================================================================================

                TOUCHSTONE SOFTWARE CORPORATION AND SUBSIDIARIES

                               __________________


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

                               __________________


                                   FORM 10-QSB


               QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934


            FOR THE QUARTER ENDED                 COMMISSION FILE NUMBER
                JUNE 30, 2004                            0-12969



                         TOUCHSTONE SOFTWARE CORPORATION
             ------------------------------------------------------
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)


                DELAWARE                                    95-3778226
   ----------------------------                         ----------------
   (STATE OR OTHER JURISDICTION                         (I.R.S. EMPLOYER
 OF INCORPORATION OR ORGANIZATION)                     IDENTIFICATION NO.)


        1538 TURNPIKE ST., NORTH ANDOVER, MASSACHUSETTS        01845
        -----------------------------------------------     ----------
           (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)         (ZIP CODE)


                                 (978) 686-6468
              ----------------------------------------------------
              (REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)


                                      NONE
                     ---------------------------------------
                     (FORMER NAME, FORMER ADDRESS AND FORMER
                   FISCAL YEAR, IF CHANGED SINCE LAST REPORT)



     Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the 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.   Yes [X]    No [_]

     The number of shares of Common Stock of the Registrant outstanding as of
November 12, 2004 was 11,440,060 shares.

================================================================================
<PAGE>
                TOUCHSTONE SOFTWARE CORPORATION AND SUBSIDIARIES



                                      INDEX

                                                                           PAGE
                                                                          NUMBER
                                                                          ------
PART I.     FINANCIAL INFORMATION

ITEM 1.     Financial Statements
            Consolidated Balance Sheet -- September 30, 2004 .............     3
            Consolidated Income Statements -- Three and Nine Months
               Ended September 30, 2004 and 2003 .........................     4
            Consolidated Statements of Cash Flows -- Nine Months
               Ended September 30, 2004 and 2003 .........................     5
            Notes to Consolidated Financial Statements ...................   6-8

ITEM 2.     Management's Discussion and Analysis of Financial
               Condition and Results of Operations .......................  9-12

ITEM 3.     Controls and Procedures ......................................    12





PART II.    OTHER INFORMATION

ITEM 1.     Legal Proceedings ............................................    13

ITEM 2.     Changes in Securities ........................................    13

ITEM 3.     Defaults Upon Senior Securities ..............................    13

ITEM 4.     Submission of Matter To a Vote of Security Holders ...........    13

ITEM 5.     Other Information ............................................    13

ITEM 6.     Exhibits and Reports on Form 8-K .............................    13



Signatures ...............................................................    14

Exhibits ................................................................. 15-17







                                        2
<PAGE>
                TOUCHSTONE SOFTWARE CORPORATION AND SUBSIDIARIES


                         PART I - FINANCIAL INFORMATION

                          ITEM 1. FINANCIAL STATEMENTS
                           CONSOLIDATED BALANCE SHEET
                               SEPTEMBER 30, 2004
                                   (UNAUDITED)



ASSETS
------
Current assets:
     Cash and cash equivalents                                     $    292,795
     Accounts receivable, net                                            11,539
     Inventories                                                         25,221
     Prepaid expenses and other current assets                           22,667
                                                                   ------------
            Total current assets                                        352,222

Note receivable, related party                                           96,659
Investments, other                                                      147,727
Property, and equipment, net                                              5,750
                                                                   ------------
                                                                   $    602,358
                                                                   ============



LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
Current liabilities:
     Accounts payable                                              $     40,501
     Accrued payroll and related expenses                                58,434
     Other accrued expenses                                              81,472
                                                                   ------------
            Total current liabilities                                   180,407
                                                                   ------------

Shareholders' equity:
     Preferred stock, $.001 par value, 3,000,000 shares
        authorized, none issued or outstanding
     Common stock, $.001 par value, 20,000,000 shares
        authorized, issued and outstanding, 11,440,060 shares
                                                                         11,440
     Additional paid-in capital                                      20,979,684
     Deferred compensation                                              (42,184)
     Accumulated deficit                                            (20,526,989)
                                                                   ------------
            Shareholders' equity, net                                   421,951
                                                                   ------------
                                                                   $    602,358
                                                                   ============



