UNITED STATES
                  SECURITIES AND EXCHANGE COMMISSION
                        Washington, DC   20549
                              FORM 10-QSB

(Mark One)

[x] QUARTERLY REPORT UNDER SECTION 13 0R 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934

For the Quarterly Period Ended  June 30, 2004
                                ------------------

[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

    For the transition period from ______________ to ______________

    Commission file number        000-010690
                             ____________________


                           Science Dynamics Corporation
     -------------------------------------------------------------------
      (Exact name of small business issuer as specified in its charter)

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

                                  22-2011859
                      -------------------------------
                     (IRS Employer Identification No.)


       7150 N. Park Dr., Suite 500, Pennsauken, New Jersey   08109
          -----------------------------------------------------
                (Address of principal executive offices)

                      (    856     )     910-1166
          -----------------------------------------------------
                       (Issuer's telephone number)

                                    N/A
      ---------------------------------------------------------------
     (Former name, former address, and former fiscal year, if changed
     since last report)

Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.    Yes [x]     No [ ]



                  APPLICABLE ONLY TO CORPORATE ISSUERS

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


         08/20/2004  45,900,534  shares of common stock were outstanding.

Transitional Small Business Disclosure Format (Check One): Yes [ ]  No [x]

<PAGE>



               S C I E N C E   D Y N A M I C S   C O R P O R A T I O N


                                     INDEX
                                     -----

                                                                   PAGE NO.

PART I. FINANCIAL INFORMATION

        Item 1. Financial Statements

        Consolidated Balance Sheets as of June 30, 2004
        (unaudited) and December 31, 2003 (audited)                    1

        Consolidated Statements of Operations for six months
        ended June 30, 2004 (unaudited) and three months
        ended June 30, 2003 (unaudited)                                2

        Consolidated Statements of Cash Flows for six months
        ended June 30, 2004 (unaudited) and three months
        ended June 30, 2003 (unaudited)                                3

        Notes to Consolidated Financial Statements                     4 - 6

        Item 2. Management's Discussion and Analysis or
        Plan of Operation                                              6 - 11

        Item 3. Controls and Procedures                                11

PART II. OTHER INFORMATION

       Item 1. Legal Proceedings                                       12

       Item 2. Changes in Securities                                   12

       Item 3. Defaults upon Senior Securities                         12

       Item 4. Submission of Matters to Vote of Security Holders       12

       Item 5. Other Information                                       12

       Item 6. Exhibits and Reports on Form 8-K                        12


SIGNATURES                                                             13
<PAGE>


PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

<TABLE>
                           SCIENCE DYNAMICS CORPORATION AND SUBSIDIARY
                                  CONSOLIDATED BALANCE SHEETS

<CAPTION>
                        ASSETS
                                                           June 30,            December 31,
                                                             2004                   2003
                                                           Unaudited              Audited
                                                           ---------              -------

<S>                                                   <C>                     <C>
Current assets:

   Cash and cash equivalents                           $     78,483            $   74,250
   Accounts receivable - trade                              531,553               447,060
   Inventories                                              133,346               181,119
   Other current assets                                       2,842                 2,812
                                                         ----------             ---------
      Total current assets                                  746,224               705,241
                                                         ----------             ---------

Property and equipment, net                                 140,063               209,654
Deferred Asset                                               21,955                66,847
Other assets                                                  2,812                 2,812
Goodwill (Note 3)                                                 -               250,498
                                                         ----------             ---------
      Total assets                                     $    911,054            $1,235,052
                                                         ==========             =========


LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
Current liabilities:
   Short term payable                                  $    261,860            $  111,860
   Customer deposits                                        191,290               137,004
   Deferred Income                                           44,377                35,404
   SBA Loan                                                  50,000                50,000
   Revolving Credit Line                                    227,998               336,309
   Loan payable stockholders                                163,192               163,192
   Accounts payable                                       1,328,518             1,488,690
   Accrued expenses                                         550,908               443,474
   Convertible Debenture (See Note 2)                     1,198,362             1,198,362
   Subscribed Stock Payable                                     -0-               200,000
                                                         ----------             ---------
      Total current liabilities                           4,016,505             4,164,295

