SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549
                              --------------------

                                    FORM 10-Q

               [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15d
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                  For the quarterly period ended June 30, 1998
               
               [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15d
                     OF THE SECURITIES EXCHANGE ACT OF 1934

          For the transition period from: ____________ to ____________

                        Commission file number: 0 - 23219


                           DENTAL CARE ALLIANCE, INC.
             ------------------------------------------------------
             (exact name of registrant as specified in its charter)

DELAWARE                                                        65-0555126
-------------------------------                             -------------------
(State or other jurisdiction of                             (IRS Employer
incorporation or organization)                              Identification No.)

                           DENTAL CARE ALLIANCE, INC.
                           1343 MAIN STREET, SUITE 700
                               SARASOTA, FL. 34236

                                 (941) 955-3150
              ----------------------------------------------------
              (Registrant's telephone number, including area code)

                                       N/A
   --------------------------------------------------------------------------
   (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 15d of the Securities and Exchange Act of 1934
during the preceding 12 months (or 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 CORPORATE ISSUERS:
  Indicate the number of shares outstanding of each of the issuer's classes of
                  common stock as of the latest practical date.

     Total number of shares of Common Stock, as of August 6, 1998: 6,978,065


<PAGE>

                           DENTAL CARE ALLIANCE, INC.

                                      INDEX


Part I.   FINANCIAL INFORMATION                                         Page No.


          Item 1. Financial Statements                                     3

          Item 2. Management's Discussion and Analysis of Financial
                  Condition and Results of Operations                      8


Part II.  OTHER INFORMATION


          Item 1. Legal Proceedings                                       14

          Item 2. Changes in Securities and Use of Proceeds               14

          Item 3. Defaults Upon Senior Securities                         14

          Item 4. Submission of Matters to a Vote of Security Holders     14

          Item 5. Other Information                                       14

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


Signatures                                                                15


Exhibits                                                                  16

                                       2

<PAGE>


PART I.  FINANCIAL INFORMATION

Item 1.  Financial statements

                           DENTAL CARE ALLIANCE, INC.
                           CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>

                                                              DECEMBER 31,      JUNE 30,
                  ASSETS                                          1997           1998
                                                              -----------    -----------
                                                                             (Unaudited)
<S>                                                          <C>             <C>
Current Assets:
   Cash and cash equivalents .............................    $20,367,722    $ 9,032,998
   Consulting and license fees receivable ................         64,116         29,569
   Management fee receivable from PAs ....................        914,026      3,104,027
   Advances to PAs, net ..................................        483,421      1,361,517
   Acquisition accounts receivable .......................           --          600,000
   Other current assets ..................................        254,412        449,474
   Current portion of long-term notes receivable from PA's         83,522        110,585
                                                              -----------    -----------

     TOTAL CURRENT ASSETS ................................     22,167,219     14,688,170

Property and equipment, net ..............................      1,113,050      2,736,150
Intangible assets, net ...................................      4,747,303     13,287,742
Long-term notes receivable from PAs, less current portion         313,940        682,859
Other assets .............................................        212,975        138,611
                                                              -----------    -----------
     TOTAL ASSETS ........................................    $28,554,487    $31,533,532
                                                              ===========    ===========
            LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
   Accounts payable ......................................    $   638,030    $   830,857
   Accrued payroll and payroll related costs .............         64,933        168,089
   Other accrued liabilities .............................        412,952        619,010
   Acquisition and affiliation obligations payable .......        920,000        600,000
   Income taxes payable ..................................        179,367        267,104
   Current portion of long-term debt and capital leases ..        195,193        508,348
                                                              -----------    -----------

     TOTAL CURRENT LIABILITIES ...........................      2,410,475      2,993,408

Deferred income taxes ....................................        773,269        808,269
Long-term debt, less current portion .....................        816,918      1,638,903
                                                              -----------    -----------

     TOTAL LIABILITIES ...................................      4,000,662      5,440,580

Commitments and contingencies ............................           --             --

Stockholders' equity:
   Common stock, $.01 par value, 50,000,000 shares
     authorized, 6,977,700 and 6,978,065 issued
     and outstanding, respectively .......................         69,777         69,781
Additional paid-in capital ...............................     24,126,009     24,130,389
Retained earnings ........................................        358,039      1,892,782
                                                              -----------    -----------

     TOTAL STOCKHOLDERS' EQUITY ..........................     24,553,825     26,092,952

     TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY ..........    $28,554,487    $31,533,532
                                                              ===========    ===========

</TABLE>

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

                                       3

<PAGE>

                           DENTAL CARE ALLIANCE, INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)
<TABLE>
<CAPTION>

                                                    THREE MONTHS                    SIX MONTHS
                                                    ENDED JUNE 30,                 ENDED JUNE 30,
                                                    --------------                 --------------
                                                  1997            1998           1997            1998 
                                                  ----            ----           ----            ----

<S>                                               <C>               <C>             <C>             <C>        
Management fees .........................    $ 1,351,768     $ 6,990,212    $ 2,471,759     $11,802,583
Consulting and licensing fees ...........         77,195         173,533        161,885         294,133
                                             -----------     -----------    -----------     -----------

