UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC. 20549


                                   FORM 10-QSB
(MarkOne)

 {x} QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934

         For the quarterly period ended September 30, 1996

 { } TRANSITION  REPORT  PURSUANT  TO SECTION  13 OR 15(d) OF THE  SECURITIES
     EXCHANGE ACT OF 1934

For the transition period from _______________________ to _____________________

Commission file number: 1-12572

                             S.O.I. INDUSTRIES, INC.
        (Exact name of small business issuer as specified in its charter)


           Delaware                                      59-2158586
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
  incorporation or organization)

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


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


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

         Check whether the issuer (1) filed all reports  required to be filed by
Section 13 or 15(d) of the  Securities  Exchange  Act of 1934 during the past 12
months (or for such shorter period that the registrant was required to file such
reports),  and (2) had been subject to such filing  requirements for the past 90
days. Yes { X } No { }

         The  number  of shares  outstanding  of the  common  stock of the small
business issuer on October 31, 1996, the latest practicable date, was 2,152,949.




<PAGE>






                                TABLE OF CONTENTS

Item                                                                   Numbered
Number Page
-----------

Part I

         1        Financial Statements   . . . . . . . . . . . . . . . .     1
         2        Management's Discussion and
                  Analysis or Plan of Operation   .  . . . . . . . . . .     8

Part II

         1        Legal Proceedings  . . . . . . . .. . . . . . . . . . .   N/A

         2        Changes in Securities  . . . . . .. . . . . . . . . . .   N/A

         3        Defaults Upon Senior Securities  .. . . . . . . . . . .   N/A

         4        Submission of Matters to a Vote of Security
                  Holders . . . . . . . . . . . . . . . . . . . . . . . .   N/A

         5        Other Information  . . . . . . . .. . . . . . . . . . .   N/A

         6        Exhibits and Reports on Form 8-K . . . . . . . . . . . .   13
<PAGE>


                    S.O.I.INDUSTRIES, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>

<S>                                                                        <C>                             <C>
                                                                           September 30,
                                                                                1996                       June 30,
                                                                            (Unaudited)                      1996
                                                                        ---------------------         -------------------
           ASSETS

Current assets:
      Cash and cash equivalents                                       $               53,232        $             36,628
      Marketable securities                                                          198,188                          -
      Accounts receivable, less allowance for doubtful accounts
        of $25,400 at September 30, 1996 and $15,500 at June 30, 1996                 77,849                      71,867
      Other accounts receivable                                                         -                            699
      Inventories                                                                     99,188                     105,760
      Prepaid expenses and other                                                     214,092                     582,562
      Deferred income taxes                                                           10,687                     617,142
      Net current assets of discontinued operations                                     -                      5,072,860
                                                                        ---------------------         -------------------
           Total current assets                                                      653,236                   6,487,518

Property, plant and equipment, net of
      accumulated depreciation                                                        14,744                      15,956
Investment in Digital Communications Technology Corporation                        1,374,439                   1,388,078
Deferred tax asset                                                                    71,026                      77,214
Other assets                                                                           5,779                       5,779
Net other assets of discontinued operations                                             -                      4,181,953
                                                                        ---------------------         -------------------
                Total assets                                          $            2,119,224        $         12,156,498
                                                                        =====================         ===================

           LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
      Accounts payable - trade                                        $               81,323        $             83,102
      Accounts payable - officer                                                        -                         16,000
      Accrued liabilities and other                                                   14,895                      30,949
      Net current liabilities of discontinued operations                                -                      9,018,638
                                                                        ---------------------         -------------------
           Total current liabilities                                                  96,218                   9,148,689
                                                                        ---------------------         -------------------

Net other liabilities of discontinued operations                                        -                      1,811,870


Commitments and contingencies

Stockholders' equity:
      Preferred stock, par value $0.00001 par value; 10,000,000
        shares authorized, none issued and outstanding                                  -                             -
      Common stock, par value $0.0002; 50,000,000 shares
         authorized, 2,152,949 shares outstanding at September 30,
         1996 and June 30, 1996                                                          417                         431
      Additional paid-in capital                                                   6,734,714                   6,717,093
      Less shares deemed treasury stock; 68,332 and 70,401 shares
         at September 30, 1996 and June 30, 1996, respectively                       (64,483)                    (39,425)
      Accumulated deficit                                                         (4,652,284)                 (5,482,160)
      Net unrealized holding gain on investment securities                             4,642                          -
                                                                        ---------------------         -------------------
           Total stockholders' equity                                              2,023,006                   1,195,939
                                                                        ---------------------         -------------------