Long Term liabilities:
Long Term Debt                                              332,963               428,828
Non current portion of bank Note                                  -                     -
                                                         ----------             ---------
      Total liabilities                                   4,349,468             4,593,123

Shareholders' equity - (Deficit)
   Preferred stock - .01 par value
       10,000,000 shares authorized                               -                     -
        No shares issued
   Common stock - .01 par value,
      200,000,000 and 45,000,000 shares authorized,
      45,850,553 and 41,554,454 issued
      45,724,733 and 41,428,654 outstanding
       in 2004 and 2003 respectively.                       458,505               415,545

   Additional paid-in capital                            15,783,608            15,593,569
   Reserve for stock compensation                           160,909               160,909
   (Deficit)                                            (19,443,604)          (19,130,261)
                                                         ----------             ---------
                                                         (3,040,582)          (2,960, 238)
   Common stock held in treasury, at cost                  (397,833)             (397,833)
                                                         ----------             ---------
   Total shareholders' equity (Deficit)                  (3,438,415)           (3,358,071)
   Total liabilities and shareholders'
    Equity                                             $    911,053          $  1,235,052
                                                         ==========             =========


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

</TABLE>



-1-
<PAGE>


<TABLE>
                           SCIENCE DYNAMICS CORPORATION AND SUBSIDIARY
                              CONSOLIDATED STATEMENTS OF OPERATIONS
                                           (UNAUDITED)

<CAPTION>

                                                   Six Months Ended               Three Months Ended
                                                       June 30,                         June 30,
                                                 2004           2003              2004           2003
                                                 ----           ----              ----           ----
S>                                           <C>           <C>                <C>           <C>


 NET SALES                                    $ 2,581,451   $ 1,774,885        $1,047,176    $1,298,588


Operating costs and expenses:

      Cost of sales                               984,697       770,590           409,086       697,783
      Research and development                    153,423       213,593            81,918        91,852
      Selling, general
          And administrative                    1,450,687     1,335,143           728,619       991,145
                                                ---------     ---------         ---------     ---------

                                                2,588,807     2,319,326         1,219,623     1,780,780
                                                ---------     ---------         ---------     ---------

     Goodwill impairment (See Note 3)             250,498             -           250,498             -

Operating Income (Loss) before
other income (expenses)                          (257,854)     (544,441)         (422,945)     (482,192)


Other income (expenses):
   Sale of Intangable Asset                        60,000             -            60,000             -
   Other Income                                     4,809         1,720             2,665         1,720
   Interest Expense                               (75,407)      (63,845)          (30,654)      (39,739)
   Finance Expense                                (44,891)      (80,988)          (22,413)      (62,354)
                                                ---------     ---------         ---------     ---------

Net Income (Loss)                                (313,343)     (687,554)         (413,347)     (582,565)
                                                ---------     ---------         ---------     ---------

Net Income (loss) per common share Basic       $    (0.01)        (0.02)        $   (0.01)        (0.02)
                                                =========     =========         =========     =========

Weighted average shares outstanding Basic      45,612,134    34,485,986        45,669,814    34,485,986
                                                =========     =========         =========     =========

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


</TABLE>

-2-
<PAGE>




<TABLE>
                                SCIENCE DYNAMICS CORPORATION AND SUBSIDIARY
                                  CONSOLIDATED STATEMENTS OF CASH FLOWS
                                              (UNAUDITED)

<CAPTION>
                                                             Three Months Ended June 30
                                                             2004                   2003
                                                             ----                   ----
<S>                                                    <C>                  <C>


Cash flows from operating activities:
   Net (loss)                                        $   (313,343)           $  (687,553)

