U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                  FORM 10-QSB

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

                    For quarterly period ended September 30, 1997

            [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF
                       THE SECURITIES EXCHANGE ACT OF 1934
           For the transition period from ......... to ...............

                          Commission File No.: 0-22254

                       INTELLIGENT DECISION SYSTEMS, INC.
        (Exact name of small business issuer as specified in its charter)

                DELAWARE                                38-3286394
      (State or other jurisdiction of      (I.R.S. Employer Identification No.)
       incorporation or organization)


                                 88 Danbury Road
                            Wilton, Connecticut 06987


                    (Address of Principal Executive Offices)

                                  203-761-1057
                            (Issuer's Telephone No.)


                                 No Changes
       (Former name and former fiscal year if changed since last report)
                                  
 
           Weyhill Building, Suite 400, 2025 East Beltline Ave., SE,
                          Grand Rapids, Michigan 49546
                  (Former address if changed since last report)
            
      Check  whether  the issuer (1) filed all  reports  required to be filed by
Section 13 or 15(d) of the  Exchange  Act of 1934  during the past 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 [ ].


                    APPLICABLE ONLY TO CORPORATE ISSUERS:

      State the number of shares  outstanding of each of the Issuer's classes of
common equity, as of the latest practicable date.

Title of Class: Common Stock

Shares outstanding at:   November 10, 1997: 15,228,712

Transitional Small Business Disclosure Format:    Yes [  ];  No [x]



<PAGE>



                      INTELLIGENT DECISION SYSTEMS, INC.


                                  I N D E X

PART  I                 FINANCIAL INFORMATION                    PAGE NO.


      Item 1.  Financial Statements

             Condensed Consolidated Balance Sheets
               September 30, 1997 and June 30, 1997                   1

             Condensed Consolidated Statements of Operations
               for the  three months ended  September 30, 1997
               and September 30, 1996                                 3

             Condensed Consolidated Statements of Cash Flows
               for the three months ended  September
               30, 1997 and September 30, 1996                        4

             Notes to Condensed Consolidated Financial
               Statements                                             5




      Item 2. Management's Discussion and Analysis or Plan
               of Operation                                           8

PART  II                OTHER INFORMATION

      Item 1.  Legal Proceedings                                      13
      Item 2.  Changes in Securities                                  13
      Item 3.  Defaults Upon Senior Securities                        13
      Item 4.  Submission of Matters to a Vote of Security Holders    13
      Item 5.  Other Information                                      13
      Item 6.  Exhibits and Reports on Form 8-K                       13

      Signatures                                                      14






<PAGE>

Part I. - Financial Information

Item 1.  Financial Statements


              INTELLIGENT DECISION SYSTEMS, INC. AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS
--------------------------------------------------------------------------------

                                     ASSETS

                                                 Sept. 30,           June 30,
                                                   1997                1997
                                               ------------        ------------
                                               (unaudited)

CURRENT ASSETS
     Cash and cash equivalents                $     19,187         $   355,009
     Accounts Receivable
       Trade, net of allowance for doubtful
         accounts of $16,598 and $16,598,
         respectively                              107,643             123,795
     Net investment in direct
       finance leases, current portion              84,101             342,205
     Inventories                                    48,557              53,534
     Contractual rights                            371,659             420,282
     Prepaid expenses                               31,563              36,740
                                                 ---------           ---------
TOTAL CURRENT ASSETS                               662,710           1,331,565

PROPERTY AND EQUIPMENT, NET                        348,006             392,412

OTHER ASSETS
     Contractual rights                             15,396              24,604
     Net investment in direct finance
       leases, net of current portion              174,355             199,914
     Intellectual property - net of
      amortization                               1,279,762           1,369,048
     Other - net of amortization                   152,694             157,033
                                                 ---------           ---------
                                               $ 2,632,923          $3,474,576
                                                 =========           =========







The  accompanying  notes  are an  integral  part of the  condensed  consolidated
financial statements.




