<PAGE>



                   SECURITIES AND EXCHANGE COMMISSION
                         Washington, D.C.  20549

                                     Form 10-QSB/A    



  X   Quarterly report pursuant to Section 13 or 15(d) of the Securities 
----  Exchange Act of 1934

For the quarterly period ended June 30, 1996

      Transition report pursuant to Section 13 or 15(d) of the Securities 
----- Exchange Act of 1934

For the transitional period from            to             
                                 ----------    -----------
Commission File Number 0-24622
                       -------




                  POLISH TELEPHONES AND MICROWAVE CORPORATION          
     ---------------------------------------------------------------------
       (Exact name of small business issuer as specified in its charter)
                     (d/b/a Telscape International, Ltd.)



                Texas                                75-2433637 
    -------------------------------            ----------------------
    (State or other jurisdiction of               (I.R.S. Employer
     incorporation or organization)            identification number)


    433 East Las Colinas Boulevard, Suite 815, Irving, Texas      75075
   ----------------------------------------------------------------------
   (Address of principal executive offices)                    (Zip Code)

Issuer's telephone number including area code -- 214/831-8722
                                                 ------------


Check whether the issuer (1) filed all reports required to be filed by 
Section 13 or 15(d) of the Exchange Act 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              No     X 
                            ----            ----

Indicate the number of shares outstanding of each of the issuer's classes of 
common stock, as of the latest practicable date:  $.001 par value, 3,525,147 
shares as of August 14, 1996


                      Index of Exhibits appears on page 17



<PAGE>
               Polish Telephones and Microwave Corporation
                            Table of Contents
                              Form 10-QSB/A Report    
                             June 30, 1996

                                                        PAGE
                                                        ----

Part I. Financial Information

   Item 1. Interim Consolidated Financial
    Statements (Unaudited)

      Consolidated Balance Sheet -
       June 30, 1996                                      2

      Consolidated Statements of Operations - 
       Six months ended June 30, 1995 and 1996            3

      Consolidated Statements of Operations - 
       Three months ended June 30, 1995 and 1996          4

      Consolidated Statements of Cash Flows - 
       Six months ended March 31, 1995 and 1996           5

      Notes to interim consolidated financial
       statements                                         7

   Item 2. Management's discussion and analysis of         
    financial condition and results of operations        10

Part II. Other Information

   Item 5. Other Information                             13

   Item 6. Exhibits and Reports on Form 8-K              13

           (a)   Exhibits

           (b)   Reports on Form 8-K

 Signatures                                              16




<PAGE>



                  Polish Telephones and Microwave Corporation
                          Consolidated Balance Sheet
                                   Unaudited

<TABLE>
<CAPTION>
                                                        JUNE 30,
                                                          1996 
                                                        ---------
<S>                                                   <C>
Current assets:      
 Cash                                                 $   860,200
 Short-term investments                                 2,007,706  
 Accounts receivable                                    1,121,301  
 Inventory                                              1,563,039  
 Other assets                                             211,298 
                                                      -----------
      Total current assets                              5,763,544
  
Property and equipment, net                               671,205
Excess of cost over  net assets  
   of business acquired                                 3,129,828
 
Other assets:      
   Deferred income tax                                     17,842  
   Investments in operating ventures                      199,392
   Other assets                                           105,216
                                                        ---------
      Total other assets                                  231,992  
      
      Total assets                                    $ 9,796,569  
                                                        ---------
                                                        ---------
Current liabilities:      
   Accounts payable                                   $ 1,950,682  
   Accrued liabilities                                    444,957
   Deferred income tax                                    309,343
   Dividends payable                                      162,553
   Other liabilities                                      144,572
                                                        ---------
      Total current liabilities                         3,010,107

Accrued employee benefits                                  13,990  
Minority interests                                        741,176  
      
Stockholders' equity:
    Series B non-voting, non-participating
     preferred stock                                          380
    Common stock                                            3,525  
 Additional paid in capital                            10,992,267  
 Unpaid capital subscriptions                            (600,000) 
 Accumulated deficit                                   (4,364,876)
                                                        ---------
      Stockholders' equity                              6,031,296 
                                                        ---------
      Total liabilities and equity                    $ 9,796,569
                                                        ---------
                                                        ---------
</TABLE>

