UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                   FORM 10-QSB

--------------------------------------------------------------------------------


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

                For the quarterly period ended December 31, 1997

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

                  For the transition period from _____ to _____

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                         Commission File Number: 1-12572

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

          Delaware                                             59-2158586
  (State of incorporation)                              (IRS Employer ID Number)

                16910 Dallas Parkway, Suite 100, Dallas TX 75248
                ------------------------------------------------
                    (Address of principal executive offices)

                                 (972) 248-1922
                           (Issuer's telephone number)


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

State the number of shares outstanding of each of the issuer's classes of common
equity as of the latest practicable date: February 15, 1998: 2,276,907

Transitional Small Business Disclosure Format (check one):    YES       NO X



<PAGE>



                                 MILLENNIA, INC.

               Form 10-QSB for the Quarter ended December 31, 1997

                                Table of Contents


                                                                            Page
                                                                            ----
Part I - Financial Information

  Item 1   Financial Statements                                                3

  Item 2   Management's Discussion and Analysis or Plan of Operation          13


Part II - Other Information

  Item 1   Legal Proceedings                                                  18

  Item 2   Changes in Securities                                              18

  Item 3   Defaults Upon Senior Securities                                    18

  Item 4   Submission of Matters to a Vote of Security Holders                18

  Item 5   Other Information                                                  18

  Item 6   Exhibits and Reports on Form 8-K                                   18










                                                                            2   

<PAGE>



Part 1 - Item 1 - Financial Statements

                        MILLENNIA, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                       December 31, 1997 and June 30, 1997


                                     ASSETS
                                     -----
                                                        (Unaudited    (Audited)
                                                        December 31,   June 30,
                                                            1997         1997
                                                         ----------   ----------
Current Assets
   Cash on hand and in bank                              $   62,366   $   54,048
   Marketable securities                                       --           --
   Accounts receivable, net of allowance for doubtful
      accounts of $30,000 and $25,000, respectively          61,226       70,021
   Accrued oil & gas sales                                  115,000      115,894
   Due from stockholder                                      71,609         --
   Income taxes recoverable                                    --         10,659
   Inventory                                                107,329      106,440
   Prepaid expenses and other                                 3,333          583
                                                         ----------   ----------

         Total current assets                               420,863      357,645
                                                         ----------   ----------


Oil & Gas Properties, net of accumulated
   depletion of $229,862 and $154,449, respectively       1,680,138    1,774,243
                                                         ----------   ----------


Other Assets
   Investment in affiliated company                         393,082      614,281
   Other property and equipment - net                        44,448       26,223
   Other                                                      6,463        6,107
                                                         ----------   ----------

         Total other assets                                 443,993      646,611
                                                         ----------   ----------


TOTAL ASSETS                                             $2,544,994   $2,778,499
                                                         ==========   ==========

                                  - Continued -




The  accompanying  notes are an integral  part of these  consolidated  financial
statements.  The  financial  information  presented  herein has been prepared by
management without audit by independent certified public accountants.
                                                                            3   

<PAGE>

<TABLE>
<CAPTION>


                        MILLENNIA, INC. AND SUBSIDIARIES
                     CONSOLIDATED BALANCE SHEETS - CONTINUED
                       December 31, 1997 and June 30, 1997


                      LIABILITIES AND STOCKHOLDERS' EQUITY
                      ------------------------------------

<S>                                                                             <C>    

                                                              (Unaudited)    (Audited)
                                                             December 31,     June 30,
                                                                  1997           1997
                                                             ------------    -----------               
Current Liabilities
   Current portion of long-term debt                          $     3,930    $     3,930
   Cash overdraft                                                  19,478           --
   Accounts payable - trade                                       417,197        215,162
   Due to stockholder and other affiliated entities               380,810        258,800
   Other accrued liabilities and deferred credits                 327,227        260,509
                                                              -----------    -----------

         Total current liabilities                              1,148,642        738,401
                                                              -----------    -----------


Long-term Debt, net of current maturities                       1,594,308      1,594,308
                                                              -----------    -----------


Commitments and Contingencies


Stockholders' Equity
   Preferred stock - $0.00001 par value.  10,000,000 shares
      authorized.  None issued and outstanding                       --             --
   Common stock - $0.0002 par value.  50,000,000 shares
      authorized.  2,276,907 and 2,274,385 issued
      and outstanding, respectively                                   455            454
   Additional paid-in capital                                   6,875,837      6,786,614
   Shares deemed to be treasury stock (43,692 and
       84,318 shares, respectively)                                (3,058)       (35,049)
   Unrealized gain (loss) on marketable securities                   --             --
   Retained earnings                                           (7,071,190)    (6,306,229)
                                                              -----------    -----------

         Total stockholders' equity                              (197,956)       445,790
                                                              -----------    -----------


TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                    $ 2,544,994    $ 2,778,499
                                                              ===========    ===========

</TABLE>


The  accompanying  notes are an integral  part of these  consolidated  financial
statements.  The  financial  information  presented  herein has been prepared by
management without audit by independent certified public accountants.
                                                                            4   

<PAGE>

<TABLE>
<CAPTION>


                        MILLENNIA, INC. AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF INCOME
              Six and Three months ended December 31, 1997 and 1996
                                   (Unaudited)

<S>                                                                             <C>     <C>    


                                              Six months    Six months    Three months  Three months
                                                 ended         ended          ended          ended
                                             December 31,   December 31,   December 31,  December 31,
                                                1997           1996           1997           1996
                                             ----------     ----------     ----------    ---------- 
Net Revenues                                $   611,211    $   447,386    $   307,352    $   317,221

