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       September 30, 1997
                                               ------------------

      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)


-----------------------------------------------------------------------
        (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

<PAGE>
     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: 22,050,150
                                                             -----------
as of July 31, 1997
      ---------------

     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 Sept. 30, 1997 (unaudited) and December 31, 1996.

     Statements of Operations for the Three-Month Periods ended
     Sept. 30, 1997 (unaudited) and Sept. 30, 1996 (unaudited)
     and the Nine-Month Periods ended Sept. 30, 1997 (unaudited)
     and Sept. 30, 1996 (unaudited) and since inception through Sept. 30, 1997
     (unaudited).

     Statements of Cash Flows for the Nine-Month Periods ended
     Sept. 30, 1997 (unaudited) and Sept. 30, 1996 (unaudited).

     Notes to Unaudited Financial Statements

<PAGE>
                   MEDICAL DISCOVERIES, INC.
                 (A DEVELOPMENT STAGE COMPANY)
                         BALANCE SHEET
           AS OF SEPTEMBER 30, 1997 AND SEPTEMBER 30, 1996
                          (UNAUDITED)

                                       Sept. 30, 1997         Dec. 31, 1996
                                       --------------         --------------
CURRENT ASSETS
        Cash                              $ 45,840               $  25,307
        Accounts receivable                 42,696                  46,784
        Prepaid expenses                    14,946                  10,780
                                          ---------               ---------
          Total Current Assets             103,482                  82,871

PROPERTY AND EQUIPMENT
        Equipment                           95,862                  74,231
        Less: Accumulated depreciation     (28,449)                (16,181)
                                          ---------              ----------
          Net Property and Equipment        67,413                  58,050

OTHER ASSETS
        Deposits                             2,220                   1,170
        Note receivable                          0                  30,586
                                          ---------               ---------
          Total Other Assets                 2,220                  31,756

Total Assets                             $ 173,115               $ 172,677
                                          =========               =========
CURRENT LIABILITIES
     Accounts payable                   $  800,276              $  670,166
     Accrued interest                       20,695                  26,039
     Short term notes payable              103,349                       0
     Current maturities of
        notes payable                            0                   2,795
                                        -----------             -----------
          Total Current Liabilities        924,320                 699,000

LONG TERM LIABILITIES
     Notes payable                         316,700                 318,708
                                        -----------             -----------
          Total Long Term Liabilities      316,700                 318,708

                                        -----------             -----------
TOTAL LIABILITIES                        1,241,020               1,017,708
                                        -----------             -----------
STOCKHOLDERS' EQUITY
     Common Stock, no par value,
        authorized 100,000,000           6,319,233               6,121,733
        shares; 22,050,150 shares
        issued and outstanding at
        Sept. 30, 1997
     Retained deficit                   (7,214,638)             (6,794,264)
     Subscription receivables             (172,500)                172,500
                                        -----------             -----------
     Total Stockholders' Equity         (1,067,905)               (845,031)
                                        -----------             -----------

TOTAL LIABILITIES AND
   STOCKHOLDERS' EQUITY                 $  173,115              $  172,677
                                        ===========             ===========
<PAGE>

                           MEDICAL DISCOVERIES, INC.
                         (A DEVELOPMENT STAGE COMPANY)
                           STATEMENT OF OPERATIONS
             FOR THE PERIODS ENDED SEPTEMBER 30, 1997 AND SEPTEMBER 30, 1996
                                 (UNAUDITED)

<TABLE>
<S>                         <C>               <C>           <C>              <C>          <C>
                                                                                            Cumulative
                                For the three months             For the nine months       Amounts since
                                   ended Sept. 30,                  ended Sept. 30,         November 20,
                            ----------------------------    ----------------------------   1991 (date of
                                 1997              1996          1997           1996         inception)
                            ----------          --------    ----------        ----------    -----------
REVENUE
  Clinical fees             $       0         $       0     $       0         $       0     $   108,200
                            ----------        ----------    ----------        ----------    ------------
    Total Revenue                   0                 0             0                 0         108,200

EXPENSES
  License                           0                 0             0                 0       1,001,500
  Research and development     50,407            49,794        80,071           200,042       1,737,127
  General and administrative   79,577           137,694       298,298           717,220       4,268,084
                            ----------        ----------    ----------        ----------    ------------
     Total Expenses           129,984           187,488       378,369           917,262       7,006,711
                            ----------        ----------    ----------        ----------    ------------
NET LOSS FROM OPERATIONS     (129,984)         (187,488)     (378,369)         (917,262)     (6,898,511)

OTHER INCOME / (EXPENSE)      (10,775)          (10,225)      (42,005)          (22,292)       (102,086)
                            ----------        ----------    ----------        ----------    ------------

LOSS BEFORE INCOME TAXES     (140,759)         (197,713)     (420,374)         (939,554)     (7,000,597)
  AND EXTRAORDINARY ITEM

