<PAGE>   1

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

                                   FORM 10-QSB

                   QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

     For Quarter Ended: September 30, 1997 Commission File Number: 0-28680
                        ------------------                         -------

                           DENTLCARE MANAGEMENT, INC.
                           --------------------------
        (Exact name of small business issuer as specified in its charter)

           Nevada                                           88-0301637
-------------------------------                         -------------------
(State or other jurisdiction of                          (I.R.S. Employer
 incorporation or organization)                              Identification No.)

             2360 Hassell Rd, Ste F, Hoffman Estates, Illinois 60195
             -------------------------------------------------------
                    (Address of principal executive offices)

                     8118 E. 63rd St., Tulsa, Oklahoma 74133
                     ---------------------------------------
                 (Former address of principal executive offices)

                                 (847) 839-0891
                                 --------------
                           (Issuer's telephone number)

Indicate by check mark whether the issuer (1) has filed all reports required to
be filed by section 13 or 15(d) of the Securities Exchange Act during the
preceding 12 months (or for such shorter period that registrant was required to
file such reports), and (2) has been subject to such filing requirements for the
past 90 days.  Yes |_|  No |X|

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the close of the period covered by this report.

<TABLE>
      <S>                                              <C>
      Common Stock $0.001 par value                    15,334,867
      -----------------------------                 ----------------
                 Class                      Outstanding at September 30, 1997
</TABLE>

Transitional Small Business Disclosure Format:  Yes |_|  No |X|
<PAGE>   2

                           DENTLCARE MANAGEMENT, INC.

                                      INDEX

                                                                            Page

PART  I.    Financial Information

 Item 1.    Consolidated Balance Sheets -
            September 30, 1997 and December 31, 1996                         3

            Consolidated Statements of Operations -
            Three and Nine Months Ended September 30, 1997 and 1996          4

            Consolidated Statement of Stockholders' Equity -
            Nine Months Ended September 30, 1997                             5

            Consolidated Statements of Cash Flows -
            Nine Months Ended September 30, 1997 and 1996                   6-8

            Notes to Consolidated Financial Statements
            Nine Months Ended September 30, 1997 and 1996                   9-13

 Item 2.    Management's Discussion and Analysis of
            Financial Condition and Results of Operations                  14-15

PART II.    Other Information                                               16


                                    2 of 17
<PAGE>   3

                   DENTLCARE MANAGEMENT, INC. AND SUBSIDIARIES
                           Consolidated Balance Sheets

<TABLE>
<CAPTION>
                                                                         September 30,   December 31,
                                                                              1997          1996
                                                                          (Unaudited)     (Audited)
                                 ASSETS
<S>                                                                       <C>            <C>        
Cash                                                                      $    67,266    $    42,113
Barter currency (net of $118,474 & $142,032 reserves)                          78,956         94,688
Accounts receivable (net of $473,103 & $423,939 reserves)                     533,068        582,525
Due from trustee of subsidiary's bankruptcy trust                                  --        449,375
Due from officers, stockholders and employees                                  21,491         19,042
Prepaid expenses and supplies inventory                                        79,909         90,454
                                                                          -----------    -----------
  Total current assets                                                        780,690      1,278,197

Net property & equipment                                                    1,256,657      1,342,843
Barter currency, less current (net of $1,066,263 & $1,278,288 reserves)       710,611        852,194
Goodwill, net of amortization                                                 175,847             --
Deposits and other                                                             17,736         28,314
                                                                          -----------    -----------

  Total assets                                                            $ 2,941,541    $ 3,501,548
                                                                          ===========    ===========

                  LIABILITIES AND STOCKHOLDERS' EQUITY

Notes payable - affiliate                                                 $   508,261    $   496,684
Notes payable - other                                                          25,000             --
Current portion of long-term obligations                                      217,438        208,202
Accounts payable                                                            1,403,255      1,053,068
Accrued expenses                                                              521,086        497,041
Due to stockholders                                                           210,372        205,016
                                                                          -----------    -----------
  Total current liabilities                                                 2,885,412      2,460,011
                                                                          -----------    -----------

Long-term obligations, less current portion                                   227,078        512,328

Deferred revenue                                                                   --         22,462

Stockholders' equity
Preferred stock                                                             2,500,000      2,500,000
Common stock                                                                   15,335         10,852
Additional paid-in capital                                                  6,999,689      5,854,172
Deficit                                                                    (8,562,217)    (6,734,521)
Due from trustee of subsidiary's bankruptcy trust                          (1,123,756)    (1,123,756)
                                                                          -----------    -----------
  Total stockholders' equity                                                 (170,949)       506,747
                                                                          -----------    -----------

  Total liabilities and stockholders' equity                              $ 2,941,541    $ 3,501,548
                                                                          ===========    ===========
</TABLE>

See accompanying notes to consolidated financial statements.