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

                                        3
<PAGE>
                TOUCHSTONE SOFTWARE CORPORATION AND SUBSIDIARIES

                         CONSOLIDATED INCOME STATEMENTS
                                   (UNAUDITED)


<TABLE><CAPTION>
                                                           THREE MONTHS ENDED                 NINE MONTHS ENDED
                                                              SEPTEMBER 30,                      SEPTEMBER 30,
                                                     ------------------------------      ------------------------------
                                                         2004              2003              2004             2003
                                                     ------------      ------------      ------------      ------------
<S>                                                  <C>               <C>               <C>               <C>
Revenues:
    Product sales                                    $    337,503      $    350,344      $  1,161,276      $  1,088,257
    Royalty income                                          7,285             2,345            33,243            81,004
                                                     ------------      ------------      ------------      ------------
        Total revenues                                    344,788           352,689         1,194,519         1,169,261
Cost of revenues                                           58,500            38,764           174,228           139,027
                                                     ------------      ------------      ------------      ------------
        Gross profit                                      286,288           313,925         1,020,291         1,030,234
                                                     ------------      ------------      ------------      ------------

Operating expenses:
    Sales, marketing, general and administrative          179,712           204,605           664,830           617,033
    Research and development                              152,736           120,800           413,034           416,089
                                                     ------------      ------------      ------------      ------------
        Total operating expenses                          332,448           325,405         1,077,864         1,033,122
                                                     ------------      ------------      ------------      ------------
Income (loss) from operations                             (46,160)          (11,480)          (57,573)           (2,888)
Gain on sale of investment                                     --            31,014                --            44,214
Other income, net                                           2,778             1,944             8,352            56,014
                                                     ------------      ------------      ------------      ------------
Income (loss) before provision for income taxes           (43,382)           21,478           (49,221)           97,340
Provision for income taxes taxes                               --                --                --                --
                                                     ------------      ------------      ------------      ------------

Net income (loss)                                    $    (43,382)     $     21,478      $    (49,221)     $     97,340
                                                     ============      ============      ============      ============

Basic earnings  (loss) per share                     $      (0.00)     $       0.01      $      (0.00)     $       0.01
                                                     ============      ============      ============      ============

Basic weighted average shares outstanding              11,440,060        11,440,060        11,040,060        11,440,060
                                                     ============      ============      ============      ============

Diluted  earnings (loss) per share                   $      (0.00)     $       0.01      $      (0.00)     $       0.01
                                                     ============      ============      ============      ============

Diluted weighted average shares outstanding            11,440,060        12,301,010        11,440,060        12,301,010
                                                     ============      ============      ============      ============
</TABLE>


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

                                        4
<PAGE>
                TOUCHSTONE SOFTWARE CORPORATION AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)


<TABLE><CAPTION>
                                                                     NINE MONTHS ENDED
                                                                       SEPTEMBER 30,
                                                               ------------------------------
                                                                   2004              2003
                                                               ------------      ------------
<S>                                                            <C>               <C>
Cash flows from operating activities:
    Net Income (loss)                                          $    (49,221)     $     97,340
    Adjustments to reconcile net income (loss) to net cash
    provided by (used in) operating activities:
        Depreciation                                                  4,279            10,681
        Amortization of deferred compensation                            --             1,350
        Gain on sale of investment                                       --           (44,214)
        Provision for doubtful account                                   --              (239)
        Deferred income taxes                                            --           (13,318)
        Changes in assets and liabilities:
           Accounts receivable                                        1,627            (8,294)
           Inventories                                               (3,444)              859
           Prepaid expenses and other current assets                   (505)           (8,349)
           Accounts payable                                         (10,541)         (241,155)
           Accrued liabilities                                        4,876             8,130
                                                               ------------      ------------
           Net cash used in operating activities                    (52,927)         (197,209)
                                                               ------------      ------------

