U.S. 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 March 31, 1999.

[ ]  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:  0-17893


                             TELTRONICS, INC.
          ------------------------------------------------------
          (Exact name of registrant as specified in its charter)


                                 DELAWARE
      --------------------------------------------------------------
      (State or other jurisdiction of incorporation or organization)


                                59-2937938
                  ---------------------------------------
                  (I.R.S. Employer Identification Number)


                       2150 WHITFIELD INDUSTRIAL WAY
                          SARASOTA, FLORIDA 34243
       ------------------------------------------------------------ 
       (Address of principal executive offices, including zip code)


                               941-753-5000
           ----------------------------------------------------
           (Registrant's telephone number, including area code)

Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes [X] No [ ]

As of May 13, 1999 there were 3,704,522 shares of the Registrant's Common
Stock outstanding.

<PAGE>

                                   INDEX


                                                       PAGE

PART I.   FINANCIAL INFORMATION

ITEM 1.   FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . .3-14

          Consolidated Balance Sheets at March 31, 1999 and 
          December 31, 1998. . . . . . . . . . . . . . . . . . . . 3-4

          Consolidated Statements of Operations for the 
          Three Months ended March 31, 1999 and 1998 . . . . . . . . 5

          Consolidated Statements of Cash Flows for the 
          Three Months ended March 31, 1999 and 1998 . . . . . . . 6-7

          Notes to Interim Consolidated Financial Statements . . .8-14

ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
          CONDITION AND RESULTS OF OPERATIONS. . . . . . . . . . 14-18


PART II.  OTHER INFORMATION

ITEM 1.   LEGAL PROCEEDINGS. . . . . . . . . . . . . . . . . . . . .19

ITEM 2.   CHANGES IN SECURITIES. . . . . . . . . . . . . . . . . . .19

ITEM 3.   DEFAULTS UPON SENIOR SECURITIES. . . . . . . . . . . . . .19
     
ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF
          SECURITY HOLDERS . . . . . . . . . . . . . . . . . . . . .19

ITEM 5.   OTHER INFORMATION. . . . . . . . . . . . . . . . . . . . .19

ITEM 6A.  EXHIBITS . . . . . . . . . . . . . . . . . . . . . . . . .19

ITEM 6B.  REPORTS ON FORM 8-K. . . . . . . . . . . . . . . . . . . .19

                                   2

<PAGE>

PART I - FINANCIAL INFORMATION

ITEM 1.   FINANCIAL STATEMENTS


<TABLE>
<CAPTION>
                     TELTRONICS, INC. AND SUBSIDIARIES
                        CONSOLIDATED BALANCE SHEETS

                                  ASSETS

                                                  March 31,    December 31,
                                                    1999           1998
                                                 -----------   ------------
                                                 (Unaudited)
<S>                                              <C>            <C>
CURRENT ASSETS:
  Cash                                           $   308,534    $   136,467
  Accounts receivable, net of allowance for
    doubtful accounts of $110,000 at 
    March 31, 1999 and December 31, 1998           5,554,522      4,755,963
  Inventories, net                                 4,007,851      3,863,371
  Prepaid expenses and other current assets          255,162        307,413
                                                 -----------    -----------

    Total current assets                          10,126,069      9,063,214
                                                 -----------    -----------

PROPERTY AND EQUIPMENT, NET                        4,365,973      4,422,722
                                                 -----------    -----------

OTHER ASSETS                                       1,008,566        944,833
                                                 -----------    -----------

    Total assets                                 $15,500,608    $14,430,769
                                                 ===========    ===========
</TABLE>


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

                                   3

<PAGE>
<TABLE>
<CAPTION>
                     TELTRONICS, INC. AND SUBSIDIARIES
                  CONSOLIDATED BALANCE SHEETS - Continued

                   LIABILITIES AND SHAREHOLDERS' EQUITY

                                                  March 31,    December 31,
                                                    1999           1998
                                                 -----------   ------------
                                                 (Unaudited)
<S>                                              <C>            <C>
CURRENT LIABILITIES:
  Current portion of long-term debt              $ 4,368,382    $ 4,184,639
  Current portion of capital lease 
    obligations                                      304,227        315,605
  Accounts payable                                 2,970,575      2,913,161
  Accrued expenses and other current 
    liabilities                                    1,029,791        821,572
  Deferred income                                    753,853        159,757
                                                 -----------    -----------
    Total current liabilities                      9,426,828      8,394,734
                                                 -----------    -----------

LONG-TERM LIABILITIES:
  Long-term debt, net of current portion           2,846,515      2,870,887
  Capital lease obligations, net of 
    current portion                                  489,140        546,401
                                                 -----------    -----------

    Total long-term liabilities                    3,335,655      3,417,288
                                                 -----------    -----------

COMMITMENTS AND CONTINGENCIES

SHAREHOLDERS' EQUITY:
  Common stock, $.001 par value, 40,000,000 
    shares authorized, 3,604,522 and 
    3,478,139 issued and outstanding at 
    March 31, 1999 and December 31, 1998, 
    respectively.                                      3,606          3,480
  Non-voting common stock, $.001 par value, 
    5,000,000 shares authorized, zero shares 
    issued and outstanding.                                0              0
  Preferred Series A stock, $.001 par value, 
    100,000 shares authorized, 100,000 
    shares issued and outstanding at 
    March 31, 1999 and December 31, 1998.                100            100
  Preferred Series B Convertible stock, 
    $.001 par value, 25,000 shares autho-
    rized, 25,000 shares issued and out-
    standing at March 31, 1999 and 
    December 31, 1998.                                    25             25
  Additional paid-in capital                      16,625,110     16,443,371
  Accumulated deficit                            (13,890,716)   (13,828,229)
                                                 -----------    -----------

