pay  expenses and make  advances
to  its  subsidiary  (MMC)  for  development  of  its  technology  and  for  the
acquisition of P&H, and the deposit on Genesis.

     The financial  statements  present the activities of the Company,  MMC, and
P&H as if the entities had been  together for all periods  presented.  Sales and
cost of sales for all periods relate to P&H.

     During the nine months  ended  September  30,  1996,  management  fees of $
319,500  were paid or  accrued to various  individuals  ($102,375  is accrued at
September  30 ,  1996).  The  Company's  President  received  $90,000,  and  the
Secretary/Treasurer  received $90,000  including  accrued amounts of $39,000 and
$30,000 respectively.

     Also during the nine months ended  September  30, 1996 $104,000 was paid to
an  entity   controlled   by  the   Company's   Secretary  for  rent  and  other
administrative services.

                                        3

<PAGE>



     Net loss  for the  three  months  ended  September  30,  1996 was  $538,788
compared  with a net loss of  $259,714  for the same  period  in 1995.  The main
reason for the  increase in the loss is due to the large  amount of research and
development  expenses  and general  and  administrative  expenses  that were not
present in 1995.

     Net sales for the three  months  ended  September  30,  1996 were  $924,511
compared to $980,837 for the same period in 1995, a decrease of 6%.

     Cost of sales for the three months ended  September  30, 1996 were $663,596
compared  with  $651,806  for the  same  period  in  1995.  The 2%  increase  is
attributed to higher variable costs.

     Selling and general and administrative  expenses for the three months ended
September 30, 1996 were  $528,985  compared with $524,866 for the same period in
1995. The increase is mainly due to increased  management  fees,  administrative
fees,  and a large  amount of travel  outside of the United  States  looking for
prospective purchasers of the Company's products and common stock.

     Research and development  expenses for the three months ended September 30,
1996 were $182,823  compared  with $0 for the same period in 1995.  The expenses
relate to the development of microwave technologies for medical purposes.

     Net  loss for the nine  months  ended  September  30,  1996 was  $1,208,647
compared with a net loss of $162,884 for the same period in 1995.

     Net sales for the nine months  ended  September  30,  1996 were  $2,374,162
compared with $2,843,832 for the same period in 1995, a 16% decrease.

     Cost of sales for the nine months ended  September 30, 1996 were $1,689,841
compared with $1,855,175 for the same period in 1995, a 9% decrease.

     Selling and general and  administrative  expenses for the nine months ended
September 30, 1996 were $1,379,430 compared with $866,909 for the same period in
1995, an increase of 59%.

     Research and  development  expenses for the nine months ended September 30,
1996 were $425,039 compared with $0 for the same period in 1995.


                                        4

<PAGE>



                           PART II - OTHER INFORMATION

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

     (a)  Exhibits
                                                                           Page
          99-1  Financial  Statements as of September 30, 1996              F-1
          Financial Data Schedule

     (b) Reports on Form 8-K

          During  the  quarter  ended  September  30,  1996 an 8-K was  filed to
          announce the signing of an agreement  providing for the acquisition of
          Genesis Health  Management  Corporation as a wholly owned  subsidiary.
          The 8-K was dated  August 27,  1996.  The  acquisition  is to occur by
          December 2, 1996.


                                        5

<PAGE>



                                   SIGNATURES

     Pursuant to the  requirements  of the Securities  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.
                                        (Registrant)



DATED: November 15, 1996                /s/  Logan B. Anderson
      ----------------------
                                       Logan B. Anderson, Secretary/Treasurer


                                        6

<PAGE>



                    DYNAMIC ASSOCIATES, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEET
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                                       September 30,
                                                                           1996
                                                                  ----------------------
ASSETS
     CURRENT ASSETS
<S>                                                               <C>
         Cash                                                     $              749,864
         Marketable securities                                                   103,219
         Accounts receivable                                                     582,492
         Loans receivable - related parties                                      164,600
         Accrued interest                                                         18,300
         Inventories                                                             858,462
         Prepaid expense                                                           6,262
         Deferred tax benefit                                                     61,000
                                                                  ----------------------

                                      TOTAL CURRENT ASSETS                     2,544,199

     EQUIPMENT                                                                   270,942

     OTHER ASSETS
         Note receivable                                                          92,953
         Investment                                                               50,000
         Deposits                                                                522,627
         Organization costs                                                          940
                                                                  ----------------------
                                                                                 666,520
                                                                  ----------------------
                                                                  $            3,481,661
                                                                  ======================
</TABLE>

