UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                    FORM 10-Q

    X  QUARTERLY  REPORT  PURSUANT  TO SECTION  13 OR 15(d) OF THE  SECURITIES
EXCHANGE ACT OF 1934

For the Quarterly period ended September 30, 1999

                                      OROR

        TRANSITION  REPORT  PURSUANT  TO  SECTION  13 OR  15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___________ to  ___________

                         Commission file number 33-95298

                              GALAXY TELECOM, L.P.
             (Exact name of Registrant as specified in its charter)

            Delaware                                   43-1697125
 (States or other jurisdiction of              (IRS Employer
 incorporation or organization)               Identification Number)

 1220 North Main, Sikeston, Missouri                  63801
(Address of principal executive offices)              (zip code)

Registrant telephone number, including area code: (573) 472-8200

Indicate by check mark whether the Registrant (1) has filed all reports required
by  Section  13 or 15(d)  of the  Securities  Exchange  Act of 1934  during  the
previous 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


<PAGE>



                              GALAXY TELECOM, L.P.

                                    FORM 10-Q

                   FOR THE QUARTER ENDED SEPTEMBER 30, 1999

                                      INDEX

                                                                          PAGE
                                                                          ----

PART I.    Financial Information

Item 1.  Financial Statements

             Galaxy Telecom, L.P. and Subsidiary ...........................3
             Notes to Consolidated Financial Statements.....................6

Item 2.    Management's Discussion and Analysis of
             Financial Condition and Results of Operations.................10

Item 3.   Quantitative and qualitative disclosures
              about market risk............................................17

PART II.  Other Information................................................18

Signatures    .............................................................19

Exhibit Index .............................................................20


                                       2
<PAGE>

PART I.  FINANCIAL INFORMATION

Item 1. - FINANCIAL STATEMENTS

                       GALAXY TELECOM, L.P. AND SUDSIDIARY

                           CONSOLIDATED BALANCE SHEETS
                                   (Unaudited)
<TABLE>
<CAPTION>

                                                                     September 30,    December 31,
                                                                          1999             1998
                                                                    -------------    -------------
                        ASSETS

<S>                                                                 <C>              <C>
Cash and cash equivalents                                           $   6,538,779    $   2,213,777
Subscriber receivables, net of allowance for doubtful accounts of
  $108,277 and $116,572, respectively                                   4,414,619        4,334,563
Systems and equipment, net                                             97,695,491      104,197,674
Intangible assets, net                                                 36,728,202       38,260,678
Prepaids and other                                                        782,480        2,735,940
                                                                    -------------    -------------

      Total assets                                                  $ 146,159,571    $ 151,742,632
                                                                    =============    =============

        LIABILITIES AND PARTNERS' DEFICIT

Accounts payable and accrued expenses                               $  20,257,832    $  14,854,052
Subscriber deposits and deferred revenue                                3,875,774        4,078,407
Long-term debt and other obligations                                  147,366,819      152,445,620
                                                                    -------------    -------------

      Total liabilities                                               171,500,425      171,378,079

Commitments and contingencies (Note 7)

Partners' deficit:
  General partners                                                    (25,340,854)     (19,635,447)
  Limited partners                                                           --               --

      Total partners' deficit                                         (25,340,854)     (19,635,447)
                                                                    -------------    -------------

      Total liabilities and partners' deficit                       $ 146,159,571    $ 151,742,632
                                                                    =============    =============
<FN>

 The accompanying notes are an integral part of the consolidated financial statements.
</FN>
</TABLE>


                                       3
<PAGE>

   GALAXY TELECOM, L.P. AND SUDSIDIARY GALAXY TELECOM, L.P. AND SUDSIDIARY

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                    For the three months ended     For the nine months ended
                                                                            September 30,                   September 30,
                                                                   ----------------------------    ----------------------------
                                                                       1999            1998            1999            1998
                                                                   ------------    ------------    ------------    ------------

<S>                                                                <C>             <C>             <C>             <C>
Revenues                                                           $ 14,183,681    $ 16,852,423    $ 43,270,181    $ 51,655,423
                                                                   ------------    ------------    ------------    ------------

Operating expenses:
  Systems operations                                                  6,793,725       7,925,228      20,378,609      24,120,258
  Selling, general and administrative                                 1,490,154       2,069,006       4,396,163       6,254,961
  Management fee to affiliate                                           420,693         761,759       1,643,770       2,325,880
  Depreciation and amortization                                       4,772,917       6,010,057      15,085,708      18,357,303
                                                                   ------------    ------------    ------------    ------------

      Total operating expenses                                       13,477,489      16,766,050      41,504,250      51,058,402
                                                                   ------------    ------------    ------------    ------------

      Operating income                                                  706,192          86,373       1,765,931         597,021

Interest expense                                                     (4,603,575)     (5,115,239)    (14,205,355)    (15,663,033)
Gain (loss) on sale of assets                                           (43,934)     (3,262,273)      6,658,432      (3,517,111)
Interest income and other, net                                           40,654         (56,973)         75,585        (193,649)
                                                                   ------------    ------------    ------------    ------------

      Net loss                                                     $ (3,900,663)   $ (8,348,112)   $ (5,705,407)   $(18,776,772)
                                                                   ============    ============    ============    ============

<FN>

The accompanying notes are an integral part of the consolidated financial statements.
</FN>