      TOTAL REVENUES ....................      1,428,963       7,163,745      2,633,644      12,096,716

Managed dental center expenses:
   Staff salaries and benefits ..........        331,101       2,102,204        601,383       3,321,912
   Dental supplies ......................        131,756         471,103        213,334         831,074
   Laboratory fees ......................        200,754         707,000        373,010       1,311,487
   Marketing ............................         79,567         223,403        176,627         423,613
   Occupancy ............................        176,193         753,874        333,085       1,278,186
   Other ................................        183,420         470,527        326,494         828,240
                                             -----------     -----------    -----------     -----------
      TOTAL MANAGED DENTAL CENTER
            EXPENSES ....................      1,102,791       4,728,111      2,023,933       7,994,512
                                             -----------     -----------    -----------     -----------

                                                 326,172       2,435,634        609,711       4,102,204

Salaries and benefits ...................        192,296         476,227        373,016         786,414
General and administrative ..............         68,269         496,893        135,970         820,226
Depreciation and amortization ...........         35,167         266,599         41,578         389,751
                                             -----------     -----------    -----------     -----------
                                                 295,732       1,239,719        550,564       1,996,391

      OPERATING INCOME ..................         30,440       1,195,915         59,147       2,105,813

Interest income, net ....................         21,528         161,648         36,464         392,955
                                             -----------     -----------    -----------     -----------

INCOME BEFORE INCOME TAXES ..............         51,968       1,357,563         95,611       2,498,768

Provision for income taxes ..............         18,979         523,748         36,000         964,025
                                             -----------     -----------    -----------     -----------

NET INCOME ..............................         32,989         833,815         59,611       1,534,743

     Adjustment to redemption value of
          common and preferred securities        (10,500)           --          (10,500)           --

   Cumulative preferred stock dividend ..        (30,000)           --          (60,000)           --

NET INCOME (LOSS) APPLICABLE TO COMMON
     STOCK ..............................    $    (7,511)    $   833,815        (10,889)    $ 1,534,743
                                             ===========     ===========    ===========     ===========

Basic net income per common share .......    $      --       $      0.12    $      --       $      0.22
Diluted net income per common share .....    $      --       $      0.12    $      --       $      0.22
Basic weighted average common shares
     outstanding ........................      4,228,302       6,977,985      4,131,510       6,977,843
Diluted weighted average common shares
     outstanding ........................      4,315,771       7,104,329      4,218,979       7,076,495

</TABLE>

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

                                            4


<PAGE>

                            DENTAL CARE ALLIANCE, INC
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)

<TABLE>
<CAPTION>

                                                                          SIX MONTHS
                                                                        ENDED JUNE 30,
                                                                        --------------
                                                                     1997             1998
                                                                     ----             ----
CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                            <C>             <C>         
   Net income .............................................    $    59,611     $  1,534,743
   Adjustments to reconcile net income to net cash provided
        by operating activities:
        Depreciation and amortization .....................         41,578          389,751
        Stock issued for services .........................           --              4,377
        Deferred income taxes .............................           --             35,000
   (Increase) decrease in:
      Consulting and license fees receivable ..............        (47,427)          34,547
      Management fee receivable from PAs ..................       (179,015)      (2,190,001)
      Other assets ........................................         17,367         (195,062)
   Increase in:
      Accounts payable ....................................         82,774          192,827
      Other accrued liabilities ...........................         20,237          293,795
      Accrued payroll & payroll related costs .............         88,336          103,156
                                                                ----------     ------------
 
     Net cash provided by operating activities ...........         83,461          203,133

CASH FLOWS FROM INVESTING ACTIVITIES:
   Additions to property and equipment ....................       (211,040)      (1,811,857)
   Advances made on notes receivable from PAs .............           --           (450,000)
   Payments received on notes receivable from PAs .........         24,639           54,019
   Acquisition and affiliations obligations payable .......           --           (920,000)
   Investment in servicing agreements and other assets ....           --         (8,667,063)
                                                               -----------     ------------
      Net cash used in investing activities ...............       (186,401)     (11,794,901)

CASH FLOWS FROM FINANCING ACTIVITIES:
   Proceeds from issuance of common stock .................         20,020             --
   Payments of long-term debt .............................        (23,449)         (80,922)
   Proceeds from issuance of long-term debt ...............           --          1,216,062
   Advances to PAs ........................................       (270,673)        (878,096)
                                                               -----------     ------------

      Net cash (used in) provided by financing activities .       (274,102)         257,044

      Net decrease in cash and cash equivalents ...........       (377,042)     (11,334,724)

Cash and cash equivalents at beginning of period ..........      1,253,259       20,367,722

Cash and cash equivalents at end of period ................    $   876,217     $  9,032,998
                                                               ===========     ============

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
   Cash paid during the period for income taxes ...........    $      --       $    838,074
   Cash paid during the period for interest ...............    $     6,809     $     62,072
   Increase to redemption value of preferred stock ........    $    10,500     $       --
   Increase in cumulative preferred stock dividend ........    $    60,000     $       --

</TABLE>
   The accompanying notes are an integral part of these financial statements.