                                       F-1

<PAGE>



                    DYNAMIC ASSOCIATES, INC. AND SUBSIDIARIES
                     CONSOLIDATED BALANCE SHEET (Continued)
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                                       September 30,
                                                                           1996
                                                                  ----------------------
LIABILITIES & EQUITY
     CURRENT LIABILITIES
<S>                                                               <C>
         Accounts payable                                         $              293,727
         Accrued expenses                                                        117,117
         Current portion of long-term debt                                        55,530
         Income taxes payable                                                     19,907
                                                                  ----------------------

                TOTAL CURRENT LIABILITIES                                        486,281

     LONG-TERM DEBT                                                              134,212

     DEFERRED INCOME TAXES                                                        57,000
                                                                  ----------------------
                                         TOTAL LIABILITIES                       677,493

     Minority interest in subsidiary                                             826,519

     STOCKHOLDERS' EQUITY Common stock $.001 par value:
              Authorized - 25,000,000 shares
                Issued and outstanding 8,780,000
                  shares                                                           8,780
                Additional paid-in capital                                     3,372,594
                Retained deficit                                              (1,078,725)
                Stock subscription receivable                                   (325,000)
                                                                  ----------------------

                                TOTAL STOCKHOLDERS' EQUITY                     1,977,649
                                                                  ----------------------
                                                                  $            3,481,661
                                                                  ======================


</TABLE>

                                       F-2

<PAGE>




                    DYNAMIC ASSOCIATES, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)
<TABLE>
<CAPTION>

                                                                   Three Months Ended              Nine Months Ended
                                                                  9/30/96        9/30/95        9/30/96         9/30/95
                                                              -------------  -------------   -------------  ------------

<S>                                                           <C>            <C>             <C>            <C>
Net Sales                                                     $     924,511  $     980,837   $   2,374,162  $   2,843,832
Cost of sales                                                       663,596        651,806       1,689,841      1,855,175
                                                              -------------  -------------   -------------  -------------
                                              GROSS PROFIT          260,915        329,031         684,321        988,657

Selling and General and Administrative expenses                     528,985        524,866       1,379,430        866,909
Research and development                                            182,823              0         425,039              0
                                                              -------------  -------------   -------------  -------------
                                                                    711,808        524,866       1,804,469        866,909
                                                              -------------  -------------   -------------  -------------
                               NET OPERATING INCOME (LOSS)         (450,893)      (195,835)     (1,120,148)       121,748

OTHER INCOME (EXPENSE)
     Interest income                                                  9,944          5,802          87,307         14,988
     Interest expense                                               (44,490)        (6,043)        (79,295)       (17,768)
     Miscellaneous income                                             9,038              0          11,548              0
     Miscellaneous expense                                           (4,430)           (30)         (4,430)        (3,415)
                                                              -------------  -------------   -------------  -------------
                                                                    (29,938)          (271)         15,130         (6,195)
                     NET INCOME (LOSS) BEFORE INCOME TAXES
                                     AND MINORITY INTEREST         (480,831)      (196,106)     (1,105,018)       115,553

INCOME TAX EXPENSE (BENEFIT)                                         34,700         39,000          52,500        157,000
                                                              -------------  -------------   -------------  -------------

                                  NET INCOME (LOSS) BEFORE
                                         MINORITY INTEREST         (515,531)      (235,106)     (1,157,518)       (41,447)

MINORITY INTEREST                                                    23,257         24,608          51,129        121,437
                                                              -------------  -------------   -------------  -------------

                                         NET INCOME (LOSS)    $    (538,788) $    (259,714)  $  (1,208,647) $    (162,884)
                                                              =============  =============   =============  =============

Net income (loss) per weighted
     average share                                            $        (.06) $        (.25)  $        (.15) $        (.16)
                                                              =============  =============   =============  =============

Weighted average number of common
     shares used to compute net income
     (loss) per weighted average share                            8,574,294      1,049,087       7,869,877      1,016,542
                                                              =============  =============   =============  =============
</TABLE>



                                       F-3

<PAGE>



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

                                              Common Stock              Additional             Stock           Retained
                                             Par Value $.001              Paid-In          Subscription        Earnings
                                         Shares          Amount           Capital           Receivable         (Deficit)
                                      -------------  -------------   -----------------  -----------------   -------------