Adjustments to reconcile net (loss) to net cash
provided by (used for) operating activities:
   Depreciation                                            69,592                171,663
   Interest expense non cash                                    -                 63,845
   Financing expense non cash                              44,891                 80,988
   Other non Cash items                                     2,998                      -
Changes in operating assets and liabilities:
    Write-off Good will                                   250,498                      -
   (Increase) decrease in:
    Accounts receivable                                   (84,492)              (663,396)
    Inventories                                            47,773                (31,626)
    Other current assets                                       30                (23,963)
    Other assets                                                -                 17,370
     Increase (decrease) in:
     Accounts Payable and                                (160,172)                     -
        accrued expenses                                  107,434                708,439
     Short term payable                                   (15,865)                 3,447
     Deferred Income                                        8,973                 29,836
        Customer Deposits                                  54,286               (199,119)
                                                       ----------             ----------

Total adjustments                                         325,887                157,484
                                                       ----------             ----------

 Net cash provided by (used for)
  operating activities                                     12,544               (530,069)
                                                       ----------             ----------

Cash flows from investing activities:
 Purchase of property and equipment - net                       -                      -
                                                       ----------             ----------

   Net cash (used) in investing activities                      -                      -
                                                       ----------             ----------

Cash flows from financing activities:
 Increase (decrease) in
Subscribed Stock                                                -                200,000
Issuance of Convertible Debt                                    -                217,000
Short term notes                                          150,000                      -
Line of Credit                                                  -                      -
  Capitalized Lease                                       (50,000)                     -
  Net borrowing on Revolving AR credit facility          (108,311)               203,500
                                                       ----------             ----------

   Net cash (used in) provided by financing
   activities                                              (8,311)               620,500
                                                       ----------             ----------

   Net increase (decrease) in
   cash and cash equivalents                                4,233                 90,431

Cash and cash equivalents -
 beginning of period                                       74,250                 43,141
                                                       ----------             ----------

Cash and cash equivalents -
 end of period                                        $    78,483            $   133,572
                                                       ==========             ==========


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

</TABLE>

-3-
<PAGE>


                     SCIENCE DYNAMICS CORPORATION AND SUBSIDIARY
                     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (unaudited)



1. Operations and Summary of Significant Accounting Policies

Basis of Presentation
---------------------


The unaudited financial statements included in the Form 10-QSB have been
prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-QSB
and Item 310(b) of Regulation SB.  The financial information furnished
herein reflects all adjustments, which in the opinion of management are
necessary for a fair presentation of the Company's financial position,
the results of operations and the cash flows for the periods presented.

Certain information and footnote disclosures, normally included in financial
statements prepared in accordance with generally accepted accounting
principles, have been condensed, or omitted, pursuant to such rules and
regulations.

These interim statements should be read in conjunction with the audited
financial statements and notes thereto included in the Company's Annual
Report on Form 10-KSB for the fiscal year ended December 31, 2003.  The
Company presumes that users of the interim financial information herein
have read or have access to the audited financial statements for the
preceding fiscal year and that the adequacy of additional disclosure needed
for a fair presentation may be determined in that context. The results of
operations for any interim period are not necessarily indicative of the
results for the full year.


Description of Business
-----------------------

Science Dynamics Corporation (the "Company, "SciDyn" or "Science Dynamics")
was incorporated in the State of Delaware in May 1973 and commenced
operations in July 1977.  The Company has been developing and delivering
technologically advanced telecommunication solutions for over thirty years.

The Inmate Telephony business continues to provide revenue for the Company,
we have been rebuilding the business by partnering with many other
organizations and providing them with custom solutions accented toward
their individual requirements.  Science Dynamics still regards itself as a
market leader in this business and is one of a few companies in this area
with applicable patented technology.

As a result of these efforts, on December 22, 2003, Evercom Systems, Inc.
(Evercom) and Science Dynamic executed a series of agreements which provide,
among other things, that Science Dynamics will assist Evercom in accelerating
its development of a next generation IP based inmate telephony system. In
concert with this development effort, Science Dynamics has sold to Evercom
certain Intellectual Property that relates to technology known as "voice over
Internet protocol". As a condition of the purchase and consulting agreements,
Science Dynamics will receive a perpetual, royalty-free, non-exclusive
license to use the technology primarily developed by Science Dynamics
during this contract term with the condition that Science Dynamics may
only exploit such technology outside of the law enforcement market place.
Under this contract,Science Dynamics' engineering resources will be required
for the development of the new platform, design and consultancy services
for the next four years.


