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

                                   FORM 10-QSB

(Mark One)

 X    Quarterly report under Section 13 or 15(d) of the Securities
===   Exchange Act of 1934

          For the quarterly period ended        March 31, 1999
                                               ----------------

      Transition report under Section 13 or 15(d) of the Securities
===   Exchange Act of 1934

          For the transition period from _____________ to ______________

     Commission File Number: 0-12627
                             -------

                            MEDICAL DISCOVERIES, INC.
-------------------------------------------------------------------------
(Exact Name of Small Business Issuer as Specified in Its Charter)

            Utah                                87-0407858
-------------------------------------------------------------------------
(State or other jurisdiction        (I.R.S. Employer Identification No.)
of incorporation or organization)


                 2985 North 935 East, Suite 9, Layton, UT 84041
-------------------------------------------------------------------------
                    (Address of principal executive offices)


                                 (801) 771-0523
-------------------------------------------------------------------------
                           (Issuer's Telephone Number)

                                       N/A
-------------------------------------------------------------------------
              (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 Exchange Act during the past 12 months (or
for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the
past 90 days.                                            X  Yes     No
                                                        ===     ===
<PAGE>

                APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
                   PROCEEDINGS DURING THE PRECEDING FIVE YEARS


     Check whether the registrant  has filed all documents and reports  required
to be  filed  by  Sections  12,  13,  or 15(d) of the  Exchange  Act  after  the
distribution of securities under a plan confirmed by a court.
                                                           Yes     No
                                                        ===     ===
                      APPLICABLE ONLY TO CORPORATE ISSUERS


     State the number of shares outstanding of each of the issuer's
classes of common equity, as of the latest practicable date: 26,473,625
                                                             -----------
as of April 30, 1999
      ---------------

            Transitional Small Business Disclosure Format (check one)

                                                           Yes   X No
                                                        ===     ===
<PAGE>
                                     PART I
                              FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

The following financial statements are filed with this report:

     Balance Sheet as of March 31, 1999 (unaudited) and December 31, 1998
     (unaudited)

     Statements of Operations for the  Three-Month  Periods ended March 31, 1999
     (unaudited)  and March 31, 1998  (unaudited)  and since  inception  through
     March 31, 1999 (unaudited)

     Statements of Cash Flows for the  Three-Month  Periods ended March 31, 1999
     (unaudited) and March 31, 1998 (unaudited) and since inception through
     March 31, 1999 (unaudited)

     Notes to Unaudited Financial Statements

<PAGE>

                            MEDICAL DISCOVERIES, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                      CONDENSED CONSOLIDATED BALANCE SHEET
                     AS OF MARCH 31, 1999 AND MARCH 31, 1998
                                   (UNAUDITED)

                                    March 31, 1999         December 31, 1998
                                     -------------           -------------
CURRENT ASSETS
        Cash                         $      32,702           $      84,847
        Accounts receivable                  2,921                   2,716
        Inventory                          165,698                 158,225
        Prepaid expenses                     6,862                  10,973
                                     -------------           -------------
          Total Current Assets             208,183                 256,761

PROPERTY AND EQUIPMENT
        Equipment                          108,521                 108,521
        Less: Accumulated depreciation     (43,222)                (39,610)
                                     -------------           -------------
          Net Property and Equipment        65,299                  68,911

OTHER ASSETS                                   900                   1,409
                                     -------------           -------------
Total Assets                         $     274,382           $     327,081
                                     =============           =============
CURRENT LIABILITIES
     Accounts payable                $   1,454,165           $   1,399,414
     Accrued interest                       58,361                  44,129
     Current maturities of:
        Notes payable                      296,717                 191,717
        Convertible notes payable          200,983                 250,983
                                     -------------           -------------
          Total Current Liabilities      2,010,226               1,886,246

STOCKHOLDERS' EQUITY
     Common Stock, no par value,
        authorized 100,000,000           9,761,250               9,661,250
        shares; 26,473,625 shares 
        and 26,373,625 shares
        issued and outstanding at
        March 31, 1999 and December
        31, 1998, respectively
     Retained deficit                  (11,314,594)            (11,107,915)
     Subscription receivables             (112,500)                112,500
                                     -------------           -------------
     Total Stockholders' Equity         (1,735,844)             (1,559,165)
                                     -------------           -------------

TOTAL LIABILITIES AND
   STOCKHOLDERS' EQUITY              $     274,382           $     327,081
                                     =============           =============
<PAGE>

                            MEDICAL DISCOVERIES, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                 CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
             FOR THE PERIODS ENDED MARCH 31, 1999 AND MARCH 31, 1998
                                   (UNAUDITED)