                Total liabilities and stockholders' equity            $            2,119,224        $         12,156,498
                                                                        =====================         ===================



                        The accompanying notes are an integral part of the financial statements
</TABLE>

                                       1
<PAGE>


                     S.O.I.INDUSTRIES,INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (unaudited)
<TABLE>
<CAPTION>
<S>                                                                       <C>          <C>           <C>       <C>
                                                                                       For the three months ended
                                                                                             September 30,
                                                                                     1996                         1995
                                                                            -------------------         ---------------------

Net revenues                                                              $            130,165        $              214,738

Cost of sales                                                                           96,832                        94,263
                                                                            -------------------         ---------------------
                                                                                        33,333                       120,475
                                                                            -------------------         ---------------------
Operating expenses
       Selling expenses                                                                 11,669                        11,872
       General and administrative expenses                                             251,468                       337,377
       Depreciation                                                                      1,212                         1,213
                                                                            -------------------         ---------------------
            Total operating expenses                                                   264,349                       350,462
                                                                            -------------------         ---------------------

Loss from operations                                                                  (231,016)                     (229,987)
                                                                            -------------------         ---------------------

Other income (expense):
       Gains on sales of securities                                                     11,129                        54,146
       Interest and other income                                                        29,759                       100,403
                                                                            -------------------         ---------------------
                                                                                        40,888                       154,549
                                                                            -------------------         ---------------------

Loss from continuing operations before income taxes                                   (190,128)                     (75,438)
Benefit for income taxes                                                                (1,429)                         -
                                                                            -------------------         ---------------------
Loss from continuing operations                                                       (188,699)                     (75,438)
                                                                            -------------------         ---------------------

Discontinued operations, net of income taxes
       Loss from discontinued operations of American Quality
          Manufacturing Corporation, net of income tax benefit of
          $0 for the periods ended September 30, 1996 and 1995,
          respectively                                                                (566,991)                    (526,738)
       Income from discontinued operations of Tempo Lighting, Inc.,
          net of income taxes of $1,600                                                                              22,045
       Gain on disposition of American Quality Manufacturing
          Corporation, net of income tax provision of $617,412.                      1,585,566                         -

                                                                            -------------------         ---------------------
Income (loss) from discontinued operations                                           1,018,575                     (504,693)
                                                                            -------------------         ---------------------

Net income (loss)                                                         $            829,876        $            (580,131)
                                                                            ===================         =====================

Weighted average shares of common
       stock outstanding                                                             2,083,914                    1,596,733
                                                                            ===================         =====================

Loss per share from continuing operations                                 $              (0.09)       $               (0.05)
Income (loss) per share from discontinued operations                                      0.49                        (0.31)
                                                                            ===================         =====================
       Net income (loss) per share                                        $               0.40         $              (0.36)
                                                                            ===================         =====================



                          The accompanying notes are an integral part of the financial statements
</TABLE>


                                       2
<PAGE>

                    S.O.I.INDUSTRIES, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
<S>                                                                              <C>            <C>            <C>
                                                                                       For the three months ended
                                                                                               September 30,
                                                                                       1996                               1995
                                                                                      (Unaudited)                     (Unaudited)
                                                                                  -------------------            -------------------
Cash flows from operating activities:
      Net income (loss)                                                           $       829,876                   $    (580,131)
                                                                                  -------------------            -------------------
      Adjustments to reconcile  net income  (loss) to net cash provided by (used
        in) operating activities:
          Depreciation and amortization                                                     1,212                           1,213
          Provision for doubtful accounts                                                   9,900                               -
          (Gain) loss on sales of marketable securities                                      (830)                         11,426
          Gain on equity investment in Digital Communications
             Technology Corporation                                                        (5,786)                        (95,209)
          Gain on sales of securities of Digital Communications
             Technology Corporation                                                       (10,453)                        (65,572)
          Discontinued operations                                                      (1,575,541)                       (433,241)
      Increase in accounts receivable                                                     (15,882)                         (1,335)
      Decrease in inventories                                                               6,572                           6,206
      Decrease in prepaid expenses and other                                              369,169                               -
      Decrease in net deferred income tax benefit (liability)                             612,643                        (303,740)
      (Decrease) increase in accounts payable                                              (1,779)                        365,484
      Decrease in accrued liabilities                                                     (16,054)                         (3,329)
                                                                                  -------------------            -------------------
               Net cash provided by (used in) operating activities                        203,047                      (1,098,228)
                                                                                  -------------------            -------------------