                                        1
<PAGE>



              INTELLIGENT DECISION SYSTEMS, INC. AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS
--------------------------------------------------------------------------------


                    LIABILITIES AND STOCKHOLDERS' EQUITY

                                                 Sept. 30,           June 30,
                                                   1997                1997
                                               -----------        ------------
                                               (unaudited)
CURRENT LIABILITIES
     Related party notes payable               $   128,494         $    30,553
     Accounts payable                              875,638             890,388
     Accrued expenses                              438,994             702,702
     Long term obligations, current                195,707             121,355
                                                ----------          ----------

     TOTAL CURRENT LIABILITIES                   1,638,833           1,744,998

LONG-TERM OBLIGATIONS, net of current portion      534,486             333,338

COMMITMENTS AND CONTINGENCIES                            0                   0

STOCKHOLDERS' EQUITY
     Preferred stock; $.001 par value;
       1,000,000 and 1,000,000 shares
       authorized; 0 and 0 shares
       issued and outstanding;
       cumulative, 7% payable annually                   0                   0
     Additional paid-in capital - preferred              0                   0
     Common stock; $.001 and 30,000,000 and
       30,000,000 shares authorized;
       14,748,196 and 14,548,196
       shares issued and outstanding                14,748              14,548
     Additional paid in capital - common        13,248,464          13,076,276
     Accumulated deficit                       (12,803,608)        (11,694,584)
                                                ----------          ----------
TOTAL STOCKHOLDERS' EQUITY                         459,604           1,396,240
                                                ----------          ----------

                                               $ 2,632,923         $ 3,474,576
                                                ==========          ==========

The  accompanying  notes  are an  integral  part of the  condensed  consolidated
financial statements.



                                        2
<PAGE>



              INTELLIGENT DECISION SYSTEMS, INC. AND SUBSIDIARIES
           CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
--------------------------------------------------------------------------------


                                      Three Months Ended
                                          Sept. 30,
                                   ------------------------
                                      1997           1996
                                   ---------      ---------

Revenues                        $   264,819    $   215,123

Costs of Goods and Services         398,109        345,013
                                  ---------      ---------
Gross Profit (Loss)                (133,290)      (129,890)

Expenses
  Selling                           257,843        205,740
  Administration                    368,995        438,370
  Research & development            170,957        192,058
  Depreciation & amortization       149,324        138,427
  Interest expense                   34,727          8,455
                                  ---------      ---------
                                    981,846        983,050

Net loss from operations         (1,115,136)    (1,112,940)

Other income (expense)                6,112         35,251

                                  ---------      ---------
Net loss                        $(1,109,024)   $(1,077,689)
                                  =========      =========

Net loss per share                 $(0.08)        $(0.08)
                                     ====           ====
Weighted average
 shares outstanding              14,681,529      12,895,934
                                 ==========      ==========



The  accompanying  notes  are an  integral  part of the  condensed  consolidated
financial statements.



                                        3
<PAGE>


              INTELLIGENT DECISION SYSTEMS, INC. AND SUBSIDIARIES
           CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
--------------------------------------------------------------------------------

                                      Three Months Ended
                                          Sept. 30,
                                   ------------------------
                                      1997           1996
                                   ---------      ---------

Net cash flows from
     operating activities        $(1,104,903)   $(1,398,871)

Net cash flows from
     investing activities            283,640        (45,899)

Net cash flows from
     financing activities            485,441        585,740
                                   ---------      ---------
Net change in
     cash and equivalents           (335,822)      (859,030)
Beginning cash and equivalents       355,009      3,064,329
                                   ---------      ---------
  Ending cash
     and equivalents             $    19,187    $ 2,205,299
                                   =========      =========










The  accompanying  notes  are an  integral  part of the  condensed  consolidated
financial statements.



                                        4

<PAGE>


              INTELLIGENT DECISION SYSTEMS, INC. AND SUBSIDIARIES
        Notes to Condensed Consolidated Financial Statements (Unaudited)
--------------------------------------------------------------------------------


Note A -- Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial  information  and with the  instructions  contained in Regulation S-B.
Accordingly,  they do not include all of the information and footnotes  required
by generally accepted accounting  principles for complete financial  statements.
In the opinion of management,  all adjustments  (consisting of normal  recurring
accruals)  considered  necessary  for a fair  presentation  have been  included.
Operating  results for the three month period ended  September  30, 1997 are not
necessarily  indicative  of the results that may be expected for the year ending
June 30, 1998. The unaudited  condensed  financial  statements should be read in
conjunction  with the financial  statements  and notes  thereto  included in the
Company's  annual  report on Form 10-KSB for the year ended June 30,  1997.  The
year end condensed consolidated balance sheet was derived from audited financial
statements,   but  does  not  include  all  disclosures  by  generally  accepted
accounting principles.

