UNITED STATES
                     SECURITIES AND EXCHANGE COMMISSION
                           Washington, D.C. 20549

                                FORM 10-QSB

[xx]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES 
      EXCHANGE ACT OF 1934

For the quarterly period ended                May 31, 1998
  
                                     or

[ ]  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:             0-27520

                            SDC International, Inc.
            (Exact name of registrant as specified in its charter)

          Delaware                                    75-2583767
(State or other jurisdiction of                    (I.R.S. Employer
incorporation or organization)                     Identification No.)

2065 Montgomery Street, Ft. Worth, TX           76107
(Address of principal executive offices)     (Zip Code)  

                             (561) 882-9300
          (Registrant's telephone number, including area code)


          (Former name, former address and former fiscal year,
                    if changed since last report)

Check whether the issuer (1) has 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 [xx]  No [  ]

       APPLICABLE ONLY TO CORPORATE ISSUERS INVOLVED IN BANKRUPTCY
                 PROCEEDINGS DURING THE PRECEDING FIVE YEARS

Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court.
Yes [  ]  No [  ]

                  APPLICABLE ONLY TO CORPORATE ISSUERS

Common stock, par value $.001 per share: 3,640,119 shares outstanding as of 
May 31, 1998.

<PAGE>

                 SDC INTERNATIONAL, INC. AND SUBSIDIARY
                                 INDEX


PART 1 - FINANCIAL INFORMATION:

ITEM 1 - FINANCIAL STATEMENTS

     Consolidated Balance Sheets May 31, 1998 (Unaudited)
     and August 31, 1997                                             1

     Consolidated Statements of Operations (Unaudited) 
     for the three months ended May 31, 1998 and 1997                2

     Consolidated Statements of Operations (Unaudited) 
     for the nine months ended May 31, 1998 and 1997                 3

     Consolidated Statement of Stockholders' Equity (Unaudited)
     for the nine months ended May 31, 1998                          4

     Consolidated Statements of Cash Flows (Unaudited)
     for the nine months ended May 31, 1998 and 1997                 5

     Notes to Consolidated Financial Statements                    6 - 13

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

PART II - OTHER INFORMATION                                          19

<PAGE>    1

                   SDC INTERNATIONAL, INC. AND SUBSIDIARY
                        CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                  (Unaudited)
                                                                    May 31,        August 31,
                                                                     1998             1997     
<S>                                                             <C>               <C>
                                      ASSETS
Current assets:
     Cash                                                        $     65,665     $     15,199
     Cash - restricted                                                 80,960          330,932
     Accounts receivable                                              128,125             -  
     Inventory                                                        554,047             -  
     Prepaid expenses                                                   8,813           21,875
     Other current assets                                               1,481            1,903
          Total current assets                                        839,091          369,909

Machinery and equipment, net                                        3,285,984        3,489,341

Other assets:
     Exclusive agency rights, net                                     191,574          263,485
     Customer list, net                                                56,250          140,625
     Organizational costs, net                                          4,778            7,643
     Deferred offering costs                                           50,000             -  
     Other assets                                                      16,546             -  
          Total other assets                                          319,148          411,753

          Total assets                                           $  4,444,223     $  4,271,003


          LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
     Accounts payable (including cash overdraft of
       $28,387 as of May 31, 1998)                               $     76,716     $     53,793
     Accounts payable - related party                                  73,477             -  
     Accrued expenses                                                 149,658           36,467
     Note payable - short term                                        100,100          215,000
     Due to officer                                                    69,539           27,036
          Total current liabilities                                   469,490          332,296

Excess of net assets acquired over cost, net                          517,471             -  

Commitments and contingencies (Note 6)                                   -                -  

Stockholders' equity:
     Common stock $.001 par value, authorized 10,000,000
       shares, issued and outstanding 3,640,119 and
       2,639,484 shares, respectively                                   3,640            2,639
     Additional paid-in capital                                     7,682,252        6,345,643
     Accumulated deficit                                           (4,131,430)      (2,409,575)
          Sub total                                                 3,554,462        3,938,707
     Deferred costs                                                   (97,200)            - 
          Total stockholder's equity, net                           3,457,262        3,938,707
Total liabilities and stockholders' equity                       $  4,444,223     $  4,271,003

</TABLE>

See accompanying notes to consolidated financial statements.

<PAGE>    2


                   SDC INTERNATIONAL, INC. AND SUBSIDIARY
                    CONSOLIDATED STATEMENTS OF OPERATIONS
                      FOR THE THREE MONTHS ENDED MAY 31,
                                (UNAUDITED)

<TABLE>
<CAPTION>

                                                                      1998             1997          
<S>                                                              <C>               <C>
Sales                                                            $     41,607      $     -  

Cost of goods sold                                                     20,993            -  

Gross profit                                                           20,614            -  

Expenses:
     Selling, general and administrative                              230,633          136,943     
Depreciation and amortization                                         122,860          117,152
     Stock based consulting and compensation                          252,037            -  
Total expenses                                                        605,530          254,095

Loss from operations before other income and provision
 for income taxes                                                    (584,916)        (254,095)

Other income (expense):
     Amortization of excess costs                                      14,000            -  
     Interest income                                                       99            1,358
     Interest expense                                                  (7,275)         (11,824)
     Foreign currency tax exchange income (loss)                        4,209            -  
Total other income (expense)                                           11,033          (10,466)

Loss before provision for income taxes                               (573,883)        (264,561)

Provision for income taxes                                               -               -  

