UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                           Washington, D.C. 20549 
                                 FORM 10-Q 
                 QUARTERLY REPORT UNDER SECTION 13 OF 15(d) 
                   OF THE SECURITIES EXCHANGE ACT OF 1934 
  
                     For quarter ended October 31, 1997    

                        Commission File Number 0-3825 
 
                      Computer Transceiver Systems, Inc.         
            (Exact name of registrant as specified in its charter) 
 
                New York                                22-1842747          
         (State of Incorporation)      (I.R.S. Employer Identification Number)

                Registrant's Telephone Number:  (973) 473-4700 
                                     
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 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      


Indicate by check mark whether the registrant has filed all documents and 
reports required to be filed by Sections 12, 13 or 15(d) of the Securities 
Exchange Act of 1934 subsequent to the distribution of securities under a 
plan confirmed by court.            

                       Yes   X                       No      

The number of shares outstanding of the registrant's Common Stock, par 
value of $.001 per share, as of December 5, 1997 was 2,716,603.
                                      
                                     1
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                      COMPUTER TRANSCEIVER SYSTEMS, INC.
	
                                  FORM 10 - Q

                               October 31, 1997
 
                                     INDEX
                                                                           
                 
                                                                   Page


Part I.  Financial Information 
 
         Item 1.  Financial Statements  
         Balance Sheets - October 31, 1997
                   and July 31, 1997                                 3
                        
         Statements of Discontinued Operations-
         Three Months ended October 31, 1997
                   and October 31, 1996                              4
  
         Statements of Cash Flows-
         Three Months ended October 31, 1997
                   and October 31, 1996                              5

         Notes to Financial Statements                               6

         Item 2.  Management's Discussion and Analysis of
         Financial Condition and Results of Operations               7 

II.	 Other Information

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

         Signatures                                                  9
                                      2
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<TABLE>
Part 1.  Financial Information
Item 1. Financial Statements
COMPUTER TRANSCEIVER SYSTEMS, INC.
Balance Sheets
<CAPTION>
                                             October 31, 1997          July 31, 1997
                                                (unaudited)              (audited)
<S>                                          <C>                      <C>
ASSETS

Current Assets:

Marketable Securities--
     Vertex Industries                       $        3,052           $       3,052 
                                             ----------------         ---------------
Total Assets                                 $        3,052           $       3,052 
                                             ================         ===============

Liabilities and Stockholders' Equity 

Commitments and Contingencies

Stockholders' Equity 

Common stock, par value $.001 per share
authorized 15,000,000 shares; issued 
and outstanding 2,716,603 shares at
October 31,1997and at July 31, 1997 
respectively                                          2,716                   2,716

Capital in excess of par value                    2,452,840               2,452,840

Accumulated deficit                              (2,450,156)             (2,450,156)

Net unrealized loss on Marketable
Securities                                           (2,348)                 (2,348) 
                                             ---------------          --------------
                                                                              
Total Stockholders' Equity                            3,052                   3,052  
                                             ---------------          --------------

Total Liabilities and Stockholder' Equity       $     3,052             $     3,052  
                                             ===============          ==============
<FN>
The accompanying notes are an integral part of these balance sheets

                                       3
</TABLE>
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<TABLE>
                      COMPUTER TRANSCEIVER SYSTEMS, INC.
                    Statement of Discontinued Operations
                                  (Unaudited)
<CAPTION>
                                                         Three Months Ended 
                                                             October 31,                                              

                                                    1997                     1996    
<S>                                            <C>                      <C>
Net Income                                     $      --                $     --    
                                             ---------------            -------------

Accumulated deficit at beginning of
period                                          ( 2,450,156)              (2,450,156) 
                                             ---------------            --------------

Accumulated deficit at end of period            ( 2,450,156)              (2,450,156) 
                                             ================           ==============

Earnings Per Share of 
Common Stock:

Net Income per share                           $       --               $      --        
                                              ================          ==============

Weighted Average Number 
of Shares Outstanding                             2,716,603                2,716,603  
                                              ================          ==============
<FN>
The accompanying notes are an integral part of these financial statements.