                                    3 of 17
<PAGE>   4

                   DENTLCARE MANAGEMENT, INC. AND SUBSIDIARIES
                      Consolidated Statements of Operations
                                   (Unaudited)

<TABLE>
<CAPTION>
                                               Three Months Ended Sept. 30,     Nine Months Ended Sept. 30,
                                                   1997             1996             1997            1996
<S>                                           <C>              <C>              <C>              <C>        
Management fee revenues                       $  1,028,161     $  1,585,870     $  3,764,169     $ 3,393,505

Cost of dental services:
  Clinical and operating compensation              697,967          554,793        2,153,633       1,408,870
  Dental supplies and laboratory costs             224,565          249,646          855,819         560,207
  Facility and equipment costs                     192,959          131,297          579,711         300,175
  Depreciation and amortization                     42,802           64,706          128,351         169,306
  Advertising                                       52,918           88,714          187,989         213,568
  Other costs                                      128,376          182,901          338,421         372,865
                                              ------------     ------------     ------------     -----------
                                                 1,339,587        1,272,057        4,243,924       3,024,991
                                              ------------     ------------     ------------     -----------
Gross profit (loss)                               (311,426)         313,813         (479,755)        368,514

General and administrative expenses                227,840          446,196        1,171,450         945,607
Depreciation and amortization                        3,900            2,500           11,417           7,500
                                              ------------     ------------     ------------     -----------
Operating loss                                    (543,166)        (134,883)      (1,662,622)       (584,593)

Other income (expense):
  Other income                                          --           95,954           12,802         110,881
  Interest expense                                 (46,844)         (43,072)        (177,876)        (68,356)
                                              ------------     ------------     ------------     -----------

Loss before income taxes                          (590,010)         (82,001)      (1,827,696)       (542,068)

Income taxes                                            --               --               --              --
                                              ------------     ------------     ------------     -----------

Net loss                                      $   (590,010)    $    (82,001)    $ (1,827,696)    $  (542,068)
                                              ============     ============     ============     ===========

Net loss per common share                     $      (0.05)    $      (0.01)    $      (0.16)    $     (0.07)
                                              ============     ============     ============     ===========

Weighted average common shares outstanding      12,326,171       10,983,928       11,383,399       7,489,399
                                              ============     ============     ============     ===========
</TABLE>

See accompanying notes to consolidated financial statements.


                                    4 of 17
<PAGE>   5

                   DENTLCARE MANAGEMENT, INC. AND SUBSIDIARIES
                 Consolidated Statement of Stockholders' Equity
                      Nine Months Ended September 30, 1997
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                          Additional                       Due From       Stock-
                               Preferred Stock          Common Stock        Paid-in                       Bankruptcy      holders'
                              Shares     Amount       Shares     Amount     Capital         Deficit        Trustee        Equity
<S>                           <C>      <C>          <C>          <C>       <C>            <C>            <C>            <C>        
Balance at December 31,
  1996                        25,000   $2,500,000   10,851,700   $10,852   $ 5,854,172    $(6,734,521)   $(1,123,756)   $   506,747

Issuance of common stock
  in the acquisition of
  a denture laboratory
  and dental practice                                    8,333         8        24,992                                       25,000

Issuance of common stock
  for the employee benefit                              16,500        17           (17)

Issuance of common stock in
 exchange for note payable                              58,334        58       174,942                                      175,000

Net proceeds from common
  stock offering                                     4,400,000     4,400       945,600                                      950,000

Net loss for the period                                                                    (1,827,696)                   (1,827,696)
                              ------   ----------   ----------   -------   -----------    -----------    -----------    ----------- 
Balance at September 30,
  1997                        25,000   $2,500,000   15,334,867   $15,335   $ 6,999,689    $(8,562,217)   $(1,123,756)   $  (170,949)
                              ======   ==========   ==========   =======   ===========    ===========    ===========    =========== 
</TABLE>

See accompanying notes to consolidated financial statements.