Cost of Sales                                   586,715        322,888        289,563        226,056
                                            -----------    -----------    -----------    -----------
                                                 24,496        124,498         17,787         91,165
                                            -----------    -----------    -----------    -----------
Operating Expenses
   Selling expenses                              28,759         27,795         16,333         16,126
   General and administrative expenses          348,298        457,819        215,398        206,351
   Depreciation and depletion                    83,070         25,154         45,414         23,942
                                            -----------    -----------    -----------    -----------
      Total operating expenses                  460,127        510,768        277,145        246,419
                                            -----------    -----------    -----------    -----------

Loss from Operations                           (435,631)      (386,270)      (259,358)      (155,254)

Other Income (Expenses)
   Gain (loss) on sales of marketable
      securities and securities of
      affiliated entity                         (62,619)        27,785        (81,370)        16,566
   Interest and other income                        460           --              152           --
   Interest expense                             (97,087)       (10,639)       (48,640)       (46,094)
   Equity in loss of affiliated entity         (170,084)        46,654        (48,231)        52,440
                                            -----------    -----------    -----------    -----------

Loss from Continuing Operations
   before Provision for Income Taxes           (764,961)      (322,470)      (437,447)      (132,342)

Benefit from Income Taxes                          --         (101,954)          --         (103,383)
                                            -----------    -----------    -----------    -----------

Loss from Continuing Operations                (764,961)      (424,424)      (437,447)      (235,725)

Discontinued Operations, net of
   income taxes
   Loss from discontinued operations of
      American Quality Manufacturing
      Corporation, net of income tax
      benefits of $217,000                         --         (566,991)          --             --
   Gain on disposition of American
      Quality Manufacturing Corporation,
      net of income tax provision of
      $539,000                                     --        1,585,566           --             --
                                            -----------    -----------    -----------    -----------
      Income from discontinued operations          --        1,018,575           --             --
                                            -----------    -----------    -----------    -----------

Net Income (Loss)                           $  (764,961)   $   594,151    $  (437,447)   $  (235,725)
                                            ===========    ===========    ===========    ===========

</TABLE>

The  accompanying  notes are an integral  part of these  consolidated  financial
statements.  The  financial  information  presented  herein has been prepared by
management without audit by independent certified public accountants.
                                                                            5

<PAGE>

<TABLE>
<CAPTION>


                        MILLENNIA, INC. AND SUBSIDIARIES
                  CONSOLIDATED STATEMENTS OF INCOME - CONTINUED
              Six and Three months ended December 31, 1997 and 1996
                                   (Unaudited)

<S>                                                                               <C>     


                                       Six months    Six months     Three months   Three months
                                           ended        ended          ended          ended
                                       December 31,  December 31,   December 31,   December 31,
                                          1997           1996           1997           1996
                                       -----------   -----------    -----------    -----------   
Loss from Continuing Operations       $  (764,961)   $  (424,424)   $  (437,447)   $  (235,725)

Income from discontinued operations          --        1,018,575           --             --
                                      -----------    -----------    -----------    -----------

Net Income (Loss)                     $  (764,961)   $   594,151    $  (437,447)   $  (235,725)
                                      ===========    ===========    ===========    ===========


Earnings (loss) per weighted-
   average share of common
   stock outstanding
      From continuing operations      $     (0.34)   $     (0.20)   $     (0.19)   $     (0.11)
      From discontinued operations           --             0.48           --             --
                                      -----------    -----------    -----------    -----------
         Total loss per share         $     (0.34)   $      0.28    $     (0.19)   $     (0.11)
                                      ===========    ===========    ===========    ===========

Weighted-average number of shares
   of common stock outstanding          2,275,436      2,092,769      2,276,133      2,101,597
                                      ===========    ===========    ===========    ===========



</TABLE>


The  accompanying  notes are an integral  part of these  consolidated  financial
statements.  The  financial  information  presented  herein has been prepared by
management without audit by independent certified public accountants.

                                                                             6

<PAGE>

<TABLE>
<CAPTION>


                        MILLENNIA, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                   Six months ended December 31, 1997 and 1996
                                   (Unaudited)

<S>                                                                             <C>     
 


                                                                1997          1996
                                                            -----------    -----------                 
Cash Flows from Operating Activities
   Net income (loss)                                        $  (764,961)   $   594,151
   Adjustments to reconcile net income (loss) to
      net cash provided by (used in) operating activities
         Depreciation and depletion                              85,496         25,124
         Provision for doubtful accounts                          5,000         12,500
         Stock issued for director fees                           5,406           --
         (Gain) loss on sales of marketable securities
            and securities of affiliated entity                  62,619        (27,785)
         Equity in earnings (loss) of affiliated entity         170,084        (46,654)
         Discontinued operations                                   --       (1,575,695)
         (Increase) decrease in:
            Accounts receivable                                   3,795        (18,425)
            Accrued oil and gas sales                               894           --
            Recoverable income taxes                             10,659           --
            Inventory                                              (889)         8,419
            Prepaid expenses and other                           (4,323)       426,424
            Deferred tax benefit                                   --          615,522
         Increase (decrease) in:
            Accounts payable                                    202,035         24,043
            Other accrued liabilities                            66,718        113,111
                                                            -----------    -----------
Net cash provided by (used in) operating activities            (157,467)       180,765
                                                            -----------    -----------

