SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                    FORM 10-Q

(Mark one)

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

                  For the quarterly period ended March 31, 1999

                                       OR

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

               For the transition period from ________to________.


                           Commission File No. 0-23900


                             IDM ENVIRONMENTAL CORP.
              ----------------------------------------------------
             (Exact name of registrant as specified in its charter)


          New Jersey                                       22-2194790
-------------------------------                ---------------------------------
(State or other jurisdiction of                (IRS Employer Identification No.)
incorporation or organization)                  


               396 Whitehead Avenue, South River, New Jersey 08882
               ---------------------------------------------------
                    (Address of principal executive offices)


                                 (732) 390-9550
               --------------------------------------------------
              (Registrant's telephone number, including area code)


             ------------------------------------------------------
              (Former name, former address and formal fiscal year,
                          if changed since last report)


     Check  whether  the issuer (1) filed all  reports  required  to be filed by
section 13 or 15(d) of the  Exchange  Act during the past 12 months (or for such
shorter period that the  registrant was required to file such reports),  and (2)
has been  subject to such  filing  requirements  for the past 90 days.  Yes X No

     As of May 10,  1999,  3,055,295  shares of Common  Stock of the issuer were
outstanding.

<PAGE>

                    IDM ENVIRONMENTAL CORP. AND SUBSIDIARIES

                                      INDEX

                                                                           Page
                                                                          Number
                                                                         -------
PART I - FINANCIAL INFORMATION

  Item 1.  Financial Statements

           Consolidated Balance Sheets - March 31, 1999 and 
           December 31, 1998..................................................1

           Consolidated Statements of Operations - For the three months ended
           March 31, 1999 and March 31, 1998..................................2

           Consolidated Statements of Cash Flows - For the three months ended
           March 31, 1999 and March 31, 1998 .................................3

           Notes to Consolidated Financial Statements.........................5

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

  Item 3.  Quantitative and Qualitative Disclosures about Market Risk........13

PART II - OTHER INFORMATION

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

SIGNATURES  .................................................................14

<PAGE>

                         PART I - FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

                    IDM ENVIRONMENTAL CORP. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS


 
<TABLE>
                                                                              March 31,        December 31,
                                                                                1999               1998     
                                                                             -----------       ------------
<S>                                                                          <C>              <C>  
                                                                             (Unaudited)
 ASSETS
                                                                                             
Current Assets:
     Cash and cash equivalents                                               $     57,496    $    384,292
     Accounts receivable                                                        1,362,342       2,572,951
     Notes receivable - current                                                   367,198         367,198
     Inventory                                                                    582,517         582,517
     Costs and estimated earnings in excess of billings                         1,697,872       1,900,336
     Prepaid expenses and other current assets                                  1,300,542         906,137
                                                                              -----------      ----------
         Total Current Assets                                                   5,367,967       6,713,431

Investments in and advances to unconsolidated affiliates                        1,687,089       2,454,521
Investment in affiliate, at cost                                                1,853,125       1,853,125
Debt discount and issuance costs                                                        -          16,124
Property, plant and equipment                                                   2,870,383       3,133,404
Other assets                                                                      979,925         979,925
                                                                              -----------      ----------
                                                                              $12,758,489    $ 15,150,530
                                                                              ===========      ==========
LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:
     Current portion of long-term debt                                        $   287,520    $    622,794
     Accounts payable and accrued expenses                                      5,949,148       6,578,070
     Billings in excess of costs and estimated earnings                           108,698               -  
                                                                              -----------      ----------
         Total Current Liabilities                                              6,345,366       7,200,864

Long-term debt                                                                     51,189          64,544
                                                                              -----------      ----------
         Total Liabilities                                                      6,396,555       7,265,408
                                                                              -----------      ----------
Commitments and Contingencies

Stockholders' Equity:
     Common stock, authorized 7,500,000 shares $.01 par value, issued
      and outstanding 3,055,295 in 1999 and 2,947,298 in 1998                      30,553          29,473
     Additional paid-in capital                                                57,514,142      57,215,536
     Convertible preferred stock, authorized 1,000,000 shares $1.00 par value
         Series RR, Issued and outstanding 215 shares in 1999 and in 1998,
       stated at a conversion value of $1,000 per share                           215,000         215,000
 
     Retained earnings (deficit)                                              (51,397,761)   ( 49,574,887)
                                                                              -----------      ----------
                                                                                6,361,934       7,885,122
                                                                              -----------      ----------
                                                                             $ 12,758,489    $ 15,150,530
                                                                              ===========      ==========
</TABLE>                                                                      


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

                                       1
<PAGE>


                    IDM ENVIRONMENTAL CORP. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)

 
<TABLE>
                                                                   For the Three Months Ended March 31,
                                                                          1999              1998      
                                                                       ----------        ----------
<S>                                                                   <C>              <C>    