Cash flows from investing activities:
    Proceeds from the sale of investment                                 --           490,487
    Collection of notes receivable - related party                       49                45
                                                               ------------      ------------
           Net cash provided by investing activities                     49           490,532
                                                               ------------      ------------

Cash flows from financing activities:
    Payment on long-term debt
                                                                    (10,660)          (22,877)
                                                               ------------      ------------
           Net cash used in financing activities                    (10,660)          (22,877)
                                                               ------------      ------------

Net increase (decrease) in cash and cash equivalents                (63,538)          270,446
Cash and cash equivalents, beginning of period                      356,333            72,426
                                                               ------------      ------------
Cash and cash equivalents, end of period                       $    292,795      $    342,872
                                                               ------------      ------------

Supplemental disclosure of cash flow information:
    Cash paid during the period for:
        Interest                                               $        308      $      2,802
                                                               ------------      ------------
        Income taxes                                           $         --      $         --
                                                               ------------      ------------
</TABLE>


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

                                        5
<PAGE>
                TOUCHSTONE SOFTWARE CORPORATION AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



1.    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NATURE OF OPERATIONS. TouchStone Software Corporation and subsidiaries
("TouchStone" or the "Company") markets, and supports a line of computer
problem-solving utility software and supporting products and engineering
services which simplify personal computer installation, support, and
maintenance. TouchStone operates from one location in the United States. The
Company markets its products, domestically and internationally, directly to
original equipment manufacturers and end users.

PRINCIPLES OF CONSOLIDATION. The 2004 consolidated financial statements of the
Company include the financial statements of the Company's wholly-owned
subsidiary; eSupport.com, Inc.. The 2003 consolidated financial statements of
the Company include the financial statements of the Company's two wholly owned
subsidiaries, eSupport.com and Touchstone Investments, Inc. All inter-company
transactions and balances have been eliminated.

BASIS OF PRESENTATION. The accompanying unaudited consolidated financial
statements have been prepared by the Company pursuant to the rules and
regulations of the Securities and Exchange Commission regarding interim
financial reporting. Accordingly, they do not include all of the information and
footnotes in accordance with generally accepted accounting principles for
complete financial statements and should be read in conjuction with the audited
financial statements included in the Company's Annual Report on Form 10-KSB for
the year ended December 31, 2003. In the opinion of management, the accompanying
unaudited financial statements contain all adjustments necessary for fair
presentation of the Company's financial position, results of operations and cash
flows at the dates and for the periods presented. Such adjustments consisted
only of normal recurring items.

The operating results for the three and nine months ended September 30, 2004 are
not necessarily indicative of the results to be expected for the full year.

The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern, which contemplates the
realization of assets and the satisfaction of liabilities in the normal course
of business. The Company previously has suffered recurring operating losses and
operating cash flow deficits, has an accumulated deficit of $20,526,989 at
September 30, 2004, and is dependent on its current cash reserves to fund future
operating losses and operating cash flow deficits. In addition, the Company is
subject to a number of risks. Principally among these risks are marketing of its
products and services, which are susceptible to increased competition from other
companies and obsolescence of its products and services. Also amoung these risks
are the decreased sales leads the Company has faced with the changes to Phoenix
Technology's website. The Company is still working with Phoenix Technologies on
a solution to the website change that occurred in February 2003. Phoenix has
moved the Company's link to a more acceptable location on their website. These
factors, among others, raise substantial doubt about the Company's ability to
continue as a going concern at September 30, 2004. The financial statements do
not include any adjustments that might result from the outcome of this
uncertainty.

Management's reorganization plan of providing for significant staff reductions
in non-core operating and support functions, limitations on corporate travel and
a realignment of senior management responsibilities has been fully executed. In
order to meet its cash requirements over the next twelve months, management
expects to supplement cash flow benefits expected from these initiatives with
current cash reserves. Other additional sources of financing, including
additional private debt or equity capital, are being explored, along with
seeking merger candidates with whom the Company has synergies.


