<PAGE>   1


                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

                   QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

   For Quarter Ended June 30, 1998             Commission File Number 0-4539

                             TRANS-INDUSTRIES, INC.

             (Exact name of registrant as specified in its charter)

          Delaware                                     13-2598139
          --------                                     ----------

(State or other jurisdiction of             (I.R.S. Employer Identification No.)
incorporation or organization)

                  2637 S. Adams Road, Rochester Hills, MI 48309
                  ---------------------------------------------

                    (Address)                     (Zip Code)

        Registrant's Telephone Number, including Area Code (248) 852-1990

         Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities and Exchange Act
of 1934 during the preceding 12 months and (2) has been subject to such filing
requirements for the past 90 days. YES  X  NO    
                                       ---    ---
The number of shares outstanding of registrant's Common stock, par value $.10
per share, at June 30, 1998 was 3,074,400.


<PAGE>   2


                 TRANS-INDUSTRIES, INC. AND SUBSIDIARY COMPANIES

                 FORM 10-Q - FOR THE QUARTER ENDED JUNE 30, 1998

                                      INDEX
                                      -----


PART I.   Financial Information
-------------------------------


Item 1.           FINANCIAL STATEMENTS

                  A.          Consolidated Statements of Earnings---
                                Three months ended June 30, 1998 and 1997. 
                                Six months ended June 30, 1998 and 1997.

                  B.          Consolidated Balance Sheets---
                                June 30, 1998 and December 31, 1997.

                  C.          Consolidated Statements of Cash Flows---
                                Six months ended June 30, 1998 and 1997.

                  D.          Notes to Consolidated Financial Statements.


Item 2.           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                  AND RESULTS OF OPERATIONS


PART II.  Other Information
---------------------------

Item 1.           LEGAL PROCEEDINGS

Item 5.           OTHER INFORMATION

Item 6.           EXHIBITS AND REPORTS ON FORM 8-K

                  SIGNATURES










                                       2
<PAGE>   3


13


                     TRANS-INDUSTRIES, INC. AND SUBSIDIARIES
A.
                CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

<TABLE>
<CAPTION>

                                                                 For 3 Months Ended:                     For 6 Months Ended:
                                                                 -------------------                     -------------------
                                                             6/30/98            6/30/97               6/30/98          6/30/97
                                                             -------            -------               -------         --------
<S>                                                        <C>                <C>                 <C>                <C>
1.   Gross sales less discounts, returns and allowances      $9,215,103         $9,289,721          $18,417,899       $17,279,497

2.   Cost of goods sold                                       6,108,611          6,020,470           12,098,346        11,058,965
                                                           ------------       ------------        -------------      ------------
3.   Gross Profit                                             3,106,492          3,269,251            6,319,553         6,220,532

4.   Selling, general and administrative exp.                 2,282,177          2,127,140            4,365,352         4,113,720
                                                           ------------       ------------        -------------      ------------

5.   Operating income/(loss)                                    824,315          1,142,111            1,954,201         2,106,812

6.   Other (income)/ expense
        Interest expense                                        134,292            157,451              275,511           333,174
        Other Income - Net Lawsuit Proceeds                  (1,596,811)                 0           (1,596,811)                0
        Other income                                            (14,067)           (13,962)             (36,457)         (183,052)
                                                           ------------       ------------        -------------      ------------
         Total other (income)/expense                        (1,476,586)           143,489           (1,357,757)          150,122
                                                           ------------       ------------        -------------      ------------
7.   Earnings/(loss) before income taxes                      2,300,901            998,622            3,311,958         1,956,690

8.   Income tax expense/(benefit)                               211,000            335,000              489,000           672,000
                                                           ------------       ------------        -------------      ------------
9.   Net profit/(loss)                                     $  2,089,901       $    663,622        $   2,822,958      $  1,284,690
                                                           ============       ============        =============      ============
10.  Earnings per share:
        Basic                                              $        .68       $        .22        $         .92      $        .42
        Diluted                                            $        .66       $        .22        $         .90      $        .42
                                                           ============       ============        =============      ============
11.  Dividends per share                                   $        .10                 --        $         .10                --
                                                           ============       ============        =============      ============

</TABLE>

See Notes to Financial Statements






                                        3

<PAGE>   4



                     TRANS-INDUSTRIES, INC. AND SUBSIDIARIES
B.
                           CONSOLIDATED BALANCE SHEETS
                           ---------------------------