Revenue:
     Contract income                                                  $ 2,428,878     $ 5,168,758
                                                                       ----------      ----------
                                                                        2,428,878       5,168,758
                                                                       ----------      ----------
Cost of Sales:
     Direct job costs                                                   2,276,002       4,752,323
                                                                       ----------      ----------
                                                                        2,276,002       4,752,323
                                                                       ----------      ----------
Gross Profit                                                              152,876         416,435
                                                                       ----------      ----------
Operating Expenses:
     General and administrative expenses                                1,820,874       3,847,615
     Depreciation and amortization                                        127,515         133,780
     Equity in net loss of unconsolidated partnerships                      8,711               -       
                                                                       ----------      ----------
                                                                        1,957,100       3,981,395
                                                                       ----------      ----------
Loss from Operations                                                   (1,804,224)     (3,564,960)

Other Income (Expense):
     Interest income (expense)                                            (14,887)     (3,176,686)
                                                                       ----------      ----------
Loss before Provision (Credit)  for Income Taxes                       (1,819,111)     (6,741,646)

Provision (Credit) for Income Taxes                                             -        (400,000)
                                                                       ----------      ----------
Net Loss                                                               (1,819,111)     (6,341,646)

Preferred Stock Dividends including amortization of beneficial
     conversion feature of $0 in 1999 and $104,000 in 1998.                 3,763        158,043
                                                                       ----------      ----------
Net Loss on Common Stock                                              ($1,822,874)    ($6,499,689)
                                                                       ==========      ==========
Loss per Share:
     Basic Loss per share                                                  ($0.61)         ($3.94)
                                                                       ==========      ==========
     Diluted Loss per share                                                ($0.61)         ($3.94)
                                                                       ==========      ==========
     Basic common shares outstanding                                    2,966,925       1,649,807
                                                                       ==========      ==========
     Diluted common shares outstanding                                  2,966,925       1,649,807
                                                                       ==========      ==========
</TABLE>




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

                                       2
<PAGE>


                    IDM ENVIRONMENTAL CORP. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)
 
<TABLE>
                                                                             For the Three Month Ended March 31,
                                                                                     1999            1998
                                                                                   --------        --------
<S>                                                                             <C>              <C>

Cash Flows from Operating Activities:
     Net loss on common stock                                                    ($1,822,874)    ($6,499,689)
     Adjustments to reconcile net loss to net cash used in operating activities:
         Deferred income taxes                                                             -       ( 400,000)
         Depreciation and amortization                                               150,543         172,031
         Amortization of debt discount and beneficial conversion feature              16,124       3,187,742
         Dividend on convertible preferred stock                                       3,763          54,043
         Compensation cost of consultant stock options                                     -       1,871,400
         Equity in net loss of unconsolidated affiliates                               8,711               -

     Decrease (Increase) In:
           Accounts receivable                                                     1,210,609         248,233
           Costs and estimated earnings in excess of billings                        202,464        (240,971)
           Prepaid expenses and other current assets                                (394,405)       (156,959)
           Bonding deposits                                                                -           9,157

     Increase (Decrease) In:
           Accounts payable and accrued expenses                                    (632,686)        535,952
           Billings in excess of costs and estimated earnings                        108,698          46,551
                                                                                  ----------      ----------
             Net cash used in operating activities                               (1 ,149,053)     (1,172,510)
                                                                                  ----------      ----------
Cash Flows from Investing Activities: 
     Disposal of property, plant and equipment                                      112, 478               -
     Investment in and advances from (to) unconsolidated affiliates                  758,722        (353,255)
     Loans and advances from (to) officers                                                 -         (54,758)
                                                                                  ----------      ----------
         Net cash provided by (used in)  in investing activities                     871,200        (408,013)
                                                                                  ----------      ----------
Cash Flows from Financing Activities:
     Net proceeds from convertible preferred stock issuance                                -       3,240,000
     Long term debt borrowing                                                              -         156,238
     Principal payments on long-term debt                                            (83,507)       (190,630)
     Proceeds from exercise of stock options and warrants                             34,564       1,441,297
                                                                                   ----------      ----------
         Net cash (used in) provided by financing activities                         (48,943)      4,646,905
                                                                                   ----------      ----------
Net Increase (Decrease) in Cash and Cash Equivalents                                (326,796)      3,066,382

Cash and Cash Equivalents, beginning of period                                       384,292         602,242
                                                                                   ----------      ----------
Cash and Cash Equivalents, end of period                                         $    57,496      $3,668,624
                                                                                   ==========      ==========

</TABLE>


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


                                       3
<PAGE>

                    IDM ENVIRONMENTAL CORP. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOW
                                   (Unaudited)
                                   (Continued)

<TABLE>
 
                                                                      For the Three Months Ended March 31,
                                                                             1999              1998     
                                                                           ---------        ----------
<S>                                                                        <C>             <C>

Supplemental Disclosures of Cash Flow Information:

 Cash paid during the year for:
  Interest                                                                 $ 15,599       $  214,374
                                                                            ========        ========
  Income taxes                                                             $      -       $        -      
                                                                            ========        ========
Supplemental Disclosure of Noncash Investing and Financing Activities:

  Repayment of stockholder's loan through issuance of common stock         $265,122       $        -        
                                                                            ========       =========
  Conversion of convertible promissory notes to common stock               $      -       $3,025,000
                                                                            ========       =========
  Conversion of preferred stock to common stock                            $      -       $2,700,000
                                                                            ========       =========
  Beneficial conversion feature of convertible preferred stock             $      -       $3,330,000
                                                                            ========       =========

</TABLE>



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

                                       4
<PAGE>


                    IDM ENVIRONMENTAL CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)


1.   INTERIM PRESENTATION

     The interim consolidated  financial statements are prepared pursuant to the
     requirements  for  reporting  on Form 10-Q.  These  statements  include the
     accounts  of IDM  Environmental  Corp.  and  all of its  wholly  owned  and
     majority owned  subsidiary  companies.  The December 31, 1998 balance sheet
     data was derived from audited financial statements but does not include all
     disclosures  required by  generally  accepted  accounting  principles.  The
     interim   financial   statements  and  notes  thereto  should  be  read  in
     conjunction  with  the  financial  statements  and  notes  included  in the
     Company's Form 10-K for the year ended December 31, 1998. In the opinion of
     management,  the interim financial  statements reflect all adjustments of a
     normal  recurring  nature necessary for a fair statement of the results for
     the interim periods presented. The current period results of operations are
     not necessarily indicative of results which ultimately will be reported for
     the full year ending December 31, 1999.

2.   CONTINGENCIES

     On August 15, 1996, the U.S.  Department of Labor,  Occupational Safety and
     Health Administration  ("OSHA") issued wilful citations and notification of
     penalty in the  aggregate  amount of $147,000 on the Company in  connection
     with  the  accidental  death  of  an  employee  of  one  of  the  Company's
     subcontractors on the United  Illuminating  Steel Point Project job site in
     Bridgeport,  Connecticut.  A complaint was filed against the Company by the
     Secretary of Labor,  United  States  Department  of Labor on September  30,
     1996. A hearing was  conducted in the matter in April,  1997. In June 1998,
     the Company  received a copy of the written decision filed by OSHA's Review
     Commission.  The Commission vacated the first alleged wilful citation,  but
     affirmed each of the second and third wilful citations,  imposing a penalty
     in the amount of $70,000 for each citation. The Company strongly objects to
     the  Commission's  finding  on the basis  that it cannot  be  sustained  as
     matters  of fact or law and has filed a timely  Notice  of Appeal  with the
     OSHA Review  Commission for Discretionary  Review,  which body has accepted
     jurisdiction  of the  matter  on  administrative  appeal.  The  Company  is
     contesting the Citations and Notification of Penalty.

     Also in connection with this accidental  death, the employee's estate filed
     a complaint for wrongful death against the subcontractor and the Company on
     February 11, 1997.  The estate seeks  damages in the amount of $45 million.
     The Company is being  defended  by the  subcontractor's  insurance  carrier
     pursuant to the  subcontractor's  obligation  to defend and  indemnify  the
     Company with respect to the actions of its (subcontractor's)  employees and
     agents.  The Company will be fully  indemnified for any liability,  if any,
     for any potential  judgement or  settlement in this matter and,  therefore,
     the action is not  expected to have any  material  effect on the  Company's
     consolidated financial statement.

     In July of 1998, the Company,  it's  subsidiary,  Global Waste & Energy and
     certain  affiliates and officers were named as  co-defendants in a cause of
     action styled  Kasterka  Vrtriebs GmbH v. IDM  Environmental  Corp., et al,
     filed in the  Court of  Queen's  Bench of  Alberta,  Judicial  District  of
     Calgary.  The  plaintiff,  Kasterka,  has alleged that the Company and it's
     affiliates  breached a marketing  agreement  that had been entered  between
     Kasterka and  Enviropower.  The plaintiff  has alleged that the  defendants
     failed to supply the  required  plans and  specifications  relating  to the
     gasification  technology  originally  developed by Enviropower  Industries,
     Inc., formerly  Continental Waste Conversion,  Inc., and that, as a result,
     Kasterka was unable to  manufacture  and market  gasification  units in the
     territories designated in the marketing agreement.  Kasterka has asserted a
     variety of claims for damages in the aggregate amount of approximately  $42
     million.  The  Company  believes  the suit is without  merit and intends to
     vigorously contest the cause of action.

                                       5
<PAGE>

                    IDM ENVIRONMENTAL CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Continued)

2.   CONTINGENCIES (Continued)

     In  September  of 1998,  the Company was named as a defendant in a cause of
     action styled Balerna  Concrete  Corporation,  et al. v. IDM  Environmental
     Corp.,  et al, filed in the United States  District Court of  Massachusetts
     (Case No.  98CV11883ML).  The  plaintiffs  alleged  that the  Company,  and
     others,  engaged in a pattern of illegal  conduct to divert  funds from the
     plaintiffs  through the  operation of a concrete  finishing  business.  The
     plaintiffs  have  asserted  various  claims  under RICO,  common law fraud,
     conversion,  breach of  contract  and others  basis  seeking  damages in an
     amount  expected  to exceed  $450,000.  The  Company  believes  the suit is
     without merit and intends to vigorously contest the cause of action.

