SECURITIES AND EXCHANGE COMMISSION
                     Washington, DC. 20549
                                
                                
                          FORM 10-QSB
                                
(Mark One)
[X]    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE  
SECURITIES EXCHANGE ACT OF 1934.

[ ]    TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES  
EXCHANGE ACT OF 1934.
                                
               For the Quarter Ended August 31, 1997
                                
                 Commission file number 0-28506
                                
             AMERICAN DIGITAL COMMUNICATIONS, INC.
(Exact name of small business issuer as specified in its charter)
                                
                                

              Wyoming                       13-3411167
      (State of Incorporation)        (IRS. Employer ID No.)
                                
                                
        5575 DTC Parkway
   Suite 355, Englewood, Colorado             80111
  (Address of Principal Executive           (Zip Code)
             Offices)
                                
                                                    
                         (303) 770-8283
          (Registrant's Telephone No. incl. area code)
                                
                                
                                
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 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 __
                                
                                               
The number of shares outstanding of each of the Registrant's class of common
equity, as of August 31, 1997 are as follows:
                                
                                             
      Class of Securities                  Shares Outstanding
      -------------------                  ------------------
 Common Stock, $.0001 par value                24,468,407
                                
                               
   This quarterly report on Form 10-QSB contains  14   pages.
    
                      
                     
                             INDEX
                                
                                
      PART I       Financial Information
                                
         Item 1.        Financial Statements
   
                        Balance Sheet...................   3

                        Statements of Operations........   5

                        Statements of Cash Flows........   6

                        Notes to Financial Statements...   7


         Item 2.        Management's Discussion and
                        Analysis or Plan of Operations..   10

 
      Cautionary Statement Pursuit to Safe Harbor Provisions of the
      Private Securities Litigation Reform Act of 1995.
                                                               
                                                               
      PART II.          Other Information
                                                               
         Item 6.        Exhibits and Reports on Form 8-K   14
                                                               
                          A)  Exhibit 27 Financial Data Schedule
                          B)  Form 8-K  -  None
                                                            
                        Signature........................  14

 

                 AMERICAN DIGITAL COMMUNICATIONS, INC.
                            BALANCE SHEET
                             (UNAUDITED)


ASSETS                                            Aug. 31,     February 28,
                                                    1997           1997
                                                  --------     ------------
Current Assets:
  Cash                                              11,261         31,701
  Accounts receivable                                    -         21,110
  Notes Receivable                                   8,548          8,548
  Inventories                                      201,143        469,415
  Radio tower equipment and related
    licenses held for sale                       2,106,662      2,126,636
  Securities, free trading                         150,000              -
  Other current assets                               7,888          3,888
                                                 ----------     ---------- 
    Total current assets                         2,485,502      2,661,298

                                           
                                           
Property and equipment:
  Office equipment                                  50,052        125,052
  Furniture and fixtures                            26,082         26,082
                                                 ----------     ----------
                                                    76,134        151,134

    Less:    Accumulated depreciation              (69,328)      (142,286)
                                                 ----------     ----------
      Net property and equipment                     6,806          8,848



Other assets:   
  Distribution rights, net of amortization         693,948      1,344,599

                                                 ----------     ----------
    TOTAL ASSETS                                 3,186,256      4,014,745
                                                 ==========     ==========

                      
            See accompanying notes to financial statements.



                 American Digital Communications, Inc.
                           Balance Sheet
                            (UNAUDITED)
                      
                      
LIABILITIES AND SHAREHOLDERS' EQUITY                Aug. 31,    February 28,
                                                      1997          1997
                                                    --------    ------------
Current Liabilities:
  Accounts payable                                   78,168         149,531
  Accounts payable - related parties                 18,273           9,510
  Accrued payroll and payroll taxes                       -           4,933
  Accrued interest - related parties                248,471         248,471
  Accrued warranty liability                          7,802          10,373
  Notes payable                                      40,000          50,370
  Notes payable - related parties                    10,370          10,370
  Current portion of capital lease obligations        6,195           6,195
  Current portion of long term note                 756,077         806,077
                                                  ----------      ----------
    Total current liabilities                     1,165,356       1,295,460