                                            5

<PAGE>

                           DENTAL CARE ALLIANCE, INC.
                      Notes to Interim Financial Statements
                             June, 1998 (Unaudited)

1.    OPERATIONS AND ORGANIZATION

      Dental Care Alliance, Inc. (the "Company") provides management services to
      dental practices ("Managed Dental Centers") by entering into
      administrative services agreements ("Management Agreements") with
      individual dental professional corporations or professional associations
      (the "PAs"). In addition, the Company provides licensing services to
      Managed Dental Centers and certain non-managed practices ("Licensed Dental
      Centers"). As of June 30, 1998, the Company provided management and
      licensing services to 49 Managed Dental Centers. Additionally, the Company
      provides only licensing services to three Licensed Dental Centers.

2.    SIGNIFICANT ACCOUNTING POLICIES

      BASIS OF PRESENTATION / BASIS OF CONSOLIDATION. The accompanying
      consolidated interim financial statements have been prepared on the
      accrual basis of accounting and include only those operations which are
      under the ownership and financial control of the Company. All intercompany
      accounts and transactions have been eliminated in consolidation. The
      Company does not have ownership in or exercise control over the dentistry
      activities of the PAs and accordingly, the accompanying interim financial
      statements do not consolidate the results of the PAs.

      The accompanying consolidated interim financial statements are unaudited
      and should be read in conjunction with the audited financial statements of
      the Company for the year ended December 31, 1997.

      In the opinion of management, the accompanying interim financial
      statements include all adjustments, consisting only of normal recurring
      adjustments, and disclosures necessary to prevent the information
      presented from being misleading. Certain prior period financial statement
      balances have been reclassified to conform with the current period
      presentation. The results of operations for the periods presented are not
      necessarily indicative of results for the full year.

3.    AFFILIATIONS

      In January, 1998, the Company executed 25-year Management Agreements with
      two practices located in Bradenton, Florida. Unaudited net practice
      revenue of the dental practices was $1.5 million for the year ended
      December 31, 1997. The total cost to the Company was approximately
      $480,000 of which $225,000 is allocated to tangible assets and $255,000,
      is allocated to Management Agreements. The Management Agreements executed
      are net revenue contracts.

      In February, 1998, the Company executed 25-year Management Agreements with
      two practices located in Orlando, Florida. Unaudited net practice revenue
      of the dental practices was approximately $1.3 million for the year ended
      December 31, 1997. The total cost to the Company is approximately $500,000
      of which $195,000 is allocated to tangible assets and $305,000 is
      allocated to Management Agreements. The Management Agreements executed are
      net revenue contracts.

      In March, 1998, the Company executed a 25-year Management Agreement with a
      practice in Mt. Dora, Florida. Unaudited net practice revenue of the
      dental practice was approximately $1.0 million. The total cost to the
      Company is approximately $349,000 of which $191,000 is allocated to
      tangible assets and $158,000 is allocated to the Management Agreement. The
      Management Agreement executed is a net revenue contract.

                                       6
<PAGE>

      In March, 1998, the Company executed a 25-year Management Agreement with a
      practice in Dalton, Georgia. Unaudited net practice revenue of the dental
      practice was approximately $1.7 million. The total cost to the Company is
      approximately $572,000 of which $100,000 has been allocated to tangible
      assets and $472,000 to the Management Agreement. The Management Agreement
      executed is a net revenue contract.

      In March, 1998, the Company executed 25-year Management Agreements with
      four dental practices in Detroit, Michigan. Unaudited net practice revenue
      of the dental practices was approximately $4.4 million. The total cost to
      the Company is approximately $2.6 million of which $185,000 has been
      allocated to tangible assets and $2.4 million to the Management
      Agreements. The Management Agreements executed are net revenue contracts.

      In May, 1998, the Company executed a 25-year Management Agreement with a
      practice in Savannah, Georgia. Unaudited net practice was approximately
      $700,000. The total cost to the Company is approximately $170,000 of which
      $2,000 has been allocated to tangible assets and $168,000 to the
      Management Agreement. The Management Agreement executed is a net revenue
      contract.

      In June, 1998, the Company executed a 25-year Management Agreement with a
      dental practice in Orange City, Florida. Unaudited net practice revenue of
      the dental practice was approximately $1.1 million. The total cost to the
      Company is approximately $365,000 of which $77,000 has allocated to
      tangible assets and $288,000 to the Management Agreement. The Management
      Agreement executed is a net revenue contract.

      In June, 1998, the Company executed a 25-year Management Agreement with a
      practice in Tallahassee, Florida. Unaudited net practice revenue of the
      dental practice was approximately $550,000. The total cost to the Company
      is approximately $140,000 of which $80,000 is allocated to tangible assets
      and $60,000 to the Management Agreement. The Management Agreement executed
      is a net revenue contract.