     ASSETS
     ------

Current Assets
--------------                                      6/30/98            12/31/97
                                                  (Unaudited)         (Audited)
                                                 ------------      ------------
Cash                                             $    108,757      $    132,297
Accounts receivable                                 8,483,999         8,433,468
Inventories (Note 2)                                7,722,472         6,824,438
Prepaid expenses                                      628,712           247,123
Deferred income taxes                                 444,000           444,000
                                                 ------------      ------------

Total current assets                               17,387,940        16,081,326

Property, Plant & Equipment, at Cost

Land                                                  314,503           314,503
Land Improvements                                     126,660           126,660
Buildings                                           5,350,242         4,992,360
Machinery & equipment                               7,933,791         7,848,472
                                                 ------------      ------------
                                                   13,725,196        13,281,995
Less: accumulated
      depreciation                                 (8,676,389)       (8,269,084)
                                                 ------------      ------------
Net plant and equipment                             5,048,807         5,012,911
                                                 ------------      ------------
Other Assets
------------

Investments in affiliates                              10,000            10,000

Patents, licenses & trademarks,
net of accumulated amortization                       222,710           231,937

Excess of cost of investment in
stock of subsidiary over equity in
underlying net assets of acquisition                  155,997           178,283

Sundry                                                104,471           104,471
                                                 ------------      ------------


Total assets                                     $ 22,929,925      $  21,618,928
                                                 ============      =============

See Notes to Financial Statements.



   LIABILITIES AND STOCKHOLDERS EQUITY
   -----------------------------------
                                                                               
   Current Liabilities                               6/30/98           12/31/97 
                                                   (Unaudited)        (Audited)
                                                 ------------      ------------
Notes Payable (Note 5)                           $   2,175,206     $  3,503,262
  Current installments
     - Long term debt (Note 5)                         175,569          193,389
  Accounts payable - trade                           2,475,134        2,419,154
  Accrued liabilities                                1,451,055        1,703,684
  Income taxes                                         639,000           88,000
                                                 -------------     ------------

  Total current liabilities                          6,915,964        7,907,489

  Deferred income taxes - Non-current                  197,000          197,000

Long term debt
--------------

Current portion shown above (Note 5)                 3,316,569        3,561,838

Other non-current liabilities                          318,952          312,355

Stockholders' Equity
--------------------

Preferred stock of $1.00 par value
  per share - authorized 500,000
  shared; none issued                                       --               -- 

  Common stock of $.10 par value per
  share - authorized 10,000,000 shares;
  3,074,400 shares issued and 3,074,400
  outstanding at 6/30/98                               307,440          307,320

  Less Dividends Paid                                 (307,440)            --   
  Additional paid-in capital                         4,070,246        4,062,116
  Retained earnings                                  8,096,205        5,273,244
  Foreign currency translation                          14,989           (2,434)
                                                 -------------     ------------
                                                    12,181,440        9,640,246
                                                 -------------     ------------

Total liabilities and stockholders' equity       $  22,929,925     $ 21,618,928
                                                 =============     ============

                                       4

<PAGE>   5

                                            
                             TRANS-INDUSTRIES, INC.
                      Consolidated Statements of Cash Flows
   C.            For the Six Months Ended June 30, 1998 and 1997
                 -----------------------------------------------

<TABLE>
<CAPTION>

                                                              Six Months Ended June 30      
                                                            1998                  1997  
                                                         (Unaudited)           (Unaudited) 
                                                         -----------           -----------  
<S>                                                    <C>                    <C>
 CASH FLOWS FROM OPERATING ACTIVITIES
 ------------------------------------
 Net income (loss)                                     $   2,822,961          $   1,284,690
 Adjustments to reconcile net income (loss)                                                 
 to net cash provided by operations:                                                        
      Depreciation/Amortization                              438,818                389,361
      Decrease (increase) in accts. receiv.                (  50,531)             (  65,565)
      Decrease (increase) in inventory                     ( 898,034)             ( 187,596)
      Decrease (increase) in prepaid exp.                  ( 381,589)             (  75,394)
      Increase (decrease) in accts. payable                   55,980              ( 297,898)
      Increase (decrease) in accr. liab.                   ( 252,629)             ( 123,717)
      Increase (decrease) in income taxes                    551,000              ( 213,000)
      (Gain) loss on sale of fixed assets                         -0-             ( 136,689)
      Dividends Paid                                       ( 307,440)                    -0-
                                                       -------------          -------------
                                                                                            
