<PAGE>
 
                                 UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION

                            Washington, D.C.  20549

                                   FORM 10-Q

  X            Quarterly Report Pursuant to Section 13 or 15 (d)
 ---               of the Securities Exchange Act of 1934

               For the Quarterly Period Ended December 31, 1997

                                      or

 ___          Transition Report Pursuant to Section 13 or 15 (d)
                    of the Securities Exchange Act of 1934

                For the Transition Period from _____ to _____
 
                          Commission File No. 0-19614


                                H.D. VEST, INC.
            (Exact name of registrant as specified in its charter)

                     Texas                        75-2154244
      ---------------------------------       --------------------
       (State or other jurisdiction of         (IRS Employer ID.)
        incorporation or organization)

         6333 North State Highway 161, Fourth Floor, Irving, TX 75038
             (Address of principal executive offices and zip code)

Registrant's telephone number, including area code (972) 870-6000



Indicate by check  mark  whether  the registrant (1) has filed all reports
required by Section 13 or 15(d) of the Securities Exchange Act of  1934  during
the  preceding 12 months, and (2) has been subject to such requirements for the
past 90 days.

                             Yes  X       No
                                -----       -----       
                                        
                                        
Number of shares of the registrant's Common Stock outstanding as of January 31,
1998: 5,423,341.

                                       1
<PAGE>
 
                                H.D. VEST, INC.

                                     INDEX



PART I.  Financial Information                           Page No.
         ---------------------                           --------

         Item 1.  Financial Statements (Unaudited)

              Consolidated Statements of Financial
               Position--December 31, 1997 and
                September 30, 1997                            3-4

              Consolidated Statements of Operations--
                Three Months Ended December 31, 1997 and
                 December 31, 1996                              5

              Consolidated Statements of Cash Flows--
                Three Months Ended December 31, 1997 and
                December 31, 1996                               6

              Notes to Consolidated Financial
               Statements                                    7-10


         Item 2.  Management's Discussion and Analysis of
                   Financial Condition and Results of
                   Operations                               11-13

PART II. Other Information
         -----------------

         Item 1.  Legal Proceedings                            14

         Item 6.  Exhibits and Reports on Form 8-K             14


              Signatures                                       15

                                       2
<PAGE>
 
PART I.  FINANCIAL INFORMATION
------------------------------

Item 1.  Financial Statements (Unaudited)
-----------------------------------------


                                H.D. VEST, INC.

                 CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

                                    ASSETS

<TABLE>
<CAPTION>
 
 
                                        December 31,  September 30,
                                            1997           1997
                                        (Unaudited)
                                        -----------   ------------- 
<S>                                     <C>            <C>
 
Current assets:
  Cash and cash equivalents               $ 5,045,185   $ 6,384,992
  Commissions and accounts
    receivable                              6,325,999     6,642,200
  Notes receivable - related parties          365,754       590,320
  Receivable from affiliate                   418,212       142,145
  Prepaid expenses                            571,619       503,738
                                          -----------   -----------
 
    Total current assets                   12,726,769    14,263,395
                                          -----------   -----------
 
Property and equipment, net
  of accumulated depreciation
  of $1,287,104 at December 31,
  1997, and $1,485,366 at September
  30, 1997                                  2,662,518     2,755,457
 
Notes receivable - related parties          2,063,694     2,127,613
 
Other assets                                1,207,584       601,166
                                          -----------   -----------
 
                                          $18,660,565   $19,747,631
                                          ===========   ===========
 
</TABLE>

       The accompanying notes are an integral part of these consolidated
                             financial statements

                                       3
<PAGE>
 
                                H.D. VEST, INC.

                 CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

                   LIABILITIES AND SHAREHOLDERS' INVESTMENT

<TABLE>
<CAPTION>
 
 
                                       December 31,  September 30,
                                           1997           1997
                                       (Unaudited)
                                       -----------   ------------
<S>                                   <C>            <C>
Current liabilities:
 Accounts payable and accrued
   expenses                              $3,258,358   $ 3,930,651
 Amounts due on clearing
   transactions                             462,839       539,538
 Commissions payable                      4,542,388     4,738,908
                                         ----------   -----------
 
Total current liabilities                 8,263,585     9,209,097
                                         ----------   -----------
 
Obligations under capital leases,
 excluding current installments           1,142,273     1,016,257
 
