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                                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 January 31, 1998    

                        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 February 17,1998 was 2,716,603.
                                     -1- 

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                      COMPUTER TRANSCEIVER SYSTEMS, INC.
	
                                FORM 10 - Q

                              January 31, 1998
                               
                                   INDEX
                                                          
                                                      Page


Part I.  Financial Information 
 
         Item 1.  Financial Statements  
         Balance Sheets - January 31, 1998
                   and July 31, 1997                          3
                        
         Statements of Discontinued Operations-
         Three  and Six Months ended January 31, 1998
                   and January 31, 1997                       4
  
         Statements of Cash Flows-
         Six Months ended January 31, 1998
                   and January 31, 1997                       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 I Financial Information
Item 1. Financial Statements
COMPUTER TRANSCEIVER SYSTEMS, INC.
Balance Sheets
<CAPTION>

                                             January 31, 1998           July 31, 1997
                                                 (unaudited)               (audited)
                                                   (note 2)
                                               ----------------           --------------  
<S>                                       <C>                      <C>
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 (Deficit)

Common stock, par value $.001 per share 
authorized 15,000,000 shares; issued and 
outstanding 2,716,603 shares at January 31, 
1998 and 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                     3052 
                                                -------------              -----------
Total Liabilities and Stockholder' Equity        $     3,052               $    3,052  
                                                ============               ===========
<FN>
The accompanying notes are an integral part of these balance sheets.
</TABLE>
                                     -3-
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<TABLE>
                       COMPUTER TRANSCEIVER SYSTEMS, INC.
                     Statements of Discontinued Operations
                                   (Unaudited)
<CAPTION>
                                                 Three Months Ended                    Six Months Ended
                                                      January 31,                         January 31,

                                               1998              1997               1998               1997    
<S>                                    <C>                <C>                <C>              <C>
Net Income                                $      --          $      --          $      --         $      --       
                                          ------------       -------------      --------------    --------------

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

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

Net Income per share                      $        --        $        --        $        --       $        --      
                                          ============       =============      ==============    ==============
Weighted Average Number of Shares 
Outstanding                                 2,716,603          2,716,603           2,716,603        2,716,603 
                                          ============       =============      ==============    ==============
<FN>
The accompanying notes are an integral part of the financial statements.
</TABLE>
                                     -4-
<PAGE>
<TABLE>
                      COMPUTER TRANSCEIVER SYSTEMS, INC.
                           Statements of Cash Flows
                                 (Unaudited)
<CAPTION>
                                                       Six Months Ended
                                             January 31, 1998      January 31, 1997
<S>                                              <C>            <C>
Cash Flows from Discontinued Operating 
Activities:

Net Income                                          $    --         $      --              

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

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:

    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 the financial statements.
</TABLE>
                                      -5-
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                        COMPUTER TRANSCEIVER SYSTEMS, INC.
                   Notes to Financial Statements - Unaudited
                                January 31, 1998


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 approximately 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 and six months ended January 31, 1998.

                                     -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 were no reports on Form 8K filed during the 
              quarter ended January 31, 1998

                                     -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:	February 17, 1998	By:     S/ Thomas J. Tully                           
                                        Thomas J. Tully
                                        President

 
                                    -10-
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