Cash Flows from Investing Activities
   Purchase of oil & gas properties and
      other property and equipment                               (9,805)      (105,414)
   Advances to stockholder                                      (71,609)          --
   Proceeds from sales of securities of affiliated entity       143,363         22,273
   Proceeds from sales of marketable securities                 108,442        375,163
   Purchases of marketable securities                          (148,594)      (562,846)
                                                            -----------    -----------
Net cash provided by (used in) investing activities              21,797       (270,824)
                                                            -----------    -----------

Cash Flows from Financing Activities
   Increase (decrease) in cash overdraft                         19,478           --
   Repayment of advances from officer                              --          (16,000)
   Advances from stockholder                                    122,010        171,000
   Proceeds from exercise of employee stock options               2,500           --
                                                            -----------    -----------
Net cash used in financing activities                           143,988        155,000
                                                            -----------    -----------

Increase in Cash and Cash Equivalents                             8,318         64,941
Cash and cash equivalents at beginning of period                 54,048         36,628
                                                            -----------    -----------
Cash and cash equivalents at end of period                  $    62,366    $   101,569
                                                            ===========    ===========

</TABLE>


                                  - Continued -

The  accompanying  notes are an integral  part of these  consolidated  financial
statements.  The  financial  information  presented  herein has been prepared by
management without audit by independent certified public accountants. 


                                                                            7
<PAGE>



                        MILLENNIA, INC. AND SUBSIDIARIES
                CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED
                   Six months ended December 31, 1997 and 1996
                                   (Unaudited)

                                                      1997             1996
                                                      --------        --------
Supplemental Disclosures of
   Interest and Income Taxes Paid

      Interest paid during the period                 $ 18,527          $1,523
                                                      ========          ======

      Income taxes paid (refunded)                    $(10,659)         $    -
                                                      ========          ======


Supplemental schedule of noncash investing and financing activities

The Company  acquired  certain oil & gas  properties  on November 30, 1996.  The
purchase price  consisted of $100,000 in cash, a $1,615,689  promissory note and
120,000 shares of the Company's common stock, valued at $150,000.

The Company's investment in Digital  Communications  Technology  Corporation was
reduced by $185,419  during the six months  ended  December  31, 1996 due to the
dilutive  effects  of  the  issuance,  by  Digital   Communications   Technology
Corporation, of approximately 858,000 shares of common stock.














The  accompanying  notes are an integral  part of these  consolidated  financial
statements.  The  financial  information  presented  herein has been prepared by
management without audit by independent certified public accountants. 


                                                                            8
<PAGE>



                        MILLENNIA, INC. AND SUBSIDIARIES

                          Notes to Financial Statements


Note 1 - Basis of Presentation

The  accompanying  consolidated  financial  statements  include the  accounts of
Millennia, Inc. and all majority-owned subsidiaries, collectively referred to as
"Company".  The  consolidated  subsidiaries  include  Omni Doors,  Inc.  (Omni),
Doblique Energy,  Inc. (Doblique) and Millennia  Entertainment,  Inc. (MEI). All
significant intercompany accounts and transactions have been eliminated.

The  Company  holds  an   approximate   9.7%  and  13.2%   interest  in  Digital
Communications Technology Corporation as of December 31, 1997 and June 30, 1997,
respectively.  The Company held equivalent  interests of approximately 15.3% and
17.6% as of December 31, 1996 and June 30, 1996, respectively.

Effective August 31, 1996, the Company sold 100.0% of its ownership  interest in
American Quality Manufacturing  Corporation (AQM) to a corporate unrelated third
party for the  assumption of all  outstanding  liabilities of AQM as of the sale
date.  The  results  of  operations  of AQM are  presented  in the  accompanying
statement of operations as discontinued operations.

During interim periods, the Company follows the accounting policies set forth in
its Annual Report Pursuant to Section 13 or 15(d) of The Securities Exchange Act
of 1934 on Form 10-KSB filed with the U. S. Securities and Exchange  Commission.
The June  30,  1997  balance  sheet  data was  derived  from  audited  financial
statements  of the  Company,  but does not include all  disclosures  required by
generally  accepted  accounting  principles.   Users  of  financial  information
provided for interim  periods should refer to the annual  financial  information
and footnotes  contained in its Annual Report Pursuant to Section 13 or 15(d) of
The  Securities  Exchange Act of 1934 on Form 10-KSB when  reviewing the interim
financial results presented herein.

In the opinion of management,  the accompanying  interim  financial  statements,
prepared in accordance with the instructions for Form 10-QSB,  are unaudited and
contain  all  material   adjustments,   consisting  only  of  normal   recurring
adjustments  necessary to present  fairly the  financial  condition,  results of
operations  and cash flows of the Company  for the  respective  interim  periods
presented.  The  current  period  results  of  operations  are  not  necessarily
indicative of results which ultimately will be reported for the full fiscal year
ending June 30, 1998.

The preparation of financial  statements in conformity  with generally  accepted
accounting principles requires management to make estimates and assumptions that
affect  the  reported  amounts  of assets  and  liabilities  and  disclosure  of
contingent  assets and  liabilities at the date of the financial  statements and
the  reported  amounts of revenues  and expenses  during the  reporting  period.
Actual results could differ from those estimates.

Note 2 - Summary of Significant Accounting Policies

a) Marketable securities

   The Company held no marketable  securities as of December 31, 1997 other than
   its investment in Digital Communications Technology Corporation. The Company,
   from  time to time,  maintains  a  marketable  securities  portfolio  and the
   portfolio may contain net unrealized  gains or losses which are reported as a
   separate  component  of  stockholders'   equity.  The  Company's   marketable
   securities portfolio is classified as "available for sale" securities.