3.   CONVERTIBLE PREFERRED STOCK SERIES RR

     On  August  11,  1998,  the  Company  sold  1,500  shares  of  Series RR 6%
     Convertible  Preferred  Stock. The securities were issued to one accredited
     investor.  The aggregate  sales price of such  securities  was  $1,500,000.
     Commissions  totaling 10% were paid in connection  with the placement.  The
     securities  were offered  pursuant to  Regulation D. The offer was directed
     exclusively to a single accredited investor without general solicitation or
     advertising  and  based on  representations  from the  investor  that  such
     investor was acquiring for investment.

     The Series RR  Preferred  Shares are  convertible  into Common Stock at the
     lesser of (i) $22.50 per share or (ii) 75% of the average closing bid price
     of the Common Stock during the five trading days prior to  conversion.  The
     Preferred  Shares pay an annual dividend of 6% payable  semi-annually or on
     conversion  or at  redemption  in cash or Common  Stock,  at the  Company's
     option.  During the year ended December 31, 1998, 1,285 shares of Series RR
     Preferred Stock were converted into 359,981 shares of the Company's  common
     stock. Subsequent to December 31, 1998, demand for conversion or redemption
     of the  remaining  215  shares  of  Series  RR  Preferred  Stock  had  been
     submitted. As of May 12, 1999, negotiations were ongoing with the holder of
     the Series RR  Preferred  Stock with  respect to the deferral of payment of
     the  redemption  price or conversion  of the remaining  shares of Series RR
     Preferred  Stock  pending  the receipt by the Company of funding to pay the
     redemption price or until the annual shareholders  meeting when approval of
     conversions above the 360,000 share cap would be solicited.

4.   EARNINGS PER SHARE

     The Company is calculating earnings per share to comply with the recent SEC
     staff  position  on  accounting  for  securities   issued  with  beneficial
     conversion features.  This accounting requires that the Company reflect the
     difference  between the market price of the Company's  common stock and the
     applicable  conversion  rate  on  the  convertible  preferred  stock  (note
     payable) as a dividend  (interest  expense) at the issue date and  amortize
     from the issue  date of the  convertible  security.  Earnings  per share as
     reported for the period ended March 31, 1998 reflects the following:

     --   The beneficial  conversion feature of the Company's  convertible notes
          and related  warrants was  $4,818,750  and was recorded as  additional
          interest  expense  from  August  13,  1997,  the  issue  date  of  the
          convertible  notes,  to March 4, 1998,  the date the last  convertible
          note was converted into common stock.  $3,106,000 was recorded for the
          three months ended March 31, 1998.


                                       6
<PAGE>


5.   STOCKHOLDERS'EQUITY

     Reverse Stock Split
     -------------------

     On March 11, 1999, the Company's  Board of Directors  authorized a 1 for 10
     reverse  stock  split of its  common  stock  effective  April 16,  1999 for
     shareholders  of  record  at the close of  business  on April 16,  1999 and
     amended the par value of the common stock to $.01. All shares and per-share
     amounts in the  accompanying  consolidated  financial  statements have been
     restated to give effect to the 1 for 10 reverse stock split.

     Reverse Split and Extension of Class A Warrants
     -----------------------------------------------
                                  
     In April 1999,  the  Company's  Board of  Directors  authorized  a 1 for 10
     reverse split of the Company's outstanding Class A Warrants effective April
     16, 1999 and an extended the term of those warrants to April 2000.

     Loans by Warrant Holders
     ------------------------

     During  November,  1998,  the holders of certain $30.00  Warrants,  Lock-Up
     Warrants and Reload Warrants loaned $671,023 to the Company.  The loans may
     be credited  against the exercise price of those  Warrants.  As of December
     31, 1998, $265,122 was still outstanding. During March, 1999, 97,525 of the
     $30.00  warrants were  converted  into 97,525  shares of common stock.  The
     exercise price of the warrants paid in full the loan outstanding.

                                       7
<PAGE>

Item 2. Management's  Discussion and Analysis Of Financial Condition And Results
        Of Operations.

This report contains  forward-looking  statements  within the meaning of Section
27A of the Securities Act of 1933 and Section 21E of Securities  Exchange Act of
1934.  Actual  results  could  differ  materially  from those  projected  in the
forward-looking  statements  as a result of the risk  factors  set forth in this
report.

Material  Changes in the Results of Operations  for the Three Months ended March
31, 1999 Compared with Three Months ended March 31, 1998

Revenues.  The Company's  total  revenues  decreased by  approximately  53% from
$5,169,000  for the quarter ended March 31, 1998 to  $2,429,000  for the quarter
ended March 31,  1999.  The decrease in contract  service  revenues in 1999 from
1998 is primarily attributable to a decrease in revenue on the East Dam project,
which produced  revenues of approximately  $2.2 million during the first quarter
of 1998 as compared to none for the first quarter of 1999.