 See notes to interim consolidated financial statements


                                    2


<PAGE>

                 Polish Telephones and Microwave Corporation
                   Consolidated Statements of Operations
                                unaudited

<TABLE>
<CAPTION>

                                                 SIX MONTHS ENDED JUNE 30, 
                                                   1996           1995 
                                                 ----------     ----------
<S>                                             <C>           <C>
Revenues                                        $ 1,350,084   $   728,435 
    
Cost of revenues                                    826,095       331,017 
                                                 ----------     ----------
Gross profit                                        523,989       397,418 
    
Selling, general and admin. expense                 999,931       747,250
                                                 ----------     ----------
Loss from operations                               (475,942)     (349,832)
                                                 ----------     ----------
Other income (expense):    
    Interest, net                                    64,067       123,702 

    Foreign exchange gain (loss)                      7,556          (452)
    
    Other income                                     44,450             0
                                                 ----------     ----------
                                                    116,073       123,250 
    
Provision for income taxes:    
    Foreign income tax on operations
     of subsidiary                                   36,242             0
    Utilization of foreign operating
     loss carryforwards                              (8,643)            0
                                                  ----------   ----------
                                                     27,599             0 
    
    
Loss before minority interest                      (387,468)     (226,582)
    
Minority interest in subsidiary's     
  income                                               (126)       (8,353)
                                                  ----------   ----------
    
Net loss                                       $   (387,594)  $  (234,935)
                                                  ----------   ---------- 
   
   Net loss per share                             $      (0.16)  $    (0.12)    
                                                  ----------   ----------
Weighted average common and common    
       equivalent shares outstanding                 2,372,598    1,982,669     
                                                  ----------   ----------
</TABLE>


            See notes to interim consolidated financial statements.

                                     3


<PAGE>

                 Polish Telephones and Microwave Corporation
                   Consolidated Statements of Operations
                                unaudited

<TABLE>
<CAPTION>

                                                THREE MONTHS ENDED JUNE 30, 
                                                   1996           1995 
                                                 ----------     ----------
<S>                                             <C>           <C>
Revenues                                        $   840,846   $   387,829 
    
Cost of revenues                                    507,934       122,807 
                                                 ----------     ----------
Gross profit                                        332,912       265,022 
    
Selling, general and admin. expense                 598,387       399,574
                                                 ----------     ----------
Loss from operations                               (265,475)     (134,552)
                                                 ----------     ----------
Other income (expense):    
    Interest, net                                    24,242        59,760 

    Foreign exchange gain (loss)                     10,484        (5,752)
    
    Other income                                     44,450             0
                                                 ----------     ----------
                                                     79,176        54,008 
    
Provision for income taxes:    
    Foreign income tax on operations
     of subsidiary                                   24,637             0
    Utilization of foreign operating
     loss carryforwards                              (4,186)            0
                                                  ----------   ----------
                                                     20,451             0 
    
    
Loss before minority interest                      (206,750)      (80,544)
    
Minority interest in subsidiary's
  losses (income)                                       264       (4,237)
                                                  ----------   ----------
    
Net loss                                       $   (206,486)  $   (84,781)
                                                  ----------   ---------- 
   
   Net loss per share                             $      (0.07)  $    (0.04)    
                                                  ----------   ----------
Weighted average common and common    
       equivalent shares outstanding                 2,779,313    1,974,562     
                                                  ----------   ----------
</TABLE>


            See notes to interim consolidated financial statements.

                                     4


<PAGE>

                      Polish Telephones and Microwave Corporation
                         Consolidated Statements of Cash Flows
                                        Unaudited