                                                               Cumulative
                                For the three months          Amounts since
                                   ended March 31,            November 20,
                              --------------------------      1991 (date of
                                 1999             1998          inception)
                              ----------        ---------     -------------
REVENUE
  Revenue and fees            $       0         $   2,273     $    126,609
  Interest                            0               726           23,406
                              ----------        ----------    -------------
    Total Revenue                     0             2,999          150,015

EXPENSES
  Cost of Sales               $       0         $   1,250     $      7,750
  License                             0                 0        1,001,500
  Research and development       58,637            73 825        2,330,928
  General and administrative    103,647           112,923        7,721,167
  Interest                       44,394            14,168          239,222
                              ----------        ----------    -------------
     Total Expenses             206,678           202,166       11,300,567
                              ----------        ----------    -------------
LOSS BEFORE INCOME TAXES       (206,678)         (199,167)     (11,150,552)
  AND EXTRAORDINARY ITEM

INCOME TAXES                          0                 0                0
                              ----------        ----------    -------------
LOSS BEFORE EXTRAORDINARY      (206,678)         (199,167)     (11,150,552)
  ITEM

FORGIVENESS OF DEBT                   0                 0        1,235,536
                              ----------        ----------    -------------
NET INCOME                    $(206,678)        $(199,167)    $ (9,915,016)
                              ==========        ==========    =============

INCOME / (LOSS) PER SHARE
  Loss from continuing
  operations                  $   (0.01)        $   (0.01)    $      (0.60)
  Gain from debt
  forgiveness                      0.00              0.00             0.07
                              ----------        -----------   -------------
  Income / (loss) per
  share                      $    (0.01)        $   (0.01)    $      (0.53)
                             ===========        ===========   =============

WEIGHTED AVERAGE NUMBER
  OF SHARES                  26,395,847        23,192,519       18,734,836
                            ============      =============   =============




<PAGE>
                            MEDICAL DISCOVERIES, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                 CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
             FOR THE PERIODS ENDED MARCH 31, 1999 AND MARCH 31, 1998
                                   (UNAUDITED)

                                                                 Cumulative
                                    For the three months        Amounts since
                                      ended March 31,            November 20,
                                    --------------------        1991 (date of
                                       1999         1998         inception)
                                   -----------   -----------    -------------
OPERATING ACTIVITIES
  Net income (loss) for the
    period                         $ (206,679)   $ (199,167)    $ (9,915,017)
  Add non-cash items
    Common stock options issued
      for services                                                 2,336,303
    Common stock issued for
      services and license             30,000             0        3,559,986
    Reduction of legal costs                0             0         (130,000)
    Depreciation                        3,612         3,726           44,681
    Loss on disposal of equipment           0             0           30,364
    Gain on debt restructuring              0             0       (1,235,536)
    Write-off receivables                   0             0          193,965
    Decrease (increase) in:
      Receivables                        (205)       11,289           10,450
      Inventory                        (7,473)      (10,500)        (165,698)
      Prepaid Expenses                  4,111         4,077           (6,862)
      Other assets                        509           940             (900)
    Increase (decrease) in:
      Accounts payable                 85,773      (131,030)       1,298,256
      Accrued expenses                (16,793)       11,546           79,842
                                   -----------   -----------    -------------
Net Cash from Operations             (107,145)      (46,949)      (3,921,066)

INVESTING ACTIVITIES
  Purchases of equipment                    0             0         (132,184)
  Payments received on note
    receivable                              0             0          130,000
                                   -----------   -----------    -------------
Net Cash from Investing Activities          0             0           (2,184)

FINANCING ACTIVITIES
  Increase in notes payable           105,000             0          351,806
  Payment of notes payable             50,000          (782)         (97,287)
  Increase in notes payable                 0             0          316,700
  Equity contributed                        0             0          131,374
  Proceeds from issuance of
     common stock                           0        50,000        3,253,359
                                   -----------   -----------    -------------
    Net Cash from Financing
      Activities                       55,000        49,218        3,955,952
                                   -----------   -----------    -------------
NET INCREASE / (DECREASE) IN CASH     (52,145)        2,269           32,702

CASH, BEGINNING PERIOD                 84,847           764                0
                                   -----------   -----------    -------------
CASH ENDING PERIOD                  $  32,702    $    3,033     $     32,702
                                   ===========   ===========    =============
<PAGE>

                            MEDICAL DISCOVERIES, INC.

                          NOTES TO FINANCIAL STATEMENTS
                                 March 31, 1999

NOTES TO UNAUDITED FINANCIAL STATEMENTS


The unaudited financial  statements include the accounts of Medical Discoveries,
Inc.  and include  all  adjustments  which are,  in the  opinion of  management,
necessary to present fairly the financial  position as of March 31, 1999 and the
results of  operations  and changes in financial  position  for the  three-month
period  ended March 31,  1999.  The results of  operations  for the three months
ended  March  31,  1999 are not  necessarily  indicative  of the  results  to be
expected for the entire year.