Cost of Sales.  Direct job costs decreased by approximately  the same percentage
as the revenue,  52.1%,  from $4,752,000 for the quarter ended March 31, 1998 to
$2,276,000  for the same period in 1999. The decrease in job costs was primarily
attributable to completion of the East Dam project. The primary elements of such
decrease in job costs were job salaries and materials and supplies.

General and Administrative  Expense. While total revenues decreased by 53.0% for
the quarter, general and administrative expenses decreased 52.7% from $3,848,000
during the quarter ended March 31, 1998 to $1,821,000  during the same period in
1999.  The  decrease  in  general  and  administrative   expense  was  primarily
attributable  to a $1.9 million expense  recorded in February,  1998 for options
granted to consultants to purchase 122,000 shares of common stock of the Company
at the market price of the company's stock at the date of grant.

Depreciation and amortization.  Depreciation and amortization  expense decreased
by approximately 4.5% from $134,000 in 1998 to $128,000 in 1999. The decrease in
depreciation and amortization  expense was primarily  attributable to a decrease
in amortization of deferred issuance costs.

Interest Expense. In addition to its operating income and expenses,  the Company
reported net interest expense of $15,000 for the quarter ended March 31, 1999 as
compared to net interest  expense of $3,177,000 for the same period in 1998. The
decrease in net  interest  income/expense  was  attributable  to  $3,106,000  in
interest expense recorded on the convertible notes and related warrants in 1998.
This amount represented the amortization of the beneficial conversion feature of
the convertible notes and warrants.

Miscellaneous.  During the first quarter of years 1998 and 1999 no provision was
made for post retirement benefits subject to FAS 106.

As a result of the  foregoing,  the  Company  reported  a loss  before  taxes of
$1,819,000  and a net loss of $1,819,000 for the quarter ended March 31, 1999 as
compared to a loss before taxes of $6,742,000  and a net loss of $6,342,000  for
the same quarter in 1998.

The net loss  attributable  to common stock was increased by the preferred stock
dividends totaling $4,000 in 1999 and $54,000 in 1998, and an accounting "deemed
dividend" of $104,000 in 1998 arising from the  amortization  of the  beneficial
conversion feature of the Company's  Preferred Stock. The Company is calculating
earning  per  share to comply  with the SEC staff  position  on  accounting  for
securities issued with beneficial conversion features.  This accounting required
that  the  Company  reflect  the  difference  between  the  market  price of the
Company's  common stock and the applicable  conversion  rate on the  convertible
preferred  stock as a  dividend  at the issue  date (the  beneficial  conversion
feature  totaled  $3,830,000 in 1998) and amortize the dividend over the 180 day
period from the issue date for the Series B Preferred.

                                       8
<PAGE>

Liquidity and Capital Resources

At March 31,  1999,  we had a working  capital  deficit  of  approximately  $1.0
million  and a cash  balance of $58,000.  This  compares to a deficit in working
capital of $.5 million and a cash  balance of $0.4 million at December 31, 1998.
The  changes  in  working  capital  and cash were  primarily  attributable  to a
combination  of the loss incurred  during 1999 and the affects of (1) a decrease
in accounts  receivable of $1.2 million,  (2) a decrease in accounts  payable of
$.6  million,  and (3) a cash  flow from the  investment  and  advances  from an
unconsolidated affiliate of $.8 million.

Approximately  $1.7 million of working  capital  consisted of unbilled costs and
estimated earnings on ongoing projects. Such amounts are expected to be received
during 1999 as projects  progress  with all such  amounts  being  payable to the
Company by the completion of such projects.

Also included in the working capital balance at March 31, 1999, was $0.6 million
of surplus equipment  inventory (net of a $0.9 million  valuation  reserve) held
for sale which gross  inventory level was identical to that reported at December
31, 1998.  The inventory  consists of nineteen (19)  generator sets with a total
electrical  capacity of 242,500  kilowatts per hour (KWH).  The estimated market
price of the generator  inventory is twelve million dollars.  Twelve (12) of the
generators  are steam  driven and range in size from 12,500  kilowatts to 33,000
kilowatts (KW).  Seven (7) of the generators are diesel driven and range in size
from  1,000  to  9,000  kilowatts  (KW).  These  generator  sets  should  not be
considered as obsolete or outdated  inventory  since their design and technology
has not  changed  much over the  years.  They are very long  lead  items  (15-18
months), experience and project specific and as such they are not to be compared
with disposable  items. It is our intent to incorporate this inventory in future
projects.

At  December  31,  1998,  we had  approximately  $30 million of  operating  loss
carry-forwards  that may be applied against future taxable income.  $2.3 million
of such  losses  expire in the year 2010,  $9.1  million in the year 2011,  $8.6
million  in the year  2012 and the  balance  the  following  year.  Based on our
continuing operating losses, we wrote-off our deferred tax asset during 1998 and
no such assets was reflected at March 31, 1999.