      In June, 1998, the Company executed 25-year Management Agreements with two
      dental practices in the Atlanta, Georgia area. Unaudited net practice
      revenue of the dental practices was approximately $1.5 million. The total
      cost to the Company is approximately $510,000 of which $105,000 is
      allocated to tangible assets and $405,000 to the Management Agreement. The
      Management Agreement executed is a net revenue contract.

4.    ACQUISITIONS

      On April 1, 1998, the Company acquired all the outstanding capital stock
      of Dental One Associates, Inc., a Georgia corporation ("Dental One"),
      pursuant to a Stock Purchase Agreement effective March 20, 1998.

      Pursuant to the Stock Purchase Agreement, the Company acquired all the
      assets of Dental One. Such assets consisted primarily of non-dental assets
      (including dental equipment) and management agreements. Five hundred
      thousand shares (500,000) of the common stock of Dental One, representing
      one hundred percent (100%) of the issued and outstanding shares were
      purchased by the Company in consideration of (a) $2.4 million in cash; (b)
      a promissory note in the amount of $1,047,510, bearing interest at 8.5%
      per annum, payable in equal quarterly payments of principal and interest
      amortized over five years with a three year balloon; and (c) a promissory
      note in the amount of $1.2 million payable in monthly installments over
      120 days. The Company was assigned management fee receivables owed Dental
      One by its Managed Dental Centers of approximately $1.2 million. These
      receivables which equal $600,000 as of June 30, 1998 have been recorded as
      acquisition accounts receivable.

                                       7
<PAGE>

Item 2. Management's discussion and analysis of financial condition and results
        of operations

         MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
                              RESULTS OF OPERATIONS

      THIS QUARTERLY REPORT ON FORM 10-Q CONTAINS FORWARD-LOOKING STATEMENTS
WITHIN THE MEANING OF SECTION 27A OF THE SECURITIES ACT OF 1933 AND SECTION 21B
OF THE SECURITIES EXCHANGE ACT OF 1934. THE COMPANY'S ACTUAL RESULTS COULD
DIFFER MATERIALLY FROM THOSE SET FORTH IN THE FORWARD-LOOKING STATEMENTS.
CERTAIN FACTORS THAT MIGHT CAUSE SUCH A DIFFERENCE INCLUDE, AMONG OTHERS, THE
PACE OF DEVELOPMENT AND ACQUISITION ACTIVITY, THE DEPENDENCE ON MANAGEMENT
AGREEMENTS, THE PAS AND AFFILIATED DENTISTS, THE REIMBURSEMENT RATES FOR DENTAL
SERVICES, AND OTHER RISKS DETAILED IN THE COMPANY'S SECURITIES AND EXCHANGE
COMMISSION FILINGS. OTHER RISK FACTORS ARE LISTED IN THE COMPANY'S REGISTRATION
STATEMENT NO. 333-34429 AS FILED WITH THE U.S. SECURITIES AND EXCHANGE
COMMISSION.

OVERVIEW

      The Company is a dental practice management company providing management
and licensing services to dental practices in Florida, Georgia and Michigan. As
of June 30, 1998 the Company provided management and licensing services to 49
Managed Dental Centers, 32 of which are located in Florida, nine of which are
located in Michigan and eight of which are located in Georgia. As of June 30,
1997, the Company provided management and licensing services to 13 Managed
Dental Centers, all located in Florida. Additionally, the Company provided only
licensing services to three Licensed Dental Centers in Florida as of both dates.
Management services include financial, accounting, billing, training, efficiency
and productivity enhancement, recruiting, team building, marketing, advertising,
purchasing, collection and other services, as well as the provision of
management and administrative personnel. Licensing services include marketing,
advertising and purchasing. With respect to management services it provides to
dental practices, the Company enters into Management Agreements with the
professional association or corporation ("PAs") that own the practices.

      Prior to October 1996, the management fee paid to the Company pursuant to
the Management Agreements had been equal to a percentage ranging from 50-90% of
the net profits of the individual Managed Dental Centers, as defined in the
Management Agreements, plus reimbursement to the Company of its non-professional
expenses. Effective October 1996, the Company revised all of its 12 then
existing Management Agreements. Ten of these agreements were revised such that
the Company earns management fees based on 74% of total net patient revenues and
is based on cash collected minus any patient refunds ("Net Collected Revenue")
and the Company assumes responsibility for the payment of the non-professional
expenses of the Managed Dental Centers (the "Standard Management Agreements").
The remaining two Management Agreements continue to have management fee
structures based upon 50-55% of the net profit, as defined, of the two related
Managed Dental Centers. Subsequent to October 1996, the Company has executed
Management Agreements on terms substantially similar to those of the Standard
Management Agreements with management fees ranging from 67% - 74% of total net
patient revenues.

      The Company also enters into license agreements with each Dental Center
pursuant to which the Company provides licensing and advertising services to the
Dental Centers. In return for such services, the Company has collected fees
generally ranging from $800 to $1,000 per month from each Managed Dental Center
and from $600 to $1,200 from each Licensed Dental Center.