    Total shareholders' equity                     2,738,125      2,618,747
                                                 -----------    -----------

    Total liabilities and 
      shareholders' equity                       $15,500,608    $14,430,769
                                                 ===========    ===========
</TABLE>

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

                                  4

<PAGE>
<TABLE>
<CAPTION>
                     TELTRONICS, INC. AND SUBSIDIARIES
             CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

                                                    Three Months Ended        
                                                         March 31
                                                 --------------------------
                                                     1999           1998
                                                 -----------    ----------- 
<S>                                              <C>            <C>
NET SALES                                        $ 6,824,986    $ 6,639,522

Cost of goods sold                                 3,529,812      4,115,372
                                                 -----------    -----------

GROSS PROFIT                                       3,295,174      2,524,150
                                                 -----------    -----------
OPERATING EXPENSES:
  General and administrative                         852,446        992,897
  Sales and marketing                              1,294,836      1,202,826
  Research and development                           937,736        652,379
                                                 -----------    -----------

                                                   3,085,018      2,848,102
                                                 -----------    -----------

Income (loss) from operations                        210,156       (323,952)
                                                 -----------    -----------

OTHER INCOME (EXPENSE):
  Interest                                          (208,379)      (236,627)
  Financing                                         (103,239)       (64,218)
  Litigation costs                                   (21,685)        (4,096)
  Gain on dispositions                               111,614      1,148,250
  Other                                               24,346         19,833
                                                 -----------    -----------
                                                    (197,343)       863,142
                                                 -----------    -----------
Income before income taxes                            12,813        539,190   
              
Income tax expense                                       300              0
                                                 -----------    -----------

NET INCOME                                            12,513        539,190

Dividends on Series B Convertible 
  Preferred  Stock                                    75,000         25,000
                                                 -----------    -----------
Income (loss) attributable to 
  Common Shareholders                            $   (62,487)   $   514,190
                                                 ===========    ===========

INCOME (LOSS) PER SHARE, (BASIC AND DILUTED)     $      (.02)   $       .15
                                                 ===========    ===========
</TABLE>

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

                                        5

<PAGE>
<TABLE>
<CAPTION>
                     TELTRONICS, INC. AND SUBSIDIARIES
             CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

                                                    Three Months Ended       
                                                         March 31             
                                                 --------------------------
                                                     1999           1998     
                                                 -----------    -----------
<S>                                              <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income                                     $    12,513    $   539,190
  Adjustments to reconcile net income to 
    net cash flows provided by operating 
    activities:
      Bad debt expense                                     0        (13,000)
      Provision for obsolete inventory                (3,376)        58,928
      Depreciation and amortization                  318,541        208,832
      Gain on dispositions                                 0     (1,148,520)
      Amortization of deferred financing costs        56,396              0

  Changes in operating assets and liabilities, 
    net of dispositions:
      Accounts receivable                           (798,559)       690,364
      Inventories                                    (41,104)       381,269
      Prepaid expenses and other current assets       52,251       (165,657)
      Accounts payable                                57,414         62,070
      Accrued expenses and other liabilities         208,219        (32,212)
      Deferred income                                594,096         29,582
                                                 -----------    -----------
Net cash flows provided by operating 
  activities                                         456,391        610,846
                                                 -----------    -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Acquisition of property and equipment             (165,014)      (233,695)
  Increase in other assets                            (3,852)      (126,133)
  Proceeds from dispositions                               0         50,000
  Acquisition of assets of Cascade 
    Technology Corporation                           (57,500)             0
                                                 -----------    -----------

Net cash flows used in investing activities         (226,366)      (309,828)
                                                 -----------    -----------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Net proceeds (payment) from line of credit         157,787       (193,234)
  Loan proceeds                                        1,099      1,281,115
  Principal repayments of loans, notes 
    and leases                                      (141,844)    (1,022,509)
  Dividends on Series B Convertible 
    Preferred Stock                                  (75,000)       (25,000)
                                                 -----------    -----------

Net cash flows provided by (used in) 
  financing activities                               (57,958)        40,372
                                                 -----------    -----------

Net increase in cash and cash equivalents            172,067        341,390

Cash and cash equivalents - 
  beginning of period                                136,467        435,538
                                                 -----------    -----------
Cash and cash equivalents - 
  end of period                                  $   308,534    $   776,928
                                                 ===========    ===========
</TABLE>

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

                                        6

<PAGE>
<TABLE>
<CAPTION>
                     TELTRONICS, INC. AND SUBSIDIARIES
       CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - Continued

                                                    Three Months Ended       
                                                         March 31             
                                                 --------------------------
                                                     1999           1998     
                                                 -----------    -----------
<S>                                              <C>            <C>
SUPPLEMENTAL NON-CASH FINANCING AND
INVESTING ACTIVITIES:

  Acquisition of assets of Cascade 
    Technology Corporation                       $   181,865    $         0
                                                 ===========    ===========
  Lease of fixed assets                          $    25,778    $         0
                                                 ===========    ===========
  Issuance of preferred stock                    $         0    $ 2,500,000
                                                 ===========    ===========
  Cancellation of unpaid shares issued 
  pursuant to Employee Stock Payment Plan        $         0    $ 1,191,500
                                                 ===========    ===========
  Issuance of warrants                           $         0    $   569,600
                                                 ===========    ===========
  Note receivable from disposition 
    of AT Supply                                 $         0    $   200,000
                                                 ===========    ===========
</TABLE>

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

                                   7

<PAGE>

                     TELTRONICS, INC. AND SUBSIDIARIES
            NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1 - NATURE OF BUSINESS AND BASIS OF PRESENTATION

Teltronics, Inc. ("Teltronics" or "Company"), a Delaware corporation,
designs, develops, manufactures and markets electronic hardware and 
application software products, and engages in contract manufacturing for
the telecommunication industry.  Through its majority owned subsidiary,
Interactive Solutions, Inc. ("ISI") it has also engaged in the design and
manufacturing of a small, Pentium (R) powered, multimedia computer for the
mobile computer industry.

The accompanying consolidated financial statements include the accounts of
the Company and is comprised of its wholly-owned subsidiaries TTG
Acquisition Corp. and TELTRONICS/SRX, Inc., and its 80% formerly owned
subsidiary AT Supply, Inc. ("AT Supply"), and its 85% owned subsidiary
Interactive Solutions, Inc. ("ISI").  AT Supply was sold on March 6, 1998. 
All significant intercompany transactions and balances have been eliminated
in consolidation.

The unaudited consolidated financial statements and related notes have been
prepared in accordance with the rules and regulations of the Securities and
Exchange Commission and on substantially the same basis as the annual
consolidated financial statements.  In the opinion of management, the
consolidated financial statements reflect all adjustments, consisting only
of normal recurring adjustments, necessary for a fair presentation of the
financial position, operating results, and cash flows for those periods
presented.  Operating results for the three month period ended March 31,
1999 are not necessarily indicative of the results that may be expected for
the year ending December 31, 1999.  These consolidated financial statements
should be read in conjunction with the consolidated financial statements,
and notes thereto, for the year ended December 31, 1998, as presented in
the Company's annual report on Form 10-K.

NOTE 2 - ACQUISITIONS

On February 19, 1999, the Company acquired certain assets and the
technology of Cascade Technology Corporation ("Cascade").  The Company
acquired all of Cascade's rights to and in certain technology for a
DiscoverMATE (tm) panel link display, open sales orders and other purchased
assets described in the Agreement.  The display is sold to Ford Visteon,
Chrysler, General Motors and Kelsey Hayes and other companies.

The Company delivered an aggregate of 126,383 restricted shares (including
52,117 shares in escrow for potential claims by the Company) of its voting
common stock for selected assets of Cascade.  The holders of these
restricted shares have been granted certain registration rights under a
Registration Rights Agreement which allows them to elect to have their
shares registered if the Company proposes to register any of its securities
under the Securities Act of 1933, as amended, in an offering for cash.  In
addition, the Company paid $57,500 at closing and issued a non-interest
bearing note for $47,913 that is due no later than May 19, 1999.

The acquisition has been accounted for using the purchase method of
accounting.  The purchase price has been assigned to the net assets
acquired based on management's estimate of the fair value of such assets
and liabilities at the date of acquisition as follows:

      Inventory                                $  100,000
      Fixed assets                                 71,000
      Goodwill                                    116,278
      Notes payable                               (47,913)
                                               ----------
        Net assets acquired                    $  239,365
                                               ==========

                                        8

<PAGE>

The excess cost over fair value of the net assets acquired (goodwill and
identifiable tangible assets) is being amortized on a straight-line basis 
as follows:

                                           $             Life 
                                        --------       --------

      Customer List                     $ 35,000       5 years
      Patent                              35,000       14 years, 7 months
      General                             46,278       15 years

The estimates are preliminary, however, management believes that any
adjustments to the amounts allocated will not have a material effect on the
Company's financial position or results of operations.  Proforma financial 
statements are not provided due to the immateriality of the acquisition.

NOTE 3 - DISPOSITIONS

On March 6, 1998, the Company sold the assets and liabilities of AT Supply,
a majority owned subsidiary.  The subsidiary was sold to the minority
owners of the subsidiary for $424,836 in cash and a note receivable for
$200,000.  Interest on the note receivable is payable at 12% and principal
and interest are due monthly over three years starting April 1, 1998.  The
note receivable is secured by a second lien on assets and is personally
guaranteed by the principals of the buyer.  The buyer paid $972,450 at
closing to terminate all liens and security interests with the Company's
principal lender.  The buyer assumed responsibility for payment of all
liabilities.  The Company recognized a gain of $1,148,250 during the
quarter ending March 31, 1998.  Revenues and net income for AT Supply were
$1,278,000 and $6,000, respectively for the quarter ended March 31, 1998.

On April 23, 1998, the Company sold the customer list and maintenance and
support agreements for the ORBi-TEL for Windows and non-Unix call
accounting product lines to MDR Telemanagement Limited.  These product
lines were sold for $100,000 in cash, a contingent consideration payable in
one year of $112,000 and a 30% commission based on sales, payable monthly
for one year.  The Company recognized a gain of $100,000 during the quarter
ending June 30, 1998 and a gain of $111,614 during the quarter ended March
31, 1999.  Revenues for these product lines were $61,000 for the quarter
ended March 31, 1998.