                                                                             9

<PAGE>



                        MILLENNIA, INC. AND SUBSIDIARIES

                    Notes to Financial Statements - Continued


Note 2 - Summary of Significant Accounting Policies - continued

b) Pending changes in accounting standards

   In February 1997, the Financial  Accounting  Standards Board issued Statement
   of Financial  Accounting Standards No. 128, Earnings Per Share (FAS 128). FAS
   128 specifies new standards designed to improve the EPS information  provided
   in financial statements by simplifying the existing computational guidelines,
   revising the disclosure requirements, and increasing the comparability of EPS
   data on an international  basis. Some of the changes made to simplify the EPS
   computations  include:  (a) eliminating  the  presentation of primary EPS and
   replacing it with basic EPS, with the principal  difference being that common
   stock  equivalents are not considered in computing basic EPS, (b) eliminating
   the  modified  treasury  stock  method  and  the  three  percent  materiality
   provision,   and  (c)  revising  the  contingent  share  provisions  and  the
   supplemental EPS data requirements. FAS 128 also makes a number of changes to
   existing  disclosure  requirements.   FAS  128  is  effective  for  financial
   statements  issued for periods  ending after  December  15,  1997,  including
   interim  periods.  There has been no significant  impact from the adoption of
   this standard.

   In June 1997, the Financial  Accounting  Standards Board issued  Statement of
   Financial  Accounting  Standards No. 130,  "Reporting  Comprehensive  Income"
   (SFAS 130).  SFAS 130  establishes  standards  for  reporting  and display of
   comprehensive  income.  The purpose of reporting  comprehensive  income is to
   present a measure  of all  changes  in equity  that  result  from  recognized
   transactions and other economic events of the period other than  transactions
   with owners in their capacity as owners. SFAS 130 requires that an enterprise
   classify items of other  comprehensive  income by their nature in a financial
   statement and display the  accumulated  capital in the equity  section of the
   balance  sheet.  SFAS 130 is  effective  for  fiscal  years  beginning  after
   December 15, 1997, with earlier  application  permitted.  The Company has not
   yet determined the impact, if any, of the implementation of SFAS 130.

   In June 1997, the Financial  Accounting  Standards Board issued  Statement of
   Financial  Accounting  Standards No. 131,  "Disclosures  About Segments of an
   Enterprise and Related  Information"  (SFAS 131). SFAS 131 specifies  revised
   guidelines for  determining an entity's  operating  segments and the type and
   level of financial information to be disclosed.  Once operating segments have
   been determined,  SFAS 131 provides for a two-tier test for determining those
   operating  segments  that would need to be disclosed  for external  reporting
   purposes.  In addition to providing the required  disclosures  for reportable
   segments,  SFAS  131 also  requires  disclosure  of  certain  "second  level"
   information by geographic area and for products/services. SFAS 131 also makes
   a  number  of  changes  to  existing  disclosure  requirements.  SFAS  131 is
   effective for fiscal years  beginning  after December 15, 1997,  with earlier
   application  encouraged.  The Company has not yet determined  the impact,  if
   any, of the implementation of SFAS 131.

Note 3 - Inventory

Inventory  consists  of  purchased  doors,  related  parts  and  other  supplies
necessary to assemble commercial metal doors for resale. These items are carried
at the  lower  of cost  or  market  using  the  first-in,  first-out  method  of
accounting.  Inventory consists of the following  components as of September 30,
1997 and June 30, 1997, respectively:
                                                      December 31,   June 30,
                                                          1997         1997
                                                       ----------    ---------
       Finished goods and purchased product             $  91,230    $  99,777
       Other raw materials and supplies                    16,099        6,663
                                                        ---------    ---------
                                                        $ 107,329    $ 106,440
                                                        =========    =========

                                                                            10

<PAGE>



                        MILLENNIA, INC. AND SUBSIDIARIES

                    Notes to Financial Statements - Continued


Note 4 - Equity investment in DCT

Summarized   financial   statement   information  for  DCT  is  presented  below
(unaudited)

                                                    For the six     For the six
                                                   months ended    months ended
                                                   December 31,    December 31,
                                                      1997            1996
                                                   ------------    ------------

      Net sales                                    $3,388,841      $15,814,416
      Operating profit (loss)                     $(2,031,826)        $614,292
      Income (loss) from continuing operations    $(1,584,647)        $301,940
      Net income (loss)                           $(1,584,647)        $297,255
      Total net earnings (loss) per share              $(2.14)           $0.47

                                                      As of          As of
                                                   December 31,     June 30,
                                                      1997          1997
                                                   ------------    ------------

   Total assets                                   $12,226,009     $12,345,302
   Total liabilities                               $7,073,334      $7,699,408
   Total stockholders' equity                      $4,867,451      $4,645,894


Note 5 - Litigation

The  Company  may from time to time be party to various  legal  actions  arising
during  the  ordinary  course of its  business.  In  addition,  the  Company  is
currently involved in the following litigation:

On March 4, 1996, Adrian Jacoby, allegedly on behalf of the Company, and Richard
Abrons,  allegedly on behalf of an  affiliate  company,  Digital  Communications
Technology  Corporation  ("DCT"),  brought a  purported  shareholder  derivative
lawsuit  against the  Company's  board of directors - Kevin B. Halter,  Kevin B.
Halter,  Jr.,  Gary C.  Evans  and  James  Smith - as  well  as  Halter  Capital
Corporation and Securities Transfer  Corporation.  In addition,  the Company and
DCT have been joined as "nominal  defendants."  In the lawsuit,  the  plaintiffs
have  alleged  breaches  of  fiduciary  duty,  fraud,  and  violations  of state
securities laws. The plaintiffs seek unspecified actual and exemplary damages, a
constructive trust against the assets of the defendants and an accounting of the
affairs of the  defendants  with respect to their  dealings with the Company and
DCT. In addition,  the plaintiffs have requested a temporary  injunction and the
appointment of a receiver for the Company and DCT.