                                        6
<PAGE>
                TOUCHSTONE SOFTWARE CORPORATION AND SUBSIDIARIES



2.    EARNINGS PER SHARE

Pursuant to Statement of Financial Accounting Standards No. 128, "EARNINGS PER
SHARE" (SFAS 128), the Company provides dual presentation of "Basic" and
"Diluted" Earnings Per Share (EPS). Basic EPS excludes dilution from common
stock equivalents and is computed by dividing income available to common
stockholders by the weighted average number of common shares outstanding for the
period. Diluted EPS reflects the potential dilution from common stock
equivalents. Common stock equivalents consisted of outstanding stock options and
warrants for the periods ended September 30, 2004 and 2003. At September 30,
2004 and 2003, the number of outstanding stock options and warrants were 760,950
and 860,950, respectively.


3.    NOTE RECEIVABLE - RELATED PARTY

During 2000, the Company entered into an agreement to advance up to $500,000 to
Metro Investments, LLC ("Metro"), to invest in internet-based companies. Metro
is owned 100% by Pierre Narath, the Company's Chairman of the Board and Jason
Raza, the Company's President and Chief Executive Officer. The advances are
supported by a 5-year promissory note. The terms of the note, as amended in
November 2001, require interest to accrue at the rate of 8% per annum payable
monthly, beginning January 2002. The note is secured by investments held by
Metro. Proceeds from the sale of any of the underlying investments must be used
to pay outstanding principal and interest prior to any distribution of income or
assets to the members of Metro. All outstanding principal and interest is due
December 31, 2004.

Total advances under this agreement amounted to $350,000 plus accrued interest
of $56,700, of which $310,041 has been repaid through September 30, 2004. The
balance at September 30, 2004 is $96,659.


4.    INVESTMENTS

INVESTMENTS, OTHER. Investments, other at September 30, 2004, include equity
instruments of privately held internet and technology companies. These
investments are accounted for under the cost method as the Company's ownership
represents less than 20% of each investee. The Company's carrying value of these
investments approximates fair value at September 30, 2004.

The Company regularly reviews the assumptions underlying the operating
performance and cash flow forecasts in assessing carrying value and or
impairment of its investments. At September 30, 2004, the Company has concluded
there has been no further decline in the value of these investments, therefore
no adjustment has been made to these investments during the quarter.


5.    INCOME TAXES

No provision for income taxes is shown in the accompanying consolidated income
statements as the Company has sufficient net operating loss carryforwards
available to offset current taxable income levels at September 30, 2004 and
2003, respectively.


                                        7
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                TOUCHSTONE SOFTWARE CORPORATION AND SUBSIDIARIES



6.    STOCK OPTIONS

The Company accounts for its stock-based employee compensation plan under the
recognition and measurement principles of APB Opinion No. 25, ACCOUNTING FOR
STOCK ISSUED TO EMPLOYEES, and related Interpretations. No stock-based employee
compensation cost is reflected in net income, as all options granted under those
plans had an exercise price equal to the market value of the underlying common
stock on the date of grant. The following table illustrates the effect on net
income and earnings per share as if the company had applied the fair value
recognition provisions of FASB Statement No. 123, ACCOUNTING FOR STOCK-BASED
COMPENSATION, to stock-based employee compensation.



      ======================================================================
                                   THREE MONTHS ENDED     NINE MONTHS ENDED
                                      SEPTEMBER 30,          SEPTEMBER 30,
      ---------------------------  ------------------     ------------------
                                     2004      2003         2004      2003
      ---------------------------  --------  --------     --------  --------
      Net income (loss) as
         reported                  $(43,382) $ 21,478     $(49,221) $ 97,340
      ---------------------------  --------  --------     --------  --------
      Pro forma impact of
         expensing options               81       164          243       492
      ---------------------------  --------  --------     --------  --------
      Pro forma net Income (loss)  $(43,463) $ 21,314     $(49,464) $ 96,484
      ---------------------------  --------  --------     --------  --------