NOTE 4 - NET INCOME (LOSS) PER SHARE

Basic net income (loss) per share is computed by dividing net income
(loss), adjusted for preferred stock dividends, by the weighted average
number of issued common shares outstanding during the applicable period. 
Diluted net income (loss) per share is computed by dividing net income,
adjusted for preferred stock dividends, by the weighted average number of
issued common shares, adjusted for potential common shares.  Potential
common shares consist of convertible preferred stock, stock options (vested
and unvested) and warrants and are computed using the treasury stock method
and were anti-dilutive and were not included in the calculation of diluted
loss per share for 1999.

                                        9

<PAGE>

The following unaudited table sets forth the computation of basic and
diluted earnings per share:



<TABLE>
<CAPTION>
                                                    Three Months Ended       
                                                         March 31             
                                                 --------------------------
                                                     1999           1998     
                                                 -----------    -----------
<S>                                              <C>            <C>
BASIC

Net income                                       $    12,513    $   539,190
Preferred dividends                                  (75,000)       (25,000)
                                                 -----------    -----------
  Income (loss) attributable to common 
    shareholders                                 $   (62,487)   $   514,190
                                                 ===========    ===========
Weighted average shares outstanding                3,534,309      3,415,513
                                                 ===========    ===========   
  Net income (loss) per share                    $      (.02)   $       .15
                                                 ===========    ===========
DILUTED

Net income                                       $    12,513    $   539,190
Preferred dividends                                  (75,000)       (25,000)
                                                 -----------    -----------
  Income (loss) attributable to common 
    shareholders                                 $   (62,487)   $   514,190
                                                 ===========    ===========
Weighted average shares outstanding                3,534,309      3,415,513
Net effect of dilutive stock options 
  using the treasury method                                0         72,357
Net effect of dilutive warrants using 
  the treasury stock method                                0              0
                                                 -----------    -----------
  Dilutive potential common shares                 3,534,309      3,487,870
                                                 ===========    ===========

  Net Income (loss) per share                    $      (.02)   $       .15
                                                 ===========    ===========
</TABLE>

NOTE 5 - INVENTORIES

The major classes of inventories are as follows:

<TABLE>
<CAPTION>
                                                  March 31,    December 31,
                                                    1999           1998       
                                                 -----------    -----------
                                                 (Unaudited)
      <S>                                        <C>            <C>
      Raw materials                              $ 2,942,110    $ 2,909,470   
      Work-in-process                              1,090,349        825,631
      Finished goods                               1,047,764      1,204,018
      Allowance for obsolete inventory            (1,072,372)    (1,075,748)
                                                 -----------    -----------
                                                 $ 4,007,851    $ 3,863,371
                                                 ===========    ===========
</TABLE>

NOTE 6 - LONG TERM DEBT

On February 25, 1998, the Company issued $1,750,000 of Subordinated Secured
Debentures (the "Debentures").  The proceeds of the Debentures were used
for the partial repayment of the $4,250,000 Convertible Debentures issued
on February 13, 1997.  Interest is paid at 12% per annum, payable quarterly
starting May 1, 1998.  The Debentures are due February 13, 2002 and fees
paid in connection with the Debentures totaled $8,750.  The Debentures do
not have a prepayment penalty and are collateralized by a first lien on
fixed assets and a second lien on all other assets.  The Holder of the
Debentures received 525,000 warrants to purchase the Company's Common Stock
at an exercise price of $2.75 per share.  These warrants are exercisable in
whole, or in part, at any time during a five-year period beginning on the
date of issuance.  The Debentures contain certain financial covenants,
including restrictions which could affect future funding of ISI by the
Company.

                                   10

<PAGE>

On March 29, 1999, the Company and Sirrom Capital Corporation ("Sirrom")
amended and restated the $1,750,000 of Subordinated Secured  Debentures
originally entered into on February 25, 1998 and due February 13, 2002. 
The Debentures have a revised maturity of $500,000 on April 30, 2000 and
$1,250,000 on February 13, 2002.

On February 25, 1998, the Company entered into senior Secured Loans
("Loans") for $1,000,000 and $280,000.  The proceeds of the Loans were used
for working capital ($1,000,000) and to repay the $290,300 term loan
agreement.  Interest is paid at 12% per annum.  The $1,000,000 loan is due
February 25, 1999 and interest is payable quarterly starting May 15, 1998. 
The monthly principal and interest payment on the $280,000 loan is $10,272
starting May 15, 1998 and the note is due October 1, 2000.  Fees paid in
connection with these Loans totaled $32,000.  The Loans do not have a
prepayment penalty and are collateralized by a first lien on property and
equipment and a second lien on all other assets.  The holder of the Loans
received 365,000 warrants to purchase the Company's Common Stock at an
exercise price of $2.75 per share.  These warrants are exercisable in whole
or in part, at any time during a five-year period beginning on the date of
issuance.  The Loan contains certain financial covenants, including
restrictions which could affect future funding of ISI by the Company.

On March 29, 1999, the Company and Sirrom amended and restated the
$1,000,000 Loan Agreement originally entered into on February 25, 1998 and
originally due February 25, 1999.  The Loan Agreement has a revised
maturity of April 30, 2000.  If the Loan is not repaid by September 30,
1999, the interest rate increases from 12% to 13.5%.  This Loan has been
classified as long-term debt at December 31, 1998.