Cash flows from investing activities:
      Proceeds from sale of securities of Digital Communications
         Technology Corporation                                                            22,273                          71,007
      Proceeds from sales of marketable securities                                         32,482                       1,988,261
      Purchases of marketable securities                                                 (225,198)                     (1,021,298)
                                                                                  -------------------            -------------------
               Net cash (used in) provided by investing activities                       (170,443)                      1,037,970
                                                                                  -------------------            -------------------

Cash flows from financing activities:
      Repayment of advances from officer                                                  (16,000)                               -
      Net short-term repayments                                                                -                          (30,437)
      Net payments from ESOP                                                                   -                           30,437
                                                                                  -------------------           --------------------
               Net cash used in financing activities                                      (16,000)                              0
                                                                                  -------------------           --------------------

Increase (decrease) in cash and cash equivalents                                           16,604                         (60,258)
Cash and cash equivalents at beginning of period                                           36,628                          97,505
                                                                                  -------------------          ---------------------
Cash and cash equivalents at end of period                                       $         53,232              $           37,247
                                                                                  ===================          =====================

Supplemental  disclosures of cash flow information:  Cash paid during the period
      for:
          Interest (non-capitalized)                                             $               0             $            4,347
                                                                                  ===================          =====================
          Income taxes                                                           $               0             $                0
                                                                                  ===================          =====================


                           The accompanying notes are an integral part of the financial statements
</TABLE>

                                       3
<PAGE>


                    S.O.I. INDUSTRIES, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)
                                  -------------

1.        Summary of Significant Accounting Policies:
          -------------------------------------------

          The  accompanying   consolidated   financial  statements  include  the
          accounts   of  S.O.I.   Industries,   Inc.   and  all   majority-owned
          subsidiaries   (collectively  referred  to  as  the  "Company").   The
          subsidiaries  include Omni Doors,  Inc.  ("Omni") and Doblique  Energy
          Corporation   ("Doblique").   Significant  intercompany  accounts  and
          transactions have been eliminated.

          The  Company  also  holds  a  17.04%  ownership  interest  in  Digital
          Communications  Technology  Corporation  ("DCT") as of  September  30,
          1996.  At June 30,  1996,  this  ownership  interest  was 17.55%.  The
          Company accounts for its investment in DCT using the equity method.

          Effective February 29, 1996, the Company sold 100% of the common stock
          of Tempo  Lighting,  Inc.  ("Tempo") for a net cash purchase  price of
          $453,436.  The  operations  of  Tempo  are  therefore  segregated  and
          presented as discontinued operations on the Consolidated Statements of
          Operations.

          Effective  August 31,  1996,  the Company  sold 100% of its  ownership
          interest in American Quality  Manufacturing  Corporation  ("AQM") to a
          corporate  unrelated third party for the assumption of all liabilities
          of AQM. The results of operations of AQM are therefore  presented as a
          component of discontinued operations in the Consolidated Statements of
          Operations.

          Certain  information  and footnote  disclosures  normally  included in
          financial  statements  prepared in accordance with generally  accepted
          accounting  principles  have been  condensed  or  omitted  from  these
          unaudited interim  financial  statements.  These financial  statements
          should be read in conjunction with the financial  statements and notes
          thereto included in the Company's annual audited financial statements.

          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  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.

          In the opinion of management,  the  accompanying  unaudited  financial
          statements   contain  all  adjustments   (consisting  of  only  normal
          recurring  accruals)  necessary  to conform  with  generally  accepted
          accounting  principles.  The  results of  operations  for the  periods
          presented are not necessarily indicative of the results to be expected
          for the full year.

2.        Marketable Securities:
          ----------------------

          Marketable  securities  consist  of  equity  securities  which  had an
          aggregate  cost of  approximately  $193,546 at September 30, 1996. The
          marketable  securities  portfolio  contains  net  unrealized  gains of
          $4,642,  resulting in a carrying  amount of $198,188 at September  30,
          1996.  The  unrealized  gains are reported as a separate  component of
          stockholders'   equity.  The  Company's   marketable   securities  are
          classified as available for sale securities.