Accounts  receivable  decreased by 46% from $2.6 million at December 31, 1998 to
$1.4 million at March 31, 1999. The decrease was attributable to the decrease in
revenue from $5.5  million in the fourth  quarter of 1998 to $2.4 million on the
first quarter of 1999.
 
We require substantial working capital to support our ongoing operations.  As is
common in the environmental services industry, payment for services rendered are
generally  received  pursuant to specific  draw  schedules  after  services  are
rendered.  Thus, pending the receipt of payments for services rendered,  we must
typically  fund  substantial  project  costs,  including  significant  labor and
bonding costs, from financing sources within and outside of the Company. Certain
contracts,  in particular those with United States  governmental  agencies,  may
provide for  payment  terms of up to 90 days or more and may require the posting
of  substantial  performance  bonds  which  are  generally  not  released  until
completion of a project.

Operations  were  historically  funded  through a combination  of operating cash
flow, term notes and bank lines of credit.  Since April of 1994, we have carried
no bank debt and have funded operations  principally  through the sale of equity
securities and securities convertible into equity securities. At March 31, 1999,
we had  no  bank  debt  and no  significant  long-term  debt  and  were  funding
operations entirely through cash on hand and operating cash flow.

Other than funds provided by operations and the potential  receipt of funds from
the exercise of outstanding  warrants, we presently have no sources of financing
or commitments to provide  financing.  A total of  approximately  34,000 Class A
Warrants  (after  giving  effect  to the April  1999  reverse  split)  issued in
connection with our initial public offering were  outstanding and exercisable at
March 31, 1999.  Such warrants are  exercisable to purchase two shares of common
stock  each for a price of  $90.00,  or $45.00  per  share.  The  warrants  were
originally  exercisable until April of 1999 unless earlier called. We declared a
1-for-10 reverse split of our Common Stock and Class A Warrants  effective April
16,  1999  and  extended  the  term of the  Class A  Warrants  to April of 2000.
Exercise of the warrants  would provide  gross  proceeds of  approximately  $3.1
million and result in the issuance of  approximately  70,000 shares after giving
effect to the reverse split.  However,  given the current price of the Company's
Common Stock,  it is not expected that the Class A Warrants will be exercised in
the near future.

                                       9
<PAGE>

In  November  of 1998,  we paid  $600,000  to acquire a 49%  interest in Kortman
Polonia,  a Polish  company  with  substantial  real estate  holdings.  Kortmann
Polonia has initiated  discussions with various real estate developers and major
U.S.  retailers  with respect to the sale of various real estate  tracts and the
development and leasing of the remaining tracts.

In addition  to funding  requirements  to support  ongoing  operations,  we have
committed  substantial  capital  resources to  implementation  of the  strategic
initiative  known as "Vision  2000." The focus of Vision 2000 is to position the
Company as a leading participant in the global energy and waste treatment market
and in the nuclear facility  decommissioning and site revitalization market. The
development and initial  implementation of Vision 2000 initiatives have required
substantial  capital  expenditures  and can be  expected  to continue to require
substantial capital expenditures in the future.  Direct investments in potential
energy and waste treatment projects undertaken under the Vision 2000 initiative,
excluding corporate overhead allocable to such initiative, totaled approximately
$9 million at December 31, 1998. Capital expenditures and other outlays to bring
proposed  projects  to an  operational  state are  expected  to far  exceed  the
investment to date. In particular,  the proposed El Salvador  Power Project,  is
expected  to  cost  approximately  $55  million  to  develop  and  will  require
substantial funding beyond that which the Company can presently provide. We have
entered into  discussions  with  several  potential  equity  investors in the El
Salvador Power Project. We are also in discussion with a major project financing
source with respect to the  provision of debt  financing  for the balance of the
cost above the  contributions of the Company and its equity partner.  Similarly,
in connection  with our  acquisition  of a  controlling  interest in the Georgia
Power Project, we agreed to perform a technical  evaluation on the facility and,
depending on the results of that evaluation, to invest up to $9 million over the
life of the facility for repairs and rehabilitation. The ability to successfully
bring the El Salvador Power Project, and other similar projects,  on line, carry
out any required  repairs and  rehabilitation  on the Georgia  Power Project and
implement  other Vision 2000  initiatives  is  substantially  dependent upon our
ability to secure project  financing and other financing.  While we believe that
we will be able to attract  adequate  financing to develop the El Salvador Power
Project and other  anticipated  projects,  we have no definitive  commitments to
provide  financing  for  those  projects  and  there is no  assurance  that such
financing  will be available.  Other than funding  Vision 2000  initiatives  and
bonding and other job costs, we do not anticipate any substantial demands on our
liquidity or capital resources during the following twelve months.