Other noncurrent liabilities              1,558,857     1,323,375
 
Unearned revenues                           112,315     1,150,341
 
Shareholders' investment:
 Preferred stock, $6 par value;
  250,067 shares outstanding              1,500,402     1,500,402
 Common stock, $.05 par value;
  100,000,000 shares authorized;
  5,423,341 issued and outstanding          271,167       271,167
 Additional paid-in capital               5,113,334     5,113,334
 Retained earnings                          698,632       163,658
                                         ----------   -----------
 
   Total shareholders' investment         7,583,535     7,048,561
                                         ----------   -----------
 
                                        $18,660,565   $19,747,631
                                        ===========   ===========
 
</TABLE>


       The accompanying notes are an integral part of these consolidated
                             financial statements

                                       4
<PAGE>
 
                                H.D. VEST, INC.

                     CONSOLIDATED STATEMENTS OF OPERATIONS
                                  (Unaudited)


<TABLE>
<CAPTION>
 
 
                               Three Months Ended  December 31,
                               --------------------------------
                                       1997         1996
                                    -----------  -----------
<S>                                 <C>          <C>
 
Revenues:
  Commissions                       $19,369,198  $13,887,594
  Portfolio management fees           3,613,388    2,343,272
  Marketing and education fees        2,531,371    2,059,645
  Interest and other                    612,016      436,946
                                    -----------  -----------
 
    Total revenues                   26,125,973   18,727,457
                                    -----------  -----------
 
Expenses:
  Commissions                        13,641,029    9,622,023
  Portfolio management fees           2,340,369    1,446,908
  General and administrative          6,320,478    3,954,972
  Representative development          2,337,219    1,729,542
  Representative recruiting             554,396      315,885
  Interest                               38,507       19,899
                                    -----------  -----------
 
    Total expenses                   25,231,998   17,089,229
                                    -----------  -----------
 
Net income before taxes                 893,975    1,638,228
 
Income taxes                            327,117      703,699
                                    -----------  -----------
 
    Net income                      $   566,858  $   934,529
                                    ===========  ===========

Net income per common share         $       .10  $       .17
                                    ===========  ===========

Weighted average number of
  common shares outstanding           5,423,341    5,423,341
                                    ===========  ===========
</TABLE> 


       The accompanying notes are an integral part of these consolidated
                             financial statements

                                       5
<PAGE>
 
                                H.D. VEST, INC.

                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                  (Unaudited)
<TABLE>
<CAPTION>
 
                                                   Three Months Ended December 31,
                                                  --------------------------------
                                                          1997           1996
                                                       -------------  ----------
<S>                                                    <C>            <C> 
CASH FLOWS FROM OPERATING ACTIVITIES:               
  Net income                                            $   566,858   $ 934,529
  Reconciliation of net income to                   
   net cash provided by operating activities:       
     Depreciation and amortization                          250,954     202,078
     Deferred tax provision                                       -     254,252
     Loss on sale of assets                                  38,072           -
  Changes in assets and liabilities:                
    Commissions and accounts receivable                     376,201     455,517
    Receivable from affiliate                              (276,067)    (34,527)
    Prepaid and other assets                                (67,881)    195,768
    Payable to officers and directors                        63,939     (50,000)
    Amounts due on clearing transactions                    (76,699)    (36,800)
    Accounts payable and accrued expenses                  (136,200)   (829,464)
    Commissions payable                                    (196,520)    176,127
    Unearned revenues                                    (1,038,026)   (701,110)
                                                        -----------   ---------
   Net cash provided by (used for)                  
    operating activities                                   (495,369)    566,370
                                                        -----------   ---------
CASH FLOWS FROM INVESTING ACTIVITIES:               
  Purchases of property and equipment                       (71,524)    (30,641)
  Additions to software development                        (564,613)    (10,900)
  Additions to other assets                                 (82,512)    (23,543)
  Proceeds from sale of assets                                5,317           -
                                                        -----------  ----------
   Net cash used for investing activities                  (713,332)    (65,084)
                                                        -----------  ----------
                                                        