Net loss                                                          $  (573,883)     $  (264,561)

Earnings (loss) per share:
     Basic:
        Net loss                                                  $      (.16)     $      (.12)

Weighted average number of shares outstanding                       3,640,119        2,289,011

</TABLE>


See accompanying notes to consolidated financial statements


<PAGE>    3

                    SDC INTERNATIONAL, INC. AND SUBSIDIARY
                    CONSOLIDATED STATEMENTS OF OPERATIONS
                       FOR THE NINE MONTHS ENDED MAY 31,
                                  (UNAUDITED)

<TABLE>
<CAPTION>

                                                                     1998              1997          
<S>                                                             <C>               <C>
Sales                                                           $     105,345     $  1,335,579

Cost of goods sold                                                     52,871        1,279,548

Gross profit                                                           52,474           56,031

Expenses:
     Selling, general and administrative                              720,254          270,698
     Depreciation and amortization                                    362,286          351,455
     Stock based consulting and compensation                          719,751             -  
Total expenses                                                      1,802,291          622,153

Loss from operations before other income and provision
 for income taxes                                                  (1,749,817)        (566,122)

Other income (expense):
     Amortization of excess costs                                      42,000             -  
     Interest income                                                    3,819            2,866
     Interest expense                                                 (34,636)         (12,200)
     Foreign currency exchange income (loss)                           (1,738)            -  
Total other income (expense)                                            9,445           (9,334)

Loss before provision for income taxes                             (1,740,372)        (575,456)

Provision for income taxes                                               -                -  

Net loss                                                         $ (1,740,372)     $  (575,456)

Earnings (loss) per share:
     Basic:
        Net loss                                                 $       (.53)     $      (.26)

Weighted average number of shares outstanding                       3,281,892        2,231,847

</TABLE>


See accompanying notes to consolidated financial statements

<PAGE>    4

                    SDC INTERNATIONAL, INC. AND SUBSIDIARY
                CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
                    FOR THE NINE MONTHS ENDED MAY 31, 1998
                                 (UNAUDITED)

<TABLE>
<CAPTION>
                                                                   Additional                                        Total
                                              Common Stock          paid-in          Accumulated     Deferred     Stockholders'
                                          Shares        Amount      capital            Deficit        Costs          Equity     
<S>                                    <C>            <C>          <C>              <C>              <C>           <C>
Balances at September 1, 1997          2, 639,484     $  2,639     $  6,345,643     $ (2,409,575)    $     -       $ 3,938,707

Issuance of common stock in
 connection with private placement
 memorandum, net of offering
 costs of $69,154                       35404,635          355          462,441            -               -           462,796
                                                                                       
Issuance of common stock
 pursuant to the 1997 Non
 Qualified Stock Option Plan              491,000          491          734,498            -            (194,400)      540,589

Issuance of common stock 
 for services                             140,000          140          126,560            -               -           126,700

Issuance of common stock in
 connection with loans                     15,000           15           13,110            -             (13,125)         -  

Amortization of deferred costs               -              -              -               -             110,325       110,325

Adjustments related to fluctuation
 of foreign currency                         -              -              -              18,517           -            18,517

Net loss for the nine months
 ended May 31, 1998                          -              -              -          (1,740,372)          -        (1,740,372)

Balance at May 31, 1998                 3,640,119     $  3,640     $  7,682,252     $ (4,131,430)     $ (97,200)   $ 3,457,187

</TABLE>

See accompanying notes to consolidated financial statements.

<PAGE>    5

                  SDC INTERNATIONAL, INC. AND SUBSIDIARY
                   CONSOLIDATED STATEMENTS OF CASH FLOWS
                      FOR THE NINE MONTHS ENDED MAY 31,
                                (UNAUDITED)

<TABLE>
<CAPTION>

                                                                     1998               1997          
<S>                                                             <C>               <C>
Cash flows from operating activities:
     Net loss                                                   $ (1,740,372)     $  (575,456)
 Adjustments to reconcile net loss to net
      cash (used for) provided by operating activities:
     Amortization and depreciation                                   449,697          351,455
     Common stock issued for services                                667,289             -  
     Adjustments from fluctuations in foreign currency                18,517             -  
     Decrease (increase) in:
          Accounts receivable                                         20,094        (130,094)
          Inventory                                                 (171,469)            -  
          Other assets                                               (16,124)         17,998
     Increase (decrease) in:     
          Accounts payable                                             9,718          (3,711)
          Accounts payable - related party                            73,477         440,269
          Accrued expenses                                            41,038         (29,764)
Net cash (used for) provided by operating activities                (648,135)         70,697

Cash flows from investing activities:
     Acquisition of subsidiary, net of cash acquired                  44,878            -  
     Proceeds from collection of notes receivable - related
       parties                                                                        62,985
     Purchase of machinery and equipment                              (5,802)           -  
     Decrease (increase) in restricted cash                          249,972          (2,262)
Net cash provided by investing activities                            289,048          60,723

Cash flows from financing activities:
     Proceeds from issuance of note payable                          100,000          35,000
     Repayment of notes payable                                     (215,000)           -  
     Proceeds from stockholder                                        42,603          32,500
     Proceeds from sale of common stock                              531,950         205,679
     Cost associated with private placement memorandum
      and sale of common stock                                          -            (16,705)
     Deferred offering costs                                         (50,000)           -  
     Repayment of loans from stockholder                                -            (95,752)
Net cash provided by financing activities                            409,553         160,722

Net increase in cash                                                  50,466         292,142

Cash at beginning of period                                           15,199            -  
Cash at end of period                                           $     65,665     $   292,142

Supplemental statement of cash flows disclosures:
     Interest paid                                              $     18,291     $    12,200
     Income taxes paid                                          $       -        $      -  

Supplemental disclosure of non-cash operating and
  financing activities:
     Issuance of 140,000 shares of common stock for services    $   194,400      $      -  
     Issuance of 15,000 shares as additional consideration
        for loan                                                $    13,125      $      -  
     Accrual of costs associated with sale of common stock      $    69,154      $      -  

</TABLE>


See accompanying notes to consolidated financial statements.