      Historically, in connection with the execution of a Management Agreement,
a PA has typically acquired both the dental and the non-dental assets of a
Managed Dental Center. The Company has either made loans to the acquiring PA or
has assisted the PA in obtaining third-party financing to purchase such assets.
Recently, the Company has acquired the non-dental assets of Managed Dental
Centers while the PAs acquired the dental assets of such Managed Dental Centers.
In addition, due to changing market conditions, the Company has begun
compensating PAs for the execution of Management Agreements.

                                       8
<PAGE>

      The Company from time to time has made loans to newly formed PAs with
which it has entered into Management Agreements to purchase the dental assets of
the related dental practices. In return the PAs execute promissory notes to the
Company in the amount of such loans. At June 30, 1998, the total outstanding
balance of such loans was $793,444. The notes underlying such loans generally
have terms ranging from two to ten years, bear interest at rates ranging
between 8.5% and 18.5% and are secured by the assets of the related dental
practice. The PAs to which such loans are made are newly formed and have no
assets other than the assets of the dental practices being acquired and no
liabilities other than the liabilities relating to the loans. In addition, the
Company from time to time makes working capital advances to individual PAs,
although it is not obligated contractually or otherwise to make such advances.
The extension of loans and working capital advances to the PAs by the Company is
not conditioned upon entering into Management Agreements with the Company.
Extension of any advances is entirely within the Company's discretion. These
advances are due within 12 months of issuance, bear interest at 8.5%, subject to
adjustment based on changes in the rates at which the Company may borrow from
its lenders. All advances made to PAs are guaranteed by the relevant PA owner,
although there is no independent collateral for these working capital advances.
A repayment default under such advances is also a default under the relevant
Management Agreement which permits the Company, among other things, to liquidate
the assets of the dental practice. At June 30, 1998, the total outstanding
balance of such advances was $1,361,517. There have been no revisions to the
terms of any such loans or advances.

      None of the PA owners are officers, directors or employees of the Company.
Dr. Dennis A. Corona, the owner of PAs operating a majority of the Managed
Dental Centers, owns approximately 1% of the Company's Common Stock.

      The Company does not consolidate the balance sheets or the operating
results (including revenue and expenses) of the dental practices under the
Management Agreements since these revenues and expenses are earned and incurred
by the PAs, not the Company. The Company has recorded goodwill and other
intangible assets in cases where the Company has paid a PA in consideration for
a modification to an existing Management Agreement or entering into new
Management Agreements. Where the Company acquires the assets of another
management company, such a transaction constitutes a business combination and
the Company recognizes the related goodwill, if any, in accordance with the
purchase method of accounting.

      In October 1997, the Company expanded its Management Information System
hardware and software in the corporate office. In 1998, the Company has begun
testing of new dental practice management software in several of its Managed
Dental Centers. The Company anticipates that all of the dental practices
currently under management will have installed the new software and, where
necessary, upgraded their hardware requirements. The Company believes that the
cost for the hardware and software will not be in excess of $500,000, but this
amount may increase as the number of Managed Dental Centers increases. The new
software installed at several of the Managed Dental Centers and the corporate
offices has addressed the Year 2000 issues for those systems under the Company's
control. The Company has not determined the level of preparedness of third
parties with which it deals nor the implications that a failure on their part
could have on the Company. The Company is in the process of making that
determination. In analyzing potential new affiliations, the Company will
consider the cost and timing of a practice's ability to meet the Year 2000 issue
before executing an agreement.

RESULTS OF OPERATIONS

THREE MONTHS ENDED JUNE 30, 1998 COMPARED TO THE THREE MONTHS ENDED JUNE 30, 
1997

      MANAGEMENT FEES. Management fees consist of a percentage of the net
realizable patient-related revenue at the majority of the PAs and a percentage
of the net realizable profits earned by the remaining PAs. Management fees
increased 417% from $1.4 million for the three months ended June 30, 1997, to
$7.0 million for the three months ended June 30, 1998. Revenues at existing
practices grew 10 percent to approximately $1.5 million while the balance of the
increase relates to the addition of 36 Managed Dental Centers since April 1,
1997.

                                       9
<PAGE>

      CONSULTING AND LICENSING FEES. Consulting and licensing fees consist of
fees earned by the Company for licensing services to all of the Dental Centers.
For the three months ended June 30, 1997 the Company also provided consulting
services to four Managed Dental Centers in Michigan. Consulting and licensing
fees increased 124.8% from $77,195 for the three months ended June 30, 1997, to
$173,533 for the three months ended June 30, 1998. The increase is primarily
attributable to the 36 additional Managed Dental Centers offset by a $37,000
decrease attributable to the cessation of consulting fees on the four Michigan
practices which were converted effective July 1, 1997 into Managed Dental
Centers. Income from these consulting fees are now included in management fees.

