SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                    FORM 10-Q

(Check One)
[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934.

     For the quarterly period ended June 30, 1999

                                       OR

[ ]  TRANSITION  REPORT  PURUSANT  TO  SECTION  13 OR  15(d)  OF THE  SECURITIES
     EXCHANGE ACT OF 1934.

     For the transition period from _____________ to _____________

                        Commission file number 000-25277


                       PACIFIC MAGTRON INTERNATIONAL CORP.
             (Exact Name of Registrant as Specified in Its Charter)


            Nevada                                               88-0353141
(State or Other Jurisdiction of                               (I.R.S. Employer
 Incorporation or Organization)                              Identification No.)


1600 California Circle, Milpitas, California                        95035
  (Address of Principal Executive Offices)                        (Zip Code)


                                 (408) 956-8888
              (Registrant's Telephone Number, Including Area Code)


               ---------------------------------------------------
               Former Name, Former Address and Former Fiscal Year,
                          if Changed Since Last Report

Indicate by check [X] 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. Yes [X] No [ ]

                    Common Stock, $.001 par value per share:
            10,100,000 shares issued and outstanding at June 30, 1999
<PAGE>
Part I. - Financial Information

Item 1. - Consolidated Financial Statements

          Consolidated balance sheets as of December 31, 1998
          and June 30, 1999 (Unaudited)                                      1-2

          Consolidated statements of income for the three months
          and six months ended June 30, 1998 and 1999 (Unaudited)              3

          Consolidated statements of cash flows for the six
          months ended June 30, 1998 and 1999 (Unaudited)                      4

          Notes to consolidated financial statements                         5-7

Item 2. - Management's Discussion and Analysis of Financial
          Condition and Results of Operations                               8-14

Part II - Other Information

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

Signatures
<PAGE>
                                             PACIFIC MAGTRON INTERNATIONAL CORP.

                                                     CONSOLIDATED BALANCE SHEETS
--------------------------------------------------------------------------------

                                                     December 31,     June 30,
                                                        1998            1999
                                                     -----------     -----------
                                                                     (Unaudited)
ASSETS

CURRENT ASSETS:
  Cash and cash equivalents                          $ 3,197,100     $ 4,320,800
  Accounts receivable, net of allowance for
    doubtful accounts of $150,000 and $150,000         6,321,800       6,762,800
  Inventories                                          6,390,300       4,273,300
  Prepaid expenses and other current assets              548,000       1,108,200
  Notes and interest receivable from shareholders        268,100         274,900
  Deferred income taxes                                  161,300         161,300
                                                     -----------     -----------
TOTAL CURRENT ASSETS                                  16,886,600      16,901,300

PROPERTY, PLANT AND EQUIPMENT, net                     4,038,000       4,631,200

DEPOSITS AND OTHER ASSETS                                183,800          71,100
                                                     -----------     -----------

                                                     $21,108,400     $21,603,600
                                                     ===========     ===========

                    See accompanying notes to consolidated financial statements.

                                                                               1
<PAGE>
                                             PACIFIC MAGTRON INTERNATIONAL CORP.

                                                     CONSOLIDATED BALANCE SHEETS
--------------------------------------------------------------------------------

                                                       December 31,    June 30,
                                                          1998          1999
                                                       -----------   -----------
                                                                     (Unaudited)
LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:
  Current portion of notes payable                     $    51,200   $    45,300
  Floor plan inventory loans                             2,305,000       907,900
  Accounts payable                                       6,460,300     7,694,100
  Accrued expenses                                         138,600       189,300
                                                       -----------   -----------
TOTAL CURRENT LIABILITIES                                8,955,100     8,836,600

NOTES PAYABLE, less current portion                      3,377,100     3,361,700

DEFERRED INCOME TAXES                                       31,500        31,500
                                                       -----------   -----------
TOTAL LIABILITIES                                       12,363,700    12,229,800
                                                       -----------   -----------
COMMITMENTS AND CONTINGENCIES

SHAREHOLDERS' EQUITY:
  Preferred stock, $0.001 par value; 5,000,000
    shares authorized; no shares issued and
    outstanding                                                 --            --
  Common stock, $0.001 par value; 25,000,000
    shares authorized; 10,100,000 shares issued
    and outstanding at December 31, 1998 and
    June 30, 1999                                           10,100        10,100
  Additional paid-in capital                             1,299,100     1,763,100
  Retained earnings                                      7,435,500     7,600,600
                                                       -----------   -----------
TOTAL SHAREHOLDERS' EQUITY                               8,744,700     9,373,800
                                                       -----------   -----------
                                                       $21,108,400   $21,603,600
                                                       ===========   ===========

                    See accompanying notes to consolidated financial statements.