<PAGE>    6

                   SDC INTERNATIONAL, INC. AND SUBSIDIARY
                 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   FOR THE THREE MONTHS ENDED MAY 31, 1998
                                 (UNAUDITED)

NOTE 1     -     GENERAL

The consolidated financial statements of SDC International, Inc.  (the 
"Company") at May 31, 1998 and 1997 include the accounts of its wholly-owned 
subsidiary Skobol, s.a. ("Skobol"), after elimination of all significant 
intercompany transactions and accounts.

 The Company was incorporated in the state of Delaware on June 30, 1994 for 
the purpose of developing and marketing an exclusive agency agreement acquired 
from Diesel a.s. (formerly known as Skoda Diesel a.s.) ("Skoda") to sell a 
broad range of Skoda's products which are primarily comprised of piston 
combustion diesel engines whose applications include locomotive and stationary 
engines for the generation and co-generation of electric power.  Skoda was 
formed in Czechoslovakia in the year 1899.

During April 1997, the Company acquired the outstanding common stock of Golden 
Grove Business, Inc., ("GGB"), a Panama Corporation, then subsequently 
dissolved GGB.  During November 1997, the Company acquired all of the 
outstanding common stock of Skobol, a Bolivia Corporation. 

The Company's equipment is located in the Czech Republic.

The accompanying unaudited consolidated financial statements have been 
prepared in accordance with generally accepted accounting principles for 
interim financial information and with instructions to Form 10-QSB.  
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 the interim consolidated financial 
statements include all adjustments necessary in order to make the consolidated 
financial statements not misleading.  The results of operations for the three 
and nine months ended are not necessarily indicative of the results to be 
expected for the full year.  For further information, refer to the Company's 
audited consolidated financial statements and footnotes thereto at August 31, 
1997, included in the Company's Form 10-KSB, filed with the Securities and 
Exchange Commission.

NOTE 2     -     EXCLUSIVE AGENCY RIGHTS, NET

On April 21, 1994, one of the founding shareholders executed an exclusive 
agency representation letter agreement as agent of the Company with Skoda 
pursuant to which the Company was appointed as Skoda's exclusive sales agent 
in North, South and Central America with the exception of the country of 
Peru.   In order for the Company to maintain its exclusively, it must generate 
annual gross sales with in the territory of at least $15,000,000 at the close
of its sixth year, (April 1999), after the execution of the agreement.  As 
consideration for the purchase of these exclusive agency rights, the Company 
has issued 51,650 shares of its common stock to Skoda.

In October 1995 the Company purchased the exclusive rights to market and sell 
Skoda Diesel products into the countries of China and South Korea based upon 
the following terms.

<PAGE>     7

                   SDC INTERNATIONAL, INC. AND SUBSIDIARY
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   FOR THE THREE MONTHS ENDED MAY 31, 1998
                                 (UNAUDITED)

NOTE 2     -     EXCLUSIVE AGENCY RIGHTS, NET (Cont'd)

South Korea

     i)    During the year 1997, sales to South Korea must be in the amount of
           least $2,400,000.
     ii)   During the year 1998, sales to South Korea must be in the amount of 
           $3,600,000.
     iii)  Each year thereafter, sales to South Korea must be in the amount of 
           at least $5,600,000.

The Company paid Skoda, a one time fee of $50,000 for the acquisition of such 
exclusive rights.

     China

     i)    During the year 1997, sales to China must be in the amount of at
           least $3,000,000.
     ii)   During the year 1998, sales to China must be in the amount of at
           least $4,500,000.
     iii)  During the year 1999, sales to China must be in the amount of at 
           least $6,000,000.

The Company paid Skoda a one time fee of $100,000 for the acquisition of such 
exclusive rights.  The agency rights from China and Korea are amortized on a 
monthly basis over five years.

On April 18, 1996, the Company entered into a modification agreement whereby 
all such sales levels were postponed for one year.

NOTE 3     -     ACQUISITIONS

a)     On April 24, 1997, the Company acquired for $120,000 plus 48,000 common
shares all the issued and outstanding common stock of GGB.  GGB had acquired 
an exclusive agency contract with Tatra a.s. (a Czech Republic truck 
manufacturer) to market and sell Tatra's products.  The Company amortized such 
agency rights over the estimated remaining useful life of four years.  
Accordingly, for the three and nine months ended May 31, 1998, amortization 
expense amounted to $13,242 and $39,726.

b)     On November 18, 1997, the Company acquired 100% of the common stock of
Skobol from Skobol's parent, Motokov International Joint Stock Company, for 
$78,000.  The acquisition was retroactively effective to September 1, 1997.  
The acquisition was accounted as a purchase with the results of Skobol 
included from the acquisition date.  Skobol is a distributor of Czech Republic 
products within the country of Bolivia.