</TABLE>

                                       4
<PAGE>

                       GALAXY TELECOM, L.P. AND SUBSIDIARY

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                      For the nine months ended September 30,
                                                      ---------------------------------------
                                                                1999            1998
                                                            ------------    ------------
<S>                                                         <C>             <C>
Cash flows from operating activities:

  Net loss                                                  $ (5,705,407)   $(18,776,772)
  Adjustments to reconcile net loss to net cash
   provided by operating activities:
   Depreciation expense                                       13,137,080      15,501,517
   Amortization expense                                        1,948,628       2,855,786
   Amortization included in interest expense                     990,000         701,082
   Provision for doubtful accounts receivable                    713,763         928,393
   (Gain) loss on sale of assets                              (6,658,432)      3,517,111
   Changes in assets and liabilities:
    Subscriber receivables                                      (793,819)       (436,121)
    Prepaids and other                                         1,953,460       1,098,435
    Accounts payable and accrued expenses                      5,403,780      (1,366,397)
    Subscriber deposits and deferred revenue                    (202,633)       (792,985)
                                                            ------------    ------------

      Net cash provided by operating activities               10,786,420       3,230,049
                                                            ------------    ------------

Cash flows from investing activities:
  Acquisition of cable systems - net of trades                      --          (133,633)
  Proceeds from sales of cable systems                         9,191,149      21,530,553
  Acquisition of capital assets                               (9,579,037)     (7,813,668)
  Other intangible assets                                       (544,860)     (1,160,453)
                                                            ------------    ------------

      Net cash provided by (used in) investing activities       (932,748)     12,422,799
                                                            ------------    ------------

Cash flows from financing activities:
  Borrowings under term debt and revolver                      3,000,000       4,425,000
  Payments under term debt and revolver                       (7,465,000)    (22,550,000)
  Borrowings on other debt                                        77,430       3,853,500
  Payments on other debt                                        (736,231)     (1,479,339)
  Payment of debt issue costs                                   (404,869)       (676,531)
                                                            ------------    ------------

      Net cash used in financing activities                   (5,528,670)    (16,427,370)
                                                            ------------    ------------

Net increase (decrease) in cash and cash equivalents           4,325,002        (774,522)

Cash and cash equivalents, beginning of period                 2,213,777       2,403,098
                                                            ------------    ------------

Cash and cash equivalents, end of period                    $  6,538,779    $  1,628,576
                                                            ============    ============

<FN>

The  accompanying  notes  are an  integral  part of the  consolidated  financial statements.
</FN>
</TABLE>


                                       5
<PAGE>

GALAXY TELECOM, L.P. AND SUBSIDIARY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
UNAUDITED

1.  BASIS OF PRESENTATION AND OTHER INFORMATION

      The attached unaudited interim consolidated financial statements of Galaxy
Telecom,  L.P. and its subsidiary  ("Galaxy" or the "Partnership") are presented
in  accordance  with  the  requirements  of  Article  10 of  Regulation  S-X and
consequently do not include all of the footnote disclosures required for audited
financial  statements by generally accepted accounting  principles.  The results
for  the  three  and  nine  month  periods  ended  September  30,  1999  are not
necessarily  indicative of the results to be expected for the entire 1999 fiscal
year. The accompanying interim consolidated  financial statements should be read
in  conjunction  with  Galaxy's  Annual  Report on Form 10-K for the year  ended
December 31, 1998.

      The following  notes,  insofar as they are  applicable to the three months
and  nine  months  ended  September  30,  1999 and  1998,  are not  audited.  In
management's  opinion,  all  adjustments,  consisting  of only normal  recurring
accruals,  considered  necessary for a fair  presentation  of such  consolidated
financial statements are included.

      The  Partnership has incurred losses each year since its inception and has
a Partnership  deficit of $25.3 million at September 30, 1999.  During 1998, the
Partnership  began  implementation of a strategy whereby it would sell its cable
television  systems in its non-core regions and focus on improving and acquiring
cable  television  systems in its core regions,  which are primarily  located in
Illinois, Kansas, Kentucky, Mississippi and Nebraska. In fiscal 1998 and for the
nine month  period  ended  September  30,  1999,  the  Partnership  received net
proceeds from sales of its non-core  cable  television  systems of $38.6 million
and $9.2 million,  respectively.  These proceeds were primarily used to pay down
the amounts due under its revolving line of credit.  Management  intends to seek
new debt and/or equity  financing and reduce its borrowings  under its revolving
line  of  credit  through  the  sales  of  non-core  systems  in  order  for the
Partnership to meet its business plan and sustain operations.  However, there is
no assurance  that the  Partnership  will be able to implement  its strategy and
raise new capital.

2.    RECENT ACCOUNTING PRONOUNCEMENTS

      In June 1998, the Financial  Accounting  Standards  Board ("FASB")  issued
Statement of Financial  Accounting  Standards ("SFAS") No. 133,  "Accounting for
Derivative Instruments and Hedging Activities." SFAS No. 133, as amended by SFAS
No. 137, is  effective  for all fiscal  quarters of all fiscal  years  beginning
after  June 15,  2000  (January  1,  2001,  for the  Partnership).  SFAS No. 133
requires  that all  derivative  instruments  be recorded on the balance sheet at
their fair value.  Changes in the fair value of  derivatives  are recorded  each
period in current earnings or other comprehensive income, depending on whether a
derivative is designated as part of a hedge  transaction and, if it is, the type
of hedge transaction.