                                                                               2
<PAGE>
                                             PACIFIC MAGTRON INTERNATIONAL CORP.

                                               CONSOLIDATED STATEMENTS OF INCOME
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                          Three Months Ended June 30,    Six Months Ended June 30,
                                          ---------------------------   --------------------------
                                              1998          1999           1998           1999
                                          -----------    -----------    -----------    -----------
                                          (Unaudited)    (Unaudited)    (Unaudited)    (Unaudited)
<S>                                       <C>             <C>             <C>             <C>
SALES                                     $23,704,000    $24,042,400    $48,815,400    $50,622,700

COST OF SALES                              21,961,300     22,126,200     45,690,400     46,805,000
                                          -----------    -----------    -----------    -----------
GROSS MARGIN                                1,742,700      1,916,200      3,125,000      3,817,700

SELLING, GENERAL AND ADMINISTRATIVE EXPENS    875,900      1,636,900      1,665,200      3,151,900

AMORTIZATION OF PREPAID CONSULTING FEE             --        130,700             --        350,100
                                          -----------    -----------    -----------    -----------
INCOME FROM OPERATIONS                        866,800        148,600      1,459,800        315,700
                                          -----------    -----------    -----------    -----------
OTHER EXPENSE (INCOME):
  Interest income on shareholder notes         (2,800)        (2,800)        (5,600)        (7,300)
  Interest income                             (39,500)       (36,900)       (83,700)       (85,900)
  Interest expense                             70,300         68,200        140,000        133,800
                                          -----------    -----------    -----------    -----------
TOTAL OTHER EXPENSE                            28,000         28,500         50,700         40,600
                                          -----------    -----------    -----------    -----------
INCOME BEFORE INCOME TAXES                    838,800        120,100      1,409,100        275,100

INCOME TAXES                                  335,500         47,900        563,600        110,000
                                          -----------    -----------    -----------    -----------
NET INCOME                                $   503,300    $    72,200    $   845,500    $   165,100
                                          ===========    ===========    ===========    ===========
BASIC AND DILUTED EARNINGS PER SHARE      $      0.06    $      0.01    $      0.09    $      0.02
                                          ===========    ===========    ===========    ===========
BASIC WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING                                 9,000,000     10,100,000      9,000,000     10,100,000

STOCK OPTIONS                                      --        118,600             --        114,500
                                          -----------    -----------    -----------    -----------
DILUTED WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING                                 9,000,000     10,218,600      9,000,000     10,214,500
                                          ===========    ===========    ===========    ===========
</TABLE>

                    See accompanying notes to consolidated financial statements.

                                                                               3
<PAGE>
                                             PACIFIC MAGTRON INTERNATIONAL CORP.

                                           CONSOLIDATED STATEMENTS OF CASH FLOWS
--------------------------------------------------------------------------------

SIX MONTHS ENDED JUNE 30,                               1998           1999
                                                     -----------    -----------
                                                     (Unaudited)    (Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income                                         $   845,500    $   165,100
  Adjustments to reconcile net income to net cash
    (used in) provided by operating activities:
      Depreciation and amortization                       69,000         87,700
      Amortization of prepaid consulting fee                  --        350,100
      Changes in operating assets and liabilities:
        Accounts receivable                           (1,629,900)      (441,000)
        Inventories                                   (3,586,200)     2,117,000
        Prepaid expenses and other current assets        (21,200)      (456,000)
        Accounts payable                               3,076,200      1,233,800
        Accrued expenses                                  23,100         50,700
                                                     -----------    -----------
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES   (1,223,500)     3,107,400
                                                     -----------    -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Notes and interest receivable from shareholders        (55,700)        (6,800)
  Deposits and other assets                                  300        122,400
  Acquisition of property and equipment                   (6,800)      (680,900)
                                                     -----------    -----------
NET CASH USED IN INVESTING ACTIVITIES                    (62,200)      (565,300)
                                                     -----------    -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Net (decrease) increase in floor plan
    inventory loans                                    1,583,400     (1,397,100)
  Principal payments on SBA loan                         (11,500)       (12,400)
  Principal payments on bank loan                         (8,100)        (8,900)
                                                     -----------    -----------
NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES    1,563,800     (1,418,400)
                                                     -----------    -----------
NET INCREASE IN CASH AND CASH EQUIVALENTS                278,100      1,123,700

CASH AND CASH EQUIVALENTS, beginning of period         3,262,900      3,197,100
                                                     -----------    -----------
CASH AND CASH EQUIVALENTS, end of period             $ 3,541,000    $ 4,320,800
                                                     ===========    ===========

                    See accompanying notes to consolidated financial statements.