                                    5 of 17
<PAGE>   6

                   DENTLCARE MANAGEMENT, INC. AND SUBSIDIARIES
                      Consolidated Statement of Cash Flows
                  Nine Months Ended September 30, 1997 and 1996
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                 Nine Months Ended September 30,
                                                      1997            1996
<S>                                               <C>             <C>        
Increase (decrease) in cash

Cash flows from operating activities:
  Cash received from customers                    $ 3,918,626     $ 2,949,100
  Cash paid to suppliers and employees             (4,832,204)     (3,743,597)
  Interest paid                                      (177,876)        (68,356)
                                                  -----------     -----------

  Net cash used by operating activities            (1,091,454)       (862,853)
                                                  -----------     -----------

Cash flows from investing activities:
  Capital expenditures                                (46,647)       (160,789)
  Proceeds from sale of assets                            450              --
  Due to/from officers and employees                    2,907         (65,153)
  Cash received (utilized) in acquisitions           (117,647)          7,578
                                                  -----------     -----------

  Net cash used by investing activities              (160,937)       (218,364)
                                                  -----------     -----------

Cash flows from financing activities:
  Proceeds from loans                                 775,000          43,954
  Repayments of notes and capital
    lease obligations                                (196,831)        (36,059)
  Proceeds from bankruptcy trustee                    449,375         336,379
  Proceeds from common stock offering, net            250,000         792,000
                                                  -----------     -----------

  Net cash provided by financing activities         1,277,544       1,136,274
                                                  -----------     -----------

Net increase in cash                                   25,153          55,057

Cash at beginning of period                            42,113           5,127
                                                  -----------     -----------

Cash at end of period                             $    67,266     $    60,184
                                                  ===========     ===========
</TABLE>

See accompanying notes to consolidated financial statements.


                                    6 of 17
<PAGE>   7

                   DENTLCARE MANAGEMENT, INC. AND SUBSIDIARIES
               Consolidated Statement of Cash Flows - (Continued)
                  Nine Months Ended September 30, 1997 and 1996
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                Nine Months Ended September 30,
                                                                       1997          1996

<S>                                                                <C>             <C>       
Reconciliation of net loss to net cash used by
  operating activities

Net loss                                                           $(1,827,696)    $(542,068)
Adjustments to reconcile net loss to net cash used by
 operating activities:
  Depreciation                                                         131,201        64,600
  Amortization                                                           8,569       112,556
  Unrealized gain from marketable securities                                --       (90,000)
  Interest accrued on related party notes payable                       36,577            --
  Gain on sale of property for debt                                     (9,729)           --
  Decrease (increase) in barter currency, net                          157,315       225,365
  Decrease (increase) in accounts receivable                            49,457      (545,924)
  Decrease (increase) in prepaid expense and supplies inventory         12,245      (129,238)
  Decrease (increase) in deposits                                           88        (2,743)
  Increase (decrease) in accounts payable and accrued expenses         350,519        44,599
                                                                   -----------     ---------
Net cash used in operating activities                              $(1,091,454)    $(862,853)
                                                                   ===========     =========

Supplementary schedule of noncash investing and
 financing activities

Acquisition of dental practices and denture laboratory:
  Increase in accounts receivable and other assets                       1,700       188,887
  Increase in dental equipment                                          59,485       515,020
  Increase in goodwill                                                 192,713       464,294
  Deposit applied                                                      (10,000)           --
  (Increase) in accounts payable                                        (1,251)     (456,373)
  (Increase) in other notes payable and long term debt                (100,000)     (716,706)
  (Increase) in common stock                                                (8)       (2,700)
  (Increase) decrease in additional paid in capital                    (24,992)           --
                                                                   -----------     ---------
    Cash received (used)                                           $  (117,647)    $   7,578
                                                                   ===========     =========
</TABLE>

                                                                       Continued

See accompanying notes to consolidated financial statements.


                                    7 of 17
<PAGE>   8

                   DENTLCARE MANAGEMENT, INC. AND SUBSIDIARIES
                       Consolidated Statement of Cash Flows - (Continued)
                  Nine Months Ended September 30, 1997 and 1996
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                Nine Months Ended September 30,
                                                                      1997          1996
<S>                                                                  <C>        <C>        
Supplementary schedule of noncash investing and
 financing activities, continued

Confirmation of plan of reorganization:
  Increase in due from trustee                                            --    $ 2,035,353
  Decrease in notes payable                                               --        773,571
  Decrease in accounts payable                                            --        652,089
  Decrease in accrued expenses                                            --        931,956
  Decrease in due to stockholders                                         --        107,031
  (Increase) in common stock issued                                       --         (2,400)
  (Increase) in additional paid in capital                                --     (4,497,600)

Other transactions
  Common stock issued in exchange for notes payable                  175,000             --
  Common stock and note issued as partial consideration for
   the acquisition of a denture laboratory and a dental practice     125,000             --
  Common stock from offering issued in exchange for notes payable    700,000
</TABLE>

See accompanying notes to consolidated financial statements.