The acquisition of Skobol resulted in an excess of net assets acquired over 
costs of $559,471 after application to all non current assets acquired.  This 
amount is being amortized on a straight-line basis over ten years from date of 
acquisition.  Accordingly, for the three and nine months ended May 31, 1998, 
amortization income amounted to $14,000 and $42,000, respectively.



<PAGE>    8

                   SDC INTERNATIONAL, INC. AND SUBSIDIARY
                 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                  FOR THE THREE MONTHS ENDED MAY 31, 1998
                               (UNAUDITED)


NOTE 4     -     NOTES PAYABLE

a)The Company had two bank lines-of-credit which provided short-term 
borrowings up to $220,000.  Interest on advances was payable quarterly at a 
fixed rate of 4.32%.  The lines-of-credit expired on October 19, 1997 and were 
secured by a certificate of deposit amounting to $250,000.  During October 
1997, the certificate of deposit was redeemed and such lines of credit were 
repaid.

b)During October 1997, the Company borrowed $100,000 from an individual which 
is payable in 180 days at an interest rate of 14% per annum.  In connection 
with such borrowing, the Company issued 15,000 common shares as additional 
consideration.  (See Note 5(c).  The issuance of such shares results in an 
effective interest rate of 40%.  As of May 31, 1998, the Company had accrued 
$7,975 of interest and amortized $13,125 of deferred interest in relation to 
this note.

NOTE 5     -     STOCKHOLDERS' EQUITY

a)     Private Placement Memorandum

On February 24, 1997, the Company commenced and privately offered pursuant to 
rule 505, Regulation D, on a best efforts basis, no more than 500,000 shares 
of common stock in a ninety-day period (before extentions) of its $.001 par valu
e common stock at $1.50 per share before deducting discounts, commissions and 
non-accountable expenses. During the nine months ended May 31, 1998, the 
Company sold an aggregate of 354,635 shares yielding net proceeds of $462,796.

b)     1997 Non-qualified stock option plan

On September 5, 1997, the Company established a Non-Qualified Stock Option 
Plan ("the Plan") pursuant to which 750,000 shares of common stock are 
reserved for issuance.  The option price per share is determined by the Board 
of Directors at the time any options are granted.  The Plan is designed to 
serve as an incentive for retaining qualified and competent persons who are 
key employees, consultants, representative, officers and directors of the 
Company.  During the three and nine months ended May 31, 1998, the Company 
issued 132,500 and 491,000 shares pursuant to the Plan.  Such shares have been 
valued at $198,750 and $734,989 representing 75% of the average market value 
during the month of issuance as a result of the illiquidity of the Company's 
stock.  In connection with the issuance of such shares, the Company has 
recorded $540,589 as stock-based compensation and the remaining balance 
amounting to $194,400 has been recorded as deferred consulting costs to be 
amortized on a monthly basis over 12 months.  Accordingly, for the three and 
nine months ended May 31, 1998, amortization expense amounted to $48,600 and 
$97,200, respectively.




<PAGE>    9

                   SDC INTERNATIONAL, INC. AND SUBSIDIARY
                 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                  FOR THE THREE MONTHS ENDED MAY 31, 1998
                                (UNAUDITED)

NOTE 5     -     STOCKHOLDERS' EQUITY (Cont'd)

c)     Deferred interest

In connection with the obtaining of a loan, the Company issued 15,000 shares 
of common stock as additional consideration.  Such shares have been recorded 
at 50% of the average market value of the stock during the month of issuance 
as a result of the illiquidity of the Company's stock.  Accordingly, the 
Company has recorded deferred interest of $13,125 which is being amortized 
over the term of the loan.  For the three and nine months ended May 31, 1998, 
amortized interest amounted to $4,375 and $13,125.

d)     Stock-based consulting

During the nine months ended May 31, 1998, the Company issued 140,000 shares 
of restricted common stock.  Such shares have been valued at $126,700 
representing 50% of the average market value when issued as a result of the 
illiquidity of the Company's stock and the restricted nature of the shares 
issued.  No restricted shares of common stock were issued during the three 
months ended May 31, 1998.

NOTE 6     -     COMMITMENTS AND CONTINGENCIES

a)     Lease agreement

The Company leases its administrative office pursuant to signed lease 
agreement commencing July 1, 1995 and expiring on June 30, 1997.  Such lease 
requires monthly payments of $3,500.  Effective December 1996, the Company 
terminated this lease.  Prior to July 1, 1995 the Company maintained its 
administrative office on a month to month basis, free of charge at the office 
of Worth. Worth is an entity which the Chairman of the Company is also a 50% 
shareholder.  Effective January 1, 1998, the Company entered into a new lease 
for a one year term.  Such lease requires monthly payments of $2,000.

Included in general and administrative expenses is rent expense which amounted 
to $9,646 and $9,318 for the three months ended May 31, 1998 and 1997, 
respectively and $26,887 and $46,999 for the nine months ended May 31, 1998 
and 1997, respectively.

b)     Concentration of credit risk

Due to its current limited sales, the Company has a high concentration of 
credit risk until such transactions are completed.  The Company is actively 
seeking sales outside of the United States.  If such sales occur, the revenue 
and subsequent collections will be subject to the fluctuations such sales 
generate, both from currency and political changes.  The Company's machinery 
and equipment is located in the Czech Republic.  The Company's primary source 
of inventory is currently Skoda and Tatra and as such, it is subject to 
Skoda's and Tatra's risks of business and its continued financial health, as
well as the risks associated with foreign businesses, both from currency and
political changes.