      Management of the Partnership  anticipates that, due to its limited use of
derivative instruments, the adoption of SFAS No. 133 will not have a significant
effect on the Partnership's results of operations or its financial position.



                                       6
<PAGE>

3.    SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

      Interest paid during the nine months ended September 30, 1999 and 1998 was
approximately $9.5 million and $11.2 million, respectively.

      During the first nine months of 1998,  Galaxy traded four systems  located
in and around Sheridan  County,  Nebraska,  representing 853 subscribers for one
system located in Jefferson  County,  Colorado  representing  approximately  800
subscribers.

      During the first nine months of 1999,  Galaxy  traded 18 cable  television
systems  located  primarily in  Colorado,  Iowa and South  Dakota,  representing
approximately  7,500  subscribers  for seven cable  television  systems  located
primarily in Mississippi, representing approximately 7,100 subscribers .

4.  RELATED PARTY TRANSACTIONS

      Galaxy  incurs  management  fees and  expenses  pursuant to the terms of a
management  agreement  with Galaxy Systems  Management,  Inc., an affiliate of a
general  partner,  under which it manages  Galaxy's  business.  Management  fees
totaled  $420,692 for the three months ended September 30, 1999 and $761,759 for
the three months ended September 30, 1998.  Management  fees totaled  $2,325,880
for the nine months ended  September 30, 1999 and $1,643,770 for the nine months
ended September 30, 1998.

5.  LONG-TERM DEBT

      Long-term debt consisted of the following:

                                      September 30,     December 31,
                                           1999             1998
                                      -------------    -------------

          Revolving Credit Facility   $  26,035,000    $  30,500,000
          Senior Subordinated Notes     120,000,000      120,000,000
            Unamortized discount           (360,000)        (405,000)
          Other                           1,691,819        2,350,620
                                      -------------    -------------

                 Total                $ 147,366,819    $ 152,445,620
                                      =============    =============


      In  March  1999,  Galaxy  amended  the  Revolving  Credit  Facility  ("the
Revolver").  The amendment allowed the Partnership to borrow up to $55.9 million
until June 1999 when the outstanding balance converted to a term loan. The first
principal  payment is due on March 31,  2000,  in an amount equal to 5.5% of the
converted balance, and in subsequent quarterly installments  escalating annually
from 22 percent to 30 percent of the converted  balance  through  December 2002.
The Revolver will require Galaxy to maintain  compliance with certain  financial
ratios and other  covenants,  such as total debt to annualized  cash flow,  cash
flow to interest expense,  capital expense limits and basic subscribers to total
long term debt. The financial  covenants in the Revolver may significantly limit
Galaxy's ability to borrow under the Revolver.


                                       7
<PAGE>


      The  required  principal  payments  on Galaxy's  long-term  debt and other
obligations  at September 30, 1999,  assuming no additional  borrowings,  are as
follows:

        Remaining principal payments due in 1999       $     113,451
        Remaining principal payments due in 2000           8,124,131
        Remaining principal payments due in 2001           9,534,237
        Remaining principal payments due in 2002           9,955,000
        Remaining principal payments due in 2003                 -
        Remaining principal payments due thereafter      120,000,000
                                                         -----------
                                                       $ 147,726,819
                                                         ===========

6.    SALES, ACQUISITIONS AND TRADES

    On February 12, 1999,  Galaxy sold one satellite  master antenna  television
system ("SMATV") located in Spring Creek,  Georgia,  representing  approximately
1,000  subscribers for  approximately  $1,220,000,  or approximately  $1,220 per
subscriber,  and recorded a gain on sale of approximately  $1.0 million.  Galaxy
used the proceeds from this sale to pay down principal of the revolving note.

      On May 1, 1999,  Galaxy traded 18 cable television  systems,  representing
approximately 7,500 subscribers for seven cable television systems, representing
approximately 7,100 subscribers from Mississippi  Cablevision,  Inc. ("MCI"), an
affiliate of  Telecommunications,  Inc. The Galaxy cable television  systems are
located  primarily  in  Colorado,  Iowa and  South  Dakota,  while the MCI cable
television systems are located in Mississippi.  The trade was accounted for as a
business combination in accordance with the Accounting  Principles Board Opinion
No. 16 "Business  Combinations."  The  estimated  fair market value of the cable
television  systems  received was  approximately  $9.4 million or  approximately
$1,300 per  subscriber.  The fair market value of the cable  television  systems
received was estimated by using the purchase  price (price per  subscriber)  for
similar cable television  systems bought from MCI by an affiliate of Galaxy. The
net historical cost of the cable television  systems given up was  approximately
$5.8 million, resulting in Galaxy recording a gain on sale of approximately $3.5
million, net of expenses.

    On June 23, 1999, Galaxy sold 24 cable television systems, located primarily
in Alabama,  representing approximately 5,500 subscribers for approximately $8.4
million, or approximately $1,540 per subscriber,  and recorded a gain on sale of
approximately  $2.2  million.  Galaxy used a majority of the proceeds  from this
sale to pay down principal of the revolving note.