                                    8 of 17
<PAGE>   9

                   DentlCare Management, Inc. and Subsidiaries
                   Notes to Consolidated Financial Statements
                  Nine Months Ended September 30, 1997 and 1996
                                   (Unaudited)

A.    Summary of significant accounting policies

      The accompanying consolidated financial statements include the accounts of
      DentlCare Management, Inc. (the "Company" or "DCMI") and its wholly-owned
      subsidiaries, Dental Management Systems, Inc. ("DMSI"), DentureCare
      Services, Inc. ("DCSI"), HPS-Nevada, Hippocratic Preservation Society,
      Inc. ("HPS-Illinois") and National DentlCare Management, Inc. ("NDCMI").
      All material intercompany accounts and transactions have been eliminated.

      The interim consolidated financial statements included herein have been
      prepared pursuant to the rules and regulations of the Securities and
      Exchange Commission for interim reporting and include all adjustments
      (consisting only of normal recurring adjustments) which are, in the
      opinion of management, necessary for a fair presentation. The consolidated
      financial statements as of September 30, 1997 and for the three months and
      nine months ended September 30, 1997 and 1996 have not been audited. The
      consolidated balance sheet as of December 31, 1996 has been derived from
      the audited consolidated balance sheet. Certain information and footnote
      disclosures normally included in financial statements prepared in
      accordance with generally accepted accounting principles have been
      condensed or omitted pursuant to such rules and regulations for interim
      reporting. The Company believes that the disclosures contained herein are
      adequate to make the information presented not misleading. The
      consolidated results of operations for the nine months ended September 30,
      1997 is not necessarily indicative of the results of operations which will
      be realized for the year ending December 31, 1997. These interim
      consolidated financial statements should be read in conjunction with the
      consolidated financial statements and notes thereto included in the
      Company's Annual Report for the year ended December 31, 1996, which is
      included in the Company's Form 10-KSB. Certain reclassifications of the
      amounts presented for the comparative period have been made to conform to
      the current presentation.

B.    Acquisitions

      Effective March 1, 1996, the Company acquired HPS-Nevada, a Nevada
      corporation engaged in dental practice management, in exchange for
      1,350,000 shares of the Company's common stock. Goodwill of $64,294, which
      was recognized in connection with the acquisition, was written off prior
      to December 31, 1996 based on expected consolidated future cash flows. On
      June 30, 1996, the Company acquired HPS-Illinois, an Illinois corporation
      engaged in dental practice management, in exchange for 1,350,000 shares of
      the Company's common stock.

      On January 31, 1997, HPS-Illinois acquired the net assets of RES, Inc. a
      dental care related service provider in Chicago, Illinois for $250,000,
      consisting of $125,000 in cash, 8,333 shares of the Company's common stock
      valued at $3.00 per share and a $100,000 promissory note. Subsequent to
      the acquisition, HPS-Illinois defaulted in the payment of the promissory
      note and RES, Inc. filed a legal action against HPS-Illinois. The lawsuit
      was settled by the Company and the Company agreed to pay RES, Inc. the
      remaining $90,000 balance under the promissory note as follows: $25,000 on
      or before September 30, 1997 and the remaining $65,000, with interest at
      10% per annum, in 12 equal monthly installments of $5,715 commencing
      October 1, 1997.

      The above acquisitions have been accounted for by the purchase method of
      accounting with the assets acquired and the liabilities assumed being
      recorded at their fair values.


                                    9 of 17
<PAGE>   10

C.    Notes payable, long-term debt and capital lease obligations

      During the six months ended June 30, 1997, the Company borrowed $600,000
      from a bank and $100,000 from a private lender, with interest at 15%, and
      utilized a portion of the proceeds to repay a $50,000 loan which had been
      made earlier in the year. In addition, the Company utilized $117,647 of
      this amount to fund the cash required to acquire RES, Inc. The remainder
      of the loans were used for working capital and to reduce accounts payable.
      The Company also incurred long-term debt in the amount of $100,000 as a
      part of its acquisition of RES, Inc. In addition, the Company retired a
      $175,000 note through the issuance of 58,334 shares of its common stock.

      During the three months ended September 30, 1997, the Company retired the
      $600,000 bank loan and the $100,000 loan from a private lender through the
      issuance of 2,800,000 shares of its common stock. In addition, during the
      third quarter of 1997, the Company borrowed $25,000 from a private lender,
      which amount was repaid during the fourth quarter of 1997. Total cash
      reductions in notes payable, long-term debt and capital lease obligations
      amounted to $196,831 during the nine months ended September 30, 1997.