                                       4
<PAGE>
                    S.O.I. INDUSTRIES, INC. AND SUBSIDIARIES
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
                                   (Unaudited)
                                  -------------
<TABLE>
<CAPTION>
<S>                                                     <C>                       <C>

3.        Inventories:

          The inventories  are valued at the lower of cost (first-in,  first-out
          method) or market and consisted of the following:

                                                             September 30,             June 30,
                                                                 1996                    1996
                                                           ------------------       ----------------

             Finished goods and purchased product        $            94,688      $         100,934
             Raw materials and supplies                                4,500                  4,826
                                                           ==================       ================
                                                         $            99,188      $         105,760
                                                           ==================       ================

4.        Property, Plant and Equipment:

          Property, plant and equipment and related accumulated depreciation are
          summarized as follows:

                                                             September 30,             June 30,
                                                                 1996                    1996
                                                           ------------------       ----------------

                  Vehicle                                $            19,635      $          19,635
                  Machinery and equipment                             13,034                 13,034
                  Leasehold improvements                               4,193                  4,193
                                                           ------------------       ----------------
                                                                      36,862                 36,862
                  Less: accumulated depreciation                      22,118                 20,906
                                                           ==================       ================
                                                         $            14,744      $          15,956
                                                           ==================       ================

5.        Equity Investment in DCT:

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


                                                             For the three           For the three
                                                             months ended            months ended
                                                             September 30,           September 30,
                                                                 1996                    1995
                                                           ------------------       ----------------

                  Net sales                              $         7,019,937      $       5,386,471
                  Operating profit                       $           168,137      $         290,586
                  Income from continuing operations      $           130,748      $         148,100
                  Net income                             $            65,667      $         207,101
                  Earnings per share                     $              0.01      $            0.04

                                                                 As of                   As of
                                                             September 30,             June 30,
                                                                 1996                    1996
                                                           ------------------       ----------------

                  Current assets                         $        11,275,100      $       9,711,473
                  Total assets                           $        17,641,040      $      15,675,489
                  Current liabilities                    $         7,503,743      $       5,955,208
                  Total liabilities                      $         9,556,707      $       7,778,487
                  Total stockholders' equity             $         8,084,333      $       7,897,002
</TABLE>


                                       5
<PAGE>


                    S.O.I. INDUSTRIES, INC. AND SUBSIDIARIES
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
                                   (Unaudited)
                                  -------------

6.        Discontinued Operations:

          Effective February 29, 1996, the Company sold 100% of the common stock
          of Tempo for a net cash  purchase  price of  $453,436.  The results of
          operations  of Tempo have been reported  separately as a  discontinued
          operation in the  Consolidated  Statement of Operations  for the three
          month period ended September 30, 1995.

          Effective  August 31,  1996,  the Company  sold 100% of its  ownership
          interest  in  AQM  to  a  corporate  unrelated  third  party  for  the
          assumption  of all  liabilities  of AQM.  In  addition,  the AQM  sale
          included the release of the  Company's  guarantees of certain debt (1)
          with their primary lending institution;  (2) with certain key vendors;
          and (3) related to the payment and  performance  of AQM's lease of its
          operating facility in Conway,  Arkansas. The sale agreement contains a
          total guaranty release cap of $5.5 million.  Additionally, the Company
          retained its  contingent  guarantee of a $400,000 note between AQM and
          DCT. The results of  operations  of AQM are  therefore  presented as a
          component of discontinued operations in the Consolidated Statements of
          Operations.

          Summarized  results of  operations of the  discontinued  operations of
          Tempo for the three months ended September 30, 1995 are as follows:
<TABLE>
<CAPTION>

<S>                                                                               <C>          <C>

                                                                                     September 30,
                                                                                         1995
                                                                                    ----------------

             Net sales                                                            $       1,166,011

             Operating income                                                     $          38,901

             Net income from discontinued operation                               $          22,045


          Summarized results of operations of the discontinued operations of AQM
          for the three months ended September 30, 1996 and 1995 are as follows:

                                                             September 30,           September 30,
                                                                 1996                    1995
                                                           ------------------       ----------------

             Net sales                                   $         2,682,751      $       4,447,019

             Operating loss                              $         (983,604)      $       (322,925)

             Net loss from discontinued operation        $         (566,991)      $       (526,738)

          The  assets and  liabilities  of AQM have been  reclassified  into net
          assets  and  net  liabilities  of   discontinued   operations  on  the
          consolidated balance sheet for June 30, 1996.