7.   COMMITMENTS AND CONTINGENCIES

      LITIGATION

      Certain  customers  in  Mississippi  have filed a class action in the U.S.
District  Court for the Northern  District of  Mississippi  alleging that Galaxy
illegally  charged a late fee on monthly cable bills. The Partnership has denied
any liability with respect to this claim and is defending  this action.  Similar
class actions  against other cable  companies have been filed in several states,
some of which  have been  successful.  At this  point,  management  is unable to
predict the likely outcome or the potential for an adverse judgment,  if any. An
adverse judgment against the Partnership  could have a material,  adverse effect
on the  Partnership's  consolidated  financial  position,  or future  results of
operations  or cash flows.  Management  has not  recorded  any  liability in the
consolidated  financial  statements that may arise from the adjudication of this
lawsuit.

                                       8
<PAGE>

      Galaxy is also subject to various legal and administrative  proceedings in
the  ordinary  course of business.  Management  believes the outcome of any such
proceedings  will  not  have a  material  adverse  effect  on the  Partnership's
consolidated financial position, or future results of operations or cash flows.

8.    SUBSEQUENT EVENT

    On  October  1,  1999,  Galaxy  sold 10 cable  television  systems,  located
primarily  in  Missouri,   representing   approximately  1,165  subscribers  for
approximately $1.36 million, or approximately $1,161 per subscriber. Galaxy used
a majority of the proceeds from this sale to pay down principal of the revolving
note.


                                       9
<PAGE>

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

      RECENT DEVELOPMENTS

    On February 12, 1999,  Galaxy sold one satellite  master antenna  television
system ("SMATV") located in Spring Creek,  Georgia,  representing  approximately
1,000  subscribers for  approximately  $1,220,000,  or approximately  $1,220 per
subscriber,  and recorded a gain on sale of approximately  $1.0 million.  Galaxy
used the proceeds from this sale to pay down principal of the revolving note.

      On May 1, 1999,  Galaxy traded 18 cable television  systems,  representing
approximately 7,500 subscribers for seven cable television systems, representing
approximately 7,100 subscribers from Mississippi  Cablevision,  Inc. ("MCI"), an
affiliate of  Telecommunications,  Inc. The Galaxy cable television  systems are
located  primarily  in  Colorado,  Iowa and  South  Dakota,  while the MCI cable
television systems are located in Mississippi.  The trade was accounted for as a
business combination in accordance with the Accounting  Principles Board Opinion
No. 16 "Business  Combinations."  The  estimated  fair market value of the cable
television  systems  received was  approximately  $9.4 million or  approximately
$1,300 per  subscriber.  The fair market value of the cable  television  systems
received was estimated by using the purchase  price (price per  subscriber)  for
similar cable television  systems bought from MCI by an affiliate of Galaxy. The
net historical cost of the cable television  systems given up was  approximately
$5.8 million, resulting in Galaxy recording a gain on sale of approximately $3.5
million, net of expenses.

    On June 23, 1999, Galaxy sold 24 cable television systems, located primarily
in Alabama,  representing approximately 5,500 subscribers for approximately $8.4
million, or approximately $1,540 per subscriber,  and recorded a gain on sale of
approximately $2.2 million.  Galaxy used the proceeds from this sale to pay down
principal of the revolving note.

    On  October  1,  1999,  Galaxy  sold 10 cable  television  systems,  located
primarily  in  Missouri,   representing   approximately  1,165  subscribers  for
approximately $1.36 million, or approximately $1,161 per subscriber. Galaxy used
a majority of the proceeds from this sale to pay down principal of the revolving
note.

      RESULTS OF OPERATIONS

      The following  table sets forth the  percentage  relationship  of selected
income statement items as a percentage of revenues for the three months and nine
months ended  September 30, 1999 and  September  30, 1998.  Amounts shown are in
thousands.

                                      10
<PAGE>

<TABLE>
<CAPTION>

                                               For the three months ended                For the nine months ended
                                          --------------------------------------     --------------------------------------
                                          September 30, 1999   September 30, 1998    September 30, 1999   September 30, 1998
                                          -----------------    ------------------     -----------------    -----------------
                                           Amount       %        Amount       %        Amount      %        Amount       %
                                          --------    -----     --------    -----     --------   -----     --------    -----

<S>                                      <C>         <C>       <C>         <C>       <C>         <C>       <C>         <C>
Revenues                                 $ 14,184    100.0%    $ 16,852    100.0%    $ 43,271    100.0%    $ 51,655    100.0%
                                         --------    -----     --------    -----     --------    -----     --------    -----

Operating expenses:
   Systems operations                       6,794     47.9%       7,925     47.0%      20,379     47.1%      24,120     46.7%
   Selling, general and administrative      1,490     10.5%       2,069     12.3%       4,396     10.2%       6,255     12.1%
   Management fees to affiliate               421      3.0%         762      4.5%       1,644      3.8%       2,326      4.5%
   Depreciation and amortization            4,773     33.7%       6,011     35.7%      15,086     34.9%      18,358     35.5%
                                         --------    -----     --------    -----     --------    -----     --------    -----

   Total operating expenses                13,478     95.0%      16,767     99.5%      41,505     96.0%      51,059     98.8%
                                         --------    -----     --------    -----     --------    -----     --------    -----

     Operating income                         706      5.0%          85      0.5%       1,766      4.1%         596      1.2%