D.    Bankruptcy proceedings

      On March 23, 1995, the Company's wholly owned subsidiary DCSI, filed a
      voluntary petition for relief under Chapter 11 of the United States
      Bankruptcy Code. In June 1996, the plan of reorganization (the "Plan"),
      was confirmed by the Bankruptcy Court of the Northern District of
      Oklahoma. In connection therewith, the Company issued 2,400,000 shares of
      its common stock in complete satisfaction of the third party liabilities
      of DCSI. Substantially all assets of DCSI are encumbered by liens which,
      in the event of failure of Plan performance, would entitle the lienholders
      to proceed against DCSI and its assets.

      Advances from DCMI and DMSI to DCSI which occurred prior to the voluntary
      petition are to be treated as unsecured claims while pre-petition and
      post-petition advances to DCSI from DCMI and DMSI, which represent
      advances for administrative purposes, are to be treated as priority
      claims. In the opinion of the bankruptcy counsel for DCSI it is reasonably
      possible that the following may occur and have an unfavorable outcome in
      that DCSI may face certain loss contingencies:

            In the event of a failure of performance of the terms of the Plan.
            Such loss contingencies encompass all the claims asserted in the
            Bankruptcy Case, covered by the Plan terms and such
            post-confirmation claims as have or may arise within that Bankruptcy
            Case proceeding, including professional fees and costs.

            In the event of failure of performance of ongoing obligations in the
            Bankruptcy Case proceedings, including but not limited to the
            payment of U.S. Trustee fees and other post-confirmation claims,
            including those of post-confirmation trade creditors and
            professionals employed by DCSI.

            In the event of failure to fulfill its ongoing obligations to
            appoint and participate as a member of the Plan Trust Committee
            established in the Plan, including failure to require the conduct of
            Plan Committee meetings and the presentation of reports by the Plan
            Trustee.

            In the event that DCSI has been involved in procuring or has
            received distributions from the Plan Trust before payments to
            creditors having payment priority, in contravention of the order of
            distribution set forth under the Plan terms.


                                    10 of 17
<PAGE>   11

            In the event that DCSI is charged with a breach of fiduciary
            obligations imposed on DCSI in the Bankruptcy Case, including such
            obligations arising from its status as debtor in possession, as
            reorganized debtor under the Plan and as Plan Committee member.

E.    Subsequent events and contingencies

      The following are contingent liabilities of the Company due to provisions
      included in the corporate bylaws and pursuant to indemnification
      agreements between the Company and certain former officers:

            On July 1, 1997, a District Court in Tulsa, Oklahoma granted a
            judgment against certain former officers of the Company for
            $347,762, plus interest, for failure to pay bank debt in accordance
            with guarantees made by the former officers. The debt is scheduled
            to be paid under DCSI's bankruptcy plan of reorganization however,
            if the amount is not paid, the Company may be liable under an
            indemnification agreement.

            On July 17, 1997, the Internal Revenue Service (the "IRS") issued a
            final notice of intent to levy civil penalties for $195,709 against
            certain former officers of the Company relating to previous payroll
            tax liabilities of DCSI. Although the underlying debt is scheduled
            to be paid under DCSI's bankruptcy plan of reorganization, if the
            amount is not paid, the Company may be liable under an
            indemnification agreement. The IRS has verbally agreed to postpone
            any attempt to levy as long as DCMI is current in its withholding
            and payment of payroll taxes.

      On June 16, 1997, a lawsuit was filed against DCMI in Nevada by a company
      for $125,000. On September 19, 1997, the Court entered a default judgment
      against DCMI, which was subsequently set aside. DCMI's management believes
      that the lawsuit will be settled for less than $125,000.

      On July 24, 1997, a lawsuit was filed in Texas against DCMI by an
      individual for $175,000 alleging breach of contract and violation of
      certain securities laws. The case was subsequently settled for $100,000
      and the issuance of 50,000 shares of the Company's common stock.

      On August 12, 1997, a lawsuit was filed against certain former officers of
      DCMI who had previously entered into an agreement to purchase 42,717
      shares of DCMI's common stock from the plaintiff on July 31, 1997 for
      $3.50 per share. The lawsuit, which claims that the terms of the agreement
      had been breached, was filed for damages of $175,000. The lawsuit was
      settled by DCMI for $120,000 with payment to be made over a 3-year period.