<PAGE>    10

                     SDC INTERNATIONAL, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                    FOR THE THREE MONTHS ENDED MAY 31, 1998
                                  (UNAUDITED)

NOTE 6     -     COMMITMENTS AND CONTINGENCIES (Cont'd)

c)     Management agreement

On December 15, 1995 the Company and Worth entered into a management agreement 
with an individual for a period of three years.  Pursuant to such agreement, 
the individual shall devote such time, attention and efforts to management 
services as may be reasonably required by the Company and Worth.  The Company 
and Worth will pay such individual an amount equal to twenty-five percent 
(25%) of the gross profit from sales made by the Company.  Such payments are 
payable monthly after the collection of receivables from said sales.  There 
are no amounts currently payable under this agreement.

d)     Letter of intent

On October 10, 1997, the Company signed a Letter of Intent with an underwriter 
to proceed on a "Firm Commitment" basis with a secondary offering of the 
Company's Common Stock and redeemable Warrants ("the Warrants").  The Company 
will offer 1,000,000 shares of common stock and 1,000,000 Warrants.  The 
1,000,000 shares and Warrants will be offered to the public at a price of 
$6.00 per share and $.125 per Warrant, respectively.  The total gross 
offering  amounts to $6,125,000.

Each Warrant, which is redeemable in 60 months, entitles the holder thereof to 
purchase one share of Common Stock at 120% of the offering price of Common 
shares.  The warrant may be redeemed by the Company at $.10 each after the 
common shares have traded at 150% of the offering price of the common shares 
for 10 consecutive days.  Due to the current progress of negotiations with 
potential strategic partners, this offering is postponed by management.

d)     Finder's fee agreement

On May 20, 1996, the Company entered into a finder's fee agreement with Prime 
Charter, Ltd ("Prime") for a period of ten years, renewable for additional 
five year periods.  Pursuant to such agreement, any sales to entities 
introduced to the Company by Prime shall result in a finder's fee to Prime of 
two percent (2%) of the gross sales price or ten percent (10%) of the adjusted 
gross profit resulting from the sales.  Such payments are due 45 days after 
each quarter-annual calendar period.

e)     Dependence on Skoda and Tatra

The Company's operations are dependent on Skoda and Tatra since Skoda and 
Tatra are responsible for the manufacturing of all of the Company's products 
and for making available sufficient inventory.  The Company faces risks of the 
inability to obtain products in the event of production problems of Skoda or 
Tatra due to labor problems, governmental regulations, working capital 
deficiencies, political unrest and other problems which may result in the 
inability of Skoda or Tatra to fulfill orders of the Company.




<PAGE>    11

                  SDC INTERNATIONAL, INC. AND SUBSIDIARY
                 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                  FOR THE THREE MONTHS ENDED MAY 31, 1998
                               (UNAUDITED)

NOTE 7     -     RELATED PARTY TRANSACTION

a)     Acquisition of exclusive agency rights

In October 1995, the Company purchased the exclusive rights to market and sell 
Skoda Diesel products into the countries of China and South Korea.  In 
consideration for these rights the Company paid Skoda $150,000.

b)     Accounts payable

At May 31, 1998, the Company had accounts payable to related parties totalling 
$73,477 which were due to Double Seal Ring Company, one of its founding 
shareholders.

c)     Due to officer

The Company's Chief Executive Officer and shareholder advances funds to or on 
behalf of the Company.  As of May 31, 1998, $69,539 was owed to such officer.  
Such advances are non-interest bearing and due on demand.

d)     Management fees

For the three months ended May 31, 1998 and 1997, the Company recorded $51,600 
and $18,000 respectively for management fees and travel allowance to the Chief 
Executive Officer and the President.

e)     Rent Expense

Effective January 1, 1998, the Company rents its executive office on a month 
to month basis from its Chief Executive Officer with monthly payments 
amounting to approximately $2,000.

NOTE 8    -     SUBSEQUENT EVENTS

a)     Note payable

During June 1998, the Company borrowed $100,000 from a shareholder which is 
payable in 90 days at an interest rate of 14% per annum.  In connection with 
such borrowing, the Company issued 20,000 common shares as additional 
consideration.  Such shares will be valued at 50% of the average market value 
when issued as a result of the illiquidity of the Company's stock and the 
restricted nature of the shares issued.  The issuance of such shares results 
in an effective interest rate of 82%.

b)     Note payable

During June 1998, the Company borrowed $100,000 from a shareholder which is 
payable in 180 days at an interest rate of 14% per annum.  In connection with 
such borrowing, the Company issued 15,000 common shares as additional 
consideration.  Such shares will be valued at 50% of the average market value 
when issued as a result of the illiquidity of the Company's stock and the 
restricted nature of the shares issued.  The issuance of such shares results 
in an effective interest rate of 40%.


<PAGE>    12

                   SDC INTERNATIONAL, INC. AND SUBSIDIARY
                 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   FOR THE THREE MONTHS ENDED MAY 31, 1998
                                (UNAUDITED)

NOTE 8    -     SUBSEQUENT EVENTS (Cont'd)

c)     Line of credit

During June 1998, the Company obtained an unsecured $500,000 line of credit 
from a shareholder with an interest rate at fourteen percent (14%) per annum. 
The Company may borrow from the credit line up to $35,714 in any one week. 
Principal and interest are payable on December 18, 1998. If the Company is not 
able to pay such principal and interest when due, the principal balance of the 
line of credit and any outstanding accrued interest may be converted into 
common stock at the rate of $1.00 per share.

d)     Due to shareholder

During July 1998, the Chairman of the Company advanced $17,000 to the Company. 
Such advances are non interest bearing and due on demand.

e)     Acquisition

During July 1998, the Company entered into a letter of intent to purchase 
43.5% of  the Czech truck manufacturer, Tatra a.s., for approximately $13.6 
million. In addition, the Company will purchase Tatra's senior secured loan 
from the bank holding such note, with an approximate balance of $89.5 million, 
for approximately $30 million. Both agreements are anticipated to close 
September 30.. 