                                                                               4
<PAGE>
                                             PACIFIC MAGTRON INTERNATIONAL CORP.

                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

1.   ORGANIZATION

     Pacific Magtron International Corp. (formerly Wildfire Capital Corporation,
     a publicly traded shell corporation) (the Company),  a Nevada  corporation,
     was incorporated on January 8, 1996.

     On July 17,  1998 the  Company  completed  the  acquisition  of 100% of the
     outstanding  common stock of Pacific  Magtron,  Inc. (PMI), in exchange for
     9,000,000 shares of the Company's  common stock.  For accounting  purposes,
     the  acquisition  has been treated as the acquisition of the Company by PMI
     with PMI as the acquirer (reverse  acquisition).  The historical  financial
     statements prior to July 17, 1998 are those of PMI. Since the Company prior
     to  the  reverse  acquisition  was  a  public  shell  corporation  with  no
     significant   operations,   pro-forma  information  giving  effect  to  the
     acquisition  is not  presented.  All shares and per share data prior to the
     acquisition  have  been  restated  to  reflect  the  stock  issuance  as  a
     recapitalization of PMI. The shares held by the shareholders of the Company
     prior to the acquisition (1,000,000 shares after reflecting a three for two
     reverse  stock  split  effected  by the  Company  immediately  prior to the
     acquisition) have been recognized as if they were issued in connection with
     the acquisition of the Company by PMI.

     PMI, a California  corporation,  was incorporated on August 11, 1989. PMI's
     principal  activity consists of the importation and wholesale  distribution
     of  electronics  products,  computer  components,  and computer  peripheral
     equipment throughout the United States.

     In  May  1998,  the  Company  formed  its  Frontline   Network   Consulting
     (Frontline) division, a corporate information systems group that serves the
     networking  and personal  computer  requirements  of  corporate  customers.
     Revenues  earned and net loss  incurred by Frontline  during the six months
     ended  June  30,  1999  were  $1,787,000  (including  service  revenues  of
     $126,300)  and $46,000,  respectively,  and  Frontline's  total assets were
     $871,600  at June  30,  1999.  Revenues  earned  and net loss  incurred  by
     Frontline  was  insignificant  during the three months and six months ended
     June 30, 1998.

                                                                               5
<PAGE>
                                             PACIFIC MAGTRON INTERNATIONAL CORP.

                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

2.   FINANCIAL STATEMENT PRESENTATION AND NEW ACCOUNTING STANDARD

     The accompanying consolidated financial statements at June 30, 1999 and for
     the three and six-month periods ended June 30, 1998 and 1999 are unaudited.
     However,  they have been prepared on the same basis as the annual financial
     statements  and, in the  opinion of  management,  reflect all  adjustments,
     which  include  only normal  recurring  adjustments,  necessary  for a fair
     presentation of consolidated  financial  position and results of operations
     for the periods  presented.  Certain  information and footnote  disclosures
     normally included in the financial  statements  prepared in accordance with
     generally  accepted   accounting   principles  have  been  omitted.   These
     consolidated  financial  statements  should be read in conjunction with the
     audited  consolidated  financial  statements and accompanying notes for the
     year  ended  December  31,  1998  presented  in the  Company's  Form 10, as
     amended.

     In June 1998, the FASB issued Statement of Financial  Accounting  Standards
     (SFAS)  No.  133,   ACCOUNTING  FOR  DERIVATIVE   INSTRUMENTS  AND  HEDGING
     ACTIVITIES.  SFAS No. 133 requires  companies to recognize all  derivatives
     contracts  as either  assets or  liabilities  in the  balance  sheet and to
     measure them at fair value. If certain conditions are met, a derivative may
     be specifically  designated as a hedge,  the objective of which is to match
     the timing of gain or loss  recognition on the hedging  derivative with the
     recognition  of (i) the  changes in the fair value of the hedged  assets or
     liability  that are  attributable  to the hedged risk or (ii) the  earnings
     effect  of  the  hedged  forecasted  transaction.   For  a  derivative  not
     designated  as a hedging  instrument,  the gain and loss is  recognized  in
     income in the period of change.  SFAS No. 133 is  effective  for all fiscal
     quarters of fiscal years beginning after June 15, 2000.

