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, 1998
                                               ----------------

      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
                                                        ===     ===

                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: 23,240,567
                                                             -----------
as of April 30, 1998
      ---------------

     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 Sheets as of March 31, 1998 (unaudited) and March 31, 1997
     (unaudited)

     Statements of Operations for the  Three-Month  Periods ended March 31, 1998
     (unaudited)  and March 31, 1997  (unaudited)  and since  inception  through
     March 31, 1998 (unaudited)

     Statements of Cash Flows for the  Three-Month  Periods ended March 31, 1998
     (unaudited) and March 31, 1997 (unaudited)

     Notes to Unaudited Financial Statements
<PAGE>
                            MEDICAL DISCOVERIES, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                                  BALANCE SHEET
                   AS OF MARCH 31, 1998 AND DECEMBER 31, 1997
                                   (UNAUDITED)

                                       March 31, 1998      December 31, 1997
                                       --------------         --------------
CURRENT ASSETS
        Cash                             $   3,033               $     764
        Accounts receivable                 19,187                  30,585
        Inventory                           10,500                       0
        Prepaid expenses                     6,792                  10,869
                                         ----------              ----------
          Total Current Assets              39,511                  42,219

PROPERTY AND EQUIPMENT
        Equipment                           72,304                  72,304
        Less: Accumulated depreciation     (27,233)                (23,507)
                                         ----------              ----------
          Net Property and Equipment        45,071                  48,797

OTHER ASSETS                                 2,220                   3,160

Total Assets                             $  86,803               $  94,176
                                         ==========              ==========
CURRENT LIABILITIES
     Accounts payable                   $1,047,764               $ 916,734
     Accrued interest                       25,906                  14,360
     Current maturities of:
        Notes payable                      101,809                 102,591
        Convertible notes payable          291,700                 291,700
                                         ----------              ----------
          Total Current Liabilities      1,467,179               1,325,385

STOCKHOLDERS' EQUITY
     Common Stock, no par value,
        authorized 100,000,000           6,557,317               6,507,317
        shares; 23,240,567 shares
        issued and outstanding at
        March 31, 1998
     Retained deficit                   (7,825,193)             (7,626,026)
     Subscription receivables             (112,500)                112,500
                                        -----------             -----------
     Total Stockholders' Equity         (1,380,376)             (1,231,209)
                                        -----------             -----------

TOTAL LIABILITIES AND
   STOCKHOLDERS' EQUITY                 $   86,803              $   94,176
                                        ===========             ===========
<PAGE>
                           MEDICAL DISCOVERIES, INC.
                         (A DEVELOPMENT STAGE COMPANY)
                           STATEMENT OF OPERATIONS
             FOR THE PERIODS ENDED MARCH 31, 1998 AND MARCH 31, 1997
                                 (UNAUDITED)

                                                               Cumulative
                                For the three months          Amounts since
                                   ended March 31,            November 20,
                              --------------------------      1991 (date of
                                 1998             1997          inception)
                              ----------        ---------     -------------
REVENUE
  Revenue and fees            $   2,273         $       0     $    110,473
  Interest                          726                 0           21,617
                              ----------        ----------    -------------
    Total Revenue                 2,999                 0          132,090

COST OF GOODS SOLD                1,250                 0            1,250
                              ----------        ----------    -------------

MARGIN                            1,749                 0          130,840

EXPENSES
  License                             0                 0        1,001,500
  Research and development       73,825               301        1,930,701
  General and administrative    112,923           161,684        4,702,380
  Interest                       14,168                 0 (1)      157,411
                              ----------        ----------    -------------
     Total Expenses             200,916           161,985        7,791,992
                              ----------        ----------    -------------
NET LOSS FROM OPERATIONS       (199,167)         (161,985)      (7,661,152)

OTHER INCOME / (EXPENSE)              0           (11,527)               0
                              ----------        ----------    -------------

LOSS BEFORE INCOME TAXES       (199,167)         (173,512)      (7,661,152)
  AND EXTRAORDINARY ITEM

INCOME TAXES                          0                 0                0
                              ----------        ----------    -------------
LOSS BEFORE EXTRAORDINARY      (199,167)         (175,512)      (7,661,152)
  ITEM

FORGIVENESS OF DEBT                   0                 0        1,235,536
                              ----------        ----------    -------------
NET INCOME                    $(199,167)        $(173,512)    $ (6,425,616)
                              ==========        ==========    =============

INCOME / (LOSS) PER SHARE
  Loss from continuing
  operations                  $   (0.01)        $   (0.01)    $      (0.43)
  Gain from debt
  forgiveness                      0.00              0.00             0.07
                              ----------        -----------   -------------
  Income / (loss) per
  share                      $    (0.01)        $   (0.01)    $      (0.36)
                             ===========        ===========   =============

WEIGHTED AVERAGE NUMBER
  OF SHARES                  23,192,519        21,675,645       17,735,587
                            ============      ==============  =============


(1) Interest expense is included as Other Income / (Expense) in 1Q97.


