U.S. Securities and Exchange Commission
                            Washington, D.C.  20549
                                   Form 10-Q

(Mark One)
         [X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                       SECURITIES EXCHANGE ACT OF 1934
                 For  the  quarterly  period  ended  March  31,  1997 
         [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                       SECURITIES EXCHANGE ACT OF 1934
                 For the transition period from                       to

                              Commission file number 0-27510

                         TMCI ELECTRONICS, INC.
          (Exact  name of  registrant as specified in its charter)

   Delaware                                             77-0413814
(State or other jurisdiction of            (I.R.S. Employer  Identification No.)
 incorporation or organization)
                1875 Dobbin Drive, San Jose, CA                         95133
-------------------------------------------------------------------------------
            (Address of principal executive offices)                 (Zip Code)

                                (408) 272-5700
                          Issuer's telephone number

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 report(s),  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: as of May 12, 1997 there were
 3,596,332 shares of Common Stock, par value .001, issued and outstanding.

  Transitional Small Business Disclosure Format (check one):  Yes          No x



<PAGE>










                        PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements

                            TMCI ELECTRONICS, INC
                    CONSOLIDATED STATEMENTS OF OPERATIONS
                                 [Unaudited]


                                                      For the Quarter Ended
                                                            March 31,
                                                       1997           1996

Sales,  net                                         $7,442,688     $7,730,465

Cost of goods sold                                   4,603,745      5,396,750
                                                   -----------     ----------

      Gross profit                                   2,838,943      2,333,715

Operating expenses                                   2,323,049      1,856,394
                                                    ----------     ----------

      Income from operations                           515,894        477,321
                                                  ------------    -----------

Other income [expense]:
      Gain on sale of equipment                          --           122,198
      Other income                                     115,456         34,159
      Non-cash finance charge                            --          (462,122)
      Interest expense                                (114,042)      (140,337)
                                                     ---------      ---------

      Total other income [expense]                       1,414       (446,102)
                                                     ---------      ---------

Income before provision for income taxes               517,308         31,219

Provision for income taxes                             210,447             --

Net income                                           $ 306,862     $   31,219
                                                     =========     ==========

Net income per share                              $        .08   $        .01
                                                  ============   ============

Weighted average number of shares outstanding
and common stock equivalents                         5,393,166      2,314,171
                                                     =========      =========













                See notes to consolidated financial statements

                           




<PAGE>



                            TMCI ELECTRONICS, INC.
                         CONSOLIDATED BALANCE SHEETS

                                                 March 31,          December 31,
                                                  1997                 1996
                                                  ----                 ----
                                               (Unaudited)
  ASSETS:
  Current Assets:
        Cash                                 $     62,936          $   145,845
        Accounts Receivable - Net               3,012,724            2,526,816
        Inventory                               6,563,485            5,170,661
        Prepaid Expenses and Other
        Current Assets                            336,709              272,587
        Deferred Income Taxes                     143,078              187,991
        Other Receivables                          65,269               63,669
        Notes Receivable - Stockholders            10,706               10,706
                                           --------------        --------------
              Total Current Assets             10,194,907            8,378,275
                                             ------------           -----------

  Property and Equipment - Net                  4,473,963            3,638,300
                                           --------------         ------------

  Other Assets:
        Notes Receivable - Stockholders           155,520              155,520
        Due from Stockholder                      238,167              238,167
        Due from Related Party                    423,953              473,952
        Other Assets                               11,561               48,152
        Goodwill, Net                           2,678,391            2,549,261
        Total Other Assets                      3,507,592            3,465,052
                                              -----------         ------------
              Total Assets                    $18,176,462          $15,481,627
                                              ===========         ============

  LIABILITIES AND STOCKHOLDERS' EQUITY:
   Current Liabilities:
        Accounts Payable and Accrued Expenses   2,510,149            2,929,242
        Line of Credit                          2,428,977              585,000
        Notes Payable - Current Portion           843,975              796,867
        Due to Affiliate                           30,635               30,634
                                             ------------        -------------
                  Total Current Liabilities     5,813,736            4,341,743
                                             ------------        -------------

  Long -Term Liabilities:
        Notes Payable - Net of Current Portion  2,669,028            2,064,273
        Deferred Income Taxes                     448,007              436,781
        Total Long -Term liabilities            3,117,035            2,501,054
                                             ------------           ----------
              Total Liabilities                 8,930,771            6,842,797
                                             ------------           ----------