      MANAGED DENTAL CENTER EXPENSES. Managed dental center expenses consist of
non-professional expenses at the Managed Dental Centers. Managed dental center
expenses increased from $1.1 million for the three months ended June 30, 1997,
to $4.7 million for the three months ended June 30, 1998. As a percentage of net
patient revenue at the Managed Dental Centers, Managed Dental Center Expenses
decreased from 59% to 48%. This decrease is attributable to economies in
purchasing of dental supplies and laboratories (5%), reduced marketing
expenditures (2%) in new affiliations with established reputations, and lower
occupancy (2%) and other (5%) costs associated with new affiliations, offset by
higher staff salaries (3%).

      SALARIES AND BENEFITS. Salaries and benefits consist of costs for salaries
and benefits for employees at the Company's corporate and regional offices.
Salaries and benefits increased 147.7% from $192,296 for the three months ended
June 30, 1997, to $476,227 for the three months ended June 30, 1998. This
increase is attributable to additional staff required to manage the additional
36 Managed Dental Centers. As a percentage of net patient revenue at Managed
Dental Centers, salaries decreased from 10% to 5%.

      GENERAL AND ADMINISTRATIVE. General and administrative expenses consists
of expenses related to the operation of the Company's corporate and regional
offices, such as rent, legal, accounting and travel expenses. General and
administrative expenses increased 627.8% from $68,269 for the three months ended
June 30, 1997, to $496,893 for the three months ended June 30, 1998. This
increase is attributable to the opening of regional offices in Michigan, Georgia
and Palm Beach, Florida, additional professional costs associated with the
change from a privately-held to publicly-held company and increased occupancy
and travel costs associated with the additional 36 Managed Dental Centers. As a
percentage of net patient revenue at Managed Dental Centers, general and
administrative increased from 4% to 5%.

      DEPRECIATION AND AMORTIZATION. Depreciation and amortization expense
consists of the depreciation expense on capital assets owned by the Company and
located at either the corporate offices or at Managed Dental Centers. It also
includes amortization on intangible assets, primarily Management Services
Agreements. Depreciation and amortization expense increased 658.1% from $35,167
for the three months ended June 30, 1997, to $266,599 for the three months ended
June 30, 1998. This increase was attributable to the depreciation on the
acquired non-dental assets and amortization on the acquired and purchased
Management Agreements related to the 36 additional Managed Dental Centers. As a
percentage of net patient revenue at Managed Dental Centers, depreciation and
amortization increased from 2% to 3%.

      INTEREST INCOME, NET. Interest income, net increased from $21,528 for the
three months ended June 30, 1997, to $161,648 for the three months ended June
30, 1998. This increase is attributable primarily to earnings on increased cash
balances associated with the Company's public offering in November 1997.

                                       10

<PAGE>

SIX MONTHS ENDED JUNE 30, 1998 COMPARED TO THE SIX MONTHS ENDED JUNE 30, 1997

      MANAGEMENT FEES. Management fees increased 377.5% from $2.5 million for
the six months ended June 30, 1997 to $11.8 million for the six months ended
June 30, 1998. Revenues at existing practices grew nine percent to approximately
$2.7 million, while the balance of the increase relates to the addition of 37
Managed Dental Centers since January 1, 1997.

      CONSULTING AND LICENSING FEES. Consulting and licensing fees increased
81.7% from $161,885 for the six months ended June 30, 1997 to $294,133 for the
six months ended June 30, 1998. The increase is attributable to the addition of
37 Managed Dental Centers, offset by the cessation of approximately $85,000 on
four Michigan practices which were converted effective July 1, 1997 into Managed
Dental Centers. Income from consulting fees is now included in management fees.

      MANAGED DENTAL CENTER EXPENSES. Managed dental center expenses increased
from $2.0 million for the six months ended June 30, 1997 to $8.0 million for the
six months ended June 30, 1998. As a percentage of net patient revenue at
Managed Dental Centers, Managed Dental Center expenses decreased from 57% to
48%. The decrease is due to economics in purchasing of dental supplies and
laboratories (3%), reduced marketing expenditures (3%) in new affiliations with
established reputations and other general and administrative expenses (3%).

      SALARIES AND BENEFITS. Salaries and benefits increased 110.8% from
$373,016 for the six months ended June 30, 1997 to $786,414 for the six months
ended June 30, 1998. This increase is attributable primarily to the hiring of
additional personnel in the Company's accounting and business development
departments and regional offices in Michigan, Georgia and Palm Beach, Florida to
administer the additional 37 Managed Dental Centers. As a percentage of net
patient revenue, salaries and benefits decreased from 11% to 5%.

      GENERAL AND ADMINISTRATIVE. General and administrative expenses increased
503.2% from $135,970 for the six months ended June 30, 1997 to $820,226 for the
six months ended June 30, 1998. This increase is attributable primarily to
opening of regional offices, additional professional costs associated with the
change from a privately-held to publicly-held company and increased occupancy
and travel costs associated with the additional 37 Managed Dental Centers. As a
percentage of the net patient revenue, general and administrative increased from
4% to 5%.