In 1995, Halter Capital Corporation  ("HCC"), in which Kevin B. Halter and Kevin
B. Halter,  Jr. (the "Halters") are principals,  negotiated the  satisfaction of
$1,217,000 in debt owed to creditors by Millennia's subsidiary, American Quality
Manufacturing Corporation ("AQM," since sold). The Halters are also officers and
directors  of  Millennia.  HCC  satisfied  these debts by  transferring,  in the
aggregate, 1,659,000 shares of Millennia common stock it owned to the creditors.
To repay HCC for the AQM  indebtedness  HCC paid,  Millennia  transferred to HCC
1,622,000 shares of DCT Common Stock it held as an investment.  With the payment
of DCT Common Stock to HCC and the salaries or other compensation  received from
Millennia by the Halters,  Mr. Evans and Mr. Smith,  plaintiffs assert that each
breached their duties of loyalty,  usurped corporate opportunities and committed
gross  mismanagement  by wrongfully  using  Millennia and DCT as instruments for
their own and HCC's pecuniary gain

                                                                            11

<PAGE>



          DIGITAL COMMUNICATIONS TECHNOLOGY CORPORATION AND SUBSIDIARY

             Notes to Consolidated Financial Statements - Continued


Note 5 - Litigation - continued

to the detriment of Millennia,  DCT and their  shareholders.  If any damages are
ultimately  awarded to the  plaintiffs,  those damages will be on behalf of, and
for the  benefit  of,  the  Company  and all of its  shareholders.  If they  are
successful,  the plaintiffs may recover certain  attorney's fees and costs. This
case is  entitled  Richard  Abrons et al v.  Kevin B.  Halter  et al,  Cause No.
96-02169-G,  in the 134th Judicial District,  Dallas County,  Texas. Even though
the Company is a nominal  defendant  in the  lawsuit,  the  Plaintiffs  have not
sought to recover any damages against the Company. In this type of lawsuit,  the
Company is joined as a procedural matter to make it a party to the lawsuit.

All of the defendants have answered denying all of the material  allegations and
claims in the Petition, disputing the plaintiffs' contention that it is a proper
shareholder  derivative  action,  denying that the plaintiffs  have the right to
pursue this lawsuit on behalf of the Company and  Millennia  and are  vigorously
defending the lawsuit.  In addition,  the  defendants  have filed  counterclaims
against the plaintiffs and third party actions  against Blake Beckham,  Attorney
at Law, Beckham & Thomas, L.L.P., Sanford Whitman, the former CFO of the Company
and Jack D. Brown Jr., the former  President of the Company,  seeking damages in
excess of $50 million.  In its  counterclaim,  the Company has asserted that the
filing of this lawsuit and the temporary restraining order the plaintiffs caused
to be issued in the case resulted in damages to the Company.

A court hearing  related to this case commenced on February 9, 1998 to ascertain
if the Plaintiffs have met the legal  requirements to file and pursue this case.
The Company  continues to believe that the results of this lawsuit will not have
any material  impact on the  operations  or  financial  condition of the Company
other than the expenditure of legal and  professional  fees, which are currently
in excess of $600,000 in the aggregate, related to this specific matter.






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Part I - Item 2

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
   AND RESULTS OF OPERATIONS


(1)   Caution Regarding Forward-Looking Information

This  quarterly   report  contains   certain   forward-looking   statements  and
information relating to the Company that are based on the beliefs of the Company
or management as well as assumptions made by and information currently available
to  the  Company  or  management.   When  used  in  this  document,   the  words
"anticipate,"   "believe,"   "estimate,"   "expect"  and  "intend"  and  similar
expressions,  as they relate to the Company or its  management,  are intended to
identify forward-looking statements. Such statements reflect the current view of
the  Company   regarding  future  events  and  are  subject  to  certain  risks,
uncertainties  and  assumptions,  including the risks and  uncertainties  noted.
Should  one or more of  these  risks or  uncertainties  materialize,  or  should
underlying assumptions prove incorrect,  actual results may vary materially from
those  described  herein  as  anticipated,   believed,  estimated,  expected  or
intended. In each instance,  forward-looking information should be considered in
light of the accompanying meaningful cautionary statements herein.


(2)   Results of Operations

Overview

Gross  revenues  for the six  months  of  Fiscal  1998  increased  approximately
$164,000  from amounts  realized  for the same period in Fiscal  1997.  The most
significant  reason  for  this  increase  was  the  addition  of  the  Company's
wholly-owned  subsidiary,  Doblique Energy Corporation during the second quarter
of Fiscal  1997.  The  addition  of this  operating  subsidiary  also caused the
Company to  experience  significant  increases in costs of sales  related to the
operation  of various  oil and gas wells,  principally  located in Texas and New
Mexico.  During the second quarter of Fiscal 1998,  Doblique Energy  Corporation
experienced  diminished  gross  margins  between  the  recognized  revenues  and
expenses. Management continues to utilize the services of a third-party operator
for this business  segment and  consistently  monitors  revenue and  expenditure
levels.