      On August 27, 1997, certain former officers of DCMI who had previously
      entered into an agreement to purchase 17,932 shares of DCMI's common stock
      on July 31, 1997 from an individual for $3.50 per share, entered into a
      Forbearance and Revised Agreement for Repurchase of Shares (the "Revised
      Agreement"). Under the Revised Agreement, the individual, who is currently
      an employee of DCMI, agreed to extend the date at which the shares must be
      purchased to September 30, 1997 for 1/2 of the shares and December 31,
      1997 for the balance of the shares. The Company is currently in default
      under the Revised Agreement.

      In August 1997, DCMI entered into a restructuring agreement (the
      "Restructuring Agreement") with certain former officers (the "Shareholder
      Group"), a creditor, Bridge Bank, and the following investment entities
      and advisors: Capital International Holdings, Inc. ("CIH"), Capital
      International Securities Group, Inc. ("CISG"), Motivo Investments Limited
      ("Motivo"), James Goldberg ("Goldberg"), JLG Trading, Inc. ("JLG"), Hudson
      Riverview Consulting, Inc. ("Hudson") and James Neifeld ("Neifeld")
      whereby DCMI agreed to satisfy its indebtedness to Bridge Bank with the
      proceeds from the sale of its common stock in two private placement


                                    11 of 17
<PAGE>   12

      offerings through CISG (the "Offerings"). The terms of the Restructuring
      Agreement are as follows:

            The Shareholder Group agreed to deposit 3,698,218 shares of DCMI
            common stock into escrow to be released 2/3 to Motivo, 1/6 to Hudson
            and 1/6 to Neifeld pursuant to the following terms and conditions.
            Upon receipt by DCMI of the minimum amount in the first Offering,
            the common stock in escrow would be transferred into a voting trust
            to be voted by the trustee in accordance with instructions of
            Motivo, Hudson and Neifeld. Upon receipt by DCMI of the maximum
            amount in the first Offering, 1,849,109 shares of common stock would
            be transferred from the voting trust to Motivo, Hudson and Neifeld.
            Upon receipt by DCMI of the minimum amount in the second Offering,
            the remaining 1,849,109 shares of common stock would be transferred
            from the voting trust to Motivo, Hudson and Neifeld.

            The first Offering consisted of the sale of up to 10,000,000 shares
            of the Company's common stock at $.25 per share. In the third and
            fourth quarters of 1997, the Company sold 10,000,000 shares in the
            first Offering and received $2,500,000, which was used to pay
            certain liabilities, provide working capital and provide funds for
            future acquisitions.

            The second Offering is to consist of the sale of up to 1,800,000
            shares of the Company's common stock at $2.50 per share. In May
            1998, there was a reverse split of the Company's outstanding shares
            of common stock whereby the common stockholders were issued one (1)
            share of common stock for each five (5) shares held.

            The Restructuring Agreement also provides that (i) upon receipt of
            the minimum amount in the first Offering, Motivo shall have the
            right to elect up to five additional directors of DCMI; (ii) upon
            receipt of the maximum amount in the first Offering, DCMI shall
            grant CIH warrants to purchase 2,500,000 shares of the Company's
            common stock at an exercise price of $1.00 per share; and (iii) upon
            receipt of the minimum amount in the second Offering, DCMI shall
            grant to CIH warrants to purchase 5,000,000 shares of the Company's
            common stock at an exercise price of $1.20 per share.

      In August 1997, the Company entered into three-year employment agreements
      with three of its employees. The employment agreements provide that each
      employee receive an annual salary of $72,000 with increases of 6% per
      year. In addition, the employees received options to purchase a total of
      550,000 shares of the Company's common stock at the market value of the
      common stock at September 1, 1997.

      On August 28, 1997, the Company entered into an employment agreement with
      Dr. Charles Mitchell which provides that Dr. Mitchell will serve as DCMI's
      President and Chief Operations officer through December 31, 2002. As
      compensation for his services, Dr. Mitchell is to receive an annual salary
      of $96,000 with increases of 6% per year, 100,000 shares of the Company's
      common stock, an annual cash bonus of 3% of the Company's annual pre-tax
      earnings and options to purchase up to 3,100,000 shares of the Company's
      common stock exercisable upon the achievement of certain earnings. In
      addition, Dr. Mitchell agreed to cause the sale of the operating assets of
      several dental practices (the "Practices") to DCMI in exchange for
      $200,000 and $1,000,000 of preferred stock which is convertible into
      2,000,000 shares of DCMI's common stock. Subsequent to the sale, DCMI will
      assume the management of the Practices. The shares of common stock to be
      issued under the employment agreement shall be decreased proportionally to
      the extent the first six months pre-tax profits of the Practices do not
      equal $125,000. On November 1, 1997, DCMI acquired the operating assets of
      the Practices in a business combination accounted for as a purchase. The
      acquisition was completed through the payment of $200,000 and the issuance
      of 2,000,000 shares of the Company's common stock.