      DEPRECIATION AND AMORTIZATION. Depreciation and amortization expense
increased 837.4% from $41,578 for the six months ended June 30, 1997 to $389,751
for the six months ended June 30, 1998. This increase is attributable to the
depreciation on the acquired non-dental assets and amortization on the
Management Agreements obtained in connection with the 37 additional Managed
Dental Centers. As a percentage of net patient revenue, depreciation and
amortization increased from 1% to 2%.

      INTEREST INCOME, NET. Interest income, net increased from $36,464 for the
six months ended June 30, 1997 to $392,955 for the six months ended June 30,
1998. This increase is attributable primarily to earnings on the higher cash
balance associated with the Company's public offering in November, 1997.

SEASONALITY

      The Company historically has experienced seasonal fluctuations in its
quarterly revenue. Specifically, the first and fourth quarters reflect the
highest patient volume, while the third quarter has traditionally had the lowest
patient volume. The Managed Dental Centers in Florida have traditionally
experienced increased patient visits in November through March due to an
increase in the population base during these months, while patient visits
decrease during the summer. The Company began managing additional Managed Dental
Centers in Michigan and Georgia in July 1997 and March 1998, respectively. The
Company expects that the seasonality in Florida will be offset to some extent by
fewer seasonal fluctuations in Michigan and Georgia.

                                     11

<PAGE>

QUARTERLY FINANCIAL INFORMATION

      The following table sets forth unaudited quarterly operating results for
each of the Company's last four quarters. This information has been prepared on
a basis consistent with the Company's audited financial statements and includes
all adjustments (consisting only of normal recurring adjustments) that
management considers necessary for a fair presentation of the data. These
quarterly results are not necessarily indicative of future results of
operations.

<TABLE>
<CAPTION>
                                                QUARTER ENDED
                                      SEPTEMBER 30,  DECEMBER 30,  MARCH 31,     JUNE 30,
                                           1997         1997         1998         1998
                                      ---------------------------------------------------
<S>                                     <C>          <C>          <C>          <C>
Number of Managed Dental Centers (1)         20           29           44           49
Net patient revenue at Managed Dental
    Dental Centers (2) ..............   $3,190,620   $3,868,333   $6,799,853   $9,942,993
Total revenues ......................    2,256,950    2,970,035    4,932,971    7,163,745
Managed dental center expenses ......    1,753,070    2,130,256    3,266,401    4,728,111
Operating income ....................      115,246      246,296      909,898    1,195,915
Net income ..........................       75,648      285,046      700,928      833,815

<FN>
(1) Presented as of the end of the period.
(2) Net patient revenue is the total amount of revenue recorded by the PAs
    during the period. Revenue is included from and after the date on which
    the relevant PA executed a Management Agreement with Company.
</FN>
</TABLE>


LIQUIDITY AND CAPITAL RESOURCES

      Since its inception, the Company has financed its operations primarily
through internal cash flow, the sale of equity securities and commercial bank
borrowings. Net cash provided by operations for the six months ended June 30,
1997 and 1998 was $83,461 and $203,133, respectively. Net cash provided by
operations for these periods consisted primarily of net income and increases in
current liabilities offset by increases in consulting, license fees and
management fee receivables.

      Cash used in investing activities for the six months ended June 30, 1997
and 1998 was $186,401 and $11,794,901, respectively. For the six months ended
June 30, 1997, the investing activities were primarily related to payments on
notes receivable from PAs. For the six months ended June 30, 1998, the investing
activities included $8,667,063 related primarily to the purchase of Management
Agreements, $1,811,857 related to the purchase of non-dental assets, $920,000
related to satisfaction of outstanding obligations on acquisitions and
affiliations and $450,000 related to an increase in notes receivable to PAs.

      Cash (used in) provided by financing activities for the six months ended
June 30, 1997 and 1998 was ($274,102) and $257,044, respectively. For the six
months ended June 30, 1997 the financing activities were primarily related to
advances to PAs. For the six months ended June 30, 1998, the Company had
$1,216,062 in net proceeds on long-term debt offset by $878,096 in working
capital advances to PAs.

      In August 1997, the Company entered into a revolving line of credit (the
"Credit Agreement") which provides for an aggregate of $1.2 million. Under the
terms of the Credit Agreement, the Company may use up to $600,000 of the credit
line for the purchase of non-dental assets of dental centers provided that each
borrowing is repaid within 45 days of its drawdown. The remaining $600,000 may
be used for general working capital needs. The revolving line of credit bears
interest at 0.75% per annum above the lender's prime rate and is payable on
demand. Interest only is payable monthly. Amounts borrowed pursuant to the
Credit Agreement are secured by a first security interest in most of the
Company's assets, including receivables and equipment. Additionally, any
outstanding balances under the working capital line are guaranteed by the
Company's Chairman of the Board, President and Chief Executive Officer.