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

OPERATIONS AND LIQUIDITY.

MDI has no  revenue  for the  period  from  January  1, 1999 to March  31,  1999
compared  to $2,278 in revenue  for the same  period in 1998.  The revenue in 1Q
1998 results from initial sales of imported  functional  water  machines,  which
product line was subsequently discontinued by the Company. MDI spent $ 58,637 in
research and development costs during the first three months of 1999 compared to
$73,825 for the same period in last year.  The decreased  spending  reflects the
reduced level of testing the Company is  conducting  while  awaiting  additional
funds.  MDI  reduced  its  General  and  Administrative  expense by 8 percent to
$103,647  from  $112,923.  Funding for on-going  operations  is discussed in the
"Additional Funding is Required" section below.

PHARMACEUTICAL DRUG DISCOVERY AND DEVELOPMENT ACTIVITIES

MDI has  completed  a series of  validation  testing  at the  Dana-Faber  Cancer
Institute, a Harvard Medical School teaching Affiliate and National Institute of
Health (NIH) approved HIV/AIDS Testing Laboratory.

These  tests  confirmed  and  extended   previous  research  and  testing  which
demonstrated  that MDI-P is shown to be capable of killing HIV in cell  cultures
without mortality to the cells.

A six-month  Research  Grant with the  Dana-Farber  Cancer  Institute to further
extend and confirm the anti -HIV/AIDS activity of MDI-P is in progress.  In this
Research,  MDI-P is being  analyzed  for  effectiveness  in  killing  laboratory
strains of HIV-1;  clinical  specimens of HIV; and  resistant  strains of HIV-1.
These test results continue to support the effectiveness or MDI-P in killing the
HIV Virus.

During its current research testing, the Company has become aware of the need to
address certain  technical issues  regarding the electrolysis  equipment used to
produce MDI-P during initial manufacture.

MDI has  temporarily  suspended  validation  testing at the  Dana-Farber  Cancer
Institute  of its novel drug  "MDI-P"  targeted at the  HIV/AIDS  disease due to
certain  technical  issues.  Although  the  testing  performed  during  the last
quarter,  which demonstrated MDI-P to be capable of killing HIV in cell cultures
without  mortality  to the cells,  remains  valid,  the  Company  has decided to
temporarily  suspend  further  investigation  until such time as these technical
issues are resolved. Work is already in progress to develop a permanent solution
to these minor technical issues.

<PAGE>

Toxicology  studies initiated in October of 1998 were completed during the first
quarter.  A final report will be  available  upon  completion  by the Company of
final payments to the testing  Laboratory.  MDI has also initiated  microbiology
studies  during the first  quarter;  however,  these studies have been suspended
pending availability of appropriate levels of funding.

Progress of the Company's plan for  submission to the FDA of an IND  Application
has been  delayed,  and  continuation  depends on the  ability of the Company to
successfully address certain technical issues, and the ability of the Company to
obtain sufficient funding enabling the completion of the toxicity, microbiology,
and  chemical  characterization  studies  in  various  stages of  progress.  See
"Additional  Funding is Required" section below.  While results to date continue
to show  promise,  the Company  can provide no  assurance  the  technology  will
eventually be proven.

MDI HEALTHCARE SYSTEMS, INC. CONSUMER PRODUCTS SUBSIDIARY

MDI's operating division,  MDI HealthCare Systems, Inc., (MDI-HCS) is focused on
the identification,  exploration, validation, development, and commercialization
of  innovative  solutions  for scar therapy,  wound  healing,  and skin care and
repair.

InvisiScar(TM),  an innovative  topical  silicone gel, and AquaCleanse  (TM), an
electrolysis  technology  based  disinfecting  cleansing  pad,  have enabled the
Company to enter the  worldwide  $3.5 billion skin care market.  In addition,  a
third product,  the  Beautification  Facemask (TM), enables the Company to enter
the anti-aging,  facial beautification market. These products are proprietary to
the Company, utilize a variety of its core technologies and position the Company
for strong revenue potential in 1999 and the next millennium.

During  the first  quarter,  MDI-HCS  launched  its  innovative  scar  treatment
products  InvisiScar  and  AquaCleanse,  into the  very  large  and  potentially
lucrative   Brazilian  market.   The  Company  has  entered  into  an  exclusive
distribution agreement.  This exclusive distribution agreement calls for minimum
purchases of the MDI-HCS in the range of $1 million.

The success of MDT-HCS depends on the Company's  ability to properly finance the
product launch and the response of competitive products. See "Additional Funding
is Required" section below.