Operating expenses declined by a net of approximately $51,000 for the six months
of Fiscal  1998  compared  to the first six months of Fiscal 1997 due to reduced
corporate overhead expenses and lower legal and professional fees related to the
stockholder  derivative  litigation.  Some of these cost  savings were offset by
depletion expenses related to Doblique Energy Corporation.

The Company  experienced  losses on sales of marketable  securities and sales of
securities  of  an  affiliated   entity,   Digital   Communications   Technology
Corporation  (DCT), of  approximately  $(62,719)  during the first six months of
Fiscal 1998 as compared to gains of  approximately  $27,785  realized during the
first six months of Fiscal 1997.

The Company  continues to experience  non-monetary  losses related to the use of
the equity method of accounting  related to its  approximate  9.7% investment in
DCT.  During the first six months of Fiscal 1997,  this  accounting  transaction
recognized  income  of  approximately   $47,000  while  the  Company  recognized
approximately  $170,000 in proportionate  losses for the first quarter of Fiscal
1998. Additionally,  on December 12, 1997, DCT announced that it had been forced
to  curtail  its  video  tape  duplication  operations  and lay off  most of its
employees  due to  severe  cash  flow  problems  which  had been  caused  by its
inability to draw funds under the Bank One, Texas, N. A. line of credit.

The Company experienced losses from continuing  operations per  weighted-average
share of common stock outstanding of approximately $0.34 per share for the first
six months of Fiscal 1998 as compared to losses of approximately $0.20 per share
for the first quarter of Fiscal 1997.  Approximately  $0.07,  or one-half of the
comparative  increase,  is attributable to the non-monetary  loss recognition of
the Company's proportionate share of

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<PAGE>



the net losses of DCT. The balance in the  increased  loss per share  related to
increased  operating expenses and lower revenues  experienced in Doblique Energy
Corporation.

Door Distribution Segment

Omni Doors, Inc. is the Company's oldest continuing  operating  subsidiary.  For
the six and three months of Fiscal 1998, respectively, Omni experienced revenues
of approximately  $258,000 and $$130,000 as compared to  approximately  $271,000
and $141,000 for the equivalent periods during Fiscal 1997. This overall decline
is nominal and reflective of the highly competitive construction market in South
Florida  which  can lead to  periodic  fluctuations  which  are  caused by price
sensitive  consumer  demands and overall  construction  activity.  During Fiscal
1997,  Omni had an exterior  door  product  approved  for  installation  in Dade
County,  Florida.  This approval process was initiated at the local governmental
level in response to damages  caused by  Hurricane  Andrew to the South  Florida
region.  Management is of the opinion that having approved products will enhance
the  overall  product  line  and  acceptability  of  Omni in the  South  Florida
marketplace.

Omni  experienced  a  year-to-date  net loss from  operations  of  approximately
$24,000 for the first six months of Fiscal 1998 as compared to a comparable  net
income of  approximately  $2,400 for the same period  during  Fiscal  1997.  The
primary  reason for this loss relates to increases in various  selling  expenses
for  increased  visibility  of Omni and its product  lines in the South  Florida
region.

Oil and Natural Gas Segment

Operations  in  Doblique  Energy  Corporation  were  started on October 1, 1997.
During  the  three  month  period  from July 1997 to  September  1997,  Doblique
experienced revenues of approximately $129,000 from sales of oil and natural gas
products.  During the second  quarter  (October  to  December)  of Fiscal  1998,
Doblique   recognized   revenues  of  approximately   $280,000  as  compared  to
approximately  $177,000 for the same period during Fiscal 1977. For  comparative
purposes,  due to domestic  demand and  pricing  fluctuations  and other  market
pressures,  Doblique  experienced second quarter production and management costs
related  to these  sales of  approximately  $121,000  for  both the  October  to
December  1997  and  1996  periods,  respectively.  Further,  depletion  on  the
properties was  approximately  $42,000 and 23,000 for the second quarter periods
in Fiscal 1998 and 1998, respectively. The Company has also experienced interest
expenses related to the acquisition  debt of approximately  $49,000 and $32,000,
respectively  during the second  quarter of Fiscal  1998 and 1997.  The  overall
year-to-date operating loss incurred in this operating segment was approximately
$155,000,  with approximately  $56,000 occurring in the second quarter of Fiscal
1998.  The second  quarter loss of  approximately  $56,000  compares to a second
quarter operating income of approximately $20,000 for Fiscal 1997.

Video Duplication and Distribution Segment

The Company  formed  Millennia  Entertainment,  Inc.  (MEI) in February  1997 to
acquire and  distribute  family classic films and other home video products on a
"by  order"  basis.  MEI  acquires  the  rights to  duplicate  the  programming,
outsources  the physical  duplication of the  programming  and  distributes  the
finished  product to the buyer.  By working on a "by order"  basis,  MEI is best
able to control its inventory  requirements  and minimize lead times between the
time an order is placed and ultimately shipped to MEI's customers.

Due to the start-up  nature of this  venture,  MEI is  currently  operating in a
deficit  position for the first six months of Fiscal 1998.  During the first six
months of Fiscal 1998, MEI  experienced  revenues of  approximately  $73,000 and
generated  a loss  from  operations  of  approximately  $76,000.  Management  is
pursuing all possible  avenues of marketing  and market  penetration  to elevate
sales  levels to meet or exceed all fixed  operational  costs.  Further,  due to
competitive  pressures,  management  continually  monitors  all raw material and
production  costs to assure  that both MEI and its  customers  receive  the best
value for the contracted sales prices.