<TABLE>
<CAPTION>
                                                     SIX MONTHS ENDED MARCH 31, 
                                                         1996          1995
                                                        ------        ------
<S>                                                 <C>           <C>
Operating Activities    
  Net loss                                          $  (387,594)  $  (234,935)
  Add non-cash expenses:
    Allowance for doubtful accounts                      (5,630)            0   
    Depreciation and amortization                        39,889        21,952
    Allowance for inventory obsolesence                    (571)            0
    Accrued employee benefits                               661             0
    Deferred income taxes                                11,453             0   
    Interest amortized on discounted    
      short-term investments                             (8,196)      (13,753)
    Minority interest in subsidiary's    
      income                                                625         8,353
    Decrease in minority interests     
      subscriptions receivable                           45,966        24,027 
  Changes in operating assets and liabilities    
    Increase in accounts receivable, net                (12,647)     (173,577)
    Taxes receivable                                     25,126             0 
    Increase in inventory                              (194,952)      (27,861)
    Decrease in other assets                             68,440        23,146
    Increase (decrease) in accounts payable              54,675       (76,360) 
    Increase (decrease) in accrued liabilities           10,159       (29,349)
    Increase (decrease) in other liabilities             46,349       (39,349)
                                                     ----------    -----------
      Net cash used by operating activities            (306,247)     (517,706)
    
Investing Activities    
    Purchase of short term investments               (4,898,790)   (7,397,227)
    Redemption of short term investments              6,370,895     7,906,760 
    Purchases of property and equipment                 (76,472)      (11,748)
    Acquisition of Telereunion, net of cash acquired   (227,185)            0
    Investment in operating venture                    (196,462)            0
                                                     ----------    -----------
      Net cash provided by investment activities        971,986       497,785

Financing Activities    
    Capital lease payments                               (2,558)            0
    Stock transactions                                   23,764             0
                                                     ----------    -----------
      Net cash provided by financing activities          21,206             0 

  Net increase (decrease) in cash                       686,945       (19,921)
    
  Cash at beginning of year                             173,255       546,267
                                                     ----------    -----------
  Cash at end of period                             $   860,200   $   526,346
                                                     ----------    -----------
                                                     ----------    -----------
</TABLE>


             See notes to interim consolidated financial statements.

                                       5


<PAGE>

                      Polish Telephones and Microwave Corporation
                    Consolidated Statements of Cash Flows-(continued)
                                        Unaudited


<TABLE>
<CAPTION>
                                                     SIX MONTHS ENDED MARCH 31, 
                                                         1996          1995
                                                        ------        ------
<S>                                                 <C>           <C>
Supplemental schedule of non-cash
  investing and financing activities:

Issuance of preferred and common stock in exchange
  for shares of common in connection with reverse
  triangular merger
    
    Excess of cost over net assets acquired         $  2,857,280  $         0
    Common stock                                          (1,605)           0
    Preferred stock                                         (380)           0
    Additional paid in capital                        (2,855,295)           0


</TABLE>


             See notes to interim consolidated financial statements.

                                       6
<PAGE>



                     POLISH TELEPHONES AND MICROWAVE CORPORATION

                 NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
                                     (Unaudited)

Note 1 - Financial Statements

     The accompanying unaudited Interim Consolidated Financial Statements 
     include the accounts of Polish Telephones and Microwave Corporation and
     subsidiaries (the "Company").

     The statements have been prepared in accordance with generally accepted 
     accounting principles for interim financial information and with the 
     instructions to Form 10-QSB and Regulation SB.  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 
     adjustments) considered necessary for a fair presentation have been 
     included.  Operating results for the six months ended June 30, 1996 are 
     not necessarily indicative of the results that may be expected for the 
     year ending December 31, 1996.  For further information, refer to the 
     consolidated financial statements and footnotes included in the Company's 
     annual report on Form 10-KSB for the year ended December 31, 1995.


Note 2 - Foreign operations

     The consolidated financial statements include amounts for the Company's 
     90% owned foreign subsidiary, DTS/ZWUT, and the Company's fully owned
     subsidiary, Telereunion, Inc., as follows:
	
	DTS/ZWUT:
                             SIX MONTHS ENDED         THREE MONTHS ENDED    
	                       6/30/96      6/30/95      6/30/96     6/30/95
                           ---------    ---------    ---------   ---------
	
     Net sales            $  679,196   $  724,461   $  169,958   $ 383,855
     Net income (loss)        (6,252)      41,764      (10,156)     62,348
     Total assets          1,157,395    1,117,356    1,157,395   1,117,356
     Net assets              835,953      950,302      835,953     950,302



	Telereunion, Inc.:
                             SIX MONTHS ENDED         THREE MONTHS ENDED    
	                       6/30/96      6/30/95      6/30/96     6/30/95
                           ---------    ---------    ---------   ---------

     Net sales            $2,958,478         -      $1,341,775       -
     Net income (loss)      (157,348)        -          50,049       -
     Total assets          2,756,325         -       2,756,325       -
     Net assets               55,762         -          55,762       -


                                       7
<PAGE>



                     POLISH TELEPHONES AND MICROWAVE CORPORATION

                 NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
                                     (Unaudited)

Note 2 - Foreign operations (cont.)