Interest expense                           (4,604)   (32.5%)     (5,115)   (30.4%)    (14,205)   (32.8%)    (15,663)   (30.3%)
Gain (loss) on sale of assets                 (44)    (0.3%)     (3,261)   (19.4%)      6,658     15.4%      (3,516)    (6.8%)
Other income (expense), net                    41      0.3%         (57)    (0.3%)         76      0.2%        (194)    (0.4%)
                                         --------    -----     --------    -----     --------    -----     --------    -----

Net loss                                 $ (3,901)   (27.5%)   $ (8,348)   (49.5%)   $ (5,705)   (13.2%)   $(18,777)   (36.4%)
                                         ========    =====     ========    =====     ========    =====     ========    =====
</TABLE>

      The following table sets forth demographic  information as of December 31,
1998, March 31, 1999, June 30, 1999 and September 30, 1999.


                       December 31,  March 31,     June 30,     September 30,
                         1998          1999        1999 (1)        1999
                         ----          ----        --------        ----

Homes Passed            228,861       227,620      225,226       214,341
Basic Subscribers       135,991       135,977      134,233       126,861
Basic Penetration        59.42%       59.74%        59.60%        59.19%
Revenue per Subscriber   $35.62       $36.52        $35.94        $36.93

Premium Subscribers      63,152       61,870        61,133        57,013
Premium Penetration      46.44%       45.50%        45.54%        44.94%



(1) Includes the  demographic  information of the Alabama systems sold effective
June 25, 1999.

                                        11
<PAGE>

      Galaxy generated revenues in the amount of $14,183,681 and $43,270,181 for
the three-month and nine-month  periods ended September 30, 1999,  respectively.
For the  three-month  and nine-month  periods ended  September 30, 1998,  Galaxy
generated  revenues in the amount of $16,852,423 and $51,655,423,  respectively.
The  decrease  in  revenue  from  1998 to 1999 was a result  of a  reduction  in
subscribers  due to the  sale of  non-core  cable  systems.  Galaxy  was able to
realize  additional  revenue per subscriber by increasing basic rates in certain
systems and from  increasing  data service revenue from its fiber optic network.
As a result, average revenues per subscriber increased from $35.62 for the three
months ended  September 30, 1998 to $36.93 for the three months ended  September
30, 1999.

      For the three months ended September 30, 1999 and 1998,  system  operating
expenses,   consisting  of  subscriber   costs,   technician  costs  and  system
maintenance costs, were $6,793,725 and $7,925,228, respectively. As a percentage
of  revenues,  these  expenses  increased  from 47.0% for the three months ended
September  30,  1998 to 47.9% in the  comparable  period  of 1999.  For the nine
months  ended  September  30,  1999 and 1998,  system  operating  expenses  were
$20,378,609  and  $24,120,258,  respectively,  and, as a percentage of revenues,
increased  from 46.7% for the nine months ended  September  30, 1998 to 47.1% in
the  comparable  period of 1999.  These  expenses  increased as a percentage  of
revenue primarily due to increased programming costs to Galaxy.

      Selling,  general and administrative  expenses, which include office rents
and  maintenance,   marketing  costs  and  corporate  expenses,  decreased  from
$2,069,006  to  $1,490,154  for the three months ended  September  30, 1999,  as
compared to the three months ended  September  30,  1998.  Selling,  general and
administrative  expenses  decreased  from  $6,254,961 to $4,396,163 for the nine
months ended  September 30, 1999 as compared to the nine months ended  September
30,  1998.  For the  three-month  period  ended  September  30,  these  expenses
decreased  as a percentage  of revenue from 12.3% in 1998 to 10.5% in 1999.  For
the nine-month period ended September 30, these expenses decreased from 12.1% in
1998 to 10.2% in 1999.  The  decrease  in these  expenses is  attributable  to a
decrease  in   marketing   costs  and  a  decrease  in  call  center  and  other
administrative costs due to the sale of non-core cable systems.

      For the three months ended September 30, 1999 and 1998,  depreciation  and
amortization expense was $4,772,917,  or 33.7% of revenues,  and $6,010,057,  or
35.7% of revenues,  respectively.  For the nine months ended  September 30, 1999
and 1998,  depreciation  and amortization  expense was $15,085,708,  or 34.9% of
revenues,  and $18,357,303 or 35.5% of revenues,  respectively.  The decrease in
these expenses is  attributable to the sale of cable  television  systems in the
Partnership's non-core areas.

      For the three months ended September 30, 1999 and 1998,  interest  expense
was $4,603,575 and $5,115,239, respectively. For the nine months ended September
30,  1999  and  1998,   interest   expense  was  $14,205,355  and   $15,663,033,
respectively.  The decrease in interest  expense is primarily due to a reduction
in the outstanding balance of the Revolving Credit Facility. During 1998, Galaxy
paid $28.7  million  towards the  principal of the  Revolving  Credit  Facility.
During the first nine  months of 1999,  Galaxy  paid $7.5  million  towards  the
principal of the Revolving Credit Facility.

      Gain (loss) on sale of assets  went from a net loss on sale of  $3,262,273
for the three months ended  September 30, 1998, to a net loss on sale of $43,934
for the three months  ended  September  30, 1999.  Gain (loss) on sale of assets
went from a net loss on sale of $3,517,111  for the nine months ended  September
30,  1998,  to a net  gain on sale of  $6,658,432  for  the  nine  months  ended
September 30, 1999.