At March 31, 1999, we had submitted claims for additional  compensation  related
to change orders on various projects  totaling  approximately  $15 million.  The
most  significant of these claims relate to the East Dam Project ($10.8 million)
and a DOE project in Los Alamos,  New Mexico  which was  completed in 1997 ($2.8
million). We are presently  aggressively pursuing collection of these claims and
expect that we will be able to collect  substantially  all amounts claimed if we
continue to pursue such claims through litigation, if necessary.  However, it is
possible that we will compromise some of our claims for additional  compensation
accepting lesser amounts in favor of a more timely resolution of such claims and
the  receipt of funds with  respect to the same.  Our claim with  respect to the
East Dam Project has been approved by our general  contractor on the project but
has not, as yet,  been  approved by the project  owner.  Our general  contractor
agreed in the first  quarter of 1999 to release  our  retainage  on the  project
($750,000).  There can be no certainty as to the amount,  if any,  which we will
receive with respect to our claims on change  orders and when,  if ever, we will
receive such amounts.

In  March of 1999,  our  management  appeared  before  a  Nasdaq  hearing  panel
regarding the possible  de-listing of our common stock for failure to maintain a
minimum  bid price of at least  $1.00.  In order to address  the  deficiency  in
minimum bid price, we proposed and have approved a 1-for-10 reverse split of our
common stock and warrants to be effective  April 16, 1999. On May 7, 1999 NASDAQ
informed us of their  decision that because of the  Company's  failure to comply
with the minimum  $5,000,000  market value of public float  requirement  for the
past 37 consecutive  trading days as of that date,  that effective with the open
of business of May 11, 1999, the company's  securities were transferred from the
National Market to the SmallCap Market, pursuant to the maintenance criteria. We
believe that our working  capital,  combined with the expected  receipt of funds
from the  resolution of certain change orders and  litigation,  is sufficient to
meet our anticipated needs, other than project financing  requirements discussed
above,  for at least the following  twelve months,  including the performance of
all existing contracts of the Company.  However,  as there is no assurance as to
the timing or amount of the receipt of funds from change  orders,  litigation or
other  sources,  we may be  required  to seek new bank  lines of credit or other
financing  in  order  to  facilitate  the  performance  of  jobs.  While  we are
conducting  ongoing  discussions with various  potential  lenders with a view to
establishing available credit facilities,  we presently have no commitments from
any  bank or  other  lender  to  provide  financing  if such  financing  becomes
necessary to support operations.

                                       10
<PAGE>

Year 2000 Issue

We recognize the need to ensure that our  operations,  as well as those of third
parties with whom we conduct  business,  will not be adversely  impacted by Year
2000 software  failures.  Software failures due to processing errors potentially
arising  from  calculations  using the year 2000 date are a known  risk.  We are
addressing this risk to the availability and integrity of financial  systems and
the  reliability  of  operational  systems  through  a  combination  of  actions
including a review of all software applications,  desktop equipment network, and
telecommunications  products  used by the Company to  determine if they are Year
2000  compliant.  We will also send  questionnaires  to our major  customers and
suppliers to assess their Year 2000 readiness, review all contacts for year 2000
liability and will develop  remediation and contingency plans where appropriate.
We expect to complete this work by this end of the second quarter 1999.

The costs of achieving Year 2000  compliance to date have been immaterial to our
financial  position,  results of operations or cash flows.  We do not anticipate
that  additional  amounts  incurred in connection  with our Year 2000 compliance
program will be material to our financial condition or results of operations.

Due to the uncertainties involved, we cannot predict the impact of the Year 2000
on our operations.  Achieving Year 2000 compliance is dependent on many factors,
some of which are not within our  control,  including  without  limitation,  the
continuity  of service  provided by the  government,  utilities,  transportation
industry and other  service  providers.  Should one of these  systems  fail,  or
should our internal  systems or the internal  systems of one or more significant
vendors or  suppliers  fail to achieve  Year 2000  compliance,  our business and
results of operations could be adversely affected.

Certain Factors Affecting Future Operating Results

This Form 10-Q contains forward-looking statements within the meaning of Section
27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act
of 1934.  Actual  results  could differ  materially  from those set forth in the
forward-looking  statements.  Certain factors that might cause such a difference
include the following:  uncertainty with respect to the continued listing of our
Common  Stock on Nasdaq;  uncertainty  with  respect  to our  ability to finance
continued  operating  losses and future growth  initiatives  pursuant to "Vision
2000";  possible  fluctuations  in the  growth  and  demand for energy and waste
treatment  services in markets in which the Company may seek to establish energy
production and waste treatment operations; intense competition for establishment
of  energy  production,  waste  treatment  and  similar  operations  in  growing
economies;   currency,   economic,   financing  and  other  risks   inherent  in
establishing  operations in foreign markets;  uncertainty  regarding the rate of
growth in demand for nuclear  decommissioning and site revitalization  services;
continued  delays in awarding  and  commencing  contracts;  delays in payment on
contracts occasioned by dealings with governmental and foreign entities; changes
in accepted remediation  technologies and techniques;  fluctuations in operating
costs  associated with changes in project  specifications  and general  economic
conditions;  substantial  fluctuations in revenues resulting from completion and
replacement of contracts and delays in contracts;  economic conditions affecting
the ability of  prospective  customers to finance  projects;  and other  factors
generally  affecting  the timing and  financing of projects.  In addition to the
foregoing, the following specific factors may affect future operating results.