Long term debt:
  Capital lease obligations                           3,047           5,597
  Long term note payable - licensee                  50,295               -
  Long term note payable - related party            348,575         535,299
                                                  ----------      ----------
    Total long term debt                            401,917         540,896


Shareholders' equity:
  Common stock, $.0001 par value; Unlimited
    shares authorized, issued and outstanding
    24,468,407 shares, issued and outstanding
    23,627,431 on February 28, 1997.                  2,447           2,363
  Additional paid in capital                      7,747,767       7,747,767
  Common stock subscribed                            93,300          93,300
  Accumulated deficit                            (6,224,531)     (5,665,041)
                                                 -----------     -----------
    Total shareholder's equity                    1,618,983       2,178,389


                                                 -----------     -----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY        3,186,256       4,014,745
                                                 ===========     ===========


            See acompanying notes to financial statements.



                American Digital Communications, Inc.
                     Statements of Operations
                            (UNAUDITED)
                      
                      
                      
                                   Six Months Ended      Three Months Ended
                                       Aug. 31,                Aug. 31,
                                   1997       1996        1997        1996
                                   ----       ----        ----        ----
Revenue
  Equipment sales                113,275    337,070         254     138,685
  220  MHz equip. /
    Distribution rights          355,000          -     240,000           -
                                --------   ---------   ---------   ---------
      Total revenue              468,275    337,070     240,254     138,685


Costs and expenses:
  General and administrative     215,240    344,310      45,112      179,195
  Cost of equipment sales         81,667    384,819         254      177,598
  Cost of 220 MHz equip./
    Distribution rights          712,482          -     616,875            -
  Depreciation                    18,276     34,692       1,021       23,119
  Consulting fee / retainer            -     20,000           -       20,000
                               ----------  ---------   --------     ---------
    Total costs and expenses   1,027,665    783,821     663,262      399,912

                               ----------  ---------   --------     --------- 
Net Loss:                       (559,390)  (446,751)   (423,008)    (261,227)
                               ----------  ---------   --------     ---------
Net loss per share of
  common stock                     (0.02)     (0.03)      (0.02)       (0.02)
                               ----------  ---------   ---------    ---------
Weighted average number of
 common shares outstanding    23,627,431  14,650,845   23,907,756  14,898,946
                              ----------- ----------   ----------  ----------


             See accompanying notes to financial statements.



                American Digital Communications, Inc.
                      Statements of Cash Flows
                            (UNAUDITED)
                  
                      
Increase (Decrease) in Cash                              Three Months Ended
                                                              Aug. 31,
                                                          1997        1996
                                                          ----        ----
Net cash used in operations
  Net loss                                             (423,008)   (307,229)
  Adjustments to reconcile net loss to
  net cash used in operating activities:      
    Depreciation and amortization                         1,021      23,119
    Loss on sale of fixed assets                        376,875           -
    Issuance of stock for interest expense                    -           -
    Issuance of common stock for services and
      in conjunction with asset purchase agreements           -           -
    Changes in:
      Accounts receivable                                 2,952      55,689
    Inventory                                               254     144,170
    Other current assets                               (150,000)    (12,833)
    Accounts payable                                       (195)     93,919
    Accrued payroll and payroll taxes                         -           -
    Other accrued liabilities                           (52,316)    (83,483)
                                                       ---------    --------
Net cash used in operating activities                  (244,417)    (86,648)
                                                       ---------    --------
Cash flows from investing activities:
  Purchase of office and radio tower equipment                -    (897,000)
  License expenditures                                        -           -
  Deposits - payments                                         -           - 
  Proceeds from sale of fixed assets                    240,000           -
                                                       ---------   ---------
Net cash provided by (used in) investing activities     240,000    (897,000)
                                                       ---------   ---------
Cash flows from financing activities:
  Proceeds from sale of common stock, net                     -     899,775
  Payments of capital lease obligations                  (1,275)      2,406
  Payments of note payable                                    -         623
                                                       ---------   ---------
Net cash provided by (used in) financing activities:     (1,275)    902,804
                                                       ---------   ---------
Increase (decrease) in cash                              (5,692)    (80,844)
                                                       ---------   ---------
Cash,  beginning of period                               16,953     116,726
                                                       ---------   ---------
Cash,  end of period                                     11,261      35,882
                                                       ---------   ---------


          See accompanying notes to financial statements.