</TABLE>

                                       6
<PAGE>





                    S.O.I. INDUSTRIES, INC. AND SUBSIDIARIES
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued
                                   (Unaudited)
                                  -------------

7.        Subsequent Event:

          In October,  1996, the Company's  wholly-owned  subsidiary,  Doblique,
          signed a letter of intent to acquire certain  interests in oil and gas
          properties  located in Texas,  Oklahoma and New Mexico. On November 4,
          1996,  a final  agreement  was  signed.  The  terms  of the  agreement
          stipulated  a  total  purchase  price  of  $1,850,000,  structured  as
          follows:  (1) $100,000 in cash, (2) 120,000 newly-issued shares of the
          Company's  Series A  convertible  preferred  stock  (convertible  into
          120,000  shares of the  Company's  common  stock) and (3) a promissory
          note in the amount of $1,600,000,  secured by the acquired  properties
          and also  secured  by 750,000  shares of DCT common  stock held by the
          Company. In addition, the Company guaranteed payment of the promissory
          note.  The  promissory  note  will have a term of 36  months,  bearing
          interest  at 12%  per  annum,  with  principal  and  interest  payable
          monthly.

                                        7
<PAGE>                             



ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

Results of Operations
---------------------

Overview

         Effective  August  31,  1996,  the  Company  sold  all the  issued  and
outstanding stock of AQM. Since, at the time of the sale, AQM had liabilities in
excess  of its  assets,  the  sale  of  AQM  relieved  the  Company  of the  net
liabilities  of  AQM  upon  consolidation  and  resulted  in  a  gain  from  the
disposition  of AQM of  approximately  $1,586,000.  AQM  generated  losses  from
operations  from  July  1,  1996 to the  effective  sale  date of  approximately
$567,000 which resulted in a net gain from the discontinued  operations and sale
of AQM of approximately $1,019,000 during the three month period ended September
30, 1996.

     The AQM sale  included the release of the  Company's  guarantees of certain
debt of AQM (1) with AQM's  primary  lending  institution;  (2) with certain key
vendors; and (3)related to the payment and performance under AQM's lease of it's
principal operating facility in Conway,  Arkansas. The sale agreement contains a
total guaranty release cap of $5.5 million.  The Company retained,  however, its
contingent  guarantee  of a $400,000  note  between  AQM and DCT. As part of the
transaction,  the Company also forgave approximately  $2,300,000 of intercompany
debt related to advances made by the Company to AQM and unpaid  management  fees
due from  AQM.  The  losses  attributable  to the  operation  of AQM  have  been
segregated  under  discontinued  operations  on the  statements  of  operations.
Likewise, the net assets and liabilities of AQM have also been segregated on the
Company's balance sheet as of June 30, 1996.

         The net gain from  discontinued  operations  offset the Company's  loss
from continuing operations of approximately  $189,000 for the three months ended
September 30, 1996,  resulting in net income of  approximately  $830,000 for the
same  period.  The loss from  continuing  operations  for the three months ended
September  30,  1996  exceeded  the  loss  from  continuing  operations  for the
corresponding  period of the prior year which was approximately  $75,000.  Since
the operating  losses for both periods were  consistent,  the primary reason for
the larger loss in the period ended  September 30, 1996 is the fewer sales,  and
the resulting gains generated by them, of the Company's investment securities of
DCT.  Additionally,  the Company's ownership  percentage in DCT was lower during
the period ended  September  30, 1996 as compared to the period ended  September
30, 1995. This,  coupled with lower earnings by DCT,  resulted in a lower equity
interest in DCT's net income (which is included in the  Company's  other income)
for the three month period ended September 30, 1996.

         Contributing to the Company's  operating  losses during the three month
periods  ended  September  30,  1996 and  September  30,  1995 were  general and
administrative  expenses of approximately  $251,000 and $337,000,  respectively.
With the  disposition  of AQM and Tempo,  an  approximate  70%  reduction in the
corporate  overhead  payroll  costs  occurred  during  the  three  months  ended
September  30, 1996 as compared to the  corresponding  period of the prior year.
The savings  resulted from fewer personnel  required at the Company's  corporate
offices due to the reduced activity of the Company during the three month period
ended  September  30, 1996.  However,  the lower  payroll costs were offset by a
significant  increase in legal fees for the three  months  ended  September  30,
1996. These legal fees were associated with the shareholder  derivative  action,
as discussed in the Company's prior reports.

         The Company's  net revenues for the three month period ended  September
30, 1996 are approximately  39% lower than those of the corresponding  period of
the prior year.  This decline is due to the  discontinuance  of management  fees
which were  charged to DCT during the three month  period  ended  September  30,
1995.  Management  fees charged to DCT ceased in December 1995,  coinciding with
the Company's reduced ownership

                                       8
<PAGE>



interest in DCT. Services previously provided by the Company were assumed by DCT
employees.

Door Distribution Segment

         Net sales  from this  segment  approximated  $130,000  as  compared  to
approximately  $125,000 for the three month periods ended September 30, 1996 and
1995,  respectively.  The highly  competitive market in which Omni operates will
often  produce  slight  fluctuations  in sales  depending  on  various  external
factors.  Therefore,  the 4% increase in sales does not necessarily  represent a
trend of continued sales increases,  but is instead a function of the volatility
of the marketplace.