CASH FLOWS FROM FINANCING ACTIVITIES:                   
  Preferred stock dividends                                 (31,884)    (31,884)
  Proceeds from deferred compensation plan                  235,482     113,761
  Advances on notes receivable-related parties             (421,653)   (397,805)
  Payments on notes receivable-related parties              646,199     347,402
Payments on capital lease obligations                      (559,250)    (89,586)
                                                        -----------  ----------
   Net cash used for financing activities                  (131,106)    (58,112)
                                                        -----------  ----------
                                                        
NET INCREASE (DECREASE) IN CASH                         
 AND CASH EQUIVALENTS                                    (1,339,807)    443,174
                                                        
CASH AND CASH EQUIVALENTS,                              
 September 30, 1997 and 1996                              6,384,992   6,734,846
                                                        -----------  ----------
                                                        
CASH AND CASH EQUIVALENTS,                              
 December 31, 1997 and 1996                              $5,045,185  $7,178,020
                                                        ===========  ==========
</TABLE>                                        

       The accompanying notes are an integral part of these consolidated
                             financial statements

                                       6
<PAGE>
 
                                H.D. VEST, INC.

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (Unaudited)



1)  Basis of Financial Statements

The accompanying unaudited consolidated financial statements have been prepared
in accordance with Rule 10-01 of Regulation S-X, "Interim Financial Statements",
and accordingly do not include all information and footnotes required under
generally accepted accounting principles for complete financial statements. The
financial statements have been prepared in conformity with the accounting
principles and practices as disclosed in the Company's Annual Report on Form
10-K for the year ended September 30, 1997. In the opinion of management, these
interim financial statements contain all adjustments (consisting only of normal
recurring adjustments) necessary for a fair presentation of the Company's
financial position as of December 31, 1997 and September 30, 1997, the results
of operations for the three month periods ended December 31, 1997 and 1996, and
the cash flows for the three month periods ended December 31, 1997 and 1996.
Results of operations for the interim period ended December 31, 1997, are not
necessarily indicative of the results that may be expected for the year ended
September 30, 1998. For additional information, refer to the consolidated
financial statements and footnotes included in the Company's Annual Report on
Form 10-K for the year ended September 30, 1997.

Certain reclassifications have been made to prior years' statements in order for
the amounts to be comparable with the current year presentation.

                                       7
<PAGE>
 
2)  Earnings per Share

In fiscal 1998, the Company adopted Statement of Financial Accounting Standards
No. 128 (SFAS No. 128), "Earnings per Share"(EPS). SFAS No. 128 requires
replacement of "primary" EPS with "basic" EPS and "fully diluted" EPS with
"diluted" EPS.  SFAS No. 128 requires previously reported EPS to be restated.
The adoption of SFAS No. 128 did not affect the Company's previously reported
EPS. The following tables show the calculation of basic and diluted EPS for the
three months ended December 31, 1997 and 1996, respectively.

 
<TABLE>
<CAPTION>
  For the Three Months Ended         Income           Shares         Per-Share
       December 31, 1997          (Numerator)     (Denominator)       Amount
-------------------------------  --------------  ----------------   ----------
<S>                              <C>             <C>               <C>
 
Net Income                            $566,858
Less: Preferred Dividend               (31,884)
                                      --------
 
Basic EPS:
  Income available to Common
   Stockholders                        534,974         5,423,341         $0.10
                                                                   -----------
 
Effect of Dilutive Securities:
  Options                                                 25,457
                                      --------         ---------
                                                       
 
Diluted EPS:
  Income available to Common
   Stockholders                       $534,974         5,448,798         $0.10
                                      --------         ---------   -----------
</TABLE>
                                                                                
Options to purchase 95,454 shares of common stock at $8.50 per share were
outstanding during the three months ended December 31, 1997 but were not
included in the computation of diluted EPS because the options' exercise price
was greater than the average market price of outstanding common shares.

250,067 shares of Convertible Preferred Stock was also outstanding during the
three months ended December 31, 1997 but were not included in the computation of
diluted EPS because the options' original purchase price is greater that the
average market price of outstanding common shares.