      ---------------------------  --------  --------     --------  --------
      Earnings (loss) per share:
      ---------------------------  --------  --------     --------  --------
         Basic-as reported         $   0.00  $   0.01     $   0.00  $   0.01
      ---------------------------  --------  --------     --------  --------
         Basic-pro forma           $   0.00  $   0.01     $   0.00  $   0.01
      ---------------------------  --------  --------     --------  --------

      ---------------------------  --------  --------     --------  --------
         Diluted-as reported       $   0.00  $   0.01     $   0.00  $   0.01
      ---------------------------  --------  --------     --------  --------
         Diluted-pro forma         $   0.00  $   0.01     $   0.00  $   0.01
      ======================================================================











                                        8
<PAGE>
                TOUCHSTONE SOFTWARE CORPORATION AND SUBSIDIARIES



ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

OVERVIEW

     TouchStone Software Corporation, Inc. and its consolidated subsidiary,
("TouchStone" or "the Company") is a provider of system management software,
which includes basic input/output ("BIOS") software upgrades, personal computer
("PC") diagnostics for personal computers and embedded systems. System
management software is one of the fundamental layers in any microprocessor-based
system (including PCs) architecture and provides an essential interface between
the systems's operating software and hardware. Organized in 1982 as a California
corporation, the Company reincorporated in Delaware in January 1997. The
Company's executive offices are located at 1538 Turnpike Street, North Andover,
Massachusetts 01845, and its telephone number is (978) 686-6468.

     In January 2000, the Company formed eSupport.com, Inc. (a New Hampshire
Corporation), a wholly-owned subsidiary, which currently conducts the day to day
operations. The Company's core product is BIOS, which is the software initially
executed after the system is turned on, tests and initializes hardware
components, initiates the operating system and then provides advanced interface
functions. BIOS software upgrades allow end-users of desktop PCs to extend the
life of their systems and reduce the overall ownership cost of a PC. During the
past several years, eSupport has grown into a full-service engineering company
supplying not only BIOS software upgrades, but also PC diagnostics software and
NRE (non-recurring engineering) services to both end-users and OEM customers. As
the evolution of software and hardware has become more complex, the need for
compatibility has increased in importance. The Company believes that its
experience and customer focus allow it to quickly identify solutions and market
products compatible with the array of operating systems, application programs,
utilities and hardware products available.

     eSupport's customers include primarily end-users, enterprises such as
Fortune 500 corporations, government agencies, major educational and financial
institutions, designers and manufacturers of motherboards, PC systems and other
microprocessor-based or embedded devices. eSupport markets and licenses its
products and services worldwide.

INDUSTRY OVERVIEW

     During the last decade, the personal computer industry has grown rapidly -
fueled most recently by the Internet. The Company believes that the market will
continue to expand in the future as technological advances and increased
functionality, combined with lower pricing, will increasingly make personal
computers common for use in both homes and businesses. Future changes in the
operating systems that run personal computers may contain some of the
functionality of certain utility software of the kind marketed by the Company.
The software industry, including the utility market, is increasingly being
dominated by a few very large competitors. However, the Company believes that
the complexities created by the Internet, multimedia and connectivity utilizing
enhanced video, storage, animation, and audio capabilities will continue to
drive the demand for new, sophisticated, separately installed utility software
and BIOS upgrades.


                                        9
<PAGE>
                TOUCHSTONE SOFTWARE CORPORATION AND SUBSIDIARIES



RESULTS OF OPERATIONS

     The following is a discussion of the financial condition and results of
operations of the Company as of September 30, 2004 and September 30, 2003 and
should be read in conjunction with the accompanying consolidated financial
statements and notes thereto and the Company's audited consolidated financial
statements and notes thereto for the year ended December 31, 2003, included in
the Company's Annual Report on Form 10-KSB and is qualified in its entirety by
reference thereto.

     The following table sets forth, for the periods indicated, certain
consolidated statement of operations information as a percentage of the
Company's total revenues represented by each item. The Company's historical
results are not necessarily indicative of results in any future period.