                                       12
<PAGE>

      Interest income and other,  net, which includes  interest income and other
expenses, reflected a net income of $40,655 for the three months ended September
30, 1999 and a net expense of $56,973 for the three months ended  September  30,
1998.  For the nine months ended  September 30, 1999 interest  income and other,
net,  reflected a net income of  $75,586,  compared to a net expense of $193,647
for the nine months ended September 30, 1998. This was mainly due to an increase
in interest income, offset by a decrease in other expenses.

      Galaxy as an entity pays no income taxes,  although it is required to file
federal and state income tax returns for informational purposes only. All income
or  loss  "flows  through"  to  the  partners  of  Galaxy  as  specified  in the
Partnership agreement.

      LIQUIDITY AND CAPITAL RESOURCES

      The  Partnership has incurred losses each year since its inception and has
a Partnership  deficit of $25.3 million at September 30, 1999.  During 1998, the
Partnership  began  implementation of a strategy whereby it would sell its cable
television  systems in its non-core regions and focus on improving and acquiring
cable  television  systems in its core regions,  which are primarily  located in
Illinois,  Kansas, Kentucky,  Mississippi and Nebraska. . In fiscal 1998 and for
the nine month period ended  September 30, 1999,  the  Partnership  received net
proceeds from sales of its non-core  cable  television  systems of $38.6 million
and $9.2 million,  respectively.  These proceeds were primarily used to pay down
the amounts due under its revolving line of credit.  Management  intends to seek
new debt and/or equity  financing and reduce its borrowings  under its revolving
line  of  credit  through  the  sales  of  non-core  systems  in  order  for the
Partnership to meet its business plan and sustain operations.  However, there is
no assurance  that the  Partnership  will be able to implement  its strategy and
raise new capital.

      As of  September  30,  1999,  Galaxy  had  $6,538,779  in  cash  and  cash
equivalents.  As of such date,  total  liabilities  less long-term debt exceeded
cash and cash equivalents by $17,594,827. Galaxy expects to fund this deficiency
through its operating cash flows,  the Revolving  Credit Facility and new equity
or debt financing.

      Operating cash flows is defined as earnings before interest,  depreciation
and amortization  expense,  and other extraordinary items. Due to the results of
operations discussed above, Galaxy generated operating cash flows of $5,479,109,
or 38.6% of operating revenues, and $6,096,430,  or 36.0% of operating revenues,
for the three months ended  September  30, 1999 and 1998,  respectively.  Galaxy
generated  operating cash flows of $16,851,639,  or 38.9% of operating revenues,
and  $18,954,324,  or 36.7% of  operating  revenues,  for the nine months  ended
September 30, 1999 and 1998, respectively.

      Galaxy had aggregate  indebtedness of approximately $147.4 million (net of
unamortized discount of $360,000) as of September 30, 1999,  representing $120.0
million of 12.375% Senior  Subordinated  Notes due in 2005 (the "Notes"),  $26.0
million outstanding debt under its Revolving Credit Facility and $1.7 million of
other bank debt.  The Revolving  Credit  Facility,  which has been  periodically
amended,  with the  latest  amendment  occurring  in March,  1999,  allowed  the
Partnership  to borrow up to $55.9 million until June 1999 when the  outstanding
balance  converted to a term loan. The first  principal  payment is due on March
31, 2000, in an amount equal to 5.5% of the converted balance, and in subsequent
quarterly installments  escalating annually from 22 percent to 30 percent of the
converted  balance through December 2002. Net proceeds from any system sale will
be used to reduce the outstanding  balance under the Revolving  Credit Facility.
The Revolving  Credit  Facility will require Galaxy to maintain  compliance with
certain  financial ratios and other covenants,  such as total debt to annualized
cash flow,  cash flow to  interest  expense,  capital  expense  limits and basic
subscribers to total  long-term  debt. The financial  covenants in the Revolving
Credit Facility may significantly limit Galaxy's ability to borrow under it.

                                       13
<PAGE>

        As of  September  30,  1999,  Galaxy had $97.7  million  in systems  and
equipment  consisting  of $92.1  million of cable  television  systems  and $5.6
million of  vehicles,  equipment,  buildings  and office  equipment,  all net of
accumulated  depreciation.  Galaxy had capital expenditures (exclusive of system
acquisitions)  of $9.6 million for the nine months ended September 30, 1999. For
the nine months  ended  September  30,  1998,  Galaxy had  capital  expenditures
(exclusive of system  acquisitions) of $7.8 million.  These capital expenditures
were financed  mainly through the Revolving  Credit Facility and cash flows from
operations.  During the first nine months of 1999, Galaxy's capital expenditures
were  primarily  used to add  channels,  eliminate  headends by  interconnecting
adjacent systems with fiber-optic  cable, and construct  wide-area  networks for
distance learning and data services.

      Galaxy's net cash provided from operating  activities was  $10,786,420 and
$3,230,049 for the nine months ended September 30, 1999 and 1998,  respectively,
an increase in net cash  provided by operating  activities of  $7,556,371.  This
increase is due to an increase in accounts  payable and accrued  expenses  and a
decrease in prepaids and other during the periods.