 Net Cash Provided (Used) by Operations                    1,978,536                574,192  
                                                                                            
 CASH FLOWS FROM INVESTING ACTIVITIES                                                       
 ------------------------------------                                                       
      Purchase of fixed assets                             ( 443,201)            (  606,079)
      Proceeds from sale of property and equipment                -0-               236,000 
                                                       -------------          -------------
                                                                                            
 Net Cash Provided (Used) by Investing                     ( 443,201)            (  370,079)
                                                                                            
 CASH FLOWS FROM FINANCING ACTIVITIES                                                       
 ------------------------------------                                                       
      Net increase (repayment) of long-term                                                 
      borrowings                                           ( 256,492)            (  163,116)
      Net proceeds (payment) of credit line               (1,328,056)            (  136,090)
      Common stock issued through ESOP                         8,250                     -0-
                                                       -------------          -------------
 Net Cash Provided (Used) by Financing                    (1,576,298)            (  299,206)
                                                                                            
 Foreign currency translation                                 17,423             (   22,916)
                                                       -------------          -------------
 Net Increase in Cash                                     (   23,540)            (  118,009)
 Cash at beginning of year                                   132,297                358,764
 Cash at end of quarter                                -------------          -------------
                                                       $     108,757          $     240,755
                                                       =============          =============

Supplemental Disclosures:
  Interest paid                                        $     272,097          $     327,159
  Income taxes (refunded) paid, net                    $     761,000          $     885,000

</TABLE>


See Notes to Financial Statements


                                       5



<PAGE>   6
 D.                  TRANS-INDUSTRIES, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   ------------------------------------------
                                                                                
                  
 1.   Basis of Presentation                                                     
      ---------------------                                                     
                                                                                
      The financial information presented as of any date other than December 31 
      has been prepared from the Company's books and records without audit.     
      Financial information as of December 31 has been derived from the audited 
      financial statements of the Company. In the opinion of management, all    
      adjustments consisting of normal recurring adjustments, necessary for a   
      fair presentation of the financial information for the periods indicated, 
      have been included. For further information regarding the Company's       
      accounting policies, refer to the consolidated financial statements and   
      related notes included in the Company's annual report on form 10-K for the
      year ended December 31, 1997.                                             
                                                                                
                                                                                
 2.   Inventories                                                               
                                                                                
      The major components of inventories are:                                  
                                                                                
                                                      6/30/98           12/31/97
                                                                                
                   Raw Materials                     $4,119,412       $3,471,708
                   Work in Process                    1,221,470        1,178,684
                   Finished Goods                     2,381,590        2,174,046
                                                      ---------        ---------
                                                                                
                                                     $7,722,472       $6,824,438
                                                      =========        =========
                                                                                
                                                                                
                                                                                
 3.   Principles of Consolidation                                               
      ---------------------------                                               
                                                                                
      There have been no significant changes in the principles of consolidation
      since our most recent audited financial statements.
                                                                                
                                                                                
 4.   Significant Accounting Policies                                           
      -------------------------------                                           
                                                                                
      There have been no significant changes in the accounting policies since
      our most recent audited financial statements.

On January 1, 1998, the Corporation adopted Financial Accounting Standards Board
(the "FASB") issued Stateme Income" ("SFAS130"), which establishes standards for
reporting and display of comprehensive income and its
 


                                       6
                                                                                
                                                                                
<PAGE>   7
                                                                                
                                                                                
                                                                                

                                                                                
     D.             TRANS-INDUSTRIES, INC. AND SUBSIDIARIES           
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS     
                  ------------------------------------------
                                                                                
                                                                                
     components (revenues, expenses, gains and losses) in a full set of         
     financial statements. This statement also requires that all items that are 
     required to be recognized under accounting standards as components of      
     comprehensive income be reported in a financial statement that is displayed
     with the same prominence as other financial statements. Consolidated       
     statements of comprehensive income for each of the three month periods     
     ended June 30, 1998 and 1997 have been omitted, as comprehensive income for
     each of the periods does not materially differ from reported earnings.     