-4-
<PAGE>


Use of Estimates
----------------

Our consolidated financial statements have been prepared in accordance with
generally accepted accounting principles in the United States (US GAAP).
The preparation of these financial statements requires us to make estimates
and judgments that affect the reported amounts in the financial statements
and accompanying notes. These estimates form the basis for judgments we
make about the carrying values of assets and liabilities that are not readily
apparent from other sources. We base our estimates and judgments on
historical experience and on various other assumptions that we believe are
reasonable under the circumstances. However, future events are subject to
change and the best estimates and judgments routinely require adjustment.
US GAAP requires us to make estimates and judgments in several areas,
including those related to impairment of goodwill and equity investments,
revenue recognition, recoverability of inventory and receivables, the useful
lives of long lived assets such as property and equipment, the future
realization of deferred income tax benefits and the recording of various
accruals. The ultimate outcome and actual results could differ from the
estimates and assumptions used.



Segment Reporting
-----------------
Management views its business in two divisions, the software
engineering division and the audiovisual division.


                                    Six Months            Three Months
                                      Ended                   Ended
                                 June 30, 2004		 June 30, 2003
                                --------------          --------------

Revenue

Audio Visual Division               $ 1,442,245             $1,076,067
Software Technology Division          1,139,206                698,818
                                      ---------              ---------
   Total Consolidated Revenue       $ 2,581,451             $1,774,885
                                      ---------              ---------

Net Income (loss)

Audio Visual Division               $ (448,048)             $  114,099
Software Technology Division           134,705                 573,454
                                      ---------              ---------
Total Consolidated Net Loss         $ (313,343)             $  687,554
                                      ---------              ---------


Assets

Audio Visual Division               $   47,736              $1,330,044
Software Technology Division           863,318                 780,762
                                      ---------              ---------
Total Consolidated Assets            $ 911,054              $2,110,806
                                      ---------              ---------


Note 2 Convertible Notes Payable

In June 2004 the Company was unable to meet the present payment terms of
its convertible notes. The Company has obtained an amendment to the
Credit Facility (Waiver), which cures the payment violation and extends
the terms until September 30, 2004.


Note 3 Goodwill

We evaluate our long-term assets to be held and used for impairment when
events or changes in economic circumstances indicate the carrying amount
of such assets may not be recoverable.  Goodwill is evaluated at least
annually for impairment.  We use an estimate of the future net cash flows
of the related asset to measure whether the assets are recoverable and
measure any impairment by reference to fair value. Fair value is generally
estimated using the Company's expectation of discounted net cash flows.
In June 2004 the Company recorded an impairment charge of $250,498.


-5-
<PAGE>


Note 4 Acquisition

In June 2004, the Company was notified by the seller of Modern Mass Media,
that they were in default of the Purchase agreement.  The Company was given
until June 30, 2004 to rectify the default. On August 23, 2004 the reached
an agreement with Chip Del Coro the seller of Modern Mass Media to execute
a 30 day demand note in the amount of 132,000 as satisfaction of the
default.


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

Forward Looking Statements
--------------------------

The Company is making this statement in order to satisfy the "safe harbor"
provisions contained in the Private Securities Litigation Reform Act of 1995.

This Form 10-QSB includes forward-looking statements relating to the
business of SciDyn. Forward-looking statements contained herein or in
other statements made by SciDyn are made based on management's expectations
and beliefs concerning future events impacting SciDyn and are subject to
uncertainties and factors relating to the Company's operations and business
environment, all of which are difficult to predict and many of which are
beyond the control of the Company, that could cause actual results of the
Company to differ materially from those matters expressed in or implied by
forward-looking statements. The Company believes that the following factors,
among others, could affect its future performance and cause actual results
of the Company to differ materially from those expressed in or implied by
forward-looking statements made by or on behalf of the Company: (a) the
effect of technological changes; (b) increases in or unexpected losses;
(c) increased competition; (d) fluctuations in the costs to operate the
business; (e) uninsurable risks; and (f) general economic conditions.