<PAGE>
                           MEDICAL DISCOVERIES, INC.
                         (A DEVELOPMENT STAGE COMPANY)
                           STATEMENT OF CASH FLOWS
            FOR THE PERIODS ENDED MARCH 31, 1998 AND MARCH 31, 1997
                                 (UNAUDITED)

                                                                 Cumulative
                                    For the three months        Amounts since
                                      ended March 31,            November 20,
                                    --------------------        1991 (date of
                                       1998         1997         inception)
                                   -----------   -----------    -------------
OPERATING ACTIVITIES
  Net income (loss) for the
    period                         $ (199,167)   $ (173,512)    $ (6,425,616)
  Add non-cash items
    Common stock issued for
      services and license                  0             0        3,419,236
    Reduction of legal costs                0             0         (130,000)
    Depreciation                        3,726         3,372           28,692
    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                      11,399        11,289            3,870
      Inventory                       (10,500)            0          (10,500)
      Prepaid Expenses                  4,077         4,044           (6,792)
      Other assets                        940             0           (2,220)
    Increase (decrease) in:
      Accounts payable                131,030       (22,329)         891,855
      Accrued expenses                 11,546        (8,751)          47,387
                                    ----------   -----------    ------------
Net Cash from Operations              (46,949)     (140,869)      (3,195,295)

INVESTING ACTIVITIES
  Purchases of equipment                    0          (986)         (95,967)
  Payments received on note
    receivable                              0             0           99,414
                                    ----------   -----------    ------------
Net Cash from Investing Activities       (986)         (986)           3,447

FINANCING ACTIVITIES
  Increase in notes payable                 0        61,000          101,000
  Payment of notes payable               (782)         (675)          (6,570)
  Increase in notes payable                 0             0          316,700
  Equity contributed                        0             0          131,374
  Proceeds from issuance of
     common stock                      50,000        80,134        2,603,159
                                    ----------   -----------    ------------
    Net Cash from Financing
      Activities                       49,218       140,459        3,145,663
                                    ----------   -----------    ------------
NET INCREASE / (DECREASE) IN CASH       2,269        (1,396)             764

CASH, BEGINNING PERIOD                    764        25,307                0
                                    ----------   -----------    ------------
CASH ENDING PERIOD                  $   3,033    $   23,911     $        764
                                    ==========   ===========    ============
<PAGE>
                          MEDICAL DISCOVERIES, INC.

                        NOTES TO FINANCIAL STATEMENTS
                               March 31, 1998

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, 1998 and the
results of  operations  and changes in financial  position  for the  three-month
period  ended March 31,  1998.  The results of  operations  for the three months
ended  March  31,  1998 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.

The Company is in the process of  establishing  a "consumer  products"  division
(MDI Healthcare  Systems) as part of its strategy of developing  certain aspects
of its core technologies for commercialization.  MDI recorded its first revenues
from its consumer products division for the period from April 1, 1998 to May 15,
1998.  MDI  reduced  its  year-to-date  general  and  administrative  expense to
$112,923 from $161,684 in 1Q1998 compared to 1Q1997 by increased efficiencies in
its operations.  Funding for on-going operations is discussed in the "Additional
Funding is Required" section below.

DEVELOPMENT OF NEW/IMPROVED TECHNOLOGY. During the last quarter, the Company has
continued to focus its research and development  activities to further enhancing
its core  technologies.  Chief among these efforts  (which are in the process of
patent  applications)  is the  capability  of  developing  a new  generation  of
consumer products utilizing its "electrolyzed  saline waters".  These variations
of the Company's patented core technologies,  and resultant  commercially viable
products,  better enable the Company to aggressively  pursue new markets outside
of its traditional  "pharmaceutical  research and development operations" with a
wide  variety of  applications.  Included  among  these new target  markets  are
applications  in the newly  evolving skin care  "cosmeceutical"  industry,  home
water purification, and "bottled waters".

These new markets represent significant revenue generating opportunities for the
Company  in  the  near  term,  and  the  Company  is  presently  developing  the
appropriate infrastructure to aggressively pursue these markets.

The  Company  remains  committed  to the  pursuit  of  establishing  MDI-P as an
effective   liquid  chemical   sterilant  for  the   sterilization  of  surgical
instruments, and developing MDI-P as an effective anti-bacterial, anti-viral and
anti-fungal pharmaceutical.

PLANS TO FORM A NEW CONSUMER  PRODUCTS  DIVISION.  MDI is in the final stages of
establislihig  a new  operating  division  focused on the  commercialization  of
products targeted at the health and wellness,  cosmetic, home water purification
systems and "bottled  waters"  markets.  The products to be marketed by this new
division will be a combination of proprietary  products internally  developed as
well as unique products  sourced from strategic  partners  located in the United
States and certain international markets.