      Galaxy used net cash in  investing  activities  of  $932,748  for the nine
months  ended  September  30,  1999,  and had net  cash  provided  by  investing
activities  of  $12,422,799  for the nine months  ended  September  30,  1998, a
decrease in net cash  provided by  investing  activities  of  $13,355,547.  This
decrease is primarily  due to a decrease in cash provided by proceeds from sales
of cable systems during the first nine months of 1999 as compared to 1998.

      Galaxy used net cash in financing activities of $5,528,670 and $16,427,370
for the nine months ended September 30, 1999 and 1998, respectively,  a decrease
in net cash used in  investing  activities  of  $10,898,700.  This  decrease was
mainly due to less payments made under the Revolver during the first nine months
of 1999.

      Galaxy's cash flows have been sufficient to meet its debt service, working
capital and capital  expenditure  requirements.  Galaxy  expects that it will be
able to meet its short-term and long-term requirements for debt service, working
capital and capital  expenditures  and to fund future cable system  acquisitions
through its operating cash flows, proceeds from sales of non-core assets and its
access to additional capital in the public and private debt markets.

      YEAR 2000

      The year 2000 ("Y2K") issue concerns the inability of information  systems
to properly recognize and process  date-sensitive  information beginning January
1, 2000. This section is a Year 2000 Readiness Disclosure.

      Galaxy has put a program in place  designed to bring  information  systems
and software into Y2K compliance in time to minimize any significant detrimental
effects on operations.  The program covers information  systems  infrastructure,
financial  and  administrative  systems,  process  control and cable  television
systems.  Galaxy's  program  recognizes that date sensitive  systems may fail at
different  points in time  depending  on their  function.  Galaxy  is  utilizing
internal  personnel,  contract  programmers  and vendors to identify Y2K issues,
modify  code  and test the  modifications.  In most  cases,  these  third  party
programmers and vendors have verified their Y2K compliance with Galaxy.  In some
cases,  non-compliant  software and hardware will be replaced.  The steps Galaxy
has taken in this program include (1) planning and awareness, (2) identification
of where failures may occur, (3) resolution  including  repair and upgrade,  and
(4) deployment of compliant systems. The first two steps, planning and awareness
and identification are largely completed.

                                       14
<PAGE>

      The following table  illustrates  Galaxy's present status of completion of
each step of its Y2K program.

                                  Percentage              Expected
                                   completed             Completion
Phase                          within each step              Date
--------------------------    ------------------       --------------
Planning and awareness               100%                    --
Identification                       100%                    --
Resolution                            95%               November 1999
Deployment                            95%               December 1999

      The  completion  dates set  forth  above  are  based on  Galaxy's  current
expectations.  However,  due to the uncertainties  inherent in the Y2K issue, no
assurances  can be given as to whether such  projects  will be completed on such
dates.  Galaxy  expects  the  total  incremental  cost  of the Y2K  issue  to be
approximately  $75,000.  This estimated cost does not include any normal ongoing
costs for computer  hardware or software that would be replaced even without the
presence  of the Y2K issue.  Galaxy has spent  approximately  $15,000 in its Y2K
effort during the first nine months of 1999.  The occurrence of the remainder of
these  costs is  expected  during  1999,  and the payment of a majority of these
costs has been and will be provided from operations.

      Galaxy has been  focusing its efforts on  identification,  resolution  and
deployment  of  its  Y2K  exposures  and  has  not  yet  developed   significant
contingency plans in the event it encounters  unknown events.  Galaxy intends to
examine its status periodically to determine whether such plans are necessary.

      The  failure  to  correct  a  material  Y2K  problem  could  result  in an
interruption or failure of certain  important  business  operations.  Management
believes  that  its  Y2K  program  will  significantly   reduce  Galaxy's  risks
associated  with  the  changeover  to  the  Y2K  and  is  implementing   certain
contingency   plans  to  minimize  the  effect  of  any  potential  Y2K  related
disruptions.  The risks and the uncertainties discussed below and the associated
contingency  plans relate to systems,  software,  equipment,  and services  that
Galaxy has deemed critical in regard to customer service,  business  operations,
financial impact or safety.

      Customer  service networks and/or automated voice response systems failure
could  prevent  access to  customer  account  information,  hamper  installation
scheduling and disable the processing of pay-per-view requests.  Galaxy plans to
have its customer service  representatives answer telephone calls from customers
in the event of outages  and  expects to retrieve  needed  customer  information
manually from the billing service provider.

      Galaxy is  dependent  on  third-party  vendors.  For  example,  if a cable
programmer  encounters  Y2K  problems  that  impede its  ability to deliver  its
programming,  Galaxy  will be unable to provide  that  programming  to its cable
customers. Galaxy has attempted to ascertain its vendors' state of Y2K readiness
through  questionnaires,  interviews,  industry  group  participation  and other
available means.  Galaxy has not received any response from third-party  vendors
that indicate a problem with the Y2K issue. There can be no assurance,  however,
that such a problem will not occur.

                                       15
<PAGE>

      A failure of the services provided by Convergys,  Galaxy's billing service
provider,  could result in a loss of customer  records  which could  disrupt the
ability to bill  customers  for a  protracted  period.  Galaxy  plans to prepare
electronic backup records of its customer billing  information prior to the year
2000 to allow for data recovery.  In addition,  Galaxy  continues to monitor the
Y2K readiness of Convergys.