Business Overview
-----------------

During the second quarter of 2004 the company continued its plans to increase
profitability and secure long-term growth of its core technology business.
The Software division continues to produce a net profit while the Audio
Visual division produced losses.  The company's focus on developing its core
software business is showing increased interest from its customers as
evidenced by the increasing revenue and profitability. The company is
continually looking to improved results through development of profitable
sales from our core technology and stringent cost controls.

While the software division currently continues to generate the majority of
revenue from the Commander product line, there is an increasing demand for
those products utilizing VoIP technology. The company is focused on these
higher margin products and services, leveraging our expertise and technology
to address the growing demand for enhanced capability in this area.

The Company is highly motivated to strengthen and grow our technology
activities. The company will strive to minimize its exposure to low margin
business and divest itself of unprofitable and unsustainable assets.

The company is implementing its plans to grow its technology business
activates, both by organic and acquisitive means, it believes that this is
the best strategy to ensure top line growth that maintains sustainable high
margins and in turn increases bottom line profitability.

The company has determined that is now prudent to write-off certain
"goodwill" and depreciating assets.


-6-
<PAGE>


Products
--------

The company's products continue to expand and develop in the communication
and technology sectors with major emphasis on new IP, Internet, intranet and
telephony solutions building on its well-founded expertise in Internet
Protocol telephony. The Company has concentrated its future in the "Converged
Communications" arena. IP Telephony is now an established, accepted and
respected voice medium, with users demanding the deployment of many services
and functions that this technology promises. The Company's focus is on
developing and deploying these services and functions on its Intelligent
Peripheral products built on its highly successful and adaptable
"BubbleLINK(R)", this technology architecture is now being developed to
facilitate demanding applications on the next generation VoIP Media Servers
and Application Servers. This move will reduce the company's dependence on
hardware suppliers, increasing the acceptance and potential marketplace for
our software products. The Company's many years of experience working with
the Regional Bell Operating Companies (RBOC's) has brought it the capability
to integrate security, process, reliability and control together with
complex billing methodologies to its product set.  This experience is now
being put to good use providing security, management and billing to
converged IP communications.

Science Dynamics regards itself as a market leader in this business and is
one of a few companies in this area with applicable patented technology.  To
maximize revenue potential, the Company made the decision to license its
technology and take on custom development projects for other organizations.
Science Dynamics is now entering a phase where the Company will be actively
developing new relationships for the deployment of its IP based technology
across many other business sectors.  The Company has undertaken to meet its
goals in the deployment of its IP technology not only through the sale of
equipment but also through partnering with others in the development of new
and innovative systems for specific vertical markets such as the current
development contract with Evercom Systems Inc.

Our success depends upon effective cash management.  The Company believes it
has made significant progress in lowering its Selling General &
Administrative and Research & Development expenses.  We continue to drive
down costs and take decisive steps to restructure the Company's business.
At June 30, 2004 we had a total of thirty employees. We intend to continue
to increase the scope of our operations while facing the challenge of
maximizing resources effectively.

With the advent of the industry's renewed demand for VoIP technology and the
Company's underlying strength in this area, the Company believes it is well
positioned to take advantage of this market opportunity.  In order to
effectively capitalize on this opportunity, the Company is continually
evaluating different alternatives for raising the additional capital required
to execute these strategies.



RESULTS OF OPERATIONS
---------------------

The following table summarizes the basic results of operations for the
periods indicated in the Consolidated Statement of Operations.

Six Months ended June 30, 2004 (unaudited) compared to the Six Months
ended June 30, 2003 (unaudited).