Note B -- Stockholders' Equity

Changes in  stockholders'  equity for the three months ended  September 30, 1997
are:

<TABLE>
<CAPTION>
                                   Common Stock

                                              Additional                        Total
                                               Paid-in      Accumulated      Stockholders'
                           Shares     Amount    Capital       Deficit          Equity

<S>                     <C>          <C>      <C>           <C>              <C>

Balance, June 30,
  1997                  14,548,193   $14,548  $13,076,276   $(11,694,584)    $1,396,240

Exercise of
  warrants and options     200,000       200      111,800                       112,000

Stock options
  issued for services                               5,000                         5,000

Stock option
  exercise price
  reductions granted
  for services and
  settlements                                      55,388                        55,388

Net loss                                                      (1,109,024)    (1,109,024)
                        ----------    ------   ----------     ----------     ----------
Balance, June 30,
  1997                  14,748,196   $14,748  $13,248,464   $(12,803,608)   $   459,604
                        ==========    ======   ==========     ==========     ==========
</TABLE>
                                       5
<PAGE>

              INTELLIGENT DECISION SYSTEMS, INC. AND SUBSIDIARIES
        Notes to Condensed Consolidated Financial Statements (Unaudited)
--------------------------------------------------------------------------------

Note C -- Earnings Per Share Computation

Earnings per share  amounts are based on the weighted  average  number of shares
outstanding exclusive of warrants and options in view of the fact that inclusion
of these common stock equivalents would be anti-dilutive.

Note D -- Related Party Transactions

During the three months ended  September 30, 1997, Mid America  Venture  Capital
Fund, Inc. ("Mid America"), an affiliate through stock ownership of more than 10
per cent of the Company's  outstanding common shares, loaned the Company $97,941
in exchange for notes payable (which are payable upon demand)  collateralized by
all  assets of the  Company.  The  loans  were in  addition  to  previous  loans
outstanding at June 30, 1997 of $30,553,  also  collateralized  by all assets of
the Company.  On September 22, 1997, the Company  granted to Mid America Venture
an option to purchase  150,000  shares of common  stock at an exercise  price of
$.50/share as consideration for cash advances made to the Company by Mid America
Venture Capital Fund, Inc.

Note E -- Commitments and Contingencies

In June  1996,  the  Company  agreed to assume the  defense of a lawsuit  with a
former  sales agent of The Neptune  Group,  Inc.  ("Old  Neptune")  and has also
acquired  the rights to a counter  suit  against the same agent.  Old Neptune is
seeking damages against the former sales agent for breach of contract and breach
of fiduciary  duty.  The former sales agent is seeking  commissions  of $753,420
plus statutory interest, punitive damages and attorney's fees. Old Neptune filed
a Motion for Summary Judgment whereby it is requesting, among other things, that
the Court enter summary judgment dismissing MKT Inc.'s counterclaims against Old
Neptune. MKT, Inc. has filed a notice of opposition to Old Neptune's motions for
summary  judgment and cross  motion for summary  judgment  whereby MKT,  Inc. is
requesting that the court enter summary judgment dismissing Old Neptune's claims
and defenses.  Neither Old Neptune's motion for summary judgment nor MKT, Inc.'s
motion  for  summary  judgment  have  been  ruled  upon by the  Court.  Although
management  believes the former  agent's claim to be without  merit,  successful
assertion of the claim could have a materially  adverse  effect on the financial
condition, liquidity and operations of the Company.

The Company has a supply  agreement that called for minimum  software  purchases
from a supplier of $250,000 by  September  30, 1997.  The Company had  purchased
$10,000 of this  software as of September  30,  1997.  The Company has not taken
delivery of the remaining $240,000 of this software.  Certain disputes regarding
other provisions of the agreement exist between the supplier and the Company.