     The periods ended 6/30/96 include operations of Telereunion, Inc. since 
     May 17, 1996, the date of Telereunion Inc.'s acquisition by the Company.  
     The periods ended 6/30/95 do not include any operations of Telereunion, 
     Inc. because they predate its acquisition by  the Company. See note 5 
     hereto.


Note 3 - Net Income (loss) per share

     The net income (loss) per common and common equivalent share is based on 
     the weighted average number of shares of common stock outstanding.  For 
     1995, common equivalent shares include stock options for 128,394 shares 
     granted at prices below the average market price of $2.32 per share, as if 
     they were outstanding for the entire quarter, calculated by the treasury 
     stock method in accordance with Securities and Exchange Commission Staff 
     Accounting Bulletin requirements.  

        For 1996, common equivalent shares include stock options and warrants 
     for 654,853 shares granted at prices below the average fair market price at
     which the Company's common stock traded during the period, as if they were 
     outstanding for the entire quarter, calculated by the treasury stock 
     method as described above.    

     The average market price during each of the periods presented has been 
     used in the calculation of equivalent shares in all periods presented as 
     this results in the maximum dilutive effect.


Note 4 - Investment in operating ventures

     During 1995, the Company made an investment of $2,930 in a Polish joint 
     venture "TELINFO".  The  joint venture was formed to provided 
     telecommunication services in a rural area of Poland.  The Company has a 
     34 percent interest in the joint venture and has no continuing obligation 
     to fund or guarantee the liabilities of the joint venture.  Currently, the 
     joint venture has no significant operations but is seeking a telephone 
     operator's license for the Suwalki, Poland area.
	
     During 1996, the Company invested $196,462 for a 7.21% interest in a 
     venture with Elterix, a Polish company developing a private network for 
     70,000 telephone lines.


                                       8
<PAGE>



                     POLISH TELEPHONES AND MICROWAVE CORPORATION

                 NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
                                     (Unaudited)

Note 5 - Business combination

     On May 17, 1996, the Company acquired all of the stock of Telereunion, a
     privately owned Delaware corporation.  Telereunion is a telecommunications 
     equipment and service company with operations primarily in Mexico. Under 
     the terms of the acquisition, the Company issued to the shareholders of 
     Telereunion 1,605,000 shares of common stock of the Company, 380,000 
     shares of non-voting, non-participating preferred stock having an 
     aggregate liquidation preference of $380,000 and warrants to purchase up 
     to 2,595,000 additional shares at $2.19.  The warrants would vest and 
     become exercisable, if at all, as the combined companies meet certain 
     specified financial objectives and would expire 7 years after closing.  In 
     addition, the Company converted and amended certain non-qualified options 
     outstanding under the Telereunion 1995 Stock Option and Appreciation 
     Rights Plan to provide for the right to acquire an aggregate of 216,618 
     shares of Common Stock of the Company at an exercise price of $1.35 per 
     share.

     At June 30, 1996, the Company incurred and capitalized costs of $356,998 
     related to the Telereunion, Inc. acquisition.  These costs will increase 
     the purchase price of the acquisition.

     The following unaudited pro forma summary financial information presents 
     the results of operations of the Company as if the acquisition of
     Telereunion, Inc. had occurred at January 1, 1995. This summary may not be 
     indicative of what would have occurred had the acquisition been made as of 
     this date or of results which may occur in the future.  The historical 
     financial statements used to prepare the summary will reflect the 
     acquisition from its effective date of the acquisition forward, using the 
     purchase method of accounting based on estimated fair values of assets 
     purchased and liabilities assumed. 