NOTE 7 - SHAREHOLDERS' EQUITY

The total number of shares of all classes of capital stock which the
Company has the authority to issue is 50,000,000 shares divided into three
classes of which 5,000,000 shares, par value $.001 per share are designated
Preferred stock, 40,000,000 shares, par value $.001 per share are
designated Common stock and 5,000,000 shares, par value $.001 per share,
are designated Non-Voting Common stock.

(A)  PREFERRED STOCK - On February 16, 1998, the Company reduced the number
of authorized shares designated as Series A Preferred Stock from 250,000 to
100,000 such shares.

On February 16, 1998, the Company authorized 25,000 shares of Series B
Convertible Preferred Stock at a par value of $.001 per share.

On February 25, 1998, the Company issued $2,500,000 of Series B Convertible
Preferred Stock.  The Company issued 25,000 shares at a par value of $.001
per share.  The proceeds were used for the partial repayment of the
$4,250,000 Convertible Debentures issued on February 13, 1997.  The Series
B Convertible Preferred Stock provides for a $12 per share annual dividend,
payable quarterly starting May 15, 1998.  The dividend increases to $20
after four years.  Fees paid in connection with this Preferred Stock
totaled $12,500.  The holder of the Series B Convertible Preferred Stock
has the right at its option to convert to the Company's Common Stock at
$2.75 per share.  The Series B Convertible Preferred Stock cannot be called
for two years and after two years, only if the twenty-day average bid price
of the Company's common stock exceeds $5.50 per share.  After four years,
the Company has the right to redeem the Series B Convertible Preferred
Stock in full at 100% of the face value plus accrued and unpaid dividends. 
The Series B Convertible Preferred Stock contains certain financial
covenants.

                                   11

<PAGE>

(B)  WARRANTS - On February 25, 1998, the Company issued 890,000 warrants
to purchase the Company's common stock at an exercise price of $2.75 per
share.  These warrants are exercisable in whole, or in part, at any time
during a five year period beginning on the date of issuance.  The fair
value of the warrants was recorded as deferred financing costs and totaled
$569,600.  This amount is being amortized to financing expense over the
life of the Subordinated Secured Debentures and Senior Secured Loans.

(C)  EMPLOYEE STOCK PAYMENT PLAN - On February 16, 1998, the Company
cancelled the remaining 211,100 shares.

(D)  CONSULTANT STOCK PAYMENT PLAN - On February 16, 1998, the Company
cancelled the remaining 105,000 shares.

NOTE 8 - SEGMENT INFORMATION

The Company's operations are classified into two reportable segments,
Teltronics and ISI.  Each reportable segment is staffed separately,
requires different technology and marketing strategies and sells to
different customers.

The accounting policies of the Segments are the same.  Intersegment sales
and transfers are recorded at Teltronics' cost  plus a normal margin for
electronic manufacturing.  Corporate overhead is allocated between
Teltronics and ISI based on estimated dollar usage for administration
expenses and net investment for interest.  Company management evaluates
performance based on segment profit, which is net income or (loss) before
taxes, excluding nonrecurring gains or losses.

                                   12

<PAGE>

The following table presents information about reportable segment
operations and assets.

<TABLE>
<CAPTION>
                                                    Three Months Ended
                                                         March 31,         
                                                 --------------------------
                                                    1999           1998      
                                                 -----------    -----------
<S>                                              <C>            <C>
NET SALES

Teltronics:
  Telecommunications                             $ 6,881,000    $ 5,057,000
  AT Supply (distribution) (1)                             0      1,278,000
ISI                                                   17,000        370,000
Elimination of Intersegment sales                    (73,000)       (65,000)
                                                 -----------    -----------
  Total sales                                    $ 6,825,000    $ 6,640,000
                                                 ===========    ===========

DEPRECIATION AND AMORTIZATION

Teltronics:
  Telecommunications                             $   198,000    $   188,000
  AT Supply (distribution) (1)                             0          1,000
ISI                                                  121,000         20,000
                                                 -----------    -----------
  Total depreciation and amortization            $   319,000    $   209,000
                                                 ===========    ===========

INTEREST AND FINANCING COSTS

Teltronics:
  Telecommunications                             $   187,000    $   144,000
  AT Supply (distribution) (1)                             0         32,000
ISI                                                  125,000        125,000
                                                 -----------    -----------
  Total interest and financing costs             $   312,000    $   301,000
                                                 ===========    ===========

SEGMENT PROFITS

Teltronics:
  Telecommunications                             $   581,000    $  (459,000)
  AT Supply (distribution) (1)                             0          6,000
ISI                                                 (680,000)      (156,000)
                                                 -----------    -----------
  Total                                              (99,000)      (609,000)

Gain on dispositions                                 112,000      1,148,000
                                                 -----------    -----------   
  Net income (loss) before taxes                 $    13,000    $   539,000
                                                 ===========    ===========

SEGMENT ASSETS

Teltronics:
  Telecommunications                             $14,206,000    $10,470,000
  AT Supply (distribution) (1)                             0              0
ISI                                                1,295,000      1,715,000
                                                 -----------    -----------
  Total segment assets                           $15,501,000    $12,185,000
                                                 ===========    ===========

ACQUISITION OF PROPERTY AND EQUIPMENT

Teltronics:
  Telecommunications                             $   119,000    $    18,000
  AT Supply (distribution) (1)                             0              0
ISI                                                   46,000        216,000
                                                 -----------    -----------
  Total acquisition of property and equipment    $   165,000    $   234,000
                                                 ===========    ===========
(1) AT Supply was sold on March 6, 1998.
</TABLE>

                                        13

<PAGE>

NOTE 9 - SUBSEQUENT EVENTS

On May 7, 1999, Sirrom Capital Corporation converted 2,750 shares of Series
B Convertible Preferred Stock into 100,000 shares of Common Stock at an
exercise price of $2.75 per share of Common Stock. 