                                               Six Months Ended
                                                   June 30,
                                             2004            2003
                                             ----            ----


       Sales                              2,581,451        1,774,885

       Net Income (Loss)                   (313,343)        (687,554)

       Net Income  (Loss) Per Share          $(0.01)         $ (0.02)



-7-
<PAGE>

                                    OPERATING EXPENSES       PERCENT OF SALES
                                             Six Months Ended June 30,
                                      2004        2003         2004      2003
                                      ----        ----         ----      ----

       Cost of Goods Sold            984,697     770,590      38.1%     43.4%

       Research & Development        153,423     213,593       5.9%     12.0%

       Sales, General & Admin.     1,381,095   1,163,480      53.5%     65.6%

       Depreciation                   69,592     171,663       2.7%      9.7%


       Total Operating Costs
       and Expenses                2,588,807   2,319,326      100.0%    130.7%





Sales for the six months ended June 30, 2004 were $2,581,451, an increase
of $806,566 from sales of $1,774,885 for the six months ended June 30, 2003.
Sales of $1,442,245 were derived from our audiovisual division, $1,139,206
were from software technology. The software technology division in the six
months ended June 30, 2004 was predominantly derived from two products: the
MinuteMan Calling Platform and the Commander Product Line.

Cost of Goods Sold increased to $984,697 in the six months ended June 30,
2004 from $770,590 in the corresponding six months ended June 30, 2003.
Costs of $795,177 were derived from the audiovisual division and $189,520
were derived from the software technology division. The cost of sales in
the audiovisual division are substantially higher than those for the
software technology.  The audiovisual division is dependent on its suppliers
for pricing and credit. The increase is directly related to the cost of
sales.

Research & Development expenses decreased to $153,423 in the six months ended
June 30, 2004 as compared to $213,593 in the comparable six months ended
June 30, 2003.  The decrease in research and development expenses during
the first six months of 2004 was due to the limited resources available for
product development.  We believe that continual enhancements of our products
will be required to enable SciDyn to maintain its competitive position.
SciDyn will have to focus its principal future product development and
resources on developing new, innovative, technical products and updating
existing products in the communications area which will enable the Company
to explore other established markets that are considered "safe" from the
telecom disruption currently facing the industry.  In addition, we have
committed some of our engineering staff to the Evercom consulting contract.

Sales, General & Administrative expenses increased to $1,381,095 in the
six months ended June 30, 2004, compared to $1,163,480 in the six months
ended June 30, 2003. The increase was derived from the addition of the
audiovisual division.

Depreciation expenses decreased to $69,592 in the six months ended
June 30, 2004, compared to $171,663 in the six months ended June 30, 2003.

Interest Expense consists of interest paid and accrued on the Convertible
Notes, and the interest due for the loan from a stockholder.

Finance Expense in the six months ended June 30, 2004 and 2003 was
$44,891 and $80,988 respectively which consists of amortization of
financing costs.


-8-
<PAGE>


RESULTS OF OPERATIONS
---------------------

The following table summarizes the basic results of operations for the
periods indicated in the Consolidated Statement of Operations.

Three Months ended June 30, 2004 (unaudited) compared to the Three Months
ended June 30, 2003 (unaudited).



                                              Three Months Ended
                                                    June 30,
                                             2004            2003
                                             ----            ----


       Sales                              1,047,176        1,298,588

       Net Income (Loss)                   (413,347)        (582,565)

       Net Income  (Loss) Per Share         $ (0.01)         $ (0.02)



                                   OPERATING EXPENSES       PERCENT OF SALES
                                            Three Months Ended June 30,
                                     2004        2003         2004      2003
                                     ----        ----         ----      ----

       Cost of Goods Sold            409,086     697,783      39.1%     53.7%

       Research & Development         81,918      91,852       7.8%      7.1%

       Sales, General & Admin.       687,287     884,338      65.6%     68.1%

       Depreciation                   41,332     106,807       3.9%      8.2%


       Total Operating Costs
       and Expenses                 1,219,623   1,780,780     116.5%    137.1%



Sales for the three months ended June 30, 2004 were $1,047,176, a decrease
of $251,412 from sales of $1,298,588 for the three months ended June 30, 2003.
Sales of $598,189 were derived from our audiovisual division, $448,987 was
from software technology. The software technology divisions revenue in the
three months ended June 30, 2004 was predominantly derived from two products:
the MinuteMan Calling Platform and the Commander Product Line.