                             SIX MONTHS ENDED          THREE MONTHS ENDED    
	                       6/30/96      6/30/95      6/30/96      6/30/95
                           ---------    ---------    ---------    ---------
     Revenue              $3,637,674   $2,900,294   $1,511,733   $1,247,468
     Loss from operations   (460,323)    (295,148)    (190,990)    (196,216)
     Net income (loss)      (564,495)    (206,689)    (107,722)     186,758
     Net income (loss)
         per share               (.24)        (.05)        (.04)         .05    

 

                                       9
<PAGE>


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

On May 17, 1996 the Company acquired Telereunion, Inc. Telereunion, which is a 
privately owned Delaware corporation, is a telecommunications equipment and 
service provider with operations primarily in the Republic of Mexico.  Its 
operations in Mexico are conducted through Vextro de Mexico, S.A de C.V.,  its 
97%-owned Mexican subsidiary.  Telereunion distributes Northern Telcom 
telecommunications products, as well as Octel voice mail systems and provides 
conference calling services in Mexico.  

The financial statements for 1996 include the operations of Telereunion, Inc. 
from May 17, 1996 through June 30.  See financial statement footnote number 2 
for certain amounts included in the Company's financial statements from 
Telereunion.  Telereunion, Inc.'s operations for 1995 are not included in the 
financial statements, as that predates the acquisition.  For a selected 
financial data presented on a pro forma basis as if the acquisition took place 
at the beginning of the period presented see financial statement footnote 
number 5.

REVENUES from the sale of products increased 117% or $453,017 from $387,829 in 
the second quarter of 1995 to $840,846 in the second quarter of fiscal 1996.  
Revenues increased 85% or $621,649 from $728,435 for the six months ended June 
30,1995 to $1,350,084 for the six months ended June 30,1996.  Sales increased 
due to the volume that the Telereunion acquisition provided, which was offset 
by a decrease in revenues from DTS/ZWUT.  Revenues from DTS/ZWUT decrease 
primarily to two significant orders not closing as anticipated during the 
quarter.  These orders are expected to close later this year.  Additionally, 
the Company anticipates benefiting from diversifying its product line from 
mainly PBX switching equipment from Cortelco in Poland, to a broad line of 
telecomm equipment from Northern Telecom (Nortel),  voice mail (Octel), 
teleconferencing bridging services and equipment (Vtel, Polycom, DataBeam), 
specialized telecomm applications, cabling and approximately $35,000 of monthly 
based service contracts.

COST OF REVENUES increased by $385,127 from $122,807 in the second quarter of 
1995 to $507,934 in the second quarter of fiscal 1996.  Cost of Sales increased 
$495,078 from $331,017 for the six months ended June 30,1995 to $826,095 for 
the six months ended June 30,1996.  The increase in the cost of revenues for 
the first half of 1996, compared with the same period of 1995, reflects the 
increase in sales revenues realized by the Company, as a result of the 
inclusion of Telereunion's operations beginning May 17, 1996.  These increases 
are offset by  decreases in cost of revenues from DTS/ZWUT as a result of the 
decreased revenues experienced by DTS/ZWUT.

GROSS PROFIT increased 26% or $67,890 from $265,022 in the second quarter of 
1995, to $332,912 in the second quarter of fiscal 1996.  There was an increase 
of 32% or $126,571 from the $397,418 gross profit of the first half of 1995, 
compared with the $523,989 gross profit for the first six months of 1996.  This 
increase in gross profit was mainly attributable to the inclusion of 
Telereunion's operations beginning May 17, 1996.


                                      10
<PAGE>
 
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES (SG&A) increased $198,813 from 
$399,574 for the second quarter of 1995, to $598,387 for the same period of 
1996.  The total SG&A expenses for the six months ended in June 30,1996 were 
$999,931, which implies an increase of $252,681 over the SG&A expenses of the 
same period of 1995 of $747,250.  This increase was mainly due to the addition 
of SG&A expenses of Telereunion, a non-recurring expense of approximately 
$55,000 relating to a severance package for the Company's former Chairman and 
CEO who resigned during February 1966 and the development of additional product 
lines in Poland.

LOSS FROM OPERATIONS increased from ($134,552) for the second quarter of 1995 
to ($265,475) for the same period of 1996 and increased from ($349,832) to 
($475,942) for the first half of 1995 and 1996, respectively. This increase for 
the first six months of the year 1996, was generated mainly by the increase in 
the Selling General and Administrative expenses.