               American Digital Communications, Inc.
                      
                  Notes to Financial Statements
                        August 31, 1997

Basis of Presentation.
----------------------

  The unaudited financial statements  and related notes have
been prepared in accordance with the rules and regulations of the
Securities and Exchange Commission. Accordingly, certain information
and footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles
have been omitted pursuant to such rules and regulations. In the opinion
of management, all adjustments considered necessary for a fair
presentation have been included. The accompanying financial
statements and related notes should be read in conjunction with the
audited financial statements of the Company, and notes thereto,  for the
fiscal year ended February 28, 1997. The accounting policies utilized in
the preparation of the financial statements herein presented are the
same as set forth in the Company's annual financial statements.


Business.
---------

  Certain matters discussed in this Quarterly Report may
constitute forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995 (the "Reform Act") and as such
may involve risks and uncertainties. These forward-looking statements
relate to, among other things, expectations of the business environment
in which the Company operates, projections of future performance,
perceived opportunities in the market and statements regarding the
Company's goals. The Company's actual results, performance, or
achievements expressed or implied in such forward-looking statements
may differ. For discussion of the factors that might cause such a
difference, see Item 2 Management's Discussion and Analysis or Plan of
Operations.


Overview.
---------

  American Digital Communications, Inc. ("American Digital",
"ADC" or the "Company") is a corporation organized June 30, 1993
under the laws of  the state of Wyoming. The Company's executive
offices are located at 5575 DTC Parkway, Suite 355, Englewood,
Colorado 80111, and its telephone number is (303) 770-8283, fax (303)
770-8315 and web address www.adcm.com.


  American Digital Communications (ADC) is the successor to
Mont Rouge Resources, Inc., a New York corporation organized on
March 19, 1987. The company completed a small public offering in 1987
and in March of 1988 acquired American Fidelity Holding Corporation, a
Delaware corporation, in a stock-for-stock exchange. The acquisition
was rescinded in 1989, and the company was dormant until early 1993. 
Mont Rouge Resources redomiciled to the State of Wyoming on
February 14, 1993 . At this point, management made the decision to
enter the wireless communications business and became active in June,
1993.


  The company's initial strategy was to acquire wireless
communications 800 MHz analog licenses with the intent of eventually
implementing an Enhanced Specialized Mobile Radio (ESMR) service.
Even though the company completed agreements for approximately nine
hundred 800 MHz channels, it was not successful in securing sufficient
contiguous spectrum in any market. The reason was simple. During this
time Nextel, OneComm, Dial-Call, Pittencrief and others were acquiring
the 800 and 900 MHz licenses and beginning to implement 800 MHz
analog to digital conversion strategies utilizing Motorola's ESMR
technology (later called iDEN).   


  Mr. Gene Klawetter joined the Company in 1994 as President /
CEO. Given the shortage of 800 MHz licenses and the accelerated
conversion of the 800 MHz spectrum to digital he decided to amicably
dissolve ADC's pending agreements for tentatively acquiring these
licenses, put the company in order and to pursue aggregation of 220
MHz licenses. Strategically ADC planned to implement the 220 MHz
spectrum as an "off-load" platform for low cost analog dispatch users,
users that were being squeezed out of the 800 MHz playing field as a
result of the fast-paced digital conversion which was taking place. The
strategy was subsequently proven to be excellent as the industry's need
for alternative voice dispatch spectrum became paramount.


220 MHz Operations.
-------------------

  In 1991 the FCC had granted, through lottery, 3,300 licenses
and 4 national licenses in the 220 MHz spectrum. An early lawsuit,
however, brought by a disgruntled potential licensee froze any activity in
the roll-out of the 220 industry. By 1994, the lawsuit was settled and 220
was launched in early April. ADC proceeded to acquire 500+ channels of
220 MHz spectrum and concurrently pursued funding to build out the
licenses. 