INCOME TAXES                        0                 0             0                 0               0
                            ----------        ----------    ----------        ----------    ------------
LOSS BEFORE EXTRAORDINARY    (140,759)         (197,713)     (420,374)         (939,554)     (7,000,597)
  ITEM

FORGIVENESS OF DEBT                 0                 0             0           673,486       1,235,536
                            ----------        ----------    ----------        ----------    ------------
NET LOSS                    $(140,759)        $(197,713)    $(420,374)        $(266,067)    $(5,765,061)
                            ==========        ==========    ==========        ==========    ============

INCOME / (LOSS) PER SHARE
  Loss from continuing
  operations                $   (0.01)        $   (0.01)    $   (0.02)        $   (0.04)    $     (0.40)
  Gain from debt
  forgiveness                    0.00              0.00          0.00              0.03            0.07
                            -----------       -----------   -----------       -----------   ------------
  Income / (loss) per
  share                     $   (0.01)        $   (0.01)    $   (0.02)        $   (0.01)    $     (0.33)
                            ===========       ===========   ===========       ===========   ============

WEIGHTED AVERAGE NUMBER
  OF SHARES                  22,060,975      21,593,715      21,873,600         22,066,709      17,296,568
                            ===========     ============    ============        ===========     ===========

</TABLE>
<PAGE>
                           MEDICAL DISCOVERIES, INC.
                         (A DEVELOPMENT STAGE COMPANY)
                           STATEMENT OF CASH FLOWS
         FOR THE PERIODS ENDED SEPTEMBER 30, 1997 AND SEPTEMBER 30, 1996
                                 (UNAUDITED)

                                                              Cumulative
                                     For the nine months      Amounts since
                                      ended Sept. 30,         November 20,
                                    --------------------     1991 (date of
                                       1997        1996        inception)
                                    ----------  ----------    -------------
OPERATING ACTIVITIES
  Net income (loss) for the
    period                         $ (420,374) $ (266,067)    $ (5,765,061)
  Add non-cash items
    Common stock issued for
      services and license                  0     313,508        3,215,611
    Reduction of legal costs                0           0         (130,000)
    Depreciation                       12,268       9,311           29,909
    Loss on disposal of equipment           0           0            6,330
    Gain on debt restructuring              0    (673,486)      (1,235,536)
    Write-off receivables                   0           0          193,965
    Decrease (increase) in:
      Receivables                      34,675      31,566           27,146
      Prepaid Expenses                 (4,166)     51,035          (14,946)
      Other assets                     (1,050)          0           (2,220)
    Increase (decrease) in:
     Accounts payable                 130,110      52,227)         594,366
     Accrued expenses                  (5,344)      9,678           42,176
     Short term notes payable         103,349           0          103,349
                                    ----------  ----------      -----------
Net Cash from Operations             (150,532)   (472,228)      (2,934,911)

INVESTING ACTIVITIES
  Purchases of equipment              (21,631)    (19,611)         (95,491)
  Payments received on note
    receivable                              0           0           52,629
                                    ----------   -----------   ------------
Net Cash from Investing Activities    (21,631)    (19,611)         (42,862)



FINANCING ACTIVITIES
  Payment of notes payable             (4,803)          0           (8,161)
  Increase in notes payable                 0      12,545          316,700
  Equity contributed                        0           0          131,374
  Proceeds from issuance of
     common stock                     197,500     485,000        2,583,700
                                    ----------  ----------     ------------
    Net Cash from Financing
      Activities                      192,697     497,545        3,023,613
                                    ----------  ----------     ------------
NET INCREASE / (DECREASE) IN CASH      20,534       5,706           45,840

CASH, BEGINNING PERIOD                 25,306      37,833                0

CASH ENDING PERIOD                  $  45,840   $  43,539        $  45,840
                                    ==========  ==========      ===========

<PAGE>
                          MEDICAL DISCOVERIES, INC.

                        NOTES TO FINANCIAL STATEMENTS
                               September 30, 1997

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
September 30, 1997 and the results of operations and changes in financial
position for the nine-month period ended September 30, 1997.  The results
of operations for the nine months ended September 30, 1997 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 had no revenue for the period from January 1, 1997 to Septemer 30, 1997
compared to no revenue for the same period in 1996.  The company is in the
process of developing its technology for commercialization.  MDI reduced
its year-to-date general and administrative expense to $79,577 from $137,694
in 1997 compared to 1996 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 developed significant improvements
to its core technologies.  Among these improvements (which are in the
process of patent applications) is the capability to develop a wide variety
of "functional water" solutions in addition to the original MDI-P solution.

These new classes of "functional waters" enable the Company to aggressively
pursue several new markets with a wide variety of applications.  Included
among these new target markets are applications in the cosmetic 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 its 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.

STRATEGIC ALLIANCE.