On July 10, 1997,  the Company  entered  into an agreement  with Old Neptune and
Visys  modifying  the  June  28,  1997  Neptune  Purchase  Agreement  and  Visys
Consulting  Agreement  respectively.  In connection  with such  agreements,  The
Company  reduced the exercise  price of warrants to purchase  300,000  shares of
common  stock  previously  granted  to Old  Neptune  to $1.00 from $2.50 and the
exercise price of warrants to purchase 750,000 shares of common stock previously
granted to Old Neptune to $2.00 from  $4.00.  The Company  also  terminated  the
Visys consulting agreement and restructured its payments to Visys in the form of
a promissory note and security  agreement with payments totaling $406,764 over a
42 month period, with a present value of $343,750, discounted at 10 per cent per
annum. A security agreement and collateralized  promissory note for $406,764 was
executed.  The Company is also obligated to pay to Visys 2% of the invoice price
for all Vision and Focus sales or leases made through a four year period  ending
June 30, 2001. In accordance  with the Agreement,  payments of $47,352 have been
deferred  through October 31, 1997 and an additional  $23,676 in future payments
will be deferred  through  December 31, 1997. On January 15, 1998,  the total of
$88,788, which includes deferral fees, will become due.

                                       6
<PAGE>


              INTELLIGENT DECISION SYSTEMS, INC. AND SUBSIDIARIES
                          (A Development Stage Company)
        Notes to Condensed Consolidated Financial Statements (Unaudited)
--------------------------------------------------------------------------------

Note F -- Income Taxes

No income tax provision was made for either period as losses were incurred.  Net
deferred tax assets were not recorded due to the uncertainty of future earnings.

Note G -- Reclassifications

Certain  amounts,  as  presented in prior  periods,  have been  reclassified  to
conform with the amounts presented in the three months ended September 30, 1997.
These  reclassifications  do not  have  an  impact  on the  net  loss  that  was
previously reported.


                                       7
<PAGE>



Item 2.  Management's Discussion and Analysis or Plan of Operation



               INTELLIGENT DECISION SYSTEMS, INC. AND SUBSIDIARIES
                     Management's Discussion and Analysis or
                            Plan of Operation
                 For the Three Ended September 30, 1997 and 1996
--------------------------------------------------------------------------------

Results of Operations

A summary of sales and gross profits:

(all amounts in thousands)
                                        Three Months Ended

                                  Sept. 30 1997     Sept. 30 1996
                                  -------------     -------------
Sales
  Vision                            $    25          $    39
  Focus                                   0                0
  Other DSI                             120               28
  Leasing                               120              148
                                     ------           ------
Total Sales                         $   265          $   215
                                     ======           ======

Gross Profit
  Vision                            $     9             $ 12
  Focus                                  (1)               0
  Other DSI                              34               16
  Leasing                                14               11
                                     ------           ------
Direct Gross Profit                 $    56          $    39

Customer Service Costs                  189              169
                                     ------           ------

Gross Profit (Loss)                 $  (133)         $  (130)
                                     ======           ======


In July, 1997 the Company completed  customized  programming and installation of
its Focus  systems  pursuant to a contract  with  Pioneer  Eye Care  Information
Systems.  Due to the  significant  complexities  of this  project,  the  Company
committed  management and personnel resources to supporting this project,  which
required   extensive  product   customization,   increased  training  needs  and
assistance in on-going data entry at the client's site necessary to manage their
business.

The Company elected to allocate  personnel and programming  resources to Pioneer
in the first fiscal  quarter with the  expectation  of additional  orders during
phase II of the relationship with this expanding  Physician Practice  Management
corporation.  Pioneer Eye Care,  through their acquisition of additional medical
practices,  represents  incremental  revenue  opportunities  for the  Company in
fiscal 1998.

The other  technology-based  products developed by the Company, Vision and MDS2,
are distributed exclusively by HPSI. Sales of these products have been static to
date.  Management  believes future sales from HPSI will come in the form of MDS2
systems that can then be upgraded to a full Vision product in the future.

The  Company,  through  its newly  formed  executive  management  committee,  is
currently  reviewing its present business strategy and strategic business focus.
Through this process the Company  intends to  extensively  review the  following
alternatives and then make a determination  regarding which  alternative is best
suited for the  Company's  outlook:  (a)  Complete  the  proposed  merger of the
Company and HPSI (b) in lieu of a merger,  strengthen  the current  distribution
contract with HPSI to include financial performance benchmarks that will support
the Company's  infrastructure or (c) search for and identify other  distribution
and licensing opportunities for these advanced information technologies.