  Commitments and Contingencies                    --                    --
                                             ------------           ----------

  Stockholders' Equity:
        Common  Stock  -  .001  par  value,  25,000,000  shares  authorized,
        3,596,332 issued and outstanding as 
        of March 31, 1997 and 3,499,772 as 
        of December 31, 1996                        3,597                3,500
        Additional Paid in Capital              7,666,561            7,366,659
        Retained Earnings                       1,575,533            1,268,671
                                               ----------          -----------
              Total Stockholders' Equity        9,245,691            8,638,830
                                               ----------          -----------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY    $18,176,462          $15,481,627
                                              ===========          ===========

                See notes to consolidated financial statements

                            




<PAGE>



                            TMCI ELECTRONICS, INC
                    CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 [Unaudited]
                                                           Three Months Ended
                                                                 March 31,
                                                             1997        1996
Operating Activities
    Net Income                                            $306,862    $ 31,219
                                                        ----------   ---------
    Adjustments to reconcile net income to
      Net Cash [Used for] Provided by Operations:
            Depreciation and Amortization                  290,579     224,247
            Deferred Income Taxes                           56,139      26,374
            Gain on Sale of Equipment                         --      (122,198)
            Non-Cash Financing Charge                         --       462,122
            Amortization of Deferred loan fees                --        28,500
      Changes in Assets and Liabilities:
      [Increase] Decrease in:
            Accounts Receivable                           (177,489)    301,170
            Inventory                                   (1,167,523) (1,115,444)
            Prepaid Expenses and Other  Current Assets     (47,812)   (202,814)
            Note Receivable - Other                           --        98,898
      Increase (Decrease) in:
            Accounts payable and Accrued Expenses         (512,601)   (559,016)
            Income Taxes Payable                              --      (258,968)
                                                         ---------   ---------

      Total Adjustments                                 (1,558,707) (1,117,038)

    Net Cash - Operating Activities - Forward           (1,251,845) (1,085,819)
                                                       ----------- -----------

Investing Activities:
            Proceeds from Sales of Equipment                  --       178,700
            Purchase of Equipment                         (224,163)   (294,335)
            Note Receivable                                 50,000        --
            Due from Stockholder                              --        (1,134)
            Business Acquisition,  net of cash  acquired  (923,389)       --
                                                       -----------   ---------

    Net Cash -  Investing Activities - Forward          (1,097,552)   (116,769)
                                                       -----------   ---------

Financing Activities:
            Credit Line Advances                         2,613,044   6,316,000
            Credit Line Payments                          (822,200) (6,825,028)
            Debt  Repayment                                (65,952)   (652,947)
            Repayment of Bridge Note Payable                  --    (1,000,000)
            Proceeds from Public Offering                     --     5,810,594
            Proceeds from Note Payable                     541,596        --
                                                       -----------   ---------

    Net Cash - Financing Activities                      2,266,488   3,648,619
                                                       -----------  ----------

    Net Increase [Decrease] in Cash                       ( 82,909)  2,446,031

    Cash - Beginning of Periods                            145,845     701,672
                                                       -----------  ----------

    Cash - End of Periods                                  $62,936  $3,147,703
                                                       ===========  ==========

Supplemental Disclosure of Cash Flow Information:
    Cash paid during the period  for interest              $84,975  $  119,217
                See notes to consolidated financial statements




<PAGE>


TMCI  ELECTRONICS, INC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



1) Basis of Reporting

The accompanying  unaudited consolidated financial statements have been prepared
in  accordance  with  generally  accepted  accounting   principles  for  interim
financial  information and with the instructions to Form 10-Q. 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,   such  statements   include  all  adjustments
(consisting only of normal recurring items) which are considered necessary for a
fair presentation of the financial position of the Company at March 31, 1997 and
the results of its operations for the three month period then ended. The results
of operations for the periods  presented are not  necessarily  indicative of the
results to be expected for the full year.

It is suggested that these financial  statements be read in conjunction with the
financial  statement and notes for the year ended  December 31, 1996 included in
the Company's Annual Report on Form 10-KSB.

The consolidated financial statements include the accounts of TMCI Electronics,
Inc. ["TMCI"], and its wholly-owned subsidiaries, Touche Manufacturing Company,
Inc. ["Touche"], Touche Electronics Inc. ["TEI"], and Enterprise Industries,
Inc.["EII"],  [collectively, the "Company"]. All significant intercompany 
balances and transactions have been eliminated in consolidation.