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

FORWARD-LOOKING STATEMENTS

A number of statements contained in this Quarterly Report on Form 10-Q are
forward-looking statements which are made pursuant to the Safe Harbor
provisions of the Private Securities Litigation Reform Act of 1995.  These
forward-looking statements involve a number of risks and uncertainties,
including the timely development and market acceptance of products and
technologies, competitive market conditions, successful integration of
acquisitions, the ability to secure additional sources of financing, the
ability to reduce operating expenses, the ability to comply with the rules
for inclusion in the Nasdaq Stock Market and other factors described in the
Company's filings with the Securities and Exchange Commission.  The actual
results that the Company achieves may differ materially from any forward-
looking statements due to such risks and uncertainties.

RESULTS OF OPERATIONS

The following unaudited tables set forth certain data, expressed as a
percentage of revenue, from the company's consolidated Statements of
Operations for the three month periods ended March 31, 1999 and 1998.

<TABLE>
<CAPTION>
                                                     Three Months Ended       
                                                          March 31          
                                                 --------------------------
                                                    1999           1998     
                                                 -----------    -----------
  <S>                                               <C>            <C>
  Net sales                                         100.0%         100.0%
    Cost of goods sold                               51.7%          62.0%
                                                    ------         ------
    Gross profit                                     48.3%          38.0%
                                                    ------         ------
  Operating expenses:
    General and administrative                       12.5%          15.0%
    Sales and marketing                              19.0%          18.1%
    Research and development                         13.7%           9.8%
                                                    ------         ------
                                                     45.2%          42.9%
                                                    ------         ------
    Income (loss) from operations                     3.1%          (4.9%)
                                                    ------         ------
  Other income (expense):
    Interest                                         (3.1%)         (3.6%)
    Financing                                        (1.5%)         (1.0%)
    Litigation costs                                 (0.3%)         (0.1%)
    Gain on dispositions                              1.6%          17.3%
    Other                                             0.4%           0.3%
                                                    ------         ------
                                                     (2.9%)         12.9%
                                                    ------         ------
    Income before income taxes                        0.2%           8.0%

    Income tax expense                                0.0%           0.0%
                                                    ------         ------
    Net income                                        0.2%           8.0%
                                                    ======         ======
</TABLE>

                                        14

<PAGE>

THREE MONTHS ENDED MARCH 31, 1999 AND 1998.

Sales were $6,825,000 for 1999 as compared to $6,640,000 for 1998.  This
increase was due to  improved Remote Maintenance and Vision sales.  The
prior year included $1,278,000 of AT Supply sales.

Gross profit was $3,295,000 or 48.3% for 1999 as compared to $2,524,000 or
38.0% for 1998.  The increase was due to a change in product mix, with
increased Remote Maintenance and Vision sales, and the sale of AT Supply.

General and administrative expenses were $852,000 for 1999 as compared to
$993,000 for 1998.  The decrease was due to the sale of AT Supply.

Sales and marketing expenses were $1,295,000 for 1999 as compared to
$1,203,000 for 1998.  The increase is due to increased commission and
travel expenses.

Research and development expenses were $938,000 for 1999 as compared to
$652,000 for 1998.  The increase was due to continued funding for ISI and
Teltronics Remote Maintenance and Vision  products.

Income from operations was $210,000 for 1999 as compared to a loss from
operations of $324,000 for 1998.  This increase relates to increased sales
and margins, and the sale of AT Supply.

Other expense was $197,000 for 1999 as compared to income of $863,000 for
1998.  Interest and financing was $312,000 for 1999 as compared to $301,000
for 1998.  The customer list and maintenance and support agreements for the
OBRi-TEL for Windows contract maintenance business were sold to MDR
Telemanagement Limited in April, 1998 for a gain of $100,000 in the second
quarter of 1998 and $112,000 in the first quarter of 1999.  AT Supply was
sold for a gain of $1,148,000 during the first quarter of 1998.

Income tax expense was offset by a corresponding reduction in the deferred
tax asset valuation allowance.

The net income was $13,000 for 1999 as compared to a net income of $539,000
for 1998.

LIQUIDITY AND CAPITAL RESOURCES

Cash requirements were met with borrowings from The CIT Group/Credit
Finance ("CIT").  On December 22, 1998, the Ninth Amendment of the
Agreement with CIT was changed reducing the maximum availability to
$5,500,000 due to the sale of AT Supply.

The Company's working capital ratio was 1.07:1 at March 31, 1999 as
compared to 1.08:1 at December 31, 1998.  Net working capital  was $699,000
at March 31, 1999 as compared to $668,000 at December 31, 1998.  Included
in current liabilities was $4,155,000 and $3,998,000 of borrowings under
the Company's line of credit at March 31, 1999 and December 31, 1998,
respectively.

Net cash increased by $172,000 for the quarter ended March 31, 1999 as
compared to a net cash increase of $341,000 for the quarter ended March 
31, 1998.  Net cash flows from operating activities totaled $456,000 for
the quarter ended March 31, 1999 as compared to $611,000 for the quarter
ended March 31, 1998.