There is no assurance that the transaction will be completed since the Company 
must obtain sufficient capital to complete the acquisition, thus, no pro forma 
financial information has been presented. The following information is from 
Tatra's audited financial statements. Tatra had sales of approximately $290 
million for the year ended December 31, 1997. At December 31, 1997, Tatra had 
total assets of approximately $230 million.

f)     Note payable

During August 1998, the Company borrowed $350,000 from a shareholder which is 
payable in 180 days at an interest rate of 14% per annum.  In connection with 
such borrowing, the Company issued 37,500 common shares as additional 
consideration.  Such shares will be valued at 50% of the average market value 
when issued as a result of the illiquidity of the Company's stock and the 
restricted nature of the shares issued.  The issuance of such shares results 
in an effective interest rate of 32%.

g)     Note payable

During August 1998, the Company borrowed $125,000 from each of two 
shareholders which is payable in 180 days at an interest rate of 14% per 
annum.  In connection with such borrowing, the Company issued each shareholder 
31,250 common shares as additional consideration.  Such shares will be valued 
at 50% of the average market value when issued as a result of the illiquidity 
of the Company's stock and the restricted nature of the shares issued.  The 
issuance of such shares results in an effective interest rate of 57%.



<PAGE>    13

                 SDC INTERNATIONAL, INC. AND SUBSIDIARY
               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE THREE MONTHS ENDED MAY 31, 1998
                              (UNAUDITED)


h)     Inventory loans

The Company has retired $96,500 of short term inventory loans since May 31, 
1998.






<PAGE>    14

ITEM 2     -  MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND 
              RESULTS OF OPERATIONS

The Company is the Central and South American distributor for Czech heavy-duty 
truck manufacturer Tatra.  Tatra, a.s., is a Czech manufacturer of on/off-road 
heavy trucks.  The factory was founded in 1850 and in 1898 the first truck was 
manufactured.  The factory continued development and innovations of its 
vehicle and today produces a truck with the an air cooled diesel engine and a 
solid central backbone tube with swing half axles, both features being unique 
features of the Tatra truck.  Engines are manufactured by Tatra, Deutz, 
Detroit Diesel or Cummins Diesel.  Tatra has ISO 9001 certification and Tatra 
trucks meet all EURO II regulations.

During the quarter ending May 31, 1998, there was minimal activity in the 
Company's division, SDC Prague, s.r.o., in the Czech Republic.  SDC Prague 
plans to market and sell electrical generating and co-generating equipment 
using the components of East European manufacturers.

During the quarter ending May 31, 1998, the Company continued rebuilding the 
inventories of its Bolivian subsidiary, Skobol, s.a., formerly the subsidiary 
of Czech trading company Motokov International.  Skobol is a thirty-seven year 
old distributor of Czech products within Bolivia, and the Company plans to use 
this subsidiary as its base to expand throughout that region of South America 
with the other Czech products offered by the Company.  The new subsidiary 
provided an excess of $559,471 of net assets acquired over the cost of the 
acquisition.  Skobol operated at a small loss during this period as the 
products are being expanded and Skobol is reintroducing itself to the 
marketplace as a continuing supplier of Czech products.  The subsidiary's 
financial statements are consolidated with those of the Company.

The Company has cancelled its plans to sell and finance inventories of 
Slovakian manufacturer Krizik, a.s., because the Company has developed similar 
opportunities with companies with whom SDC has existing relationships and 
which are located within the Czech Republic where the Company conducts most if 
its business activities.

The Company concluded its Regulation D, Rule 505 offering of its common stock 
which provided a gross total of $740,000 for the Company.  The Five Year 
Growth Plan which was completed in August 1997 has been updated to reflect the 
positive developments of the prior six months and management is exploring 
different sources of additional capital and reviewing different methods of 
obtaining additional capital for the Company in order to execute its five year 
plan.

At the close of the quarter ending May 31, 1998, the Company continued 
negotiating for a possible acquisition of Skoda's Diesel International 
operations.  Management and shareholder control of Diesel International 
(formerly Skoda Diesel) changed in 1996, and the Company believes that if an 
acquisition can be made on terms favorable to the Company, potential negative 
effects of the management and shareholder changes of 1996 will be eliminated 
and the Company could exert total control over this supplier.  SDC management 
continues to work with the management in place at Diesel International and 
relationships with management are satisfactory.  Discussions continue with two 
other East European manufacturers of industrial products which should be 
synergistic with the Company's present products and markets.

There can be no assurances that any of the matters discussed above will come 
to fruition or will result in positive results for the Company.


<PAGE>    15

ITEM 2     -   MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
               RESULTS OF OPERATIONS

The Company has devoted substantial time and effort to negotiating and 
arranging strategic alliances with major Czech manufacturers rather than 
devoting its time to beginning its marketing and sales development.  It is 
felt that the most efficient use of time and resources will be with the proper 
product mix for entering new markets.  Therefore, the Company's revenues to 
date are primarily the result of orders received by the Company rather than 
the results of marketing efforts by the Company.  The Company records revenue 
when products are shipped.  During the quarter ending May 31, 1998, the 
Company shipped $41,607 and realized a gross profit from those sales of 
$26,395.  These sales were made by the new subsidiary, Skobol, s.a.  
Management believes sales by Skobol will increase as its reorganization of its 
operations is completed and new inventories are provided.  However, Company 
sales and shipments will continue to be sporadic until a more steady flow of 
orders exist, and until the marketing efforts for larger items, such as 
electrical generating sets and trucks, can come to fruition.