2) Income Per Share

Income  per share of common  stock is based on the  weighted  average  number of
common shares  outstanding and common stock equivalents,  if dilutive,  for each
period presented.

3) Common Stock

Effective  January 1, 1997,  the Company issued 96,560 shares of common stock in
connection with the acquisition of the business as discussed in note 5.

4) Inventory

Inventory consists of the following:
                                                 March 31,
                                                   1997

      Raw Materials                             $3,529,926
      Work in Process                            2,237,894
      Finished Goods                               795,665
                                                   -------

            Total                               $6,563,485

5)  Acquisition of Business

Effective  January 1, 1997, the Company acquired 100% of the outstanding  shares
of common stock of Enterprise  Industries,  Inc., a North Hollywood,  California
based  metal  stamping   manufacturing  business  for  a  total  purchase  price
consisting  of  $1,000,000  in cash and the  issuance  of  96,560  shares of the
Company's common stock. The Company acquired assets of approximately  $1,088,000
and assumed  liabilities  of  approximately  $323,000  resulting  in goodwill of
approximately $122,600. At the same time, the Company entered into an employment
contract with the President of Enterprise.

The following unaudited pro forma combined results of operations reflect the 
acquisition as if it had occurred at the beginning of the period presented.  
These pro forma results may not be indicative of the results that actually would
have occurred if the acquisition had been in effect on the date indicated.

                                                 March 31, 1996

Total Revenues                                    $ 8,480,465

Net Earnings                                      $    53,719 

Earnings Per Common Share                         $       .02

Weighted Average Common Shares Outstanding          2,410,731
<PAGE>





6) Arbitration of Pen Interconnect Acquisition

Subsequent  to the closing of the  acquisition  of the San Jose  Division of Pen
Interconnect,  a dispute arose concerning various aspects of the transaction. On
February 14, 1997,  TMCI filed a Demand for Arbitration  against Pen,  seeking a
substantial purchase price reduction or, in the alternative,  other remedies and
damages as  provided  by law.  Management  has  suspended  all  payments to Pen,
including payments due under the promissory notes, aggregating $900,000. Pen has
sought to accelerate the promissory notes.  Management,  after consultation with
legal  counsel,  believes  that it will prevail in all  material  aspects of the
dispute.  Accordingly,  at December 31,  1996,  the Company has  classified  the
promissory notes as maturing under the original terms provided therein.

















































<PAGE>

Item 2.     Management's Discussion and Analysis


                     Management's Discussion and Analysis
               of Financial Condition and Results of Operations

Overview

      Effective  March 5, 1996,  November  1, 1996,  and  January 1, 1997,  TMCI
Electronics,  Inc.  ("Company")  acquired  Touche  Manufacturing  Company,  Inc.
("Touche") and Touche  Electronics,  Inc. ("TEI"),  the San Jose Division of Pen
Interconnect,  Inc.("Pen"), and Enterprise Industries, Inc. ("EII"), pursuant to
certain Stock Purchase Agreements and an Asset Purchase Agreement, respectively.
The Touche and TEI,  and EII  Agreements  were  executed on December  28,  1995,
November 12, 1996,  and January 24,  1997,  respectively.  Prior to the March 5,
1996 acquisition,  the Company's operations consisted of forming of the Company,
preparing  for the  acquisition  of Touche and TEI, as well as preparing for the
initial public offering of its securities discussed below.

      Effective  January 1, 1997, the Company  acquired  Enterprise  Industries,
Inc., a metal  stamping  business,  to augment the operations at Touche and TEI:
the  value-added  turnkey  and wire and cable  manufacturing  divisions,  and to
broaden its customer base with metal stamping  capabilities,  respectively.  TEI
divisions  will  produce  basic  cable   products  and  will  provide   assembly
capabilities for specialized products for their customers,  respectively,  while
stamping is expected to diversify overall operations. In addition, the Company's
strategy  is to expand its core and value added  businesses  by  increasing  its
product  offerings to satisfy its customers'  needs and their growing demand for
more outsourcing of contract manufacturing services.

Results of Operations

      The results of operations  utilizes the consolidated  results from Touche,
TEI,  Pen  and  EII  after  their   acquisition  by  the  Company,   eliminating
intercompany  transactions  as  represented  by the  financial  statements.  The
discussion below should be read in conjunction with the financial statements and
the notes thereto, that appear elsewhere in this report.