     Historically, the Company has not entered into derivatives contracts either
     to hedge  existing  risks or for  speculative  purposes.  Accordingly,  the
     Company does not expect  adoption of this  standard to affect its financial
     statements.

                                                                               6
<PAGE>
                                             PACIFIC MAGTRON INTERNATIONAL CORP.

                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

3.   STOCK OPTIONS

     During the six months ended June 30,  1999,  no  additional  options of the
     Company's common stock were granted and no issued options were exercised.

4.   STATEMENTS OF CASH FLOWS

     Cash was paid during the six months ended June 30, 1998 and 1999 for:

     Six Months Ending June 30,                           1998           1999
     --------------------------                         --------       --------
     Income taxes                                       $502,500       $386,000
                                                        ========       ========
     Interest                                           $140,000       $133,800
                                                        ========       ========

5.   CONSULTING AGREEMENT

     On July 17,  1998,  the Company  issued  100,000  restricted  shares of its
     common  stock  to an  unrelated  party  under  the  terms  of a  consulting
     agreement.  Under the Agreement,  if the services are provided,  the shares
     vest 50% on July 17, 1999 and 50% on July 17, 2000. If the services are not
     provided as required,  the consultant will forfeit those shares not vested.
     The Company is accounting for this  transaction in accordance with Emerging
     Issues Task Force (EITF) No. 96-18,  ACCOUNTING FOR EQUITY INSTRUMENTS THAT
     ARE ISSUED TO OTHER THAN  EMPLOYEES FOR ACQUIRING,  OR IN CONJUNCTION  WITH
     SELLING,  GOODS OR SERVICES.  As the  measurement  date for determining the
     final  value of these  shares  has yet to  occur as of June 30,  1999,  the
     Company is valuing the shares at each reporting date at their  then-current
     value.  As of June 30, 1999, the Company has recorded these shares at their
     estimated  current fair value of $975,000 as of June 30, 1999. The $464,000
     increase  in the  estimated  then-current  fair value of these  shares from
     $511,000 as of  December  31, 1998 to $975,000 as of June 30, 1999 has been
     reflected as an increase in additional  paid-in capital.  Included in other
     current and long-term assets as of June 30, 1999 is $507,800,  representing
     the unamortized  portion of the prepaid consulting fees.

6.   EQUITY INVESTMENT

     In May 1999,  the Company  entered  into a Management  Operating  Agreement
     which provides for a 50% ownership interest in a newly formed company,  LEA
     Publishing,  LLC  (LEA).  LEA  is  in  the  post-technological  feasibility
     production  phase  of  various  new  software  products.   The  Company  is
     accounting  for its  investment in LEA on the equity method  whereby 50% of
     the equity  interest in the net income or loss of LEA flows  through to the
     Company.

                                                                               7
<PAGE>
ITEM 2. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

The accompanying  discussion and analysis of financial  condition and results of
operations  is based on the  consolidated  financial  statements of the Company,
which are included elsewhere in this Quarterly Report. The following  discussion
and  analysis  should be read in  conjunction  with the  accompanying  financial
statements and related notes thereto.  This discussion contains  forward-looking
statements  within the meaning of Section 27A of the  Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The
Company's  actual  results could differ  materially  from those set forth in the
forward-looking  statements.  Forward-looking  statements, by their very nature,
include risks and uncertainties. Accordingly, the Company's actual results could
differ materially from those discussed in this Report. A wide variety of factors
could adversely  impact revenues,  profitability,  cash flows and capital needs.
Such  factors,  many of which are beyond  the  control  of the  Company  and its
management,  include, but are not limited to, technological changes,  diminished
marketability of inventory,  increased warranty costs, competition,  recruitment
and  retention  of  technical  personnel,  Year 2000,  dependence  on  continued
manufacturer  certification,  dependence on certain suppliers,  risks associated
with the  projects  the Company is engaged to complete,  and  dependence  on key
personnel.