                                    12 of 17
<PAGE>   13

      On October 31, 1997, DCMI acquired the assets and assumed certain
      liabilities of a dental practice in a business combination accounted for
      as a purchase.

      The Series A preferred stock dividends of $100,000 ($.04 per share) are in
      arrears through December 1, 1997. Under the Company's agreement with the
      holders of the Series A preferred stock they have the right to appoint
      members to the Board of Directors with voting power equal to 50% if the
      dividends are not paid when due. In January 1998, the Company entered into
      an agreement with the holders of the preferred stock whereby, they agreed
      that the preferred stock dividends for the period November 1996 through
      November 1998 would be paid through the issuance of the Company's common
      stock.

F.    Continuation of the Company as a Going Concern

      The accompanying financial statements have been prepared in conformity
      with generally accepted accounting principles which contemplates the
      continuation of the Company as a going concern. As of September 30, 1997,
      the Company had a deficiency in working capital of $2,105,000 and a
      deficiency in assets of $171,000. In addition, the Company has sustained
      substantial operating losses since its inception. Although, the Company
      raised $2,500,000 from the sale of 10,000,000 shares of its common stock
      in the third and fourth quarters of 1997, the Company will need additional
      working capital to fund its future operations. In view of these matters,
      realization of the assets included in the accompanying balance sheet is
      dependent upon the continued operations of the Company, which in turn is
      dependent upon the Company's ability to meet its financing requirements
      and the success of its future operations. Management believes that actions
      currently being taken to revise the Company's operating and financial
      requirements provide the opportunity for the Company to continue as a
      going concern.


                                    13 of 17
<PAGE>   14

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
         AND RESULTS OF OPERATIONS

From time to time, the Company may publish forward-looking statements relating
to certain matters, including anticipated financial performance, business
prospects, product development, and other similar matters. All statements other
than statements of historical fact contained in this Form 10-QSB or in any other
report of the Company are forward-looking statements. The Private Securities
Litigation Reform Act of 1995 provides a safe harbor for forward-looking
statements. In order to comply with the terms of that safe harbor, the Company
notes that a variety of factors could cause the Company's actual results and
experience to differ materially from the anticipated results or other
expectations expressed in the Company's forward-looking statements. In addition,
the Company disclaims any intent or obligation to update those forward-looking
statements.

The following discussion should be read in conjunction with the Company's
Consolidated Financial Statements included herein.

Consolidated Results of Operations

During the nine months ended September 30, 1997, the Company's dental practice
management revenues amounted to $3,764,169, which included $1,669,555 (44%) from
the Las Vegas operations, $1,021,630 (27%) from the Tulsa operations and
$1,072,984 (29%) from the Chicago operations. This compares to revenues of
$3,393,505 during the same period in 1996, which included $1,562,257 (46%) from
the Las Vegas operations, $1,461,474 (43%) from the Tulsa operations and
$369,774 (11%) from the Chicago operations. The Company acquired the Las Vegas
operations in March 1996 and the Chicago operations in July 1996.

On a pro forma basis, the Las Vegas operations would have had approximately
$2,009,000 in dental practice management revenues during the nine months ended
September 30, 1996. Accordingly, dental practice management revenues for the Las
Vegas operations have decreased approximately 17% during the nine months ended
September 30, 1997, as compared to the same period in 1996. The decrease is
primarily due to increased competition during 1997. During the nine months ended
September 30, 1997, the Las Vegas operations had a loss (before administrative
costs and other income and expenses) of $39,173 compared to a profit of $450,881
during the seven months ended September 30, 1996. The reduction is primarily due
to increases in the amounts being retained by the dentists and hygienists (33%
of gross patient services during the 1997, as compared to 21% during 1996), due
primarily to a shortage of licensed dentists and hygienists in Nevada. In
addition, other compensation costs were 56% of dental practice management
revenues during the nine months ended September 30, 1997 compared to 38% during
the seven months ended September 30, 1996.