Net Sales

      Net sales  decreased by  approximately  $287,800 or 4% to $7,442,688  from
$7,730,465 for the quarter ended March 31, 1997 as compared to the quarter ended
March 31, 1996. The decrease in sales was due primarily to a comparatively  slow
start  during the first two months of  operation  in the  quarter.  Because of a
slowly  recovering  OEM market,  the  Company's  customers  lowered their demand
requirements  for product and placed smaller orders for manufacture and assembly
with the Company.  Even though the first  quarter  sales results were lower than
that  recorded  for the same  period a year prior,  sales for the quarter  ended
March 31, 1997 were actually up approximately  32% over the fourth quarter ended
December 31, 1996, which are in line with improving market conditions within the
industry, and it is expected that this trend will continue during 1997.

Gross Profit

      Gross profit  increased  approximately  $505,200 or 22% to $2,838,943 from
$2,333,715 for the quarter ended March 31, 1997 as compared to the quarter ended
March 31, 1996. As a percentage of sales,  gross profit increased  approximately
8% to 38% from 30% for the  quarter  ended  March 31,  1997 as  compared  to the
quarter ended March 31, 1996. The increase is primarily due to  improvements  in
operations through better production yield, labor efficiencies,  and a reduction
in material costs.


Operating Expenses
      General and administrative expenses increased approximately $466,700 or 
25% to $2,323,049 from




<PAGE>



$1,856,394 for the quarter ended March 31, 1997 as compared to the quarter ended
March  31,  1996.  As  a  percentage  of  sales,   the  Company's   general  and
administrative expenses increased 7% to 31% from 24% for the quarter ended March
31,  1997,  as compared to the quarter  ended March 31,  1996.  The  increase in
operating  expenses was  primarily  due to  investments  in  infrastructure  and
through business acquisitions:  San Jose Division of Pen Interconnect,  Inc. and
Enterprise  Industries,  Inc. in support of planned growth and expansion.  These
investments continue to reflect an increase in personnel, building rental costs,
repairs,  promotions  and  increases in  management  positions and other related
items.

Other income [expense]

      Other  income  increased  approximately  $447,500  or 315% to $1,414  from
($446,102)  in the quarter  ended  March 31,  1997 as compared  with the quarter
ended March 31, 1996.  The increase in other income was  primarily  due to a net
decrease of  approximately  $462,100 in a one-time  financing  charge on certain
bridge  loans that was  incurred by the Company in the first  quarter of 1996, a
net decrease of  approximately  $26,300 in interest expense due to a decrease in
borrowings as a result of the  utilization  of proceeds from the initial  public
offering, and a net increase of approximately $81,300 in other income, offset by
a net decrease of approximately  $122,200 on the sale of equipment recognized in
the quarter ended March 31, 1996.

Net Income

      Net income  increased by  approximately  $275,600 or 883% to $306,862 from
$31,219  for the quarter  ended March 31, 1997 as compared to the quarter  ended
March 31, 1996. The increase in net income was primarily due to: (1) income from
operations  of  approximately  $515,900,  and (2) other income of  approximately
$115,500,  offset by a provision for income taxes of approximately $210,500, and
interest expense of approximately $114,000.


Liquidity and Capital Resources

      The Company has a long-term  revolving  line of credit with  Manufacturers
Bank ("Mfrs"), which expires June 1, 1997, and bears interest at Mfrs' base rate
plus 1/2% which was based on the  completion  of  re-negotiations  for increased
credit limits and lower interest rates. These completed negotiations permits the
Company  to  borrow  up  to  $4,400,000  based  on a  stipulated  percentage  of
contractually  defined  eligible trade accounts  receivable,  including EII. The
Company had approximately $2,429,000 in outstanding borrowings under the line of
credit as of March 31, 1997. In addition,  the Company and Mfrs have agreed to a
term facility of up to $2,500,000 available for equipment purchases,  which will
bear  interest at Mfrs' base rate plus 1%. There were  approximately  $1,624,400
outstanding borrowings under this facility as of March 31, 1997.

      On March 11, 1996, the Company  closed an Initial  Public  Offering of its
securities resulting in net proceeds of approximately $ 5.8 million. The Company
used the proceeds of the offering to repay  certain  bridge notes and other debt
and apply the remaining proceeds to working capital.