OTHER INCOME (EXPENSE) decreased $7,177 from $123,250 for the first six months 
of 1995, to $116,073 for the same period of 1996.  Primary components of this 
change were Interest Income, Foreign exchange gain (loss) and Other Income. The 
Company has realized less interest income when comparing the first six months 
of 1996 to the same period of 1995, primarily due to a decrease in the amount 
invested in short term securities, as a result of the net cash utilized in by 
the Company for its operations.

PROVISION FOR INCOME TAXES was $27,599 for the first six months of 1996 as 
compared to no provision for the same period of 1995.  This change was mainly 
attributed to a negative impact on the deferred federal taxes in the Mexican 
subsidiary of Telereunion, Inc., due to a change of the relative positions of 
inventories.  The provision for income taxes was $20,451 for the three months 
ended June 30, 1996, while no provision was required for the same period of 
1995.

NET LOSS increased to ($387,594), from ($234,935) for the first six months of 
1996 and 1995, respectively.

LIQUIDITY AND CAPITAL RESOURCES At June 30, 1996 the Company had cash and 
equivalents of approximately $2,868,000.  Since inception the Company has 
financed its operations primarily through the issuance of debt and equity, and 
through cash generated by operations.

The Company does not maintain a line of credit and relies on its working 
capital position to fund its operations on an on going basis.

The Company's future cash requirements for the remainder of 1996, and beyond, 
will depend primarily upon the level of sales, the timing of inventory 
purchases, expenditures on new product lines implementation and marketing, and 
upon capital expenditures for strategic acquisitions and network development.

OUTLOOK AND UNCERTAINTIES 

Future trends for the revenues and profitability of the Company are difficult 
to predict.  The Company continues to face many risks and uncertainties, 
including general and specific market economic risks, the risks associated  
with the continued conversion of the Polish economy from a communist economy to 
a market economy, political risks and sudden economic changes in Mexico, 
competitive factors, the risks of its customers being able to obtain financing 


                                      11
<PAGE>


for their purchases of the Company's products, risks of collectibility of 
accounts receivable generally and the availability of products that will be 
approved for use in the Company's foreign markets. In addition, the Company 
believes that the markets in which it participates could be subject to numerous 
factors that will contribute to the slow growth of its business in those 
markets, such as the lack of capital for the creation of infrastructure, lack 
of governmental support for the telecommunications industry and intense 
competition from other vendors with substantially greater resources and name 
recognition that the Company.  In addition, many of the products and services, 
or their components, sold by the Company, are subject to price fluctuations 
which are beyond the Company's control and can affect the Company's ability to 
price its products and services competitively and, thus, the overall 
profitability of the Company.  Furthermore, the Company faces the challenge of 
maintaining product lines that reflect the rapidly improving and changing 
technology of the telecommunications industry.

It is also difficult to predict what effect the Company's purchase of 
Telereunion and the proposed purchase of Orion Communications will have on the 
Company's liquidity and capital resources.  The exploitation by Telereunion of 
the opportunities in the Mexican Telecommunications market and the 
opportunities in the US long distance resale and shared tenant services market 
are expected to require substantial capital.  To the extent Telereunion does 
not have a positive net cash flow from its operations, it can be expected that 
the Company would have to fund any shortfalls from its working capital.  In 
addition, any capital expenditures needed to expand the operations of Vextro de 
Mexico (a subsidiary of Telereunion), or Orion Communications would likely be 
funded out of the working capital of the Company.  Any such fundings would 
reduce the funds available to finance and expand the Company's operations in 
Eastern Europe. In addition, further economic crises in Mexico or Poland could 
result in the need to fund any cash shortfalls of the subsidiaries operating in 
those countries.

SUBSEQUENT EVENTS  On July 8, 1996, the Company announced it had signed a 
letter of intent to combine with Orion Communications, Inc. (Orion) of 
Houston. Orion is a reseller of long distance and Internet Services.  Orion 
was founded in April 1996 as a management spin-off of portions of DNS 
Communications, Inc. (DNS) from Matrix Telecom, Inc. (Matrix), a $80 million
reseller.  DNS was a $21 million revenue reseller prior to its merger with 
Matrix.