Operating expenses for the quarter ending May 31, 1998, were more than in the 
quarter ending May 31, 1997, due primarily to the expansion of management, 
development of additional product lines needed in order to enhance future 
growth and revenues of the Company, and the continuing negotiations for major 
strategic alliances which often times include paid professional advisors such 
as attorneys and accountants.  Expense categories such as legal, accounting, 
travel, and costs and expenses for securities matters increased due to the 
fact that the Company is a fully reporting 12 (g) company, due to the planned 
acquisition of new product lines, and due to the extensive discussions and 
negotiations in the Czech Republic regarding future strategic alliances and 
the possible acquisition of Diesel International.

Total expenses for the quarter ending May 31, were $265,919 in 1997 and 
$612,805 in 1998.  Non-cash expenses as deprecation and amortization and 
payment for consulting services accounted for $321,610, more than fifty-two 
(52%) of the expenses during the quarter ending May 31, 1998.  During the 
quarter ending May 31, 1998, expenses increased due to the increased activity 
level of corporate and product acquisition plans and related activities.  The 
Company's net loss of $573,883 for the quarter ending May 31, 1998, includes 
certain non-cash charges as follows:

               Depreciation and amortization     $     122,860
               Issuance of common stock as
                 consideration of services             198,750

               Total non-cash charges            $     321,610

Accordingly, the Company's cash loss before the above charges amounted to 
approximately $252,273.

<PAGE>    16

ITEM 2     -  MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
              RESULTS OF OPERATIONS

During the three months ending May 31, 1998, as compared to the three months 
ending May 31, 1997, operating expenses were approximately $351,435 higher.  
Management expects operating expenses (non-depreciation and non-amortization), 
to remain at this approximate level for the near future due to the level of 
negotiations and expansion discussions taking place presently.

Operating expense categories which exceeded $5,000, for the three months 
period ending May 31, 1998, were; Amortization and depreciation $122,860; 
Office rent $9,646; Management compensation and salary $51,600; Travel and 
lodging $19,981; Consulting $13,474; Legal and accounting $9,130; Telephone 
$10,169; Consulting costs paid by issuance of stock $102,037; Advertising 
$6,500; Repair and maintenance $16,162; Office supplies $7,530 Wages $39,850; 
and Management compensation paid by stock $150,000.

Operating expense categories which exceeded $5,000 for the three month period 
ending May 31, 1997 were; Amortization and depreciation $117,151; Office rent 
$9,318; Marketing $35,720; Taxes and licenses $9,335; Interest $11,824; 
Management compensation and salary $18,000; Travel and lodging $23,866; 
Consulting $18,293; Legal and accounting $8,157; and Telephone $9,537.

LIQUIDITY AND CAPITAL RESOURCES

At the end of May 1998, the Company's working capital is $369,601.   Net cash 
used for the Company's operating activities for the quarter ending May 31, 
1998 amounted to $648,135 whereas the net cash provided by operating 
activities for the quarter ending May 31, 1997 amounted to $70,697.  Net cash 
provided by financing activities in the quarter ending May 31, 1998 was 
$409,553 compared to $160,722 for the quarter ending May 31, 1997.  Net cash 
provided by  investing activities during the quarter ending May 31, 1998 was 
$289,048 compared to $60,723 for the quarter ending May 31, 1997.  Therefore, 
total cash at the end of the quarter ending May 31, 1998 was $65,665 compared 
to $292,142 at the end of the quarter ending May 31, 1997.  During the quarter 
ending May 31, 1998, all corporate debt amounted to $169,639.

Management is evaluating its current and projected cash needs to determine if 
its current financial situation will be sufficient to meet such needs.  If the 
Company continues according to its present plans and without modification, the 
Company will be required to obtain additional financing or equity capital.  
Management is actively exploring possible sources of additional capital and is 
reviewing possible methods to obtain such additional capital, as needed.  
There is no assurance that such financing or capital will be available.

Negative cash flows from the Company's operating activities are anticipated to 
continue until the Company has established its distributors within its sales 
territories, nas received and shipped orders, and has collected payment for 
such orders.  The Company may encounter difficulties in financing the purchase 
of inventory necessary to complete orders.  The Company acknowledges that 
there can be no assurance that it will be able to obtain capital or financing 
until the time of such payment is received or that such capital is unable to 
provide needed revenues to finance its ongoing operating or if the Company 
does not receive additional capital, there could be a severe adverse impact on 
the Company's future operations.


<PAGE>    17

ITEM 2     -  MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
              RESULTS OF OPERATIONS

LIQUIDITY AND CAPITAL RESOURCES (Cont'd)

On September 5, 1997, the Company established a Non-Qualified Stock Option 
Plan ("The Plan") pursuant to which 750,000 shares of common stock are 
reserved for issuance.  The option price per share shall be determined by the 
Board of Directors at the time any options are granted.  The Plan is designed 
to serve as an incentive for retainage qualified and competent persons who are 
key employees, consultants, representatives, officers and directors of the 
corporation.  As of May 31, 1998, 491,000  shares had been issued under such 
Plan.  See Notes to financial statements, Note 5(b).