                                                                                
                                                                                
5.   Long-Term Debt                                                             
     --------------    
<TABLE>
                                                         
     <S>                                                                                        <C>
                                                                                
     Long-term debt at June 30, 1998 consisted of the following:                
                                                                                
     Trans-Industries, Inc., $3,840,000 term note, payable in $3,379,575 monthly                $3,379,575
     installments of $39,333 which includes interest at 1/4% over the bank's    
     prime lending rate, and a balloon payment of $3,137,124 in October 1999.   
     The note is secured by substantially all the assets of Trans-Industries,   
     Inc. and subsidiaries.                                                     
                                                                                
     Term note, payable in monthly installments of $896                                            112,563 
     including interest at a rate of 6%.  The note is due January 21, 2002.                                
                                                                                                           
                                                                                                ----------           
                                                                                                 3,492,138 
     Less current installments                                                                  (  175,569)
                                                                                                ----------           
     Long-term debt                                                                             $3,316,569 
                                                                                                ========== 
                                                                                                           
</TABLE>



                                       7
<PAGE>   8

                     TRANS-INDUSTRIES, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   ------------------------------------------
                                                                                
      5.    Long-Term Debt (continued)                                          
            --------------------------                                          
                                                                                
            The Trans-Industries, Inc. term loan agreement contains restrictive
            provisions relating principally to the maintenance of working
            capital, net worth, ratio of debt to net worth, payment of
            dividends, and acquisition of fixed assets. At June 30, 1998 the
            Company was in compliance with all provisions.
                                                                               
            The Company also has a secured $6,500,000 line of credit of which
            $2,175,206 was utilized at June 30, 1998. Interest is charged at the
            bank's prime lending rate. This line of credit expires on July 1,
            1999. The line is secured by substantially all of the assets of
            Trans-Industries, Inc. and its domestic subsidiaries.
                                                                                
                                                                                
       6.   Earnings Per Share                                                  
            ------------------                                                  
                                                               
            The following is a reconciliation of the numerator and denominator
            of the basic and diluted earnings per share computations.
<TABLE>
<CAPTION>

                                                             EARNINGS               SHARES          PER SHARE   
                                                            (NUMERATOR)          (DENOMINATOR)       AMOUNT     
                                                            -----------          -------------       ------     
            <S>                                             <C>                  <C>                <C>
            Qtr. ended June 30, 1998                                                                            
            ------------------------                                                                            
                Basic earnings per share:                                                                       
                     Earnings available to common                                                               
                         stockholders                       $ 2,089,901             3,073,600            .68    
                     Effect of dilutive securities                                                              
                         Stock options                          --                     62,415           (.02)   
                                                            -----------          ------------       --------    
                Diluted earnings per share:                                                                     
                     Earnings available to stockholders                                                         
                     plus assumed conversions               $ 2,089,901             3,136,015            .66    
                                                            ===========          ============       ========   
                                                                                                              
</TABLE>


<TABLE>
<CAPTION>
                                                             EARNINGS               SHARES          PER SHARE   
                                                            (NUMERATOR)          (DENOMINATOR)       AMOUNT     
                                                            -----------          -------------       ------    
            <S>                                             <C>                  <C>                <C>   
            Qtr. ended June 30, 1997                                                                            
            ------------------------                                                                            
                Basic earnings per share:                                                                       
                     Earnings available to common                                                               
                         stockholders                          $663,622             3,072,000            .22
                                                                                                                
                     Effect of dilutive securities
                         Convertible debt                         7,070               107,124            .00    
                                                            -----------          ------------       --------    
                Diluted earnings per share:                                                                       
                     Earnings available to stockholders                                                          
                     plus assumed conversions                  $670,692             3,179,124            .22
                                                            ===========          ============       ========
</TABLE>




                                       8

<PAGE>   9

                     TRANS-INDUSTRIES, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   ------------------------------------------



7.   Stock Changes                                                              
     -------------                                                              
                                                                                
     In February of 1998, the Company received a request from an employee to
     exercise his stock option for 1200 shares of common stock at a price of
     $6.875 per share. Accordingly, the Company issued a certificate for 1200
     shares.