GENERAL

Pacific  Magtron  International  Corp., a Nevada  corporation  (the "Company" or
"Pacific  Magtron"),  is an integrated  solutions  provider of  computer-related
equipment  and  services.  The  Company's  primary  business  is  the  wholesale
distribution  of computer  and related  hardware  components  and  software  for
personal  computers to value added resellers,  retailers,  systems  integrators,
original  equipment  manufacturers,  independent  hardware and software vendors,
consultants,  and  contractors.  In May 1998,  the  Company  formed a  corporate
information systems division known as Frontline Network Consulting ("Frontline")
to  serve  the  networking  and  personal  computer  requirements  of  corporate
customers.  As used herein and unless otherwise  indicated,  the terms "Company"
"we" and "our"  refer to Pacific  Magtron  International  Corp.  and each of its
operating divisions and subsidiaries.

RESULTS OF OPERATIONS

The following  table sets forth,  for the periods  indicated,  certain  selected
financial data as a percentage of sales:

                                     Three Months Ended       Six Months Ended
                                          June 30,                June 30,
                                      -----------------       -----------------
                                       1998        1999        1998        1999
                                       ----        ----        ----        ----
Sales                                 100.0%      100.0%      100.0%      100.0%
Cost of sales                          92.6        92.0        93.6        92.5
                                      -----       -----       -----       -----
Gross margin                            7.4         8.0         6.4         7.5
Operating expenses                      3.7         7.4         3.4         6.9
                                      -----       -----       -----       -----
Income from operations                  3.7         0.6         3.0         0.6
Other expense, net                      0.1         0.1         0.1         0.1
Income taxes                            1.4         0.2         1.2         0.2
                                      -----       -----       -----       -----
Net income                              2.1%        0.3%        1.7%        0.3%
                                      =====       =====       =====       =====

                                                                               8
<PAGE>
THREE MONTHS ENDED JUNE 30, 1999 COMPARED TO THREE MONTHS ENDED JUNE 30, 1998

Sales for the three months ended June 30, 1999 were $24,042,400,  an increase of
$338,400,  or  approximately  1%,  compared to $23,704,000  for the three months
ended June 30, 1998. Approximately $1,046,200 of the sales earned by the Company
during  the  three  months  ended  June  30,  1999 was  attributable  to the new
FrontLine  division  that was  formed  in May 1998 to serve the  networking  and
personal  computer  requirements  of  corporate  customers.  Sales earned by the
Company's  Frontline division were negligible during the three months ended June
30, 1998.  Thus,  there was a decrease in sales  attributable  to the  Company's
computer products division for the three months ended June 30, 1999 of $707,800,
or approximately 3%, compared to the  corresponding  period of the previous year
as the Company focused its efforts on improving gross margin,  which resulted in
an overall decrease in sales.

Gross  margin  for the three  months  ended  June 30,  1999 was  $1,916,200,  an
increase of $173,500 or 10%,  compared to $1,742,700  for the three months ended
June 30, 1998. The gross margin as a percentage of sales increased from 7.4% for
the three months ended June 30, 1998 to 8.0% for the three months ended June 30,
1999.  This  increase  is  primarily  due to  better  cost  controls,  including
participation  in  more  vendor  rebate  programs,  and an  increased  focus  on
marketing  products  with a higher gross  margin.  Gross margin  relating to the
FrontLine  division for the three months  ended June 30, 1999 was  $124,600,  or
11.9% of FrontLine's  sales during the same period.  However,  since FrontLine's
sales levels were relatively  insignificant in relation to that of the Company's
computer  products group, the higher gross margin percentage earned by FrontLine
had only a minor effect on the overall  increase in the  Company's  gross margin
during the three months ended June 30, 1999.

Operating expenses, including selling, general,  administrative and amortization
of  prepaid  consulting  fee for the  three  smonths  ended  June 30,  1999 were
$1,767,600, an increase of $891,700, or 102%, compared to $875,900 for the three
months  ended June 30,  1998.  The noted  increase is  primarily a result of the
hiring of  additional  personnel  to  support  the  expansion  of the  Company's
business and  establishment  of the  management  infrastructure,  including  the
ramp-up of the  Company's  Frontline  division.  Further,  the Company  incurred
additional  expenses  during the three months  ended June 30, 1999,  including a
non-cash charge of $130,700 for the amortization of a prepaid consulting fee, in
connection with the transition to a publicly traded company.  As a percentage of
sales,  operating expenses increased to 7.4% for the three months ended June 30,
1999 as compared to 3.7% for the three months ended June 30, 1998 resulting from
an increase in the Company's fixed cost component of operating expenses.