                                       8
<PAGE>
 
<TABLE>
<CAPTION>
  For the Three Months Ended         Income           Shares       Per-Share
       December 31, 1996          (Numerator)     (Denominator)      Amount
-------------------------------  --------------  ----------------  ---------
<S>                              <C>             <C>               <C>
 
Net Income                            $934,529
Less: Preferred Dividend               (31,884)
                                      --------
 
Basic EPS:
  Income available to Common
   Stockholders                        902,645         5,423,341         $0.17
                                                                   -----------
 
Effect of Dilutive Securities:
  Options                                                 11,440
                                      --------         ---------
 
Diluted EPS:
  Income available to Common
   Stockholders                       $902,645         5,434,781         $0.17
                                      --------         ---------   -----------
</TABLE>
                                                                                
Options to purchase 373,454 shares of common stock at prices ranging from $4.38
to $8.50 per share were outstanding during the three months ended December 31,
1996 but were not included in the computation of diluted EPS because the
options' exercise price was greater than the average market price of outstanding
common shares.

250,067 shares of Convertible Preferred Stock was also outstanding during the
three months ended December 31, 1996 but were not included in the computation of
diluted EPS because the options' original purchase price is greater that the
average market price of outstanding common shares.

3)  Commitments and Contingencies

Litigation and Contingencies - In September 1997, litigation was initiated
against the Company and its subsidiary, H.D. Vest Investment Securities, Inc.,
in regard to the activities of a former Registered Representative. As of
December 31, 1997, the plaintiffs seek recovery for alleged out-of-pocket losses
totaling $450,000. The plaintiffs also seek recovery for treble and punitive
damages as well as recovery for pain and suffering. The Company believes it has
a defense against these claims and intends to vigorously defend them. The
Company is currently unable to determine the likelihood that additional material
claims arising from the Registered Representative's conduct will be made.
Although the Company believes that a defense to any additional claims exists,
and intends to vigorously defend such claims if necessary, a negative result in
multiple claims could have a material adverse impact on the Company.

                                       9
<PAGE>
 
4)  Subsequent Events

Subsequent to December 31, 1997 the Company moved its corporate headquarters to
6333 North State Highway 161, Fourth Floor, Irving, Texas 75038.  Included in
general and administrative expenses for the three months ended December 31, 1997
is approximately $450,000 related to the accrual of unexpired lease commitments
and the write off of abandoned assets (primarily leasehold improvements).

                                       10
<PAGE>
 
ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
--------------------------------------------------------------------------------
OF OPERATIONS
-------------

Liquidity and Capital Resources

The main source of liquidity and capital resources for the Company are cash
flows from operations and deferrals of compensation by Registered
Representatives. At December 31, 1997, the Company had net working capital of
$4,463,184, a decrease of $591,114 from the $5,054,298 of working capital at
September 30, 1997. The decrease in working capital is primarily the result of
the Company's focus on upgrading information systems, hosting its national
education convention in December and relocating its corporate headquarters.

The Company's cash flows used for operating activities was $495,369 for the
three months ended December 31, 1997, compared to net cash provided by operating
activities of $566,370 during the three months ended December 31, 1996. The
primary reasons for the usage of cash flow in operating activities is the
increase in costs related to new systems implementation, increases in education
costs related to the Company's national education convention and costs
associated with the relocation of the corporate headquarters.

Cash used for investing activities for the purchase of property and equipment
included costs incurred for furniture, fixtures and computer equipment.  These
costs were $71,524 and $30,641 for the three months ended December 31, 1997 and
1996, respectively. Furniture , fixtures and computer equipment expenditures
increased due to the Company's corporate relocation and to their focus on
upgrading information processing equipment.  The Company also capitalized
$564,613 and $34,443 for software development investments during the three
months ended December 31, 1997 and 1996, respectively. Software development has
increased due to the Company's growth and focus on upgrading information
processing capabilities.

Cash used for financing activities during the three months ended December 31,
1997 was $131,106 compared to cash used for financing activities of $58,112
during the three months ended December 31, 1996. The increase of net cash used
for financing activity is primarily the results of net receipts from related
parties of $224,546 for the three months ended December 31, 1997 compared to net
advances to related parties of $50,403 for the three months ended December 31,
1996. Proceeds from deferred compensation also increased to $235,482 for the
three months ended December 31, 1997 compared to proceed from deferred
compensation of $113,761 for the three months ended December 31, 1996.
Offsetting the positive cashflow from net receipts from related parties and
proceed from deferred compensation are the payments of lease obligations of
$559,250 for the three months ended December 31, 1997 compared to payments of
lease obligations of $89,586 for the three months ended December 31, 1996.

