Tanknology-NDE International, Inc. and Subsidiaries


                     U.S. SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549


                                  FORM 10-QSB/A
                                 Amendment No. 1

(Mark One)

  [X]     Quarterly Report Under Section 13 or 15(d) of the Securities  Exchange
          Act of 1934 for the quarterly period ended September 30, 1998.

  [ ]    Transition  Report  Under to Section 13 or 15(d) of the Exchange Act
         for the transition period from ________________ to _________________.



                         Commission File Number 1-10361


                       Tanknology-NDE International, Inc.
        (Exact name of small business issuer as specified in its charter)


        Delaware                                           95-3634420
(State of Incorporation)                       (IRS Employer Identification No.)


              8900 Shoal Creek Blvd., Bldg. 200 Austin, Texas 78757
                    (Address of Principal Executive offices)


          Issuer's telephone number, including area code (512) 451-6334





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 ninety days.

                                    Yes     [X]        No   [ ]


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







                        Outstanding at September 30,
Class                               1998
--------------       -----------------------------------

Common                           16,404,166




Transitional Small Business Disclosure Format (check one):  Yes  [ ]    No   [X]

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               Tanknology-NDE International, Inc. and Subsidiaries


     The undersigned  registrant  hereby amends the following  items,  financial
statements,  and Notes to the financial  statements  of its Quarterly  Report on
Form 10-QSB for the fiscal quarter ended  September 30, 1998 as set forth in the
pages attached hereto:

          Condensed  Consolidated  Statement of Operations is hereby amended and
          replaced in its entirety to correct an error in the calculation of the
          Net Income  (Loss)  Available to Common  Shareholders  for the 3 and 9
          month periods ending September 30, 1998.

          Note 2 is hereby  amended and  replaced in its  entirety to correct an
          error in the  calculation of the Numerator for basic income (loss) per
          share -income  available to common  shareholders and the Numerator for
          diluted  income (loss) per share for the 3 and 9 month periods  ending
          September 30, 1998.


                                    Tanknology-NDE International, Inc.
                                    (Registrant)

Date:       November 16, 1998            /s/ DAVID G. OSOWSKI
          --------------------      ------------------------------------------
                                    David G. Osowski
                                    Vice President and Chief Financial Officer






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               Tanknology-NDE International, Inc. and Subsidiaries


PART I            Financial Information

Item 1.  Financial Statements (Unaudited)


                 Condensed Consolidated Statements of Operations
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                    Three Months Ended                       Nine Months Ended
                                             -------------------------------        --------------------------------
                                              September 30,    September 30,         September 30,    September 30,
                                                 1998              1997                  1998             1997
                                             --------------   --------------        --------------    --------------

<S>                                          <C>              <C>                   <C>               <C>
Revenues.................................... $  17,405,934    $   9,889,309         $  44,513,355     $  25,407,707

Cost of services............................    12,830,362        7,410,762            33,044,725        19,211,475
                                             --------------   --------------        --------------    --------------

     Gross Margin...........................     4,575,572        2,478,547            11,468,630         6,196,232

Selling, general and administrative.........     3,256,279        1,853,215             8,377,025         5,971,560
                                             --------------   --------------        --------------    --------------

     Operating Income ......................     1,319,293          625,332             3,091,605           224,672

Other income (expense):
      Interest income.......................        31,641           66,202                93,437            66,202
      Interest expense......................      (447,258)        (810,570)           (1,243,597)       (2,481,934)
     Other income (expense), net............        13,702            --                   18,606           --
                                             --------------   --------------        --------------    --------------

     Income (Loss) Before Provision
         for Income Taxes...................       917,378         (119,036)            1,960,051        (2,191,060)

Provision for income taxes..................       226,356              600               260,253            25,900
                                             --------------   --------------        --------------    --------------

      Net Income (Loss).....................       691,022         (119,636)            1,699,798        (2,216,960)

Less - Preferred stock dividends............       (37,500)           --                 (112,500)          --
                                             --------------   --------------        --------------    --------------

     Net Income (Loss) Available to
         Common Shareholders................ $     653,522    $    (119,636)        $   1,587,298     $  (2,216,960)
                                             ==============   ==============        ==============    ==============

     Basic Income (Loss) Per Share.......... $        0.04    $       (0.01)        $        0.10     $       (0.14)
                                             ==============   ==============        ==============    ==============


     Diluted Income (Loss) Per Share........ $        0.03    $       (0.01)        $        0.07     $       (0.14)
                                             ==============   ==============        ==============    ==============


<FN>
See accompanying notes to condensed consolidated financial statements.
</FN>
</TABLE>



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               Tanknology-NDE International, Inc. and Subsidiaries


     NOTE 2: INCOME (LOSS) PER SHARE CALCULATIONS

     The following  table sets forth the calculation of basic and diluted income
(loss) per share:


<TABLE>
<CAPTION>
                                                        Three Months Ended             Nine Months Ended
                                                    --------------------------   ---------------------------

                                                    September      September      September      September
                                                     30, 1998       30, 1997       30, 1998       30, 1997
                                                   -----------    -----------    -----------    -----------
Numerator:
<S>                                                <C>            <C>            <C>            <C>
     Net income (loss) .........................   $   691,022    $  (119,636)   $ 1,699,798    $(2,216,960)
     Preferred stock dividends .................       (37,500)          --         (112,500)          --
                                                   -----------    -----------    -----------    -----------
     Numerator for basic income (loss) per share
     -income available to common shareholders ..       653,522       (119,636)     1,587,298     (2,216,960)

     Effect of dilutive securities - preferred
     stock dividends ...........................        37,500           --          112,500           --
                                                   -----------    -----------    -----------    -----------
     Numerator for diluted income (loss) per
     share .....................................   $   691,022    $  (119,636)   $ 1,699,798    $(2,216,960)

Denominator:
     Denominator for basic income (loss) per
     share - weighted-average shares ...........     16,303,623    15,978,610      16,201,960      15,978,610

     Effect of dilutive securities:
     Stock options .............................      3,680,104          --         3,873,458            --
     Warrants ..................................      2,850,530          --         3,157,291            --
     Convertible preferred stock ...............      1,147,139          --         1,387,578            --
                                                   ------------    ----------    ------------    ------------
     Dilutive potential common shares ..........      7,677,773          --         8,418,327            --

     Denominator for diluted earnings (loss) per
     share - adjusted weighted- average shares
     and assumed  conversions ..................     23,981,396          --        24,620,287            --
                                                   ============    ==========    ============    ============

     Basic income (loss) per share .............   $       0.04    $    (0.01)   $       0.10    $      (0.14)
                                                   ============    ==========    ============    ============


     Diluted income (loss) per share ...........   $       0.03    $    (0.01)   $       0.07    $      (0.14)
                                                   ============    ==========    ============    ============
</TABLE>




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