Cost of Goods Sold decreased to $409,086 in the three months ended
June 30, 2004 compared to $697,783 in the corresponding three months ended
June 30, 2003.  $329,944 were derived from the audiovisual division and
$79,142 were derived from the software technology division.

Research & Development expenses decreased to $81,918 in the three months
ended June 30, 2004 as compared to $91,852 in the comparable three months
ended June 30, 2003.  The decrease in research and development expenses
during the three months ended June 30, 2004 was due to the limited resources
available for product development.  We believe that continual enhancements
of our products will be required to enable SciDyn to maintain its competitive
position.


-9-
<PAGE>

SciDyn will have to focus its principal future product development and
resources on developing new, innovative, technical products and updating
existing products in the communications area which will enable the Company
to explore other established markets that are considered "safe" from the
telecom disruption currently facing the industry.

Sales, General & Administrative expenses decreased to $687,287 in the
three months ended June 30, 2004, compared to $884,338 in the three months
ended June 30, 2003. The decrease was due to continued cost cutting of
non-essential expenses.

Depreciation expense decreased to $41,322 in the three months ended
June 30, 2004, compared to $106,807 in the three months ended June 30, 2003.

Interest Expense consists of interest paid and accrued on the Convertible
Notes, and the interest due for the loan from a stockholder.

Finance Expense in the three months ended June 30, 2004 and 2003 was
$22,413 and $62,354 respectively which consists of amortization of
financing costs.



LIQUIDITY AND CAPITAL RESOURCES:
-------------------------------


Cash and cash equivalents increased to $78,483 from $74,250 at
December 31, 2003.  Net cash used in operating activities was $12,544 for
the six months ended June 30, 2004 compared to $530,069 in the corresponding
six months ended June 30, 2003.  Net cash used in operating activities consist
of net income of $313,343 increase in  accounts receivable, and decrease in
accounts payable and short term payables offset by an increase in accrued
expenses, customer deposits and a decrease in inventory. Accounts payable
consists of over extended accounts payable.  Payment arrangements have been
made with several vendors to extend payments over the next year. At the
present time we are having difficulty meeting some of those arrangements.
The accrued expenses consist primarily of accrued interest due on the
convertible notes.

Net cash used in investing activities - There was no cash used for the
three months ended June 30, 2004, and ended June 30, 2003. The lack of
investing in capital equipment is attributable to budgetary restraints.

Net cash used in financing activities in the six months ended June 30, 2004
amounted to $8,311 compared to $620,500 provided  in the corresponding six
months ended June 30, 2003. Due our need for liquidity we negotiated two
short-term notes for $150,000 that are collateralized by the future sale
of the New Jersey Net Operating Loss. These notes will be paid directly
from the sale of the Net Operating Loss with approximately $50,000 of
interest.  The proceeds of $150,000 short-term note were offset by the
repayment of $108,311 on our revolving credit facility and $50,000 repayment
of current portion of long term debt in connection with the acquisition of
Modern Mass Media.

In June 2004 the Company was unable to meet the present payment terms of
its convertible notes held by Laurus Master Funds, Ltd. On August 23, 2004
Laurus Master Fund waived any payment defaults under these notes until
September 30, 2004.  We are currently working with Laurus to develop a
suitable conversion schedule.

In June 2004, we were notified by the seller of Modern Mass Media, that we
were in default of the Purchase agreement.  The Company was given until
June 30, 2004 to rectify the default.  On August 23, 2004 the Company
reached an agreement with Chip Del Coro the seller of Modern Mass Media
to execute a 30 day demand note in the amount of $132,000 as satisfaction
of the default.  We are presently working on a licensing agreement which
would give us the necessary cash flow to satisfy the note and avoid default.