During the nine months ended September 30, 1997, dental practice management
revenues from the Tulsa practices decreased $439,845 (30%) from the same period
in 1996. One office was closed as of the end of the third quarter of 1996 and a
second office was closed at the end of the second quarter of 1997, which
accounted for most of the decline During the nine months ended September 30,
1997, the Tulsa operations had a loss from operations (before administrative
costs and other income and expenses) of $296,005, compared to a loss of $244,094
during the same period in 1996. While all operating costs were lower in 1997
compared to 1996 because of the office closings, the increased loss is primarily
due to a significant reduction in practice management revenues during the third
quarter of 1997. Revenues declined $324,652 in the three months ended September
30, 1997, compared to the year earlier period, while costs declined $254,631
during the comparable periods.

During the six months ended June 30, 1997, dental practice management revenues
from the Chicago operations remained relatively stable as compared to the year
earlier period on a proforma basis. During


                                    14 of 17
<PAGE>   15

the six months ended June 30, 1997 the Chicago operations had a loss from
operations (before administrative costs and other income and expenses) of
$23,829, the majority of which was attributed to start-up costs associated with
a dental insurance company during the first quarter of 1997, which was
discontinued during the fourth quarter of 1997. During the three months ended
September 30, 1997, the Chicago operations had revenues of $308,794 compared to
revenues of $369,774 during the same period in 1996, a decline of 16%. During
the three months ended September 30, 1997, the Chicago operations had a loss of
$102,021 compared to a profit of $5,114 during the 1996 period. Approximately
50% of the loss was due to higher compensation costs. The remainder of the loss
was due to lower revenues in the 1997 period and losses of the dental insurance
company that was discontinued during the fourth quarter of 1997.

During the nine months ended September 30, 1997, general and administrative
expenses of the Company amounted to $1,171,450 as compared to $945,607 for the
same period in 1996, an increase of 24%. The principal components of the
increase were higher compensation costs and higher travel costs associated with
the additional dental practices under management. The 1997 amount also includes
an increase in the allowance for bad debts of $66,954 in 1997. There was no
corresponding increase during the 1996 period. Commencing in early July 1997,
the Company made substantial reductions in administrative compensation,
professional fees and other administrative costs which resulted in
administrative costs for the three months ended September 30, 1997 being
$218,356 (49%) less than the corresponding 1996 period.

Interest expense increased $109,520 (160%) during the nine months ended
September 30, 1997 as compared to the same period in 1996. The increase is due
to the increased debt at both the Las Vegas and Chicago locations, as well as
the working capital loans which the Company initiated during the first month of
the year. The working capital loans were converted into common stock during
August 1997.

Liquidity and Capital Resources

As of September 30, 1997, the Company had a deficiency in working capital of
$2,104,722, as compared to a deficiency in working capital of $1,181,814 as of
December 31, 1996, an increase of $922,908. The increase was primarily due to
the loss of $1,827,696 during the nine months ended September 30, 1997. Current
assets declined $497,507, primarily due to the collection of $449,375 from the
trustee of the bankruptcy trust of a subsidiary of the Company. Current
liabilities increased during the same period by $425,401, which was primarily
due to increases in accounts payable of $350,187.

During the nine months ended September 30,1997, the Company purchased $47,000 in
capital equipment and added tangible capital assets of $59,485 in connection
with the acquisition of the denture laboratory and dental practice in January
1997.

During the nine months ended September 30, 1997, the Company borrowed $600,000
from a bank and $100,000 from a private lender and utilized the proceeds to
reduce other obligations. The loans were converted to common stock during August
1997. (See Note E of Notes To Consolidated Financial Statements.)

As of September 30, 1997, the Company had a deficiency in working capital of
$2,105,000 and a deficiency in assets of $171,000. In addition, the Company has
sustained operating losses since its inception. Although the Company raised
$2,500,000 from the sale of 10,000,000 shares of common stock during the third
and fourth quarters of 1997, the Company will need additional working capital to
fund its future operations. (See Note F of Notes To Consolidated Financial
Statements.)

Trends

There are no seasonal factors affecting the Company's business.


                                    15 of 17
<PAGE>   16

                                     PART II

ITEM 1.  LEGAL PROCEEDINGS.

See Note F of Notes To Consolidated Financial Statements.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K.

      (a)   Exhibits - None

      (b)   Reports on Form 8-K

            On September 2, 1997, the Company filed a Current Report on Form 8-K
            announcing a change in control of the Company and the appointment of
            Charles R. Mitchell, D.D.S. as the Company's President and Chief
            Operations Officer and a Director.

                                    SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                                        DENTLCARE MANAGEMENT, INC.


Date: August 12, 1998                   By: /s/ Ron Stoeppelwerth
                                            ------------------------------------
                                            Ron Stoeppelwerth
                                            Chief Financial Officer and
                                            Principal Accounting Officer


                                    16 of 17