  The funding, it turned out, was extremely difficult to find.
Investment capital that was available to the wireless industry was finding
its way to the highly visible 800 MHz-based digital mobile radio
implementation. At the same time the FCC continued to change the
construction deadlines for 220 by granting extensions, some as short as
four months, a period of time so brief it discouraged many manufacturers
from taking the risk to make enough equipment to satisfy the potential
construction demand. Motorola, a significant player in any wireless
market elected not to develop equipment for 220 MHz, an unheard of
occurrence which caused the investment community to conclude, "if
Motorola is not in 220, it must not be very good or very significant." This,
among other factors, became major impediments to finding timely
funding support for construction and operation of 220 MHz.


  As a result of the dynamics occurring throughout the wireless
industry, 220 development was slow. To date, minimal national license
build-out has occurred. It is estimated that less than 750 of the original
3,300 licenses have been built. The reason for this poor performance
was lack of funding brought about by 1) construction deadline issues, 2)
insufficient demand to generate product availability, 3) delay caused by
the original lawsuit, 4) the spectrum auction process, 5) available funds
diverted to other wireless activity, i.e. PCS, Digital Paging, IVDS, etc.,
and 6) a final set-in-stone construction deadline of 8/17/96. The Federal
Government , as a result of item 6, will recapture a significant number of
un-built licenses. In the late fall of 1997, the FCC will conduct 220 MHz
spectrum auctions. This move will, in all probability, place a premium on
the price of the new 220 MHz licenses awarded in the auction of which
only a few large participants can take advantage.


  Nevertheless, the 220 MHz spectrum will be exploited and will
eventually be successful... but only for a few larger aggregators who are
emerging with the bulk of the existing licenses and who will have deep
enough pockets to not only compete in the upcoming auctions but have
sufficient capital to operate large networks.


  While ADC was unable to construct as many licenses as it had
targeted during this time, the Company accomplished a great deal.
Twenty three licenses for a total of 115 channels were constructed and
are operational. ADC was able to establish a strategic relationship with
Simmonds Capital Ltd. SCL is the parent organization of Simmonds
Electronics (of Canada). Midland International, Helix, Simmonds
Distribution, PowerTel and a principal in Intek Diversified Inc. Intek is a
merger between Securicor Radiocoms Ltd. (a significant manufacturer of
220 MHz radio equipment), RoamerOne (a large 220 MHz aggregator),
and Midland International Corp. (a distributor of wireless radio equipment
in the US) and is the largest 220 MHz operator in the United States. SCL
and / or its affiliates own approximately 30% of ADC's stock and has
been instrumental in ADC's success in building out the 23 systems. To a
degree, ADC has become operational, even though cash flow is not yet
at an acceptable level.

Distribution Rights Operations. 
-------------------------------

  In November 1995, the Company became exclusive licensee in
the US for the next ten years for distribution of 800 MHz Midland LTR
Radios. This activity enabled the Company to become operational in
January 1996.


  On October 1, 1996, the Company entered into a Letter of Intent
to acquire international distribution rights for the Midland Land Mobile
Radio (LMR) products from Midland International Limited, a wholly
owned subsidiary of Simmonds Capital Limited (SCL). Under the terms
of the agreement, the primary markets include most of Western Canada,
Mexico, South America, The Pacific Rim, Australia and Southeast Asia.
This transaction was consummated on November 8, 1996. As a part of
the agreement, the Company could receive up to $1,000,000 in credit for
the purpose of acquiring inventory. To date, the Company has signed
one three year note for $348,573. 
                                

  The terms of the November 8, 1996 acquisition calls for the
Company to acquire the distribution rights to the Midland LMR products
for the indicated international markets with a combination of 1,750,000
shares of the Company's common stock which was issued under
Regulation S guidelines with 41 day holding period and 3,000,000
shares of Regulation S common stock with a 12 month holding period.
For accounting purposes the restricted common stock was entered on
the books at $367,500  and $630,000 respectively. 