Accounts receivable increased by $799,000 for the quarter ended March 31,
1999 as compared to a decrease of $690,000 for the quarter ended March 31,
1998.  This increase was due to strong first

                                        15

<PAGE>

quarter, 1999 sales.  Inventories increased by $56,000 for the quarter
ended March 31, 1999 as compared to a decrease of $381,000 for the quarter
ended March 31, 1998.

Net cash flows from investing activities totaled $226,000 for the quarter
ended March 31, 1999 as compared to $310,000 for the quarter ended March
31, 1998.  Acquisition of property and equipment totaled $165,000 for the
quarter ended March 31, 1999 as compared to $234,000 for the quarter ended
March 31, 1998.  The decrease was due to reduced expenditures for dies and
molds for ISI.

Cash flows used in financing activities totaled $58,000 for the quarter
ended March 31, 1999 as compared to cash flows provided by financing
activities of $40,000 for the quarter ended March 31, 1998.

The Company entered into an agreement on February 25, 1998 with Sirrom
Capital.  Pursuant to this agreement, the Company issued $2,500,000 of
Series B Preferred Stock and $1,750,000 of 12% Subordinated Secured
Debentures due February 13, 2002.  The proceeds of this financing were used
to repurchase $4,250,000 of 11% Subordinated Convertible Debentures due on
February 13, 2002.  In connection with the Subordinated Secured Debentures,
the Company issued 525,000 warrants to purchase the Company's Common Stock
at an exercise price of $2.75 per share.  The warrants were recorded at
fair value and are being amortized to financing expense over the life of
the related obligation.  These warrants are exercisable in whole, or in
part, at any time during a five year period beginning on the date of
issuance.

On March 29, 1999, the Company and Sirrom amended and restated the
$1,750,000 of Subordinated Secured  Debentures originally entered into on
February 25, 1998 and due February 13, 2002.  The Debentures have a revised
maturity of $500,000 on April 30, 2000 and $1,250,000 on February 13, 2002.

The Company borrowed $1,280,000 from Sirrom Capital under a Loan and
Security Agreement between the Company and Sirrom Capital dated February
25, 1998 ("Loan Agreement") and delivered its: (i) Secured Senior
Subordinated Promissory Note in the principal amount of $1,000,000 with
interest at 12% per annum maturing in February, 1999, the proceeds of which
were used for working capital of the Company and (ii) Secured Senior
Subordinated Promissory Note in the principal amount of $280,000 with
interest at 12% per annum maturing in October, 2000, the proceeds of which
were used to pay an equipment loan made to the Company by CIT.  The Company
issued 365,000 warrants to purchase the Company's Common Stock at an
exercise price of $2.75 per share.  The warrants were recorded at fair
value and are being amortized to financing expense over the life of the
related obligation.  These warrants are exercisable in whole, or in part, 
at any time during a five year period beginning on the date of issuance.

On March 29, 1999, the Company and Sirrom amended and restated the
$1,000,000 Loan Agreement originally entered into on February 25, 1998 and
originally due February 25, 1999.  The Loan Agreement has a revised
maturity of April 30, 2000.  If the Loan is not repaid by September 30,
1999, the interest rate increases from 12% to 13.5%.  This Loan has been
classified as long-term debt at December 31, 1998.

In addition, the Company is exploring other equity financing.

CURRENT OUTLOOK

The key to increased sales in the Vision product line is additional
distribution.  To this end, all of the current distributors of Vision were
invited to the factory to see first hand the advances that have been made
for this product line.  This has already resulted in new sales.  At the
same meeting, we also launched the Vision Si, a low end switch which will
compete with key phone systems.  The advantage of this switch is that it
will have all the features of our other PBX and have an upgrade path to
larger

                                        16

<PAGE>

systems.  The new voice mail systems were also introduced with an entry
level system as well as  VisionWorks that allows screen pops and unified
messaging to Microsoft Outlook.  

The Remote Maintenance business continues to grow and the Company has also
started to receive upgrade orders from its major customers for older non
year 2000 compliant products.

The Company has developed a number of new orders for electronic
manufacturing from new customers.  These orders continue to help the
product line contribute to the profitability of the Company.

Interactive Solutions has signed an agreement with Siemens ElectroCom
whereby Siemens will market SIMON, their version of the MENTIS (R) computer
to their customers.  Siemens continues to develop software for SIMON.  The
Company continues to pursue a number of high level customers that are
developing solutions for their customers. 

YEAR 2000 READINESS DISCLOSURE

The Company is preparing for the impact of the arrival of the Year 2000 on
its business.  The "Year 2000 Issue" is a term used to describe the
problems created by systems that are unable to accurately interpret dates
after December 31, 1999.  These problems are derived predominantly from the
fact that many software programs have historically categorized the "year"
in a two-digit format.  The Year 2000 Issue creates potential risks for the
Company, including potential problems in the Company's products as well as
in the Information Technology ("IT") and non-IT systems that the Company
uses in its business operations.  The Company may also be exposed to risks
from third parties with whom the Company interacts who fail to adequately
address their own Year 2000 Issues.

The Company is pursuing an organized program to assure the Company's
products, production equipment and information systems and related
infrastructure will be year 2000 compliant.  The Company's Year 2000
program includes four phases: (1) an audit and assessment phase designed to
identify Year 2000 issues; (2) a modification and testing phase designed to
correct year 2000 issues internally; (3) a purchase phase designed to
correct Year 2000 issues externally; and (4) an implementation and test
phase to install and test the system for Year 2000 compliance for external
purchases.