On October 10, 1997, the Company signed a Letter of Intent with an underwriter 
to proceed on a "Firm Commitment" basis with a secondary offering of the 
Company's common stock and redeemable warrants ("the Warrants").  The Company 
plans to offer 1,000,000 shares and warrants will be offered to the public at 
a price of $6.00 per share and $0.125 per warrant, respectively.  The total 
gross offering amounts to $6,125,000.  The Company, if necessary, will effect 
a reverse stock split in order to complete the secondary offering at a price 
of at least $6.00 per share.  Each warrant, which is redeemable within 60 
months, entitles the holder thereof to purchase one share of common stock at 
120% of the offering price of the common shares. The warrants may be redeemed 
by the Company at $0.10 each after the common shares have traded at 150% of 
the offering price of common shares for ten consecutive days.  Due to the 
current progress of negotiations with potential strategic partners, this 
offering is postponed by management.

The Company' products are sold in US dollars and the Company does not believe 
currency exchange rates or current inflation rates will have a significant 
effect on sales or profitability.  Although the Company maintains a bank 
account in Czech currency within the Czech Republic for paying local expenses, 
the amount on deposit in such account is usually small and, therefore, 
fluctuation in the currency exchange rates should not have a significant 
effect on the Company.

During June 1998, the Company borrowed $100,000 from a shareholder which is 
payable in 90 days at an interest rate of 14% per annum.  In connection with 
such borrowing, the Company issued 20,000 common shares as additional 
consideration.  Such shares will be valued at 50% of the average market value 
when issued as a result of the illiquidity of the Company's stock and the 
restricted nature of the shares issued.  The issuance of such shares results 
in an effective interest rate of 82%.

During June 1998, the Company borrowed $100,000 from a shareholder which is 
payable in 180 days at an interest rate of 14% per annum.  In connection with 
such borrowing, the Company issued 15,000 common shares as additional considerat
ion.  Such shares will be valued at 50% of the average market value when 
issued as a result of the illiquidity of the Company's stock and the 
restricted nature of the shares issued.  The issuance of such shares results 
in an effective interest rate of 40%.

During June 1998, the Company obtained an unsecured $500,000 line of credit 
from a shareholder with an interest rate at fourteen percent (14%) per annum. 
The Company may borrow from the credit line up to $35,714 in any one week. 
Principal and interest are payable on December 18, 1998. If the Company is not 
able to pay such principal and interest when due, the principal balance of the 
line of credit and any outstanding accrued interest may be converted into 
common stock at the rate of $1 per share.
     
<PAGE>    18

ITEM 2     -  MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
              RESULTS OF OPERATIONS

LIQUIDITY AND CAPITAL RESOURCES (Cont'd)
     
During July 1998, the Chairman of the Company advanced $17,000 to the Company. 
Such advances are non interest bearing and due on demand.


During July 1998, the Company entered into a letter of intent to purchase 
43.5% of  the Czech truck manufacturer, Tatra a.s., for approximately $13.6 
million. In addition, the Company will purchase Tatra's senior secured loan 
from the bank holding such note, with an approximate balance of $89.5 million, 
for approximately $30 million. Both agreements are anticipated to close 
September 30.

There is no assurance that the transaction will be completed since the Company 
must obtain sufficient capital to complete the acquisition. The following 
information is from Tatra's audited financial statements. Tatra had sales of 
approximately $290 million for the year ended December 31, 1997. At December 
31, 1997, Tatra had total assets of approximately $230 million.

The Company has retired $96,500 of short term inventory loans since May 31, 
1998.

During August 1998, the Company borrowed $350,000 from a shareholder which is 
payable in 180 days at an interest rate of 14% per annum.  In connection with 
such borrowing, the Company issued 37,500 common shares as additional 
consideration.  Such shares will be valued at 50% of the average market value 
when issued as a result of the illiquidity of the Company's stock and the 
restricted nature of the shares issued.  The issuance of such shares results 
in an effective interest rate of 32%.

During August 1998, the Company borrowed $125,000 from each of two 
shareholders which is payable in 180 days at an interest rate of 14% per 
annum.  In connection with such borrowing, the Company issued each shareholder 
31,250 common shares as additional consideration.  Such shares will be valued 
at 50% of the average market value when issued as a result of the illiquidity 
of the Company's stock and the restricted nature of the shares issued.  The 
issuance of such shares results in an effective interest rate of 57%.



<PAGE>    19

                       PART II - OTHER INFORMATION


ITEM 1 - Legal Proceedings:

     None

ITEM 2 - Changes in Securities:

     None

ITEM 3 - Defaults Upon Senior Securities:

     None

ITEM 4 - Submission of Matters to a Vote of Security Holders:

     None

ITEM 5 - Other Information:

     None

ITEM 6 - Exhibits and Reports on Form 8-K:

     None

<PAGE>    20

                               SIGNATURES

In accordance with section 13 or 15(d) of the Exchange Act, the registrant 
caused this report to be signed on its behalf by the undersigned, hereunto 
duly authorized.

                                                SDC INTERNATIONAL, INC.



                                                BY:/s/Ronald A. Adams
                                                   Ronald A. Adams, President

August 31, 1998


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



/s/Ronald A. Adams                              August 31, 1998
Ronald A. Adams, Director and President
(Principal Executive Officer and Principal
Financial Officer)


/s/Henry S. Green                               August 31, 1998
Henry S. Green, Jr., Director