Income from operations for the three months ended June 30, 1999 was $148,600,  a
decrease of $718,200, or 83%,  compared to $866,800  for the three months ended
June 30, 1998. As a percentage  of sales,  income from  operations  decreased to
0.6% for the three  months ended June 30, 1999  compared to 3.7% for the three
months ended June 30, 1998. This decrease was primarily due to the 102% increase
in operating  expenses  which was minimally  offset by the improved gross margin
experienced during the three months ended June 30, 1999.

                                                                               9
<PAGE>
Interest  expense  for the three  months  ended  June 30,  1999 was  $68,200,  a
decrease of $2,100 or 3%,  compared to $70,300 for the three  months  ended June
30, 1998.  This  decrease was due to a decrease in the balance of the  Company's
mortgage  on its office  building  facility as a result of  scheduled  principal
payments. Interest income decreased from $42,300 for the three months ended June
30,  1998 to $39,700 for the three  months  ended June 30,  1999,  a decrease of
$2,600 or 6%, which was principally due to lower market interest rates available
for short-term investments of cash and cash equivalents.

SIX MONTHS ENDED JUNE 30, 1999 COMPARED TO SIX MONTHS ENDED JUNE 30, 1998

Sales for the six months  ended June 30, 1999 were  $50,622,700,  an increase of
$1,807,300,  or  approximately  4%,  compared to $48,815,400  for the six months
ended June 30, 1998. Approximately $1,787,000 of the sales earned by the Company
during the six months ended June 30, 1999 was  attributable to the new FrontLine
division  that was  formed  in May 1998 to serve  the  networking  and  personal
computer  requirements  of corporate  customers.  Sales earned by the  Company's
Frontline  division were  negligible  during the six months ended June 30, 1998.
The  remainder of the increase in sales was  primarily  due to increased  market
share  achieved  during the first  quarter of 1999  through  expanded  marketing
efforts by the Company's computer products group.

Gross margin for the six months ended June 30, 1999 was $3,817,700,  an increase
of $692,700 or 22%,  compared to  $3,125,000  for the six months  ended June 30,
1998. The gross margin as a percentage of sales  increased from 6.4% for the six
months ended June 30, 1998 to 7.5% for the six months ended June 30, 1999.  This
increase is primarily due to better cost controls,  including  participation  in
more vendor rebate programs, and an increased focus on marketing products with a
higher gross margin. Gross margin relating to the FrontLine division for the six
months ended June 30, 1999 was $245,900,  or 13.8% of  FrontLine's  sales during
the same  period.  However,  since  FrontLine's  sales  levels  were  relatively
insignificant in relation to that of the Company's  computer products group, the
higher gross margin  percentage  earned by FrontLine  had only a minor effect on
the overall  increase in the Company's  gross margin during the six months ended
June 30, 1999.

Operating expenses, including selling, general,  administrative and amortization
of  prepaid  consulting  fee,  for the six  months  ended  June  30,  1999  were
$3,502,000,  an increase of $1,836,800,  or 110%, compared to $1,665,200 for the
six months ended June 30, 1998. The increase is primarily a result of the hiring
of additional  personnel to support the expansion of the Company's  business and
establishment  of the  management  infrastructure,  including the ramp-up of the
Company's  Frontline  division.  In addition,  the Company  incurred  additional
expenses in 1999,  including a non-cash charge of $350,100 for the  amortization
of a prepaid  consulting  fee, in connection  with the  transition to a publicly
traded company.  As a percentage of sales,  operating expenses increased to 6.9%
for the six months ended June 30, 1999 compared to 3.4% for the six months ended
June 30, 1998 resulting  from an increase in the Company's  fixed cost component
of operating expenses.

                                                                              10
<PAGE>
Income from  operations  for the six months ended June 30, 1999 was $315,700,  a
decrease of $1,144,100,  or 78%, compared to $1,459,800 for the six months ended
June 30, 1998. As a percentage  of sales,  income from  operations  decreased to
0.6% for the six months  ended  June 30,  1999 as  compared  to 3.0% for the six
months ended June 30, 1998. This decrease was primarily due to the 110% increase
in operating  expenses  which was minimally  offset by the improved gross margin
experienced during the six months ended June 30, 1999.