  In the quarter ended August 31, 1997, the Company completed
the sale of its distribution rights of Midland LMR products in Mexico,
South America, Pacific Rim, Australia, New Zealand, Thailand and
Southeast  Asia. The transaction was completed with the exchange of
120,000 free trading shares of Intek Diversified common stock and the
distribution rights. At the time of this transaction, Intek stock was valued
at $2.00 per share. The causal effect of this necessary cash
management strategy was a $390,000 write-down of the asset.
Concurrently, the Company's option to acquire Midland Europe Limited
expired on June 30, 1997. 


Due to Related Party.
---------------------

  A significant shareholder of the Company, loaned the Company
$75,000 on March 15, 1994. This year, the Company signed a new note
due in 1997. As of August 31, 1997 the outstanding balance on the 9%
interest bearing note was $10,370 plus accrued interest.


  In December 1995, the Company constructed its first 13 220
MHz communications systems and financed the systems for $1,047,900
through Ventel, Inc. In February 1996, the Company sold three of the
financed, constructed systems. In April 1997, the Company also sold
one system and currently owes Ventel, Inc. $756,077 plus interest, a
total of approximately $1,004,548. The Company plans to retire this note
from the proceeds of its Intek  sale of the balance of  its constructed 220
MHz systems.


  In August 1996, the Company financed and constructed 13
additional "turn-key" communication systems through Securicor Ltd. The
terms were $897,000, half in cash, half in common stock (1,150,000
shares at $0.39). As a part of the terms of sale, this stock will be
returned to the Company upon closing of the transaction with Intek
Diversified.                    
                                  

  By June 1997, the Company executed the purchase option
under the Management Agreement of all 22 constructed licenses. All
licenses were transferred into the Company's name as of September 19,
1997.




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

  On April 15, 1997, the Company and Intek Diversified
Corporation (Intek) of Torrance, California reached an agreement and
entered into a letter of intent  by which Intek will acquire ADC's 22
constructed 220 MHz systems.


  Under the terms of the contract, Intek will pay ADC $75,000 at
closing. Part of the purchase price will be paid by returning to the
Company 1,150,000 shares of ADC common which was issued in
August, 1996 at $0.39 per share as partial payment to finance the
acquisition of Securicor transmitter equipment. Additionally, ADC will
receive 2.6 million shares of Ventel, Ltd. stock currently held by Intek at
$0.11 per share or $286,000. The total value of this transaction, as
stated in the Agreement, is approximately $3.7 million.  

                      
                      
                 Transaction                                Amount
                 -----------                                ------
Gross sale at $168,000 per system paid as follows:
                      
    Cash                                                     75,000
    1,150,000 shares ADC @ $0.39 per share                  448,500 
    2,600,000 shares Ventel @ $0.11 per share               286,000
    759,473 shares Intek Diversified @ $3.80 per share    2,886,500
                                                          ---------
Total value as stated in the Agreement:                   3,696,000
                                                          =========

                                           
  As noted, Intek will issue stock for payment of the net balance
based upon a share price of $3.80. At the time of actual closing, the
share price could be less than the $3.80 strike price. 

  The Company will possibly attempt to settle the 3 year, 8%
inventory note which was negotiated with Simmonds Communications
Ltd. (SCL) in November 1996.  The Company will strive to settle debt
with  stock held by the Company. The Company will net a significant
number of Intek shares which can possibly be leveraged for cash as
needed, depending on terms. However there can be no assurance of
this until done.

  The Company entered the wholesale radio business as an
adjunct to that of operating and providing radio dispatch services. With
the decision to exit the 220 MHz market it also followed to somewhat
modify ADC's original strategy for  the land mobile radio product
distribution business. After careful consideration ADC made the decision
to sublicense territories and deploy certain assets in order to more
aggressively pursue other opportunities. 
                      