<S>                                   <C>            <C>             <C>                <C>                 <C>
Balances at 12/31/95                      7,000,000  $       7,000   $       1,335,000  $                0  $     129,922
   Sale of common stock (Regulation
     S) at $2.00 per share at 3/25/96        12,500             13              24,987
   Sale of common stock (Regulation
     S) at $1.75 per share                1,290,000          1,290           2,256,209            (689,862)
   Sale of common stock (S-8) at
     $1.00 per share                         30,000             30              29,970
   Sale of common stock (restricted)
     at $1.00 per share                      40,000             40              39,960
   Acquisition of subsidiary                                                (1,000,000)
Net loss for period                                                                                              (669,859)
                                      -------------  -------------   -----------------  ------------------   ------------
Balances at 6/30/96                       8,372,500          8,373           2,686,126            (689,862)      (539,937)
   Collection of stock subscription                                                                689,862
   Sale of common stock (Regulation
     S) at $1.75 per share                  372,500            372             651,503            (325,000)
   Sale of common stock (S-8) at
     $1.00 per share                         35,000             35              34,965
Net loss for period                                                                                              (538,788)
                                      -------------  -------------   -----------------  ------------------   ------------

Balance at 9/30/96                        8,780,000  $       8,780   $       3,372,594  $         (325,000) $  (1,078,725)
                                      =============  =============   =================  ==================  =============

</TABLE>




                                       F-4

<PAGE>



                     DYNAMIC ASSOCIATES, INC. AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)
<TABLE>
<CAPTION>

                                                                                             Nine Months Ended
                                                                                   --------------------------------------
                                                                                       9/30/96               9/30/95
                                                                                   ----------------     -----------------

OPERATING ACTIVITIES
<S>                                                                               <C>                   <C>
   Net income (loss)                                                              $      (1,208,647)    $        (162,884)
   Adjustments  to  reconcile  net  income  (loss)  to cash  provided  (used) by
     operating activities:
       Depreciation & amortization                                                           43,614                48,336
       Bad debt                                                                                   0                10,187
       Minority interest                                                                     51,130               121,437
       Deferred income tax                                                                   (5,000)               35,000
       Stock received for interest                                                          (50,000)                    0
   Changes in assets and liabilities:
       Accounts receivable                                                                  213,333               242,035
       Inventories                                                                         (269,659)                8,626
       Prepaid expenses                                                                      (1,739)                3,130
       Insurance receivable                                                                       0                63,001
       Other assets                                                                               0                10,320
       Accounts payable and accrued expenses                                                 90,590               (22,888)
       Income taxes payable                                                                (109,898)               85,832
       Refund payable                                                                             0              (115,652)
                                                                                  -----------------     -----------------
                             NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES            (1,246,276)              326,480

INVESTING ACTIVITIES
   Loans to related party and accrued interest                                               78,602                     0
   Loan - other                                                                             (92,953)                    0
   Purchase of equipment                                                                   (136,619)               (9,905)
   Refund of option                                                                          30,000                     0
   Deposits                                                                                (501,312)                    0
   Purchase of subsidiary                                                                (1,000,000)                    0
                                                                                  -----------------     -----------------
                                        NET CASH USED BY INVESTING ACTIVITIES            (1,622,282)               (9,905)

FINANCING ACTIVITIES
   Decrease in book overdraft                                                                     0                (8,905)
   Principal payments on debt                                                              (281,733)              (45,962)
   Principal payments on capital lease obligation                                                 0                (9,322)
   Loan proceeds                                                                                  0                81,758
   Proceeds from sale of common stock                                                     2,714,374               483,640
                                                                                  -----------------     -----------------
                                    NET CASH PROVIDED BY FINANCING ACTIVITIES             2,432,641               501,209

                             INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS              (435,917)              817,784

Cash and cash equivalents at beginning of year                                            1,289,000               202,821
                                                                                  -----------------     -----------------

                                   CASH AND CASH EQUIVALENTS AT END OF PERIOD     $         853,083     $       1,020,605
                                                                                  =================     =================

SUPPLEMENTAL INFORMATION Cash paid for:
     Interest                                                                     $          39,425     $          18,022
     Income taxes                                                                           168,590                43,460
</TABLE>

                                       F-5