The Company has completed the audit and assessment phases for all products. 
The modification of all products and related testing was completed by
December 31, 1998.  Selected older and discontinued products are not Year
2000 compliant and customers have been advised.  The Company has
established an Internet site as contemplated by the Year 2000 Readiness
Disclosure Act to assist customers and provide information related to the
Year 2000 Issue.  The cost to update products for year 2000 compliance was
not significant and was completed in conjunction with ongoing development
efforts.

The Company has completed the audit and assessment of production equipment
and related infrastructure.  Such equipment and infrastructure is year 2000
compliant.

The Company has completed an audit and assessment of the Year 2000 issue
for the computer system, which includes finance and production hardware and
software.  The Company's computer system is not Year 2000 compliant.  This
could cause a system failure or miscalculations, causing operation
disruption and a temporary inability to process transactions, send invoices
or engage in similar normal business activities.

                                        17

<PAGE>

The Company has leased a new computer system that is year 2000 compliant. 
This system cost $570,000 and was received in August and September, 1998. 
Internal costs are expected to increase $100,000 per year due to the
computer system installation.  The external installation and training costs
are estimated to be $130,000 and the installation is estimated to be
completed by June 30, 1999, which would be  prior to any significant impact
of the Year 2000 on its operating systems. Training and installation costs
of $100,000 related to the new computer system have been incurred as of
March 31, 1999.  The $130,000 will be paid from operating cash flow.  The
system installation should not defer any additional systems projects.

The Company has initiated formal communications with its significant
suppliers to determine the extent to which its raw materials are vulnerable
to the Year 2000 Issue.  If any suppliers indicate that they are not Year
2000 compliant, the Company plans to develop contingency plans to address
the issue.

There can be no assurance that the Company will be completely successful in
its efforts to address Year 2000 Issues.  If the Company's products are not
Year 2000 compliant, the Company could suffer lost sales or other negative
consequences, including, but not limited to, diversion of resources, damage
to the Company's reputation, increased service and warranty costs and
litigation, any of which could materially adversely affect the Company's
business operations or financial statements.

The Company is also dependent on third parties, such as its customers,
suppliers, service providers and other business partners.  If these or
other third parties fail to adequately address Year 2000 Issues, the
Company could experience a negative impact on its business operations or
financial statements.  For example, the failure of certain of the Company's
principal suppliers to have Year 2000 compliant systems could impact the
Company's ability to manufacture and/or ship its products or to maintain
adequate inventory levels for production.

At the present time, the Company does not have a contingency plan to
operate in the event that its business systems, products and raw materials
are not Year 2000 compliant.  If testing scheduled for the  second quarter
of 1999 suggests that there is a significant risk that the computer system,
products and raw materials might not be Year 2000 compliant, the Company
anticipates developing a contingency plan.

Notice:  Various statements in this discussion of year 2000 are forward-
looking statements within the meaning of the Private Securities Litigation
Reform Act of 1995.  These statements include statements of the Company's
expectations, statements with regard to schedules, cost and expected
completion dates and statements regarding expected Year 2000 compliance. 
These forward-looking statements are subject to various risk factors which
may materially affect the Company's efforts to achieve Year 2000
compliance.  These risk factors include, but are not limited to, the
availability and cost of personnel trained in this area,  the ability to
install the new computer system on a timely basis, the ability to source
Year 2000 compliant raw materials, and the completion of product
modifications.  The Company is attempting to reduce the risks by utilizing
an organized approach, extensive testing, and allowance of ample
contingency time to address issues identified by tests.

                                        18

<PAGE>

PART II - OTHER INFORMATION

ITEM 1.   LEGAL PROCEEDINGS

From time to time, the Company is a party to litigation which arises in the
normal course of business.  There is no litigation pending against the
Company which, if determined adversely, would have a material adverse
effect upon the business or financial condition of the Company.

ITEM 2.   CHANGES IN SECURITIES - None

ITEM 3.   DEFAULTS UPON SENIOR SECURITIES - None

ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS - None

ITEM 5.   OTHER INFORMATION - None

ITEM 6A.  EXHIBITS

    10.1  Global Amendment dated March 29, 1999 between 
          Sirrom Capital Corporation and Teltronics, Inc. 
          and its Subsidiaries........................................(a)
    10.2  Amended and Restated Senior Secured Promissory Note 
          in the amount of $1,000,000.00 dated and delivered 
          March 29, 1999 by the Company to Sirrom Capital 
          Corporation.................................................(a)
    10.3  Amended and Restated 12% Subordinated Secured 
          Debenture Due February 13, 2002 dated and 
          delivered March 29, 1999 by the Company to 
          Sirrom Capital Corporation..................................(a)
    10.4  Lease Rider No. 990325 dated march 25, 1999 between 
          the Company and SunShore Leasing Corporation................(a)
    27    Financial Data Schedule.....................................(a)

ITEM 6B.  REPORTS ON FORM 8-K - None
__________________________
(a)  Filed as an Exhibit to this Quarterly Report on Form 10-Q for the
     three month period ended March 31, 1999.

                                   19

<PAGE>

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.


                                   TELTRONICS, INC.


May 13, 1999                       Ewen R. Cameron
                                   President & Chief Executive Officer


May 13, 1999                       Mark E. Scott
                                   Vice President Finance, Secretary,
                                   Treasurer and Principal Accounting
                                   Officer 


                                        20