                                       4     
</TABLE>
<PAGE>
<TABLE>
                     COMPUTER TRANSCEIVER SYSTEMS, INC.
                           Statements of Cash Flows
                                   (Unaudited)   
<CAPTION>
                                                               Three Months Ended
                                                   October 31, 1997          October 31, 1996
<S>                                                 <C>                     <C>
Cash Flows from Discontinued
Operating Activities:

Net Income                                          $        --              $          --     

Net Adjustments to Reconcile
Net Income to net cash used for
operating activities:

Increase (decrease) in liabilities:

Accrued expenses                                             --                         --

Net adjustments to reconcile net income
to net cash used for discontinued 
operating activities                                         --                         --
                                                    ----------------         ----------------

Net Cash used for discontinued operating
activities                                                   --                         --
                                                    ----------------         ----------------

Cash Flows From Financing Activities:
Proceeds from additional capital contribution                --                         --
                                                    ----------------         ----------------

     Net Cash Provided by Financing Activities               --                         --
                                                    ----------------         ----------------
     Net (Decrease) in Cash                                  --                         --

     Cash at Beginning of Year                               --                         --
                                                    ----------------         ----------------
     Cash at End of Period                                   --                         --
                                                    ----------------         ----------------
<FN>
The accompanying notes are an integral part of these financial statements.

                                       5
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                       COMPUTER TRANSCEIVER SYSTEMS, INC.
                   Notes to Financial Statements - Unaudited
                               October 31, 1997

Note 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The accompanying financial statements have been prepared by the Company
pursuant to the rules and regulations of the Securities and Exchange
Commission, and reflect all adjustments which, in the opinion of the
management,  are necessary for a fair statement of the results of the
interim periods presented. These financial statements do not include all
disclosures associated with annual financial statements, and accordingly 
should be read in conjunction with the notes to financial statements
contained in the Company's Form 10-K Annual Report for the fiscal year
ended July 31, 1997.

Note 2 - SALE OF ASSETS TO VERTEX AND FUTURE PLANS 

On August 31, 1994, pursuant to an "Asset Purchase Agreement" dated
May 1, 1993 between the Company and Vertex Industries, Inc. ("Vertex"),
the Company's majority stockholder, and with the approval of the Company's
directors and shareholders, the Company sold all of its assets to Vertex
and Vertex assumed the Company's liabilities.  The assets sold included
inventory, equipment, receivables, proprietary technology, goodwill and other
intangibles.  The selling price of $1,699,580 was paid by Vertex through the
offset and cancellation of the Company's indebtedness to Vertex in the
amount of $1,257,001, with the balance of $442,579 being paid through the 
issuance of 236,042 shares of Vertex common stock to the Company. 
CTSI subsequently distributed 233,170 shares of Vertex common stock in an
exchange offer for 746,161 shares of CTSI's common stock.  The Vertex shares
reflected in the balance sheet as marketable securities as of July 31, 1995
represents the remaining shares of 2,872 which were not distributed to the CTSI
shareholders.  After completion of the Exchange Offer, the number of issued
and outstanding shares of the Company was reduced from 3,462,764 to 2,716,603.
As a result of the transaction, Vertex's ownership of the Company is approx-
imately 72.5%.

The Company's current business purpose is to seek out and obtain an
acquisition, and/or merger transaction, whereby its shareholders may benefit
by owning an interest in a viable enterprise.  Since the Company has no
operations or significant assets as a result of the sale, its potential for
profits will come solely from operations it may undertake after any acquisition
or merger transaction.  The Company has not received from, or made any
specific proposals to, any possible merger or acquisition candidate and there
is no guarantee that such transaction will occur.  Vertex will be responsible
for, and shall be the source of, any funds necessary for the Company to 
continue operating and to comply with any regulatory requirements, taxes, and
fees.  It will fund any costs associated with pursuing merger or acquisition
candidates.

                                       6
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ITEM 2:	MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL 
CONDITION AND RESULTS OF OPERATIONS.


The Company ceased operations on August 31, 1994 and, 
therefore, has no operating results for the three months ended 
October 31, 1997 and 1996.

                                       7

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                       COMPUTER TRANSCEIVER SYSTEMS, INC. 
                                    PART II 

                              OTHER INFORMATION 



Item 6.	EXHIBITS AND REPORTS ON FORM 8K 
 
         (a)  Exhibits:  None 

		         (b) There have been no reports filed on form 
8-K for the quarter ended October 31, 1997.

                                       8

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                                  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. 
 
                       COMPUTER TRANSCEIVER SYSTEMS, INC. 
                                 (Registrant) 
 
 
 
Date:  December 5, 1997                By:     S/Thomas J. Tully              
                                               Thomas J. Tully
                                                  President

                                      9
 
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