      Advertising  revenue could be adversely affected by the failure of certain
equipment  which could impede or prevent the insertion of  advertising  spots in
Galaxy's  programming.  Galaxy  anticipates  that it can minimize such effect by
manually resetting the dates each day until the equipment is repaired.

      In the event that the local public  utility  cannot supply  power,  Galaxy
will not be able to supply power to most of its cable headends and office sites.

      The financial impact of any or all of the above  worst-case  scenarios has
not been and cannot be estimated by Galaxy due to the numerous uncertainties and
variables associated with such scenarios.

      Despite  Galaxy's  efforts in  addressing  the Y2K issue,  there can be no
assurance that partial or total systems  interruptions or the costs necessary to
update  hardware  and  software  would not have a material  adverse  effect upon
Galaxy's business,  financial condition,  and results of operations and business
prospects.

      SAFE HARBOR UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

      The statements  contained in this Form 10-Q relating to Galaxy's operating
results, and plans and objectives of management for future operations, including
plans or  objectives  relating to Galaxy's  products  and  services,  constitute
forward  looking  statements  within  the  meaning  of  the  Private  Securities
Litigation  Reform Act of 1995.  Actual results of Galaxy may differ  materially
from those in the forward-looking  statements and may be affected by a number of
factors including the receipt of regulatory  approvals,  the success of Galaxy's
implementation of digital technology,  subscriber equipment availability,  tower
space  availability,  and the absence of interference,  as well as other factors
contained herein and in Galaxy's other securities filings.

      Galaxy's future revenues and profitability are difficult to predict due to
a variety of risks and  uncertainties,  including  (i) business  conditions  and
growth in Galaxy's existing  markets,  (ii) the successful launch of systems and
technologies in new and existing markets,  (iii) Galaxy's existing  indebtedness
and the need for additional  financing to fund subscriber  growth and system and
technological  development,   (iv)  government  regulation,   including  Federal
Communications  Commission  regulations,  (v)  Galaxy's  dependence  on  channel
leases,  (vi) the  successful  integration  of  future  acquisitions  and  (vii)
numerous competitive factors,  including alternative methods of distributing and
receiving video transmissions.

      Galaxy expects to continue its subscriber  growth within existing  systems
and launch additional  systems.  Moderate  increases in revenues and subscribers
are anticipated in 1999; however,  the rate of increase cannot be estimated with
precision or certainty. Galaxy believes that general and administrative expenses
and depreciation  and amortization  expense will continue to increase to support
overall growth.

      Because of the foregoing uncertainties affecting Galaxy's future operating
results, past performance should not be considered to be a reliable indicator of
future performance, and investors should not use historical results or trends as
determinative   of  Galaxy's   future   performance.   In   addition,   Galaxy's
participation in a developing  industry  employing  rapidly changing  technology
could  result  in  significant  volatility  in the  market  value of the  Senior
Subordinated Notes.

                                       16
<PAGE>

      In addition to the matters noted above,  certain other  statements made in
this Form 10-Q are forward  looking.  Such statements are based on an assessment
of a variety of factors,  contingencies  and  uncertainties  deemed  relevant by
management,  including technological changes,  competitive products and services
and management  issues. As a result, the actual results realized by Galaxy could
differ materially from the statements made herein. Readers of this Form 10-Q are
cautioned not to place undue reliance on the forward looking  statements made in
this Form 10-Q or in Galaxy's other securities filings.

      For  information on the impact of recent  accounting  pronouncements,  see
Note 2 to the consolidated financial statements, appearing elsewhere herein.

Item 3. - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

      Galaxy is not directly  exposed to any foreign exchange rates or commodity
price fluctuations.

      Galaxy is exposed to changes in interest rates due to its variable rate of
interest (LIBOR plus 3.25%) on its revolving line of credit.

     Based on Galaxy's  variable  debt at  September  30, 1999, a 1% increase in
market interest rates would increase yearly interest expense and decrease income
by  approximately  $147,300.  This  amount  was  calculated  using the  variable
interest  rate in effect at  September  30, 1999,  assuming a constant  level of
variable-rate  debt.  This amount  does not include the effects of other  events
that  could  affect  interest  rates,  such as a downturn  in  overall  economic
activity,  or actions  management  could take to lessen risk. This also does not
take into account any changes in Galaxy's  financial  structure  that may result
from higher interest rates.



                                       17
<PAGE>

PART II.  OTHER INFORMATION

Items 1 through 5.

None.

Item 6.  Exhibits and Reports on Form 8-K

  Exhibits.  The following exhibits are included or incorporated by
  reference below.

      27.  Financial Data Schedule

  (b) Reports of Form 8-K. No reports on Form 8-K were filed  during the quarter
  ended September 30, 1999.



                                       18
<PAGE>

SIGNATURES

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.

                                      GALAXY TELECOM, L.P.
                                BY:   Galaxy Telecom, Inc.

                                      as General Partner

Date: November 12, 1999              /s/ J. Keith Davidson
                               -------------------------------------
                                BY:    J. Keith Davidson
                                       Vice President-Finance
                                      (Principal Financial Officer)

                                       19
<PAGE>

                                  EXHIBIT INDEX

Exhibit Number             Description

--------------               ----------------------------------
    27            Financial Data Schedule