         For the three month  period  ended  September  30,  1996,  this segment
generated an operating loss of approximately  $2,900 as compared to an operating
income of  approximately  $2,700 for the three months ended  September 30, 1995.
The  difference  in  operating  results is due  primarily  to an increase in the
general and administrative  expenses of Omni, particularly an approximate $9,900
increase in the provision for bad debts. No specific  accounts were written off,
however,  based on  slower  collections  occurring  in the first  quarter  ended
September 30, 1996,  management believed that an increase in the reserve for bad
debts was appropriate.  Management will continually  monitor  collections on all
accounts receivable to ensure timely collections.

Capital Resources
-----------------

         The  Company  does not  currently  have any  material  commitments  for
capital  expenditures.  However,  the  Company is actively  seeking  acquisition
candidates to include within the consolidated group. Such business  acquisitions
are  expected  to be  financed  through  a  combination  of debt  and new  stock
issuances.

Liquidity
---------

         During the three month period ended  September 30, 1996,  the Company's
operating  activities  provided cash flows of  approximately  $203,000.  This is
compared with net cash used in operating activities of approximately  $1,098,000
for the three month period ended  September 30, 1995. The primary reason for the
positive  operating cash flows in the first quarter ended September 30, 1996 was
the receipt of the  Company's  income tax refund and related  interest  totaling
approximately $395,000. The Company was able to utilize its net operating losses
experienced  during the 1995 fiscal year and carry them back to prior years when
the  Company  generated  taxable  income and paid income  taxes.  The income tax
refund  offset  the  operating  cash  requirements  of the first  quarter  ended
September 30, 1996,  and the excess cash was utilized to establish the Company's
marketable  securities  portfolio which had previously been liquidated  prior to
June 30, 1996.

         The  primary  sources of funding for the  operations  of the Company in
fiscal  year 1997 will be  remaining  proceeds  from the  Company's  income  tax
refund, which will be invested in the Company's marketable securities portfolio,
and proceeds from the marketable securities portfolio. The Company may also sell
its  investment  securities in DCT to provide cash as needed.  Furthermore,  the
Company plans to seek out additional business acquisition  candidates which will
provide  supplemental  operating cash  necessary to fund the Company's  overhead
requirements.

     In  connection  with  seeking  out  business  acquisition  candidates,  the
Company's  wholly-owned  subsidiary,  Doblique,  signed a letter of intent  with
Magnum  Hunter  Production,  Inc. to purchase  certain  interests in oil and gas
properties  located  in Texas,  Oklahoma  and New  Mexico in  October  1996.  On
November  4, 1996,  a final  agreement  was  signed.  The  general  terms of the
agreement transfered


                                       9
<PAGE>




the  ownership  interests of the oil and gas  properties to Doblique in exchange
for a total purchase price of $1,850,000, structured as follows: (1) $100,000 in
cash,  (2) 120,0000  newly-issued  shares of the Company's  Series A convertible
preferred stock (convertible into 120,000 shares of the Company's Common Stock )
and (3) a promissory  note in the amount of $1,600,000,  secured by the acquired
properties  and  750,000  shares of DCT  common  stock held by the  Company.  In
addition, the Company will guaranteed payment of the promissory note.





         The Company  utilized  approximately  $170,000  in cash from  investing
activities  during the three  months  ended  September  30,  1996 as compared to
approximately  $1,038,000  in cash  provided  by  investing  activities  for the
corresponding period of the prior year. During the first quarter ended September
30, 1995, the Company's  marketable  securities portfolio was larger than in the
most  recent  quarter,  and  consequently  generated  more cash  from  investing
activities. The Company intends to continue to invest funds in equity securities
which are listed  primarily on the New York Stock  Exchange  and American  Stock
Exchange. The Company limits the amount of exposure in any one equity investment
and  continually  monitors  them to reduce the risk of any adverse  stock market
volatility.  Cash not invested in securities is placed on account with brokerage
firms,  which is swept daily into a federally  insured money market account,  or
placed on account with a federally insured national bank.

Significant  Unconsolidated  Subsidiary  --  Digital  Communications  Technology
-------------------------------------------------------------------------------
Corporation
-----------

         The   operations  of  DCT  are  not   consolidated   in  the  Company's
consolidated  financial  statements  as of and for the years ended June 30, 1995
and 1996 as the Company's ownership in DCT is less than 50%. However,  since DCT
is a significant investee corporation,  selected financial statement information
for DCT is included as part of this Form 10-QSB.  Included below is a discussion
related to this financial statement information.