                      
                                                                Original
          Assets                    Disposition                Book Value
          ------                    -----------                ----------
Exclusive US marketing rights       For sale or sun-license     $360,000
to Midland 800 MHz LTR land
mobile radios

Exclusive Midland LMR marketing     Territory sub-licensed,     $367,500
rights to certain western             option to own
Canadian provinces
                      
                      
  *  The Company is presently receiving modest quarterly royalty
       payments in conjunction with this sub-license agreement.


  The Midland marketing rights will be sub-licensed or sold on a
negotiated basis with either 3 or 5 year payouts. In the transaction
currently under negotiation the structure involves a cash down payment
with ownership retained by ADC and a royalty paid by the purchasing
party to ADC for a fixed term. The purchaser will have an option to buy
at the end of that term with the royalty payments applied to and
deducted from the principal. At the end of the term, it is anticipated that 
the amortized book value will be such that the sale is favorable to ADC.
While it is expected that the disposition of the above assets will go
according to plan and be favorable to the Company, there can be no
assurance that such will be the case. 


  Upon completion of the 220 MHz liquidation and full deployment
of the remaining assets, the Company's profile will include reduction of
shares outstanding by 1.150M. The Company will hold as much as 2.6
million shares of Ventel stock and, after satisfying the Ventel debt, will
hold approximately  500K shares of Intek stock. Further, the company
will have all of its assets deployed under some form of revenue
agreement with the revenue applied against a predetermined purchase
price. With the completion of  the asset deployment the Company will
have, ostensibly, fully disengaged from the radio business. 


  The decision is also consistent with the Company's near-term
objectives of employing assets in such a way as to  realize immediate
operating results by generating 1) short-term cash and 2) ongoing
revenue streams.


  Concurrently ADC will look to acquire an existing operating
company using assets realized from the sale of the constructed 220
systems. While the Intek stock has a twelve-month hold the Company
would expect to leverage the stock, if necessary, to accomplish the
acquisition. ADC has been and continues to look at possible acquisition
alternatives.


  The Company feels confident it will be able to find a fit based on
what it has to offer and what potential candidates are seeking. However,
there can be no assurance that the Company can find and implement an
acceptable core business strategy in a timely manner.


  On September 10, 1997, the Company announced its Letter of
Intent  to acquire a majority of the assets of SCL Wireless Inc., whose
principal business includes wireless broadband communications
services. Additionally, included in the acquisition are the world-wide
distribution rights and all assets of TrackPower  and its associated
operations.


  With TrackPower, the Company will become an applications
specific content provider delivering a digital image signal throughout
North America via wireless broadband communications. The specific
application involves live horse racing and the opportunity to wager via
interactive communications utilizing on-premise television i.e.. home,
track, public establishment or theatre. The planned wireless broadband
communications footprint will generally cover all of North America.


  As called for in the Letter of Intent, the Company would secure
equity capital of approximately $1,000,000 in the form of a convertible
Preferred Stock, convertible into common stock at a price of $1.00 per
share. The contemplated investment, would be made by a consortium of
participants involved in the horse industry and its associated activities.


  At the filling date of this report, this letter of Intent has not been
consummated. There can be no assurance this will be accomplished.


Liquidity and Capital Resources. 
--------------------------------

  Cash on hand at  quarter end  was nominal in light of the
Company's acquisition plan. During the quarter ended August 31, 1997,
the Company raised $240,000 through sale of  its exclusive distribution
rights for Midland LMR products in Mexico, South America, Pacific Rim,
Australia, New Zealand, Thailand and Southeast Asia. 


  Through August 1997, the Company has executed the purchase
options under the 220 MHz Management Agreements for all constructed
licenses for their sale to Intek Diversified Corporation. Each of these 22
220 MHz communication systems are constructed and operational. In
the main, most licensees accepted stock as payment for the license.
However, five licensee did accept a 3 year note for $50,295 as a part of
this activity. 

  Under the terms and conditions of the Management Options Agreement
entered into by each licenseholder, the Company was obligated to certain
construction payments to each licensee. In addition, the Agreement
specified a purchuse option payment due the licensee should the Company
wish to exercuise its purchuse option rights. In order to sell the systems
to Intek Diversified, all purchase option were exercised.