Scott Crist, Chairman of Orion, former CEO of Matrix, and co-founder of DNS 
will head up the combined companies as President.  Mark Vance, CEO of Orion, 
former COO/CFO of Matrix, and co-founder of DNS will serve as Executive Vice 
President and CFO of PTMC (d.b.a. Telscape International, Ltd.).

The total merger consideration included 400,000 shares of Telscape Common Stock 
in exchange for 100% of the Orion's Common Stock .

The Company believes this merger will strongly reinforce its strategy of 
becoming a leading supplier of telecommunications equipment and services to the 
Hispanic marketplace within Mexico and the US, by bringing a seasoned 
management team in the US long distance and Internet telecommunications 
industries .


                                      12
<PAGE>


 
PART II.  OTHER INFORMATION


Item 5.   Other information

           Litigation is currently pending against Polish Telephones and 
           Microwave Corporation ("PTMC") in the Dallas County District Court, 
           298th Judicial District, Cause No. 96-00768.  SA Telecommunications, 
           Inc.  f/k/a SA Holdings, Inc., ("SATI"), filed suit against 
           Dickinson & Co. ("Dickinson"), Dickinson Holding Corp. ("Dickinson 
           Holding") and PTMC on May 3, 1996.  SATI claims  1)Dickinson and/or 
           Dickinson Holding intentionally interfered with the agreements 
           and/or business relationship between SATI and PTMC; 2) PTMC and/or 
           Dickinson Holding intentionally interfered with the agreements 
           and/or business relationships between SATI and Dickinson; and 3) 
           Dickinson and/or PTMC made material misrepresentations to SATI.  
           SATI has additional DTPA and breach of contract claims against 
           Dickinson.  SATI is seeking an undisclosed damage amount plus 
           exemplary damages from PTMC.  Litigation is now in the early 
           discovery phase.

Item 6.    Exhibits and Reports on Form 8-K

           (a)   Exhibits.  See index to Exhibits on page 17.

           (b)    Reports on Form 8-K.  

           On June 3, 1996 the Company filed a report on Form 8-K reporting
           that the Company acquired all of the issued and outstanding shares 
           of Telereunion, Inc., a Delaware corporation ("Telereunion").  The
           acquisition was completed by means of a merger between Telereunion
           and a newly formed subsidiary of the Company.  Upon consummation of 
           the merger, the subsidiary changed its name to Telereunion, Inc.  
           Telereunion distributes Northern Telcom telecommunications products,
           as well as Octel voice mail systems and provides conference calling 
           services in Mexico.  Telereunion's operations are conducted through 
           Vextro de Mexico, S.A de C.V. ("Vextro"),  its 97% owned subsidiary 
           organized under the laws of the Republic of Mexico.

           Under the terms of the acquisition, the Company issued to the 
           stockholders of Telereunion, in exchange for the issued and 
           outstanding shares of common stock of Telereunion,: (i) an aggregate 
           of 1,605,000 shares of the common stock, $.001 par value per share, 
           of the Company (the "Common Stock"), (ii) warrants for the purchase 
           of an aggregate of 2,500,000 shares of Common Stock at an exercise 
           price of $2.19 per share and having a term of seven years (the 
           "Series A Common Stock Warrants"), (iii) warrants for the purchase 
           of an aggregate of 95,000 shares of Common Stock at an exercise 
           price of $2.19 per share and having a term of seven years (the 
           "Series B Common Stock Warrants"), and (iv) an aggregate of 380,000 
           shares of a new series of non-voting, non-participating preferred 
           stock, $.001 par value per share, of the Company (the "Series B
           Preferred Stock").  In addition, the Company converted and amended


                                      13
<PAGE>


           certain non-qualified options outstanding under the Telereunion 1995 
           Stock Option and Appreciation Rights Plan to provide for the right 
           to acquire an aggregate of 216,618 shares of Common Stock for an 
           exercise price of $1.35 per share.  The options are fully vested and 
           immediately exercisable.  The consideration paid by the Company for 
           the issued and outstanding common stock of Telereunion has been 
           determined by negotiation between the parties.