                                       12
<PAGE>

      On May 14, 1998, the Company executed a $15 million Revolving Note with
Nationsbank, N.A. which replaced the Credit Agreement. The Revolving Note is
intended to provide funds for the acquisition and affiliation with dental
practices and working capital uses in a revolving line of credit facility. The
note matures in one year, with annual renewals thereafter. The Company, and its
subsidiaries, have pledged substantially all of its assets as collateral. The
note bears interest at 1.75% over LIBOR, payable monthly. The Company is
required to maintain certain financial covenants during the term of the note. As
of June 30, 1998, the Company had no outstanding balances against the Revolving
Note.

      The Company previously has made loans to various PAs in connection with
the PAs' acquisition of assets of dental practices and has made working capital
advances to various PAs for their operations. The loans, which are evidenced by
interest-bearing notes that are payable upon demand, are being paid in
accordance with their terms. Both the loans and advances are personally
guaranteed by the PA owners.

      The Company intends to enter into additional Management Agreements with
respect to, as well as purchase the non-dental assets of, additional practices.
In addition, the Company intends to acquire Management Agreements or lend money
to PAs to fund the purchase of the assets of additional dental practices. The
Company plans to finance these activities through a combination of the available
cash, cash flow from operations, bank financing and issuances of Common Stock.

      On November 4, 1997, the Company completed the public offering of
2,000,000 shares of Common Stock at $12 per share resulting in proceeds, net of
underwriter commissions and offering costs, of approximately $21.0 million.
Based upon the Company's anticipated needs for acquisition of non-dental assets
of dental practices, working capital and general corporate purposes, management
believes that the combination of existing cash, cash flow from operations,
available credit lines and net proceeds from the Offering will be sufficient to
meet its capital requirements through the next year.

                                       13
<PAGE>

PART II.    OTHER INFORMATION


ITEM 1.     LEGAL PROCEEDINGS.
            None.

            ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS. 
            There have been no changes in securities. From November 4, 1997
            through December 31, 1997 the Company expended an estimated
            $2,812,700 for costs incurred in connection with the offering,
            including Underwriter discounts and commissions ($1,680,000), legal
            ($395,000), accounting ($342,000), printing ($155,000) and
            miscellaneous expenses. None of these expenses were payable either
            directly or indirectly to any directors, officers or affiliates.
            After deducting these costs, net proceeds of the offering to the
            Company were $21,187,300.

            Since its initial public offering, the Company has expended an
            estimated $12,208,000 for the purchase of tangible assets ($1.8
            million),advances to PAs ($880,000), Notes Receivable from PAs
            ($450,000) and the entering into Management Agreements with dental
            practices ($9 million). No portion of the $12,208,000 was paid to
            any directors, officers or affiliates. The balance of the proceeds
            remain invested in short-term cash and cash equivalents.

ITEM 3.     DEFAULTS UPON SENIOR SECURITIES.
            None.

            ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. The
            1998 Annual Meeting of Stockholders of the Company was held on May
            27, 1998. Shareholders were asked to approve the election of two
            members to the Board of Directors and approve and ratify the
            Company's 1997 Executive Incentive Compensation Plan. Directors
            Steven R. Matzkin and Robert Raucci continue to serve on the Board.
            Voting was as follows:

              Directors:                 FOR           AGAINST       WITHHELD
               Michell B. Olan        4,756,687         6,435
               Curtis Lee Smith       4,756,687         6,435

              Compensation Plan       4,479,917       277,380         5,825

ITEM 5.     OTHER INFORMATION.
            None.

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

EXHIBITS

            10.28  Loan Agreement Dated May 14, 1998 Between the Company and
                   NationsBank.

            27     Financial Data Schedule for the Quarter Ended June 30, 1998 
                   (for Sec use only).

REPORTS ON FORM 8-K

            The Company filed a report on Form 8-K on June 15, 1998, as an
            amendment to Form 8-K filed on April 16, 1998 to include the audited
            financial statements of Dental One Associates, Inc.

            The Company filed a report on Form 8-K on July 10, 1998, as a second
            amendment to Form 8-K on April 16, 1998 to include certain changes
            to the Pro Forma Financial Statements of the Company.

                                       14
<PAGE>

                           DENTAL CARE ALLIANCE, INC.


SIGNATURES

      PURSUANT TO THE REQUIREMENTS OF THE SECURITIES AND EXCHANGE ACT OF 1934,
THE COMPANY HAS DULY CAUSED THIS REPORT TO BE SIGNED ON ITS BEHALF BY THE
UNDERSIGNED, THEREUNTO DULY AUTHORIZED.


DATE:    AUGUST 14, 1998                   DENTAL CARE ALLIANCE, INC.



                                       /s/ STEVEN R. MATZKIN, DDS
                                       --------------------------
                                           STEVEN R. MATZKIN, DDS
                                           President and Chief Executive Officer
                                           Chairman of the Board



                                       /s/ DAVID P. NICHOLS
                                       --------------------
                                           DAVID P. NICHOLS
                                           Chief Financial Officer
                                           (Principal Accounting Officer)

                                       15
<PAGE>

                                 EXHIBIT INDEX

EXHIBIT                       DESCRIPTION
-------                       -----------

10.28               Loan Agreement dated May 14, 1998 
                    between the Company and NationsBank.

27                  Financial Data Schedule