  The construction and purchase option payments were made in a combination
of long term notes, cash, Company stock and Intek Diversified shares. A
breakout of the total payments is as follows. 

      Construction Payments                      65,000
      Purchase Option Payments                  261,000
                                                -------
        TOTAL                                   326,000

      Cash                                       48,000
      Notes                                      50,000
      Intek Shares to be Isuued*                 42,601
        $ Value of Shares                       138,000
      ADC Shares Issued                         331,942
        $ Value of Shares                        90,000
                                                -------
        TOTAL                                   326,000

  *  Shares to be issued to licensees as soon as licenses are transferred 
     to Intek Diversified.


  Although the Company has been  operational since January of
1996, historical lack of operating cash flow has meant that it has been
dependent on sales of its securities, borrowings, leasehold financing or
other extensions of credit. The Company intends to raise additional
capital in the current fiscal year, either through the sale of equity
securities or a combination of equity sales, borrowings and leasehold
financing as needed according to the Company's new line of business
plan. Market  conditions will dictate what the Company can do in this
regard.


Financial Conditions and Results of Operations.
-----------------------------------------------

  During the quarter ended August 31, 1997, total assets
decreased from $3,665,254 to $3,186,256 and shareholders' equity
decreased from $2,042,007 to $1,618,983. The ratio of current assets
versus current liabilities is 2:1. Cash on hand at August 31, 1997 was
approximately $11,000. The Company expects this to change radically
as it sheds its current assets as discussed earlier. It is anticipated that
this will be of relative short duration with substantially greater revenues
realized from the acquisition of a new line of business. While the
Company believes this to be the direction it will take, there can be no
assurances it will happen as planned.
 

  The Company incurred a loss of $423,008 during the quarter
ended August 31, 1997. The activities during the fiscal quarter ended
were mainly part of the sale of the Company's Distribution Rights of
Midland LMR products in Mexico, South America, Pacific Rim, Australia,
New Zealand, Thailand, and Southeast Asia.  
                      
                      
                      
              CAUTIONARY STATEMENT PURSUANT TO SAFE HARBOR
           PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM
                             ACT OF 1995
                 American Digital Communications, Inc.
                      
                      
  This report contains certain statements of a forward-looking
nature relating to future events or the future financial performance of the
Company. Investors are cautioned that such statements are only
predictions and that actual events or results may differ materially. In
evaluating such statements, investors should specifically consider the
various factors which could cause actual results to differ materially from
those indicated in such forward-looking statements. The most important
factors that could cause actual results to differ from those expressed in
the forward-looking statements include, but are not limited to the
following:

  -  The failure of the Company's ability to close the current outstanding
       letter of intent.

  -  The Company's inability to launch its new line of business as
       planned.

  -  The inability to find a high technology Company for purchase,
       acquisition, or merger.

  -  The risk of business interruption arising from the Company's
       dependence on finding a new business.

  -  The Company's ability to manage potential expansion of operations.

  -  The Company's ability to attract and retain key personnel.

  -  The Company's ability to respond to rapid technological changes
       within its sphere of interest or                   influence.

  -  Changes in rules and regulations of the Federal Communications
       Commission.

  -  Changes in economic conditions affecting the Company's customers. 


                      
             (Remainder of page left intentionally blank)


PART II.     Other Information


Item 6.      Exhibits and Reports on Form 8-K        

Exhibits.    None. 

EX-27        Financial Data Schedule

Form 8-K     None.



                             SIGNATURES
                             ----------

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


                      
                      
DATE:   OCTOBER 14, 1997               BY:
                                           /s/   R. Gene Klawetter
                                          -----------------------------
                                                 R. Gene Klawetter
                                             President / CEO / Director
                      
                      
                      
DATE:   OCTOBER 14, 1997               BY:
                                          /s/   Daniel M. Smith
                                          -----------------------------
                                                Daniel M. Smith
                                        Acting Chief Financial Officer,
                                     Controller, Chief Accounting Officer