Interest expense for the six months ended June 30, 1999 was $133,800, a decrease
of $6,200,  or 4%,  compared to $140,000 for the six months ended June 30, 1998.
This decrease was due to a decrease in the balance of the Company's  mortgage on
its  office  building  facility  as a result of  scheduled  principal  payments.
Interest income increased from $89,300 for the six months ended June 30, 1998 to
$93,200 for the six months  ended June 30, 1999,  an increase of $3,900,  or 4%,
which was principally due to the Company's improved cash management.

LIQUIDITY AND CAPITAL RESOURCES

Since inception,  the Company has financed its operations primarily through cash
generated by operations and borrowings under its floor plan inventory loans.

At June 30,  1999,  the  Company  had  consolidated  cash  and cash  equivalents
totaling $4,320,800 and working capital of $8,064,700. At December 31, 1998, the
Company had  consolidated  cash and cash  equivalents  totaling  $3,197,100  and
working capital of $7,931,500.

Net cash provided by operating  activities  during the six months ended June 30,
1999 was $3,107,400,  which principally reflected the decrease in inventory, the
increase in accounts payable, the amortization of the prepaid consulting fee and
the net  income for the  period,  which was  partially  offset by  increases  in
accounts receivable, and prepaid expenses and other current assets. The decrease
in inventory was due primarily to the Company's focus on improving its inventory
turnover  by  balancing  the  inventory  product  mix and levels in  relation to
customer  orders with  favorable  vendor  terms and  programs.  Net cash used in
operating  activities  during the six months ended June 30, 1998 was $1,223,500,
which reflected the net effect of increases in accounts receivable and inventory
that were partially offset by an increase in accounts payable and the net income
for the period.

Net cash used in investing  activities was $565,300  during the six months ended
June 30, 1999,  primarily  reflecting cash used for improvements to the building
owned and occupied by the Company to support the Company's expanding  workforce.
Net cash used in investing  activities during the six months ended June 30, 1998
was  $62,200,  primarily  resulting  from the  issuance  of an  additional  note
receivable to a shareholder.

Net cash used in financing  activities  was  $1,418,400 for the six months ended
June 30, 1999,  primarily  from the decrease in floor plan inventory  loans,  as
well as payment of the mortgage loans for the Company's facility. As of June 30,
1999,  the Company had  available  financing in the form of a $7.0 million floor
plan inventory loan, which is collateralized by the inventory  purchased and any
proceeds from the sale of the inventory.  The  outstanding  balance of the floor
plan inventory loan at June 30, 1999 was $907,900 and the loan is subject to

                                                                              11
<PAGE>
45-day  repayment  terms,  at which time interest  begins to accrue at the prime
rate (7.75% at June 30,  1999).  Net cash provided by financing  activities  was
$1,563,800  for the six months ended June 30, 1998,  primarily from the increase
in the floor plan inventory loans,  which was partially offset by payment of the
mortgage loans for the office facility.

As of June 30, 1999, the Company's material commitments for capital expenditures
consisted of an estimated $400,000  investment in its 50% equity interest in LEA
Publishing,  LLC, a company that was formed  during 1999 and is currently in the
post-technological   feasibility   production  phase  of  various  new  software
products.  The Company believes that the cash flow from operations and borrowing
available  under its $7.0  million  inventory  floor plan loan will  satisfy the
Company's anticipated requirements for working capital through at least the next
12 months.

RECENT ACCOUNTING PRONOUNCEMENT

In June 1998, the FASB issued Statement of Financial Accounting Standards (SFAS)
No. 133, ACCOUNTING FOR DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES.  SFAS No.
133 requires  companies to recognize all derivatives  contracts as either assets
or  liabilities  in the  balance  sheet and to measure  them at fair  value.  If
certain  conditions  are met, a derivative may be  specifically  designated as a
hedge, the objective of which is to match the timing of gain or loss recognition
on the hedging  derivative  with the  recognition of (i) the changes in the fair
value of the hedged assets or liability that are attributable to the hedged risk
or  (ii)  the  earnings  effect  of the  hedged  forecasted  transaction.  For a
derivative  not  designated  as a  hedging  instrument,  the  gain  and  loss is
recognized in income in the period of change.  SFAS No. 133 is effective for all
fiscal quarters of fiscal years beginning after June 15, 2000.

Historically,  the Company has not entered into derivatives  contracts either to
hedge existing risks or for speculative purposes.  Accordingly, the Company does
not expect adoption of the standard to affect its financial statements.