Overview
--------

     DCT continued to  experience  rapid sales growth for the three months ended
September  30,  1996.  Net sales  increased  by over 30% from the  corresponding
quarter of the prior year.  However,  DCT  continued to  experience a decline in
operating  profit from  approximately  $291,000 to $168,000 for the three months
ended September 30, 1995 and 1996, respectively. Increases in cost of goods sold
and  general and  administrative  expenses   particularly  related to legal fees
associated  with the  shareholder  derivative  lawsuit (approximately  $96,000),
contributed to the lower operating profits.

Liquidity
---------

         DCT utilized approximately $224,000 and $129,000 in cash from operating
activities for the three months ended September 30, 1996 and 1995, respectively.
DCT s operating cash position is due primarily to the large increase in accounts
receivable  which was partially  offset by an increase in accounts  payable.  In
addition,  increases in prepaid  expenses and other  assets  contributed  to the
current operating cash position.

         Accounts receivable increased approximately $1,676,000 from the balance
at June 30, 1996. The increase is due to the corresponding increase in net sales
for the current three month period. DCT's accounts receivable  collection period
(measuring  how quickly,  on average,  DCT  collects  its  accounts  receivable)
increased from  approximately  61 days at June 30, 1996 to approximately 76 days
at September 30, 1996. The increase is due to significant billings that occurred
in the last week of September.  These billings  negatively  affected the average
days in collection by increasing  the balance of accounts  receivable at the end
of the  quarter.  DCT  continues  to  receive  competitive  pressures  from  its
customers to grant longer  payment terms.  Management  will continue to focus on
this area to improve credit and collections efforts.


                                       10
<PAGE>



         Accounts  payable  increased  approximately  $1,179,000  for the  three
months  ended  September  30, 1996 as  compared  to a decrease of  approximately
$287,000 for the same period ended  September 30, 1995. The increase in accounts
payable in the current year is due  primarily to the growth in sales volume that
has dictated  additional  raw  material,  equipment,  and supply  purchases.  In
addition, efforts to maintain a low outstanding balance on the revolving line of
credit have contributed to the increase.

         Prepaid expenses and other assets  increased by approximately  $405,000
for the first quarter ended  September 30, 1996.  This  significant  increase is
primarily  the result of the  increase of prepaid  income taxes and deferred tax
assets in the current year.

     Approximately $370,000 in net cash was used in investing activities for the
first quarter ended September 30, 1996 as compared to approximately  $292,000 in
cash provided by investing activities for the corresponding quarter of the prior
year.  The primary  reason for this  change in  position is the  decrease in the
funds invested in DCT's marketable  securities  portfolio.  DCT invests funds in
equity  securities,  mainly listed on the New York and American Stock Exchanges,
and by policy, limits the amount of exposure in any one equity investment.  Such
investments  are  continually  monitored to reduce the risk of any adverse stock
market  volatility.  Cash not invested in  securities  is placed on account with
brokerage  firms,  which is swept daily into a federally  insured  money  market
account, or placed on account with a federally insured national bank.

         DCT utilized its line of credit to provide  approximately  $414,000 for
working  capital  needs  during the three months  ended  September  30, 1995 and
repaid  approximately   $182,000  in  long-term  debt.   Management  intends  to
selectively  utilize  its  line of  credit  to  fund  capital  expenditures  and
inventory purchases when needed, and expects to reduce the amount outstanding on
the line of credit as collections on sales are received.

         During the three month period  ended  September  30,  1996,  DCT's cash
needs were met  primarily  through  operations.  Long-term  liquidity  needs are
anticipated to be met through sales growth and separate financing  arrangements.
Management  anticipates  that it will continue to meet most  obligations as they
come due, and no vendor/supplier problems are expected.

Capital Resources
-----------------

         DCT  invested   approximately   $557,000  in  equipment  and  leasehold
improvements  for the first  quarter ended  September 30, 1996.  This amount was
larger than capital  expenditures during the corresponding  quarter of the prior
year.  The  current  quarter  expenditures  related  primarily  to  duplication,
loading,  packaging,  and leasehold improvements at DCT's Indianapolis facility.
DCT plans to continue to expand  current  operating  facilities at both the Fort
Lauderdale  and  Indianapolis  plants  in order to  fully  meet the high  volume
demands of the  retail-sell-through  market  and the fall  selling  season.  DCT
intends to finance these  expenditures  through  operations and through separate
financing arrangements.