                                                                           14

<PAGE>



Investment in Digital Communications Technology Corporation

On August 21, 1997, DCT's lending institution,  Bank One, Texas, N. A., notified
DCT that the lending institution intended, 120 days subsequent to the notice, to
stop making further advances on DCT's line of credit and accelerate the maturity
of the debt then owed.

On December 1, 1997, DCT announced that it had filed a lender liability  lawsuit
in Dallas County, Texas against Bank One, Texas, N. A. (Bank) in connection with
the Bank's  commitment in November 1996 to lend up to  approximately  $9 million
for working  capital and funds needed to permit the  relocation and expansion of
DCT's  business.  In the  lawsuit,  DCT has  alleged  that  the  Bank's  conduct
constitutes  breach of contract,  fraud in the inducement and several violations
of the  Bank's  statutory  duties of good  faith and fair  dealings  which  have
resulted in damages exceeding $5 million to DCT.

Funds to  reduce  the Bank  debt are  being  generated  from the  collection  of
accounts  receivable  and the  sale of video  tape  duplication  equipment.  The
inability  to draw  upon  the  Bank  credit  facility  has  left  DCT  with  few
alternatives  other  than to  retire  the  outstanding  bank  debt and allow the
release of existing liens which cover virtually all of DCT's assets.

DCT anticipates having sufficient remaining equipment to continue its video tape
duplication  business  on a reduced  scale,  if it so  chooses,  or it may enter
another line of business.

As a result of these events,  DCT effectively  ceased all video tape duplication
activities  on December 31, 1997 and has laid off a  significant  portion of its
workforce.

Further,  DCT, at this time,  does not fully  satisfy all of the American  Stock
Exchange  guidelines  for  continued  listing  and,  accordingly,  there  is  no
assurance that such listing will be continued by the American Stock Exchange.

DCT continues to experience  elevated  general and  administrative  costs due to
general  overhead  matters  and  legal and  professional  costs  related  to the
stockholder  derivative  litigation.  A  court  hearing  related  to  this  case
commenced on February 9, 1998 to ascertain if the Plaintiffs  have met the legal
requirements to file and pursue this case. The Company continues to believe that
the results of this lawsuit will not have any material  impact on the operations
or financial  condition of the Company other than the  expenditure  of legal and
professional  fees,  which are currently in excess of $600,000 in the aggregate,
related to this specific matter.

DCT's Results of operations

DCT experienced a decline in second quarter sales volume from approximately $8.8
million for the three  months  ended  December  31, 1996 to  approximately  $1.2
million  for the three  months  ended  December  31,  1997.  Further,  the DCT's
revenues for the first six months of Fiscal 1998 were approximately $3.4 million
as compared to approximately  $15.8 million for the comparable  period in Fiscal
1997. Several factors impacted this decline in sales including,  but not limited
to, management  evaluation of DCT's customer base and elimination of inefficient
and  unprofitable  accounts and the overall  industry  decline in product sales.
Additionally,  due to the  lack of  available  funding  on its  existing  credit
facilities,  DCT  effectively  ceased  all video  tape  duplication  operations,
effective  December  31,  1997.  The full  impact  of this  curtailment  will be
realized in future periods.

The  industry  consensus  is that the overall  industry  sales  activity  during
Calendar 1997 was significantly slower than expected. DCT has experienced severe
cash flow problems caused by its inability to access its line of credit from its
lending institution which will negatively impact its ability to solicit sales to
customers during the last half of DCT's fiscal year ending June 30, 1998.

DCT incurred  costs of sales of  approximately  $1.25 million and $3.24 million,
respectively,  for the three and six month  periods  ended  December 31, 1997 as
compared to approximately $7.09 million and $12.65 million for the

                                                                           15

<PAGE>



comparable  periods  ended  December  31, 1996.  The primary  component of these
expenses  are  DCT's  fixed  costs  related  to  its   production   facility  in
Indianapolis,  Indiana and its former  production  facility  in Ft.  Lauderdale,
Florida.  These costs were  approximately  106% and 95.6% of sales for the three
and six months ended  December 31, 1997 as compared to  approximately  80.4% and
80.0% for the comparable periods ended December 31, 1996.  Management  continues
to evaluate its fixed and variable costs in relation to sales activity to strive
towards optimum efficiency and profitable  operations.  Further,  DCT intends to
continuing to reduce its  inventory  levels to achieve a better  utilization  of
available resources.

Selling expenses decreased by approximately  $305,000 and $494,000 for the three
and six  months  ended  December  31,  1997 from the  comparable  periods  ended
December  31,  1996.  These  costs  continue  to  decline as a result of reduced
business  activity  related to  diminished  cash flows as a direct result of the
inability to access DCT's existing credit facilities.

General and administrative expenses continue to experience pressure from general
corporate overhead and legal and professional fees. DCT incurred aggregate costs
of  approximately  $362,000  and $1.3  million  during  the  three and six month
periods ended December 31, 1997,  respectively.  These costs were  approximately
$564,000 and $1.2 million for the  comparable  period ended December 31, 1996. A
significant  component of these expenses occurred during the July-September 1997
quarter as an effect of closing and  relocating of the Ft.  Lauderdale,  Florida
operations to the Indianapolis,  Indiana  facility.  DCT's management was of the
opinion  that the  closing of the Ft.  Lauderdale  facility  and the sale of the
assets of its  satellite  uplink  operation  would  significantly  contribute to
future cost savings for DCT.