                                       11
<PAGE>
 
Results of Operations

Revenues-

The Company's revenues for the three months ended December 31, 1997, were
$26,125,973, a 40% increase over the three months ended December 31, 1996.
Revenues are directly related to the number of Representatives and their
experience in the financial planning and sales industry.  Additionally, the
Company believes that the increase in revenues is due in part to continued
strength in overall financial markets and to the Company's commitment to train
representatives in diversification and long-term investing activities.

Due to the declining trend of commission revenue as a percentage of gross
product sales, the Company has continued to devote resources to the continued
development of its fee-based programs.  Portfolio management fees were
$3,613,388 for the three months ended December 31, 1997, a 54% increase over the
three months ended December 31, 1996.  As Representatives switch client
investment strategies from front-end sales charge investments (i.e., mutual
funds) to fee-based investments, ongoing portfolio management fees will replace
commission revenue. Although this investment strategy eliminates commission
revenues at the time of the original transaction, the Company has the potential
to earn greater revenues from continued portfolio management fees. Portfolio
management fees are earned quarterly on client funds that remain invested in
fee-based programs, compared to the one-time front-end sales charge on mutual
fund investments.


Net Income -

Net income for the three months ended December 31, 1997, was $566,858, a
decrease of $367,671 compared to net income of $934,529 for the three months
ended December 31, 1996.

General and administrative expenses increased by $2,365,506 to $6,320,478 for
the three months ended December 31, 1997, compared to the same period for the
prior year. This increase is due to costs associated with the relocation of the
Company's corporate headquarters, including the accrual of unexpired lease
commitments and the write off of abandoned assets (primarily leasehold
improvements).  The Company's continued expansion of the operations division and
increased technology investment also contributed to the increase.


Representative development costs for the three months ended December 31, 1997,
were $2,337,219, a 35% increase related to development costs of $1,729,542 for
the three months ended December 31, 1996. This increase in Representative
development

                                       12
<PAGE>
 
costs is the result of the Company's focus on the development of programs to
educate the Company's Representatives as well as the expansion of staff
necessary to support participation in these programs. Increased costs associated
with the Company's national education convention and the introduction of the
Representative mentoring program also contributed to the increased
Representative development costs.

Representative recruiting costs for the three months ended December 31, 1997,
were $554,396, a 76% increase compared to recruiting costs of $315,885 for the
three months ended December 31, 1996. This increase in recruiting cost is the
result of an increase in direct mail and other recruiting methods used to find
prospective Representatives.  To the extent that the Company decides in the
future to devote significant resources to rapidly expand its Representative base
through aggressive recruiting activities, future profitability would likely be
negatively impacted.

                                       13
<PAGE>
 
PART II  OTHER INFORMATION
--------------------------

ITEM 1.  LEGAL PROCEEDINGS
--------------------------

In September 1997, litigation was initiated against the Company and H.D. Vest
Investment Securities, Inc. in regard to the activities of a former Registered
Representative.  The plaintiffs seek recovery for alleged out-of-pocket losses
totaling $450,000.  In addition, the plaintiffs seek recovery for treble and
punitive damages as well as recovery for pain and suffering.  The Company
believes it has a defense against these claims and intends to vigorously defend
them. The Company is currently unable to determine the likelihood that
additional material claims arising from the Registered Representative's conduct
will be made. Although the Company believes that a defense to any additional
claims exists, and intends to vigorously defend such claims if necessary, a
negative result in multiple claims could have a material adverse impact on the
Company.

Reference is made to Item 3 of the Company's Annual Report to Shareholders on
Form 10-K for the fiscal year ended September 30, 1997.


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

No reports on Form 8-K were filed during the quarter ended December 31, 1997.

Exhibit:
 
  27.1    Financial Data Schedule for the three months ended December 31, 1997

                                       14
<PAGE>
 
                                  SIGNATURES



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



                                                  H. D. VEST, INC.
                                             -------------------------
                                                   (Registrant)




Date: February 13, 1998                      By:   s\ Herb D. Vest
                                                   ------------------------  
                                                   Herb D. Vest
                                                   Chief Executive Officer,
                                                    Chairman of the Board


Date: February 13, 1998                      By:   s\ Wesley Ted Sinclair
                                                   ------------------------
                                                   Wesley Ted Sinclair
                                                   Chief Financial Officer,
                                                      Vice President
                                                      (Principal Financial
                                                      and Accounting Officer)

                                       15