Results of Operations
---------------------

         Overall growth in DCT's target markets led to continued sales growth in
the current  year.  Net sales  increased  approximately  30% from  $5,386,000 to
$7,020,000 for the three months ended September 30, 1995 and 1996, respectively.
Significant  sales increases were  experienced as orders were filled to meet the
holiday buying season demands.  As in the prior fiscal year,  management's focus
on the  "retail-sell-through  market" resulted in this sales surge.  This market
centers on sales of pre-recorded video tapes which are sold at the retail level.
DCT's  customer base has become  increasingly  dominated by the companies  which
distribute these  pre-recorded  videos to the retail  sell-through  market,  and
management  has  positioned  DCT to  capitalize  on this  portion  of the  video
industry.


                                       11
<PAGE>






     Operating  profit  did  not  match  the  increased  sales,  declining  from
approximately  $291,000  (5.4% of net sales) to $168,000 (2.4% of net sales) for
the three months ended September 30, 1995 and 1996, respectively. The decline in
operating  profit is due to  increases  in cost of goods  sold and  general  and
administrative expenses,  particularly related to legal fees associated with the
shareholder derivative lawsuit ( approximately $96,000 ).

         Cost of goods sold, as a percentage of sales,  increased to 79% for the
three  months ended  September  30, 1996 as compared to 76% for the three months
ended  September  30,  1995.  The  increased  cost of  goods  sold  is  directly
attributable  to increased  usage of temporary  labor and the cost of offloading
excess production volumes. Use of these outside sources was unavoidable in order
to complete  customer orders that exceeded  existing capacity at both facilities
-- due to unexpected delays in the installation of new capacity.  Management has
already taken the steps necessary to provide for the increase in sales volume by
providing for new duplication and packaging  equipment.  In addition,  increased
consultant fees were incurred in the current period as hands-on  outside experts
were  utilized to accelerate  the  implementation  of expanded  capacity and new
management methods in the Indianapolis facility. Management recognizes that cost
containment through efficiency gains and productivity  improvements is essential
to DCT s continued profitable growth.

         Selling  expenses  increased in relative  proportion to the increase in
net sales for the three months ended  September 30, 1996. As a percentage of net
sales, selling expenses remained relatively consistent,  decreasing from 4.6% to
4.4% for the three months ended September 30, 1995 and 1996, respectively.

         General and  administrative  expenses  increased  for the first quarter
ended  September  30,  1996 to  approximately  $624,000  (8.8% of net  sales) as
compared to approximately  $460,000 (8.5%) for the  corresponding  period of the
prior year. The slight  increase in the percentage of net sales is  attributable
to salary  increases and additional  legal fees incurred in connection  with the
shareholder derivative lawsuit.

         DCT  realized  income from  securities  transactions  of  approximately
$71,000  for  the  three  months  ended   September  30,  1996  as  compared  to
approximately $116,000 for the corresponding period of the prior year. The gains
were from investment  transactions  associated with DCT's marketable  securities
portfolio. DCT invests funds in equity securities, mainly listed on the New York
and American Stock  Exchanges,  and by policy,  limits the amount of exposure in
any one equity investment.  Such investments are continually monitored to reduce
the risk of any adverse stock market volatility. Cash not invested in securities
is placed on account with brokerage firms, which is swept daily into a federally
insured  money market  account,  or placed on account  with a federally  insured
national bank.

         Interest expense decreased from approximately  $176,000 to $109,000 for
the three months ended September 30, 1995 and 1996, respectively.  This decrease
is due to decreased borrowings on DCT's line of credit.




                                       12
<PAGE>




                                     PART II


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

The Company filed a current report on Form 8-K with the Commission on August 21,
1996  reporting the  dismissal of Coopers & Lybrand  L.L.P.  as its  independent
auditors and the  appointment of S.W.  Hatfield + Associates as its  independent
auditors  effective  as of August 14, 1996.  On  September 5, 1996,  the Company
filed a current  report on Form 8-K/A with the  Commission  amending its current
report on Form 8-K which included a letter from Coopers & Lybrand  L.L.P.  dated
September 5, 1996 addressed to the Commission.






                                       13
<PAGE>



                                   SIGNATURES


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


S.O.I. INDUSTRIES, INC.


              /s/ Kevin B. Halter
By:  ________________________________                 Date:  November 5, 1996
       Kevin B. Halter, President



             /s/ Tim C. Hafer
By: ________________________________                  Date: November 5, 1996
       Tim C. Hafer, Vice President and
          Chief Financial Officer