                                       9

<PAGE>   10

                     TRANS-INDUSTRIES, INC. AND SUBSIDIARIES                   
                                                                               
Item 2.           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL            
                  -------------------------------------------------
                       CONDITION AND RESULTS OF OPERATIONS                     
                       -----------------------------------
                       For Six Months Ended June 30, 1998                       
                       ----------------------------------
                       
Sales and Earnings                                                              
------------------                                                              
                                                                                
     Sales for the quarter ended June 30, 1998 were $9,215,103 compared to      
$9,289,721 for the same period a year ago. This decrease of $74,618 was         
primarily attributable to the hardware and software design and customer signoffs
required on major VMS highway contracts before manufacturing begins.            
                                                                                
     During the second quarter of 1998, the Company realized a net profit of    
$2,089,901 on sales of $9,215,103. For the same period of the prior year, the   
Company reported net profit of $663,622 on sales of $9,289,721. This increase in
net profit of $1,426,279 can be attributed to the proceeds received in May,     
1998, which was for damages awarded the Company in the settlement of a patent   
infringement lawsuit which the Company filed against a competitor in 1991. The  
damage award was for approximately $3,024,000, after allowing for legal fees and
federal income taxes, the Company reported net proceeds of approximately        
$1,600,000. Net profit per share for the second quarter was $.68 and $.22 for   
1998 and 1997, respectively.

Inventories
-----------

     Inventory valuation is based upon the lower of cost or market. At June 30,
1998, consolidated inventories were $7,722,472 compared to $6,350,188 a year
ago. This increase of $1,327,284 is to accommodate anticipated growth in sales
volume.

Interest
--------

     Interest expense amounted to approximately $134,000 and $157,000 for the
second quarter of 1998 and 1997 respectively. This decrease of $23,000 was the
result of average debt levels being less during the second quarter of 1998
compared to 1997.

Financial Condition
-------------------

     Current financial resources coupled with anticipated funds from operations
are expected to meet funding requirements for the remainder of the year, based
upon present needs.

     As noted in Item 1, "Legal Proceedings", the Company was paid $3,023,773
on May 1, 1998. This amount represents damages awarded by the Court in a patent
infringement case. After paying related fees and income taxes, the Company
expects to net approximately $1.6 million.




                                       10



<PAGE>   11

     During the second quarter, the Company reached an agreement with its bank
which will lower its borrowing cost to a quarter point under prime on the
operating line and to prime on the term debt. The bank will also release all
collateral requirements associated with the working capital line. This new
agreement is expected to be executed in August 1998.





                                       11
<PAGE>   12


                           PART II - OTHER INFORMATION



Item 1.                         LEGAL PROCEEDING
                                ----------------

     The Company is the plaintiff in a patent infringement lawsuit. During
November of 1993, an advisory jury recommended a decision in favor of the
Company. In April of 1994, the judge concurred with the advisory jury and
ordered that the defendant be enjoined from any further manufacture, use, or
sale of the accused patented device. It was also ordered that the defendant pay
approximately $3 million in damages. During 1994, the defendant appealed the
case based on the lower courts interpretation of the law. On May 2, 1995, the
Company was notified that the U.S. Circuit Court of Appeals changed the District
Courts ruling that the defendant literally infringed the patent instead of
infringement by equivalents. Further the Court of Appeals remanded the case back
to the Federal District Court for further determination of damages. On April 9,
1998, the District Court awarded the Company $3,023,773 in damages and
$1,119,588 in interest. On May 1, 1998, the defendant paid the damages
awarded to the Company and indicated they intended to appeal the interest award.
A final outcome is expected in 9 - 12 months.


Item 5.                         OTHER INFORMATION
                                -----------------

     On August 6, 1997 the Company repurchased all remaining convertible
subordinated debentures outstanding. This purchase eliminates the possibility of
any dilution of common stock which would have resulted from the conversion of
these debentures.


Item 6.                  EXHIBITS AND REPORTS ON FORM 8-K
                         --------------------------------


     (b) Form 8K dated May 4, 1998; receipt of damage award and Declaration of
Special Dividend.







                                       12
<PAGE>   13


                                   SIGNATURES
                                   ----------



     Pursuant to the requirements of the Securities Exchange Act of l934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.


                                     TRANS-INDUSTRIES, INC.




Date: 8/11/98                        /s/ Kai Kosanke
      ------------                   -------------------------------------
                                     Kai Kosanke, Treasurer
                                     and Chief Financial Officer



Date: 8/11/98                        /s/ Paul Clemo                       
      ------------                   -------------------------------------
                                     Paul Clemo
                                     Assistant Treasurer


                                       13



<PAGE>   14




                                INDEX TO EXHIBITS
                                -----------------



EXHIBIT NO.                        DESCRIPTION
------------                       -----------

   27                              Financial Data Schedule











                                       14