      The Company's  working capital  increased by  approximately  $344,600 from
$4,036,532 to $4,381,171 in the first fiscal  quarter ended March 31, 1997.  The
increase  resulted  primarily  from  an  increase  in  accounts   receivable  of
approximately $485,900, an increase in inventory of approximately  $1,392,800, a
decrease in accounts payable of approximately  $419,100, and an increase in bank
short-term borrowings of approximately $1,844,000.  The increase in inventory is
due to the Company's planned growth and business  acquisition during the quarter
ended March 31, 1997.
      The Company  required cash to fund operating  activities of  approximately
($1,252,500)  in the fiscal quarter ended March 31, 1997 as compared to required
cash to fund operating  activities of  approximately  ($1,085,800) in the fiscal
quarter ended March 31, 1996.  Cash used in investing and financing  activities,
includes




<PAGE>




the purchase of equipment,  note  receivable,  debt reduction,  acquisition of a
Stamping Company (see Note 5, Acquisition of Business),  note payable  proceeds,
bank  short-term  borrowings,  proceeds from public  offering,  and repayment of
bridge note payable, was approximately $1,267,100 and $3,648,600 in the quarters
ended March 31, 1997 and March 31, 1996, respectively.

      During the quarter  ended March 31, 1997 and March 31,  1996,  the Company
spent  approximately  $224,200 and $294,300,  respectively,  to purchase capital
equipment which was funded through long-term  borrowings and current operations.
Additionally,   management   expects  the  Company's  level  of  future  capital
expenditures  to  increase  at a level  that is  consistent  with the  Company's
projected  growth and  operational  projects.  Management has projected  capital
expenditure  requirements of approximately $2,000,000 for the fiscal year ending
December 31, 1997.  This increase will be supported by increased bank borrowings
and internal operations.

      Management  believes that its current  financial  position,  together with
available  borrowings  under the Company's  various  credit  facilities  will be
sufficient  to meet the  Company's  anticipated  operating  needs and  projected
capital expenditure requirements for the next twelve months.


































                        





<PAGE>

                          PART II - OTHER INFORMATION


Item 1.  Legal Proceedings.

Subsequent  to the closing of the  acquisition  of the San Jose  Division of Pen
Interconnect,  a dispute arose concerning various aspects of the transaction. On
February 14, 1997,  TMCI filed a Demand for Arbitration  against Pen,  seeking a
substantial purchase price reduction or, in the alternative,  other remedies and
damages as  provided  by law.  Management  has  suspended  all  payments to Pen,
including payments due under the promissory notes, aggregating $900,000. Pen has
sought to accelerate the promissory notes.  Management,  after consultation with
legal  counsel,  believes  that it will prevail in all  material  aspects of the
dispute.  Accordingly,  at December 31,  1996,  the Company has  classified  the
promissory notes as maturing under the original terms provided therein.

Item 2.  Changes in Securities.

On January  24,  1997,  the Company  completed  the  acquisition  of 100% of the
outstanding shares of capital stock of Enterprise  Industries,  Inc. for a total
purchase  price of $1,500,000  consisting of $1,000,000 in cash and the issuance
of 96,560 shares of the Company's  common stock  pursuant to an exemption  under
the Securities Act.
However, the effective date of acquisition is January 1, 1997.  (See Note 5)

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

(a) This  Report  contains  the  following  Exhibits  as required by Item 601 of
Regulation S-B.

Exhibit                       Description


10.1  Stock Purchase Agreement of Enterprise Industries, Inc.*

11.0  Computation of Earnings Per Share

(b) On February 7, 1997 the Company filed with the Securities and Exchange 
Commission (the "Commission"), a Current Report on Form 8-K containing 
information relating to the acquisition, by the Company, of Enterprise 
Industries, Inc. ("EII") pursusant to a Stock Purchase Agreement effective
January 1, 1997.

*Incorporated by reference from the registrant's Current Report on Form 8-K 
filed on February 7, 1997 (File No. 0-27510)






















<PAGE>




                                  SIGNATURES

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


                              TMCI Electronics, Inc.
                                    (Registrant)

Date:  May 13, 1997                   By:_____________________________________
                                         Charles Shaw, Chief Financial Officer
                                           (Principal Financial Officer)








<PAGE>










                                  SIGNATURES

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


                                         TMCI Electronics, Inc.
                                           (Registrant)

Date:  May 13, 1997                   /s/ Charles Shaw
                                    -------------------------------------
                                     Charles Shaw, Chief Financial Officer
                                    (Principal Financial Officer)