<PAGE>
STRATEGIC ALLIANCE.  MDI has initiated discussions with a privately held company
specializing in the research,  development, and commercialization of proprietary
products in the health care industry.  It is anticipated that these  discussions
will  conclude in the  establishment  of "joint  venture"  health  care  company
focused  on  the  identification,   exploration,   validation,  development  and
commercialization  of new  innovative  solutions to existing and newly  emerging
health care problems and opportunities.

MANAGENIENT AND SCIENTIFIC BOARD ADDITIONS. William J. Novick, Jr., Ph.D., Chief
Technical Officer was promoted to the position of Vice President, and will serve
as an Officer of the Corporation.

Osao Sumita,  Ph.D.,  has joined the Company as Sr.  Director,  Engineering  and
Technology  Development.  Dr.  Sumita has spent  nearly 20 years in research and
development in the field of electrolysis and related technologies. Since 1992 he
has been  president  and  founder  of  Coherent  Technologies  (Tokyo,  Japan) a
research and  development  firm  specializing  in the development of proprietary
electrolysis  technology  systems.  Dr. Sumita  received his Doctorate  from the
Tokyo  Institute  of  Technology,  Tokyo,  Japan,  and is the  holder of several
patents in the field of electrolysis. In this newly created position, Dr. Sumita
will be responsible for technology development and related research activities.

Mr. Neal G. Ofiesh has recently  joined the company as National Sales  Director,
Consumer  Products.   Mr.  Ofiesh  has  been  actively  engaged  in  the  sales,
distribution and management of sales activities for a number of companies in the
field of water purification systems, cosmetics and related consumer products. In
this newly  created  position,  Mr.  Ofiesh will provide the Company with proven
expertise in  establishing  a national  distribution  network for the  Company's
consumer products.  Prior to joining the Company, Mr. Ofiesh was affiliated with
the MeLaLeuca, Natural World and NSA corporations.


PATENT  ACTIVITY.  The Company was notified by the US Patent Office that another
patent  for its  MDI-P  technology  was  issued.  The  patent  number  is titled
"Electrically  Hydrolyzed  Salines as  Microbicides"  and is for a microbiocidal
solution for in vivo and in vitro treatment of microbial infections. This brings
to six the current number of patents issued for the Company's core technologies.
Additionally,  the Company  received  notice of allowance of another patent from
the US Patent Office for the use of MDI-P  "Electrically  Hydrolyzed  Salines as
Microbicides".


JAPANESE  MARKET  OPPORTUNITIES  AND  ANALYSIS.  MDI is  continuing  discussions
regarding  licensing and other business  development  relationships with several
Japanese  companies.  There is strong  interest  in the  medical  pharmaceutical
market  applications  of  the  Company's  proprietary  compound,  MDT-P.  MDI is
actively  discussing  potential  alliances  with several  Japanese  companies to
jointly  collaborate in this area using the Company's patented  technologies and
drawing on its  experience  in the  medical  area with its  Scientific  Advisory
Board.

In  December  of 1997,  MDI was  invited to  present  an update of its  research
activities at the annual  Functional Water Society  Foundation in Tokyo,  Japan.
Dr. Novick, the Company's Chief Technical Officer,  presented the results of the
research  work of Aldonna  Baltch,  MD and her  colleagues  at the  Stratton  VA
Medical Center, Albany, New York. Dr. Baltch's in-vitro research activities have
confirmed  the  effectiveness  of MDI-P  as an  efficient  anti-fungal  compound
through the complete destruction of the fungus Candida Albicans.


ADDITIONAL  FUNDING IS REQUIRED.  MDI needs to raise additional  capital to fund
its FDA and international  regulatory approvals process.  Additionally,  each of
the  research  and testing  programs in progress  continues  to show promise and
generate valuable scientific data, and therefore, requires appropriate levels of
funding.  Management  intends to raise  substantial  additional funds in private
stock  offerings  in the near  future  in order  to meet its  near-term  funding
requirements  with a  special  emphasis  in  Japan.  In the  future,  management
anticipates  the need to raise  substantial  additional  funds in  public  stock
offerings  as well.  As  additional  funds are raised,  the  Company  intends to
commence paying salaries to its officers.  The Company also intends at that time
to hire  additional  technical  and  administrative  personnel.  The bulk of any
additional  funding will likely be spent on  continued  research,  testing,  and
patent protection with respect to MDI-P.

FUNDING.  In January  1998,  the  Company  raied  $50,000 in exchage for 270,270
shares of common  stock at $0.1875 per share and  warrants  to purchase  540,540
shares of stock at $1.00 per share.


<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, 1997.


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