DCT's Liquidity and capital requirements

During the first six months of Fiscal 1998, DCT experienced net cash provided by
operations  of  approximately  $1.583  million as  compared to using net cash in
operations of approximately  $(224,000)  during the same period of the preceding
year. Included in this net cash flow into DCT was the collection, and affiliated
reduction, of accounts receivable of approximately $930,000 and the reduction of
inventories of approximately  $965,000. The funds provided by these inflows were
utilized to reduce accounts payable by approximately $569,000.

Further  liquidity was provided by  approximately  $168,000 in proceeds from the
sale  of  the  satellite  uplink  equipment  to an  unrelated  third  party  and
approximately  $500,000 in proceeds  from the sale of the closed Ft.  Lauderdale
facility.  These cash inflows were offset by  purchases  and  upgrading of video
duplication   equipment  and   leaseholds  at  the   Indianapolis   facility  of
approximately $739,000.

DCT also  utilized  cash  during the first half of Fiscal  1998 to reduce a book
cash overdraft by approximately  $137,000,  to lower the outstanding  balance on
DCT's  revolving  line of credit of  approximately  $772,000 and to reduce DCT's
long-term  debt by  approximately  $224,000.  Further,  during January 1998, DCT
utilized the proceeds from the sale of excess  equipment and collection of trade
accounts  receivable to further  reduce  outstanding  bank debt due to Bank One,
Texas, N. A.

Overall,  DCT's available cash on hand decreased by approximately  $225,000 from
June 30, 1997 to December 31, 1997 with the net change  relating  principally to
the overall increase in property and equipment at the Indianapolis facility as a
result of relocating the Ft. Lauderdale operations.

DCT relocated and expanded the entire  Indianapolis  facility into a new 172,000
square foot building during Fiscal 1997. The  Indianapolis  plant opened in June
1997 with an increased operating capacity of approximately 20%. The new facility
layout is designed to optimize  process flow, to reduce product  handling and to
minimize the total cycle time of  productions  from order entry to delivery.  As
mentioned, DCT added approximately $739,000 in property and equipment during the
first six months of Fiscal 1998.  In the event that DCT continues its video tape
duplication business, due to the capital intensive and high technology nature of
this business line,  certain levels of capital  acquisitions for new duplication
and production  equipment and/or upgrades of existing  equipment may be required
to keep DCT competitive in the marketplace. Any such expenditures, if necessary,
are proposed, at this time, to

                                                                           16

<PAGE>



potentially be financed  through  operations  and/or separate  financing/leasing
arrangements. There can be no assurances, however, that DCT will either continue
its  video  tape   duplication   business  or  actually  incur  further  capital
expenditures. At this time, DCT has no plans to acquire or upgrade any equipment
for the remainder of the fiscal year ending June 30, 1998.

(3)   Liquidity and Capital Resources of Millennia, Inc.

During the first six months of Fiscal  1998,  the Company  experienced  net cash
requirements for operating  activities of approximately  $157,000 as compared to
cash provided by operating activities during the first six months of Fiscal 1997
of approximately  $181,000.  Further,  the Company experienced net positive cash
flows from marketable securities transactions of approximately  $103,000.  These
proceeds  were  utilized  to  support  the cash  deficit  created  by  operating
activities.

The primary  sources of funding for the  operations of the Company during Fiscal
1998 will be proceeds from transactions in its marketable  securities portfolio.
Additionally,  the Company intends to seek out additional  business  acquisition
candidates which will provide  supplemental  operating cash necessary to further
fund the Company's operational requirements.

(4)   Other Comments

The Company's door distribution  segment's sales levels  historically follow the
commercial construction market and activity levels in South Florida.  Therefore,
this segment is subject to economic,  climatic and other  intangible  influences
that affect the segment's trade area.

The Company's activities have not been, and in the near term are not expected to
be, materially affected by inflation or changing prices in general. However, the
results of operations and cash flow of the Company's oil and natural gas segment
have been and will  continue to be affected to a certain  extent by the domestic
and international  volatility in oil and natural gas prices. Should this segment
experience  a  significant  increase  in oil  and  natural  gas  prices  that is
sustained over a prolonged  period,  it would be anticipated that  corresponding
increases in production costs and related operating expenses would occur.





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                                                                           17

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Part II - Other Information

Item 1 - Legal Proceedings

     See Notes to the Consolidated Financial Statements

Item 2 - Changes in Securities

     None

Item 3 - Defaults on Senior Securities

     None

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

     The Company held its Annual Meeting of Shareholders on November 25, 1997.

     All four of its current directors,  Kevin B. Halter,  Kevin B. Halter, Jr.,
     Don R.  Benton  and  James  Smith,  were re-  elected  each  receiving  the
     favorable vote of more than 98.0% of the shares actually voted.

     The stockholders also ratified the appointment of Hein + Associates, LLP as
     the Company's independent auditors.

Item 5 - Other Information

     None

Item 6 - Exhibits and Reports on Form 8-K

     None


                                                                           18

<PAGE>


                                   SIGNATURES


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

                                                                 MILLENNIA, INC.



February   16, 1998                                     /s/ Kevin B. Halter
         ------                                ---------------------------------
                                                                 Kevin B. Halter
                                       Chairman and Principal Accounting Officer




                                                                           19