                                        8
<PAGE>

                       Intelligent Decision Systems, Inc.
                     Management's Discussion and Analysis or
                              Plan of Operation
             For the Three Months Ended September 30, 1997 and 1996
-------------------------------------------------------------------------------

Revenues in the next two quarters will come  primarily  from Neptune  Technology
Leasing  Corp,  a wholly  owned  subsidiary  of IDSI.  This  direction  has been
followed for the past sixty days and is expected to generate  more than $100,000
in initial net revenues  monthly.  Significant  contract  discussions have taken
place, and together with pending leasing transactions, that if consummated, will
increase net revenues from leasing to $200,000 per month by the end of the first
calendar quarter, or the third quarter of fiscal 1998.

Pioneer is now developing  their  information  systems budget for calendar 1998.
the Company has been informed that there will be an expansion of the Pioneer Eye
Care  Information  System  project in the first  calendar  quarter  of 1998.  An
announcement will be forthcoming once those figures are conveyed to the Company.


Operating expenses were:

                                       Three Months Ended Sept. 30,   % incr.
                                            1997         1996         (decr.)
                                          --------      -------      --------
         Selling                       $   257,843  $   205,740         25.3
         Administration                    368,995      438,370        (15.8)
         Research & development            170,957      192,058        (11.0)
         Depreciation & amortization       149,324      138,427          7.9
         Interest expense                   34,727        8,455        310.7
                                          --------      -------
                                       $   981,846   $  983,050         (0.1)
                                          ========      =======


Selling  expenses  increased  due to the first stages of building a direct sales
force for the Focus  system.  For the three  months  ended  September  30, 1997,
personnel  expenses were $174,150,  travel totaled  $49,499 and bad debt expense
was  $28,781.  For the first three months ended  September  30, 1996,  personnel
expenses were $117,903 and travel totaled $51,718.

Administration  expenses  decreased  by $69,375 due  primarily  to a decrease in
expenses related to consulting contracts.

Research and  development  costs were lower than the same period in the previous
year due to an adjustment in the number of programmers  working on developmental
projects.

Depreciation  and  amortization  increased  over the same period of the previous
year due to  additional  depreciation  associated  with the  purchases of office
equipment and furniture for the Neptune leasing operation.

Interest  expense  increased  over the same period of the  previous  year due to
additional  borrowings from a related party, and from notes payable exchanged in
lieu of cash  payments  required  pursuant to the  termination  of a  consulting
contract with the former owners of Old Neptune.

Total  employment was 33 at September  30, 1997, a decrease of 9 from  September
30, 1996.

Operational Streamlining

In the past 90 days,  significant  head count reduction  has taken  place in the
Company's three operating locations.  In addition, the Grand Rapids, MI location
is to be  closed.  CFO  responsibilities  and  other  accounting  functions  are
currently being transitioned to the Wilton,  Connecticut facility. This location
will also serve as the new headquarters for the Company.

The impact of our  streamlining  operations is expected to result in net savings
of  $750,000  in  operating  expenses,  assuming  current  levels  of  operating
activity.




                                        9
<PAGE>


                       Intelligent Decision Systems, Inc.
                     Management's Discussion and Analysis or
                                Plan of Operation
               For the Three Months Ended September 30, 1997 and 1996
--------------------------------------------------------------------------------

Liquidity and Capital Resources

During  the  first  three  months  of  fiscal  1998,  the  Company  used cash of
$1,104,903 in its operations.  The net loss for the three months ended September
30, 1997 was $1,109,024. Non-cash charges to income were $255,174. Proceeds from
the sale of leases held for resale were $248,377.  Collections of lease payments
totaled $39,748. The Company borrowed an additional $97,941 from a related party
via short-term  collateralized note payable and exchanged  collateralized  notes
payable of $343,750 for accrued amounts owed consultants.

Sources  of cash  included  proceeds  from  the  exercise  of  options  totaling
$112,000. The remainder of the shortfall from operations was made up by reducing
cash reserves by $335,822.

Cash and cash equivalents were $19,187 at September 30, 1997, which  represented
only a fraction  of one  month's  operating  capital,  assuming  no  increase in
current sales  levels.