           The exercise price for the Series A Common Stock Warrants and the 
           Series B Common Stock Warrants was calculated based upon the average 
           of the closing price for a share of Common Stock quoted on the
           Nasdaq Small Cap market for the twenty (20) trading days immediately 
           preceding December 22, 1995, the date of execution of the letter of 
           intent with respect to this acquisition.  The Series A Common Stock 
           Warrants will vest and become exercisable, if at all, upon the 
           Company meeting certain fiscal year earnings per share targets, 
           computed in accordance with the terms of the Series A Common Stock 
           Warrants, as follows: (i) 1,000,000 shares if earnings per share 
           equals at least $.315 per share; (ii) an additional 1,000,000 shares 
           if earnings per share (computed to include the effect of the vesting 
           of 2,000,000 shares under the Series A Common Stock Warrants) equals 
           at least $.458 per share; and (iii) an additional 500,000 shares if 
           earnings per share (computed to include the effect of the vesting of 
           all of the Series A Common Stock Warrants) equals at least $.75 per 
           share.  The Series B Common Stock Warrants will vest and become 
           exercisable, if at all, upon the Company achieving a $5,000,000 
           increase in net shareholder's equity, computed in accordance with 
           the terms of the Series B Common Stock Warrants.  Both the Series A 
           Common Stock Warrants and the Series B Common Stock Warrants are 
           subject to accelerated vesting if the closing price for the 
           Company's Common Stock as quoted on The Nasdaq Stock Market or any 
           other reliable public market is at least $12.00 per share for a 
           period of 90 consecutive trading days during the warrants' terms.

           The Series B Preferred Stock is redeemable by the Company for a 
           price of $1.00 per share upon the attainment of a specified increase 
           in net stockholder's equity or upon the attainment of a specified 
           operating cash flow target.  If a redemption event does not occur 
           within eighteen months of its issuance, the Series B Preferred Stock 
           is automatically terminated.

           In addition to the foregoing terms, three stockholders of 
           Telereunion who are the principal executive officers of Telereunion 
           and its operating subsidiaries received three year employment 
           agreements.  The Company also increased the size of its Board of 
           Directors by one member, from its pre-acquisition size of six 
           members to seven.  The three "management" stockholders of 
           Telereunion joined the Board as new directors and four of the six 
           pre-acquisition directors of the Company comprise the remaining 
           members of the Board.  Messrs. Panno, Varghese, Kirkland and Efird 
           and Messrs. Landa, Mora and Gudino comprise the Board of Directors 
           of the Company after consummation of the acquisition.

           Mr. Christopher Efird, who is a director of the Company, is also a 
           director of Telereunion.  In addition, Mr. Efird is an employee of 
           Benchmark Equity Group ("Benchmark"), a stockholder of Telereunion.


                                      14
<PAGE>


  
           Upon consummation of the acquisition, Mr. Efird received, as 
           compensation for his services as an employee of Benchmark, 65,625 
           shares of Common Stock, 37,500 Series A Common Stock Warrants and 
           11,875 Series B Common Stock Warrants, which shares and warrants 
           constitute a portion of the Common Stock and warrants issued to 
           Benchmark at the closing of the acquisition.  Mr. Efird originally 
           joined the Board of the Company on November 17, 1995.

           On June 28, 1996 the Company filed a report on Form 8-K reporting 
           that the Company had filed an Assumed Name Certificate with the
           state of Texas.  Accordingly, the Company is now conducting business 
           as Telscape International, Ltd.  In connection with the name change, 
           the Company's trading symbol changed from "PTMC" to "TSCP".



                                      15
<PAGE>


                                  SIGNATURES


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





                                       POLISH TELEPHONES AND MICROWAVE 
                                       CORPORATION



   Date:   11/19/96                   By:    /s/ Mark Vance        
        -----------------                ----------------------
                                            Mark Vance    
                                            Executive Vice President and CFO    



                                     16


<PAGE>

                              INDEX OF EXHIBITS


Exhibit No.         Description
-----------         -----------
  10.9        -     Agreement and pland of merger between the Company and
                    Orion Communications, Inc.
  11.1        -     Statements regarding computation of per share earnings
  21.1        -     Subsidiaries of the Registrant
  27.1        -     Financial Data Schedule





                                      17