INFLATION

Inflation has not had a material effect upon the Company's results of operations
to date. In the event the rate of inflation should  accelerate in the future, it
is  expected  that to the  extent  resulting  increased  costs are not offset by
increased revenues, the operations of the Company may be adversely affected.

YEAR 2000

The Year 2000 problem  concerns the  inability  of certain  computer  systems to
appropriately  recognize  the Year 2000 when the last two digits of the year are
entered in the date field. The Company's date critical  functions related to the
Year  2000  and  beyond,  such as  sales,  distribution,  purchasing,  inventory
control,  merchandise,  planning and  replenishment,  facilities,  and financial
systems,  may be adversely  affected unless these computer systems are Year 2000
compliant.

                                                                              12
<PAGE>
The Company's  management  has performed a complete  assessment of the Company's
Year  2000  requirements,   including  all  of  its  information  technology  an
non-information  technology systems, and has made the expenditures  necessary to
make the Company's major computer  systems and some  non-critical  programs Year
2000 compliant.  The total cost of identifying and addressing Year 2000 problems
was $75,000.

The Company has  developed a  contingency  plan for dealing  with the worst case
scenario in order to minimize  the risks  associated  with  potential  Year 2000
disruptions, including assessing the need to locate alternate vendors or service
providers.

The Company's Year 2000 compliance is partially dependent upon key third parties
also being Year 2000 compliant on a timely basis. The Company could be adversely
affected by the Year 2000 problem if computer  systems of third  parties such as
banks,  suppliers and others with whom the Company does business fail to address
the Year 2000 problem  successfully.  For example,  the Company may be adversely
affected by, among other things, warranty and other claims made by the Company's
suppliers  related  to product  failures  caused by the Year 2000  problem,  the
disruption  or  inaccuracy  of data  provided to the  Company by  non-Year  2000
compliant third parties,  and the failure of the Company's  service providers to
become Year 2000 compliant.

In an effort to evaluate  and reduce its  exposure in this area,  the Company is
making an  inquiry  of its  vendors  and other  business  partners  about  their
progress in identifying and addressing  problems that their computer systems may
face in  correctly  processing  date  information  related to the Year 2000.  In
particular,  the Company is obtaining  statements from a substantial majority of
its suppliers  that certain of their  products are Year 2000  compliant,  can be
upgraded  to  meet  Year  2000  demands,  or  do  not  affect  "date  sensitive"
information.  The Company  estimates  that this process,  including  analysis of
responses and follow up interviews,  will be complete on or before September 30,
1999.

The Company's  management believes that the purchasing patterns of customers and
prospective  customers might be affected by Year 2000 issues. Many companies may
need to modify or upgrade  their  information  systems to address  the Year 2000
problem.  The  effects of this issue and of the  efforts by other  companies  to
address it are unclear.  Many companies are expending  significant  resources to
correct  their  current  software  systems  for  Year  2000  compliance.   These
expenditures  might result in reduced funds  available to purchase  services and
products such as those that the Company offers.

The Company has no reason to believe  that its  exposure to the risks of lack of
supplier  and customer  Year 2000  readiness is any greater than the exposure to
such risks that affect its  competitors  generally.  However,  if a  significant
number of the Company's key  suppliers,  customers and other  business  partners
experience  business  disruptions  as a  result  of  their  lack  of  Year  2000
readiness,  their problems could have a material adverse effect on the financial
position and  operations  of the Company.  In addition,  if all Year 2000 issues
within the  Company's  business  are not  properly  identified,  there can be no
assurance  that the Year 2000 issue will not have a material  adverse  effect on
the Company's results of operations or financial position.

                                                                              13
<PAGE>
The Company's time frame will be influenced by its ability to identify Year 2000
problems and the  compliance  success of third parties.  For those  reasons,  no
assurance can be given at this point that the Company's computer systems will be
Year  2000  compliant  in a timely  manner  or that the  Company  will not incur
significant additional expenses pursuing Year 2000 compliance.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

     (a)  Exhibits:

          27   Financial Data Schedule

     (b)  Reports on Form 8-K:

          None

                                                                              14
<PAGE>
                                   SIGNATURES

Pursuant to the  requirement  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 August 16, 1999

                                        PACIFIC MAGTRON INTERNATIONAL CORP.,
                                        a Nevada corporation
                                        (Registrant)


                                        /s/ Theodore S. Li
                                        ----------------------------------------
                                        Theodore S. Li
                                        President and Chief Executive Officer

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