                                    THREE       THREE        NINE        NINE
                                    MONTHS      MONTHS      MONTHS      MONTHS
                                     ENDED       ENDED       ENDED      ENDED
                                   SEPTEMBER   SEPTEMBER   SEPTEMBER   SEPTEMBER
                                      30,         30,         30,         30,
                                     2004        2003        2004        2003
                                   --------------------------------------------
     Revenues:
        Product sales                    98%         99%         97%         93%
        Royalty income                    2           1           3           7
                                   --------------------------------------------
           Total revenues               100         100         100         100
     Cost of revenues                    17          11          15          12
                                   --------------------------------------------
     Gross profit                        83          89          85          88
                                   --------------------------------------------
     Operating expenses:
        Sales, marketing, general
          and administrative             52          58          56          52
        Research and development         44          34          34          36
                                   --------------------------------------------
           Total operating expenses      96          92          90          88
                                   --------------------------------------------
     Income (loss) from operations      (13)         (3)         (5)         --
     Gain on sale of investment          --           9          --           4
     Other income, net                    1          --           1           5
                                   --------------------------------------------
     Income (loss) before provision
       for income taxes                 (12)          6          (4)          9
     Provision for income taxes          --          --          --          --
                                   --------------------------------------------
     Net income (loss)                  (12)%         6%         (4)%         9%
                                   ============================================



                                       10
<PAGE>
                TOUCHSTONE SOFTWARE CORPORATION AND SUBSIDIARIES



COMPARISON OF NINE MONTH PERIODS ENDED SEPTEMBER 30, 2004  AND 2003

     REVENUES. The Company's revenues consist of product sales, royalties and
engineering services revenues. Product revenues are recorded at the time
products are shipped. Royalty income is recognized upon receipt of a royalty
report and payment from the licensor. Engineering services revenue generally
consists of amounts charged for customization of the software prior to delivery
and are generally recognized as the services are performed. For the nine months
ended September 30, 2004 the Company experienced an overall increase in revenues
of 2% as compared to the same period a year ago. The increase in revenues is due
to an increase in our web advertising campaign. The Company is also still
working with Phoenix Technologies on a solution to the website change that
occurred in February 2003. Phoenix has moved the Company's link to a more
acceptable location on their website. Product sales increased approximately 7%
as compared to the same period one year ago. Royalty revenue decreased by
approximately 59% as compared to the same period one year ago due to one royalty
agreement being cancelled. The second royalty situation is lower due to a
product phase out. The royalty revenue will come to an end when this product is
completely phased out.

     COST OF REVENUES. Cost of revenues consists of the cost of materials,
freight expenses, royalties paid to other software development companies and
direct costs associated with engineering services revenues. Cost of revenues as
a percentage of revenue increased to 15% of revenues for the nine month period
ended September 30, 2004 from 12% for the same period a year ago. This is due
mainly to an increase in costs associated with new third party products the
Company has introduced on a test basis. This increase does not apply to the core
products the Company sells.

     SALES, MARKETING, GENERAL AND ADMINISTRATIVE. Sales, marketing, general and
administrative expenses consist primarily of salaries & commissions,
professional services and facilities costs. Sales, marketing, general and
administrative expenses increased by approximately $48000, or 8%, for the nine
month period ended September 30, 2004, from the same period one year ago. This
increase is related to higher commissions paid, the larger web advertising
campaign and some outside service cost.

     RESEARCH AND DEVELOPMENT. Research and development expenses consist
primarily of engineering personnel and related expenses. Research and
development expenses decreased approximately $3,000 or 1% for the nine month
period ended September 30, 2004 from the same period one year ago.

     OTHER INCOME, NET. Other income, net consists of interest income associated
with the related party note, interest income from the Company's money market
accounts, and interest expense associated with the long term debt. Other income
decreased by approximately $48,000 for the nine month period ended September 30,
2004 as compared to the same period one year ago. The decrease is due to a
settlement the Company received from former legal counsel in 2003.