Management's  Plan for  Viability                             

The Company  expects its  operating  expenses,  including  customer  service and
assembly,  to be $3.6 million  dollars for the next twelve  months.  In order to
sustain the Company, management plans to:
  
1. Allocate the proper resources needed to support the increased  business being
generated  from  Neptune  Technology  Leasing  Corp.  It is expected  that these
revenues will cover a significant  portion of the Company's  operating budget in
the short term.

2. Redefine the relationship that will be in place between the Company and HPSI.

3.  Pursue  product  license   agreements  with  other  health  care  technology
companies.

4. Begin phase II of the Pioneer Eye Care  Information  System project.  Budgets
are currently being developed within this Physician Practice  Management Company
("PPMC").  Revenues from this project are expected to offset any  shortfalls due
to  activities  in the first two  quarters.  The Company will continue to pursue
similar opportunities with other PPMCs.

5. Discussions are currently taking place with investment  partner  prospects to
raise cash in the form of debt and/or equity.

Organizational Structure

Currently the Company is functioning under the direction of an interim executive
management  committee.  This  committee  is  comprised  of  managers  from  each
subsidiary of the corporation.  An active search is now taking place for a Chief
Financial Officer. Further management changes are not planned until December 31,
1997,  at which time the status of the intended  merger with HPSI should be more
assessable.

Management  believes  that a  combination  of revenues  and new  financing  will
provide  sufficient  operating capital to sustain operations for the next twelve
months.

                                       10

<PAGE>

                       Intelligent Decision Systems, Inc.
                     Management's Discussion and Analysis or
                                Plan of Operation
               For the Three Months Ended September 30, 1997 and 1996
-------------------------------------------------------------------------------

Commitments and Contingencies

In June  1996,  the  Company  agreed to assume the  defense of a lawsuit  with a
former sales agent of The Neptune  Group,  Inc. and has also acquired the rights
to a counter suit against the same agent.  The Neptune Group is seeking  damages
against the former  sales agent for breach of contract  and breach of  fiduciary
duty.  The former sales agent is seeking  commissions of $753,420 plus statutory
interest,  punitive  damages and attorney's fees. Old Neptune filed a Motion for
Summary  Judgment whereby it is  requesting, among other  things, that the Court
enter summary judgment dismissing MKT Inc.'s counterclaims  against Old Neptune.
MKT, Inc. has filed a notice of opposition to Old Neptune's  motions for summary
judgment and cross motion for summary  judgment  whereby MKT, Inc. is requesting
that the court  enter  summary  judgment  dismissing  Old  Neptune's  claims and
defenses.  Neither Old  Neptune's  motion for summary  judgment nor MKT,  Inc.'s
motion  for  summary  judgment  have  been  ruled  upon by the  Court.  Although
management  believes the former  agent's claim to be without  merit,  successful
assertion of the claim could have a materially  adverse  effect on the financial
position, liquidity and operations of the Company.

The Company has a supply  agreement that called for minimum  software  purchases
from a supplier of $250,000 by  September  30, 1997.  The Company had  purchased
$10,000 of this  software as of September  30,  1997.  The Company has not taken
delivery of the remaining $240,000 of this software.  Certain disputes regarding
other provisions of the agreement exist between the supplier and the Company.

On July 10, 1997,  the Company  entered  into an agreement  with Old Neptune and
Visys  modifying  the  June  28,  1997  Neptune  Purchase  Agreement  and  Visys
Consulting  Agreement  respectively.  In connection  with such  agreements,  The
Company  reduced the exercise  price of warrants to purchase  300,000  shares of
common  stock  previously  granted  to Old  Neptune  to $1.00 from $2.50 and the
exercise price of warrants to purchase 750,000 shares of common stock previously
granted to Old Neptune to $2.00 from  $4.00.  The Company  also  terminated  the
Visys consulting agreement and restructured its payments to Visys in the form of
a promissory note and security  agreement with payments totaling $406,764 over a
42 month period, with a present value of $343,750, discounted at 10 per cent per
annum. A security agreement and collateralized  promissory note for $406,764 was
executed.  The Company is also obligated to pay to Visys 2% of the invoice price
for all Vision and Focus sales or leases made through a four year period  ending
June 30, 2001. In accordance  with the Agreement,  payments of $47,352 have been
deferred  through October 31, 1997 and an additional  $23,676 in future payments
will be deferred  through  December 31, 1997. On January 15, 1998,  the total of
$88,788, which includes deferral fees, will become due. Discussions are on going
with Visys that will  result in meeting  their needs as well as the needs of the
Company.