MDI has agreed in principle and signed a letter of intent to enter into a
strategic alliance with Advanced H2O of San Francisco, California.
Advanced H2O is a privately held company specializing in the
commercialization of systems which produce varying types of "functional
water".

MANAGEMENT AND SCIENTIFIC BOARD CHANGES

Mr. Aaron Etra, Esq. has agreed to accept appointment to the Company's
Board of Directors.  Since 1981, Mr. Etra has been President of Investors &
Developers Associates, Inc.,  a corporation engaged in the following
activties:  merchant developers of commercial, residential and industrial
property in the U.S.; brokerage and property management; managing and
financing ventures internationally; domestic and international trading and
<PAGE>
commerce; technology transfer; business advisors and counselors.
Previously, Mr. Etra was an attorney with Fried, Harris, Shriver & Jacobson
(New York and London), and Etra & Etra (New York).  Additionally, he has
served as Managing Director, International Advisory Group-New York and
London; Hollander Concern-Stockholm, Paris, London.  Mr. Etra also served
in the Cabinet of Director-General, International Labor Organization,
Geneva, Switzerland.  Mr. Etra has been a lecturer at Columbia University
(New York), University of Malawi (Blantrye, Malawi) and the Center for
International Studies (New York University).  Mr. Etra received his Juris
Doctorate in law from Columbia University, his LL.M. from New York
University, and his B.A. for Yale University, and studied at the Hague
Academy of International Law.  Mr. Etra also serves as a director and
officer of several U.S., Dutch, U.K., and Australian companies engaged in
industrial, retailing, trading, licensing, property and financial services.

The Company has agreed to terms with Edward Alexander, Principle of
Advanced H2O, to join MDI as Vice President, and to serve on the Board of
Directors.  Mr. Alexander will provide the Company with expertise in the
areas of product, market applications and technology development in the
consumer products applications of "Functional waters".

The Company has engaged the services of Augostino Vittadini as a consultant
in the areas of Market Development, specifically focusing on
commercializing opportunities in the consumer products areas.  In addition,
Mr. Vittadini has agreed to server on the Company's Board of Directors.
Mr. Vittadini will focus his expertise and efforts in assisting the Company
in commercializing its "functional waters' in the areas of cosmetic and
other consumer applications.

PATENT ACTIVITY.

The Company was notified by the US Patent Office that another patent for
its MDI-P technology was issued.  This latest patent is No. 5,674,537:
"Electrolyzed Saline Solution Containing Concentrated Amounts of Ozone and
Chlorine Species".  This brings to five 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 has initiated discussions regarding licensing and other business
development relationships with several Japanese companies.  The Japanese
market is in already in full scale commercialization of "functional waters"
for a wide variety of applications including: water purification, waste
water treatment, food processing and sterilization, and agricultural
applications.  To date, there has been limited activity in the area of
medical applications of "functional waters".  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.

Recently, MDI was invited to present an update of its research activities
at the Society for Water Design in Tokyo, Japan.  As a result of the
material presented at this meeting, MDI has been invited to meet with
several Japanese companies in December to discuss possible areas of mutual
interest and collaboration.

In December, the Company will present additional scientific research at the
Functional Water Foundation Annual Congress to be held in Tokyo.
<PAGE>
FUNCTIONAL WATER SOCIETY OF NORTH AMERICA/FOUNDING MEMBER.

In late October, MDI agreed to become a founding member of the newly
created Functional Water Society of North America.  The Functional Water
Society of North America is a non-profit organization for research in the
science of electrolyzed water.  This organization is dedicated to
contributing to the scientific exploration of "functional water" for the
benefit of health and the environment.  As a founding member, MDI will play
an active role in the investigation, understanding, and promotion of the
benefits of "functional waters".  The Advisory Committee is focused on the
development of "functional waters" in the following areas:  Agriculture,
Chemistry, Dentistry, Environmental, Food Science, Geriatrics,
Immunobiology, Hydrotherapy, Japan and Russian Issues, Medical, Systems
Engineering, Water and Life, Water Physics, and Veterinary Medicine.

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.


                              PART II
                         OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

The Company is not currently involved in any litigation.  On November 1997,
MDI negotiated a general release with Spira and Associates in exchange for
800,000 shares of common stock.  The Company had retained Spira and
Associates in 1995 to assist in funding and to provide general consulting
in exchange for two issuances of stock (the first issuance due upon
execution of the agreement and the second due in the future based on
certain criteria).  The Company and Spira and Associates had terminated
their relationship in 1996 and the second stock issuance of 1,240,000
shares was voided.  Spira and Associates has agreed to accept 800,000
shares of common stock in lieu of the second issuance of stock due under
the original agreement.

ITEM 2.  CHANGES IN SECURITIES

     N/A

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

     N/A
<PAGE>
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: August 14, 1997                     /s/ Lee F. Kulas
                                       ---------------------------
                                       President and Chief Executive Officer