LIQUIDITY AND CAPITAL RESOURCES

     During the nine months ended September 30, 2004, cash resources of
approximately $53,000 were used by the Company's operating activities as
compared to cash of approximately $197,000 used during the same period a year
ago.

     The Company's cash balance at September 30, 2004 was approximately $293,000
as compared to approximately $343,000 a year ago.

     Management expects that the cash balance and the benefits from the
reduction in overall operating expenses to be sufficient to meet its cash
requirements. Other additional sources of financing, including additional
private debt or equity capital, are being explored, along with seeking merger
candidates with whom the Company has substantial synergies.


                                       11
<PAGE>
                TOUCHSTONE SOFTWARE CORPORATION AND SUBSIDIARIES



     The Company continues to operate with no material commitments for capital
expenditures and we anticipate that expenditures will continue to decrease in
the immediate future as we continue to cut costs during our efforts to
restructure current operating expenditures in line with our current revenue
stream.

     The impact of inflation during 2004 has had no material impact on our
business and financial results.


                SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

     The report, other than historical financial information, includes
forward-looking statements that involve known and unknown risks and
uncertainties, including quarterly flucutations in results. Such statements are
made pusuant to the "safe harbor" provisions established by recent securities
legislations, and are based on the assumptions and expectations of the Company's
management at the time such statements are made. Important factors that could
cause actual results to differ include the timely availability and acceptance of
new products, general market conditions governing supply and demand, the impact
of competitive products and pricing and other risks detailed in the Company's
filings with the Securities and Exchange Commission. Actual results may vary
materially. Accordingly you should not place undue reliance on any
forward-looking statements. Unless otherwise required by law, the Company
disclaims any obligations to revise or update such forward-looking statements in
order to reflect future events or developments.


ITEM 3.  CONTROLS AND PROCEDURES

     As of September 30, 2004, an evaluation was performed under the supervision
and with the participation of the Company's management, including the Chief
Executive Officer and the Accounting Manager, of the effectiveness of the design
and operation of the Company's disclosure controls and procedures. Based on that
evaluation, the Company's management, including the Chief Executive Officer and
the Accounting Manager, concluded that the Company's disclosure controls and
procedures were effective as of September 30, 2004. There have been no
significant changes in the Company's internal controls or in other factors that
could significantly affect internal controls subsequent to September 30, 2004.



                                       12
<PAGE>
                TOUCHSTONE SOFTWARE CORPORATION AND SUBSIDIARIES


                           PART II--OTHER INFORMATION



ITEM 1.  LEGAL PROCEEDINGS

         The Company is subject to legal proceedings and claims, which arise in
the ordinary course of its business. Although occasional adverse decisions (or
settlements) may occur, the Company believes that the final disposition of such
matters will not have a material adverse effect on the financial position or
results of operations of the Company.



ITEM 2.  CHANGES IN SECURITIES

         None



ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

         None



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

         None



ITEM 5.  OTHER INFORMATION

         None



ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

         (a)  Exhibits

              Exhibit 31.1   Certification Pursuant to Rule 13a-14 of the
                             Securities Exchange Act of 1934

              Exhibit 31.2   Certification Pursuant to Rule 13a-14 of the
                             Securities Exchange Act of 1934

              Exhibit 32     Certifications Pursuant to Rule 13a-14(b) of the
                             Securities Exchange Act of 1934

         (b)  Reports on Form 8-K

              No reports on Form 8-K were filed by the Company during the
              quarter ended September 30, 2004.





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<PAGE>
                TOUCHSTONE SOFTWARE CORPORATION AND SUBSIDIARIES




                                   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.



                                                TOUCHSTONE SOFTWARE CORPORATION
                                                        (Registrant)





          NAME                           TITLE                      DATE
          ----                           -----                      ----



/s/  Jason K. Raza                Chief Executive Officer     November 12, 2004
----------------------------      and President
     JASON K. RAZA



/s/  Michelle L. Carrozzella      Accounting Manager          November 12, 2004
----------------------------
     MICHELLE L. CARROZZELLA























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