                                       11


<PAGE>


                       Intelligent Decision Systems, Inc.
                     Management's Discussion and Analysis or
                                Plan of Operation
             For the Three Months Ended September 30, 1997 and 1996
--------------------------------------------------------------------------------

Subsequent Events

New Board and Management

On October 30, 1997,  James  Keller and Mark Babin  resigned as directors of the
Company,  leaving three  positions  held and four open. On November 3, 1997, the
remaining  directors  appointed  an interim  management  team to run the Company
which includes David Horowitz,  Robert Hyte,  Eugene Feher,  Ron Greenberg,  Jon
Preiser,  Scott  Preiser and Jerry Beck.  Mark Babin  resigned as CFO of IDSI on
November 3, 1997.

David Horowitz remains as CEO and President and was appointed  Treasurer.  Roger
Fowler,  controller of IDSI's  subsidiary  DSI, was named as interim CFO. Robert
Hyte was appointed as Secretary.


              DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS

This Form 10-QSB,  including all documents  incorporated by reference,  includes
"forward-looking statements" within the meaning of Section 27A of the Securities
Act and Section 21E of the Exchange Act. All statements other than statements of
historical facts included in this Form 10-QSB (and in documents  incorporated by
reference),   including  without  limitation,   statements  under  "Management's
Discussion and Analysis or Plan of Operation"  regarding the Company's financial
position,  business  strategy  and plans and  objectives  of  management  of the
Company for future  operations,  are  forward-looking  statements.  Although the
Company  believes  that  the  expectations  reflected  in  such  forward-looking
statements are reasonable,  it can give no assurance that such expectations will
prove to have been  correct.  All  subsequent  written and oral  forward-looking
statements  attributable  to the  Company  or  persons  acting on its behalf are
expressly qualified in their entirety by this section.






                                       12
<PAGE>

                         PART II - OTHER INFORMATION

Item 1.     Legal Proceedings:

               As  reported  in the  Company's  Form  10-KSB for the fiscal year
               ended June 30, 1997, The Neptune Group,  Inc. ("Old  Neptune") is
               involved in litigation  with  MKT, Inc.  MKT,  Inc. has  filed  a
               notice  of  opposition  to  Old  Neptune's  motions  for  summary
               judgment and cross motion for summary judgment whereby MKT,  Inc.
               is  requesting that the court  enter summary judgment  dismissing
               Old Neptune's claims and defenses.  Neither Old Neptune's  motion
               for summary judgment nor MKT, Inc.'s motion for summary  judgment
               have been ruled upon by the Court.

               No other  reportable  events have  occurred  which would  require
               modification of the discussion under Legal  Proceedings set forth
               in the  Company's  Form 10-KSB  Annual Report for the fiscal year
               ended June 30, 1997.


Item 2.     Changes in Securities:

               None.

Item 3.     Defaults by the Company upon its Senior Securities:

               None.

Item 4.     Submission of Matters to a Vote of Security Holders:

               None.

Item 5.     Other Information:

               None.

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

                A) Exhibits.
                    EX-10.22      Amendment to the Neptune Purchase Agreement

                    EX-10.23      Modification of Visys Agreement

                    EX-10.24      Vision Promissory Note

                    EX-10.25      Security Agreement

                    EX-27         Financial Data Schedule    

                B) Reports on Form 8-K filed during  the quarter ended September
                   30, 1997.

                         None


                                      13

<PAGE>







                                  SIGNATURES



In accordance with the requirements of the Securities  Exchange Act of 1934, the
registrant  caused  this  report to be signed on its behalf by the  undersigned,
thereunto duly authorized.







                                        INTELLIGENT DECISION SYSTEMS, INC.



Date: November 13, 1997                  /s/ David A. Horowitz
                                         --------------------------
                                         David A. Horowitz
                                         President





Date: November13, 1997                   /s/  Roger Fowler
                                         --------------------------
                                         Roger Fowler
                                         Chief Financial Officer








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