The cash requirements for funding our operations continue to exceed cash
flows from operations. We have satisfied our operating cash flow deficiencies
primarily through debt financing.

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<PAGE>


We have successfully negotiated payment arrangements with some of our vendors
and are attempting to negotiate payment arrangements with other vendors.
Some of the payment arrangements that have been made are currently in arrears
no default notifications have been received. We cannot guarantee that any
of these discussions will be successful.   If we are unable to obtain
successful negotiations, our business may well be severely adversely affected.

While SciDyn believes that its current cash flows are sufficient to pay
the current expenses that the Company incurs, the Company is unable to pay
past accounts payable, accrued expenses and convertible notes from current
cash flows.  In order to satisfy all of the Company's obligations that are
due in the next twelve months, SciDyn must obtain additional financing
through debt or equity.  The inability to obtain the required additional
funds could require SciDyn to reduce or curtail operations.



Item 3. Controls and Procedures.

As of the end of the period covered by this report, Science Dynamics
conducted an evaluation, under the supervision and with the participation of
its principal executive officer and principal financial officer, of the
Company's disclosure controls and procedures (as defined in Rule 13a-15(e)
of the Exchange Act). Based upon this evaluation, Science Dynamics'
principal executive officer and principal financial officer concluded
that the Company's disclosure controls and procedures are effective to
ensure that information required to be disclosed by the Company in the
reports that it files or submits under the Exchange Act is recorded,
processed, summarized and reported, within the time periods specified
in the Commission's rules and forms.  There was no significant change in
Science Dynamics' internal controls or in other factors that could
significantly affect these controls subsequent to the date of the
evaluation.


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<PAGE>



PART II. OTHER INFORMATION

Item 1. Legal Proceedings

        None.

Item 2. Changes in Securities

        In April 1, 2004 the Company issued 1,080,000 options to employees
        under the 2002 Employee Stock Option Plan at a price of  $.18 per
        share.

        In April 2004 the Company issued 196,079 shares of common stock for
        settlement of $30,000 in notes payable.

        The issuance of the options and the shares was exempt from
        registration requirements of the Securities Act of 1933 pursuant
        to Section 4(2) of such Securities Act.

Item 3. Defaults Upon Senior Securities

        In June 2004 the Company was unable to meet the present payment terms
        of its convertible notes held by Laurus Master Funds, Ltd. On
        August 23, 2004 Laurus Master Fund waived any payment defaults under
        these notes until September 30, 2004.

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

        None.

Item 5. Other Information

        None.

Item 6. Exhibits and Reports on Form 8-K

(a) Exhibits:

        Exhibit No.   Description of Exhibit
        -----------   ----------------------
        3.1           Articles of Incorporation (1)
        3.2           By-Laws (1)
       31.1           Certification by Alan C. Bashforth, Chief Executive
                      Officer and acting Chief Financial Officer, pursuant
                      to Section 302 of the Sarbanes-Oxley Act of 2002.
       32.1           Certification by Alan C. Bashforth, Chief Executive
                      Officer and acting Chief Financial Officer, pursuant
                      to Section 906 of the Sarbanes-Oxley Act of 2002.

       (1) Incorporated by reference to the Company's Registration Statement
           on Form S-18, File Number 33-20687, effective April 21, 1981.

(b) Reports on Form 8-K:
       None.

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<PAGE>


                               SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, registrant has duly caused this report to be signed in
its behalf by the undersigned thereunto duly authorized.


SCIENCE DYNAMICS CORPORATION

BY: /s/ Alan C. Bashforth
    ---------------------
    CEO/President/Acting CFO


DATED: August 23, 2004


In accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on
the dates indicated.


    Signature               Title                        Date
    ---------               -----                        ----

BY: /s/ Alan C. Bashforth   CEO/President/Acting CFO     August 23, 2004
    Alan C. Bashforth       Chairman of the Board
                            Secretary


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