RESEARCH AND DEVELOPMENT ACTIVITIES, JAPAN

In addition to its novel drug, MDI-P, and Cosmeceuticals product development and
commercialization  accomplishments,  the Company  continues  its  discovery  and
development  activities for electrolysis  technologies in its Tokyo, Japan based
Research  and  Development  Group.  MDI's Team Japan is to  identity  additional
applications  for the Company's  electrolysis  based  technologies,  and develop
appropriate  technological  innovations for rapid market entry.  Currently,  the
Company is investigating several resultant product development activities which,
if proven, may lead to additional revenue producing opportunities.

LIQUIDITY AND FINANCIAL RESOURCES

ADDITIONAL  FUNDING  IS  REQUIRED.   Management  intends  to  raise  substantial
additional  funds in private stock offerings in the near future in order to meet
its near-term funding requirements.  In the future,  management  anticipates the
need to raise  substantial  additional  funds in public stock offerings as well.
The funds to be raised will be used in the following  areas: 1) submission of an
IND Application with the FDA for it novel  Anti-HIV/AIDS  drug, 2) the launch of
MDl-HCS.  3) payment  of the MDI Trust  Fund  obligations,  4)  commencement  of
payment of salaries to Company  personnel,  and 5) at such time as funds  become
available, the prior debts of the Company.

<PAGE>


YEAR 2000 ISSUE. The Company is aware of the issues  associated with programming
codes in existing computer systems as the millennium (year 2000) approaches. The
Company has  completed  the  upgrading  of its design  engineering  software and
believes, but can give no assurance,  that this software is year 2000 compliant.
However,  the accounting and material  management  system is not compliant.  The
Company has conducted  preliminary  research  into  replacement  accounting  and
material  management  system.  The Company  plans to acquire and implement a new
system in the third quarter 1999. If the new accounting and material  management
system is not  implemented as planned,  the Company could be adversely  affected
beginning in the year 2000 since many computer applications could fail.

FORWARD-LOOKING  STATEMENTS.  Certain  matters  discussed  in  this  Report  are
"forward-looking  statements"  intended  to qualify  for the safe  harbors  from
liability  established  by Section 27A of the  Securities Act and Section 21E of
the  Securities  Exchange Act of 1934, as amended (the  "Exchange  Act").  These
forward-looking  statements  can  generally  be  identified  as such because the
context of the  statement  will  include  words such as the Company  "believes,"
"anticipates," "expects" or words of similar import. Similarly,  statements that
describe   the   Company's   future   plans,   objectives   or  goals  are  also
forward-looking  statements.  Such  statements  may  address  future  events and
conditions  concerning,  among other things, the Company's results of operations
and  financial   condition;   the  consummation  of  acquisition  and  financing
transactions  and  the  effect  thereof  on  the  Company's  business;   capital
expenditures;  litigation;  regulatory  matters;  and the  Company's  plans  and
objectives  for  future  operations  and  expansion.  Any  such  forward-looking
statements  would be subject  to the risks and  uncertainties  that could  cause
actual  results of  operations,  financial  condition,  acquisitions,  financing
transactions,  operations,  expenditures,  expansion  and other events to differ
materially from those expressed or implied in such  forward-looking  statements.
Any such forward-looking  statements would be subject to a number of assumptions
regarding,   among  other  things,  future  economic,   competitive  and  market
conditions generally. Such assumptions would be based on facts and conditions as
they exist at the time such  statements  are made as well as  predictions  as to
future facts and conditions,  the accurate  prediction of which may be difficult
and involve the assessment of events beyond the Company's control.  Further, the
Company's  business  is subject to a number of risks that would  affect any such
forward-looking  statements.  These risks and uncertainties include, but are not
limited to, the ability of the Company to commercialize its technology;  product
demand  and  industry  pricing;  the  ability of the  Company  to obtain  patent
protection for its  technology;  developments in  environmental  legislation and
regulation;  the ability of the company to obtain future  financing on favorable
terms; and other circumstances  affecting  anticipated revenues and costs. These
risks and  uncertainties  could  cause  actual  results of the Company to differ
materially from those projected or implied by such forward-looking statements.
<PAGE>

PART II
                         OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

The Company is not currently  involved in any  litigation  and there has been no
change in any with regard to any potential legal dispute since the filing of the
Company's 10KSB for the year ended December 31, 1998.


ITEM 2.  CHANGES IN SECURITIES

     N/A


ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

     N/A


ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     N/A


ITEM 5.  OTHER INFORMATION

     N/A

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

     (a)     Exhibits required by Item 601 of Regulation S-B.

     The following are exhibits to this Form 10-QSB.

EXHIBIT NUMBER     DESCRIPTION
- --------------     -----------

27                 Financial Data Schedule.

     (b)  Reports on Form 8-K

          N/A

<PAGE>

SIGNATURES

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



                                       MEDICAL DISCOVERIES, INC.



Date: May 15, 1998                     /s/ Lee F. Kulas
                                       ---------------------------
                                       President and Chief Executive
                                       Officer