                                       11
<PAGE>

At March 31,  1999,  we had a backlog  of  approximately  $7  million  of signed
services  contracts  as  compared  to a backlog of  approximately  $8 million at
December  31, 1998.  The largest  projects in our backlog at March 31, 1999 were
the Oak Ridge asset recovery project,  with an estimated value of services to be
performed of $4 million,  and the North Rim project,  with an estimated value of
services to be performed  of $3 million.  The Oak Ridge  project  began in March
1998 and the North Rim project began in May 1999 with both projects scheduled to
be completed during 1999. However, the elapsed time from the award of a contract
to commencement of services,  and completion of performance,  may be two or more
years.  The backlog at March 31, 1999 does not include  services  expected to be
rendered under the EWN project in Germany.  The total German government  funding
for the EWN project is approximately  $3.65 billion.  We anticipate that we will
perform  as much as $700  million  of  services  at the EWN site over a ten year
period. We expect to finalize a comprehensive  agreement for the  revitalization
of the EWN site during the first half of 1999 and to be  performing  remediation
services  during the second half of 1999.  Because of the  uncertainty as to the
actual  start date for  services at the EWN site,  no estimate can be made as to
the value of services expected to be rendered during 1999.

In addition to existing  contracts,  we are presently  bidding on, or propose to
bid on, numerous  projects in order to replace revenues from projects which will
be completed  during 1999 and to increase  the total  dollar  volume of projects
under  contract.  We anticipate  that efforts to bid on and secure new contracts
will focus on projects which can be readily  serviced from the regional  offices
as well as certain large  international  plant  relocation  projects and nuclear
decommissioning  projects  which we  intend to  pursue.  Our  regional  offices,
particularly the Oak Ridge,  Tennessee  offices,  are  strategically  located in
areas  having a high  concentration  of  prospective  governmental  and  private
remediation  sites.  While bidding to perform services at such sites is expected
to be highly  competitive,  we believe  that our  existing  presence on adjacent
projects  combined  with our proven  expertise  and  resources  will allow us to
successfully bid on and perform substantial additional projects based out of our
regional offices.

In  addition  to  remediation  and  plant  relocation  projects  on which we are
presently  bidding or  negotiating,  during  1997 and 1998 we entered the energy
production  and waste  treatment  services  market.  We  expect to begin  energy
production  and sales at our Georgia Power Project  during the second quarter of
1999 and expect to begin  operations at, and to receive  revenues from,  various
other energy and waste treatment projects and nuclear  decommissioning  projects
at various sites by as early as the second half of 1999.

While we anticipate that entry into the energy  production,  waste treatment and
nuclear facilities  decommissioning and site revitalization  market will provide
significant  opportunities for sustainable growth in both revenues and operating
profits,  entry into those markets requires  substantial capital commitments and
involves  certain risks.  Undertaking  energy  production,  waste  treatment and
nuclear decommissioning projects can be expected to require capital expenditures
of as little as several  million  dollars to hundreds of millions of dollars per
project.  We do not currently have the necessary  capital resources to undertake
such ventures without third party financing.  We anticipate that we will take on
equity  partners  and seek third  party debt  financing  to finance  substantial
portions  of the  projects  which we  expect  to  undertake.  While we have been
successful in attracting  substantial partners in carrying out various phases of
the  EWN  nuclear  decommissioning/site   revitalization  project,  we  have  no
commitments from potential partners and financing sources to provide funding for
future  projects and there is no  assurance  that such  partners  and  financing
sources will be available, or will provide financing on acceptable terms, if and
when we commence future projects.

There is  substantial  uncertain  as to our  ability to continue to operate as a
result of continuing losses and a lack of currently  available resources to fund
future  operations.  In an effort to deal with these concerns,  we are presently
evaluating the sale or other  liquidation of various  long-term  assets which we
believe can provide adequate funding to support future  operations.  In March of
1999, we agreed to accept  $300,000 in full  settlement  of our note  receivable
from UPE relating to the sale of our surplus equipment  inventory.  $150,000 was
paid at closing  with the  balance  payable in monthly  installments  over eight
months.  We are  presently  evaluating  the sale of properties in Poland and the
potential  compromise of our claims for additional  compensation on the East Dam
project as sources of additional funds. We believe that adequate funding will be
provided  from  the  efforts   described  to  support  our  operations  for  the
foreseeable future.  However, in the absence of receipt of adequate funding from
those,  or other,  sources,  our  ability to  continue to operate at the current
level is in doubt. Impact of Inflation

                                       12
<PAGE>

Inflation has not been a major factor in our business since inception. There can
be no assurances that this will continue.  However,  it is anticipated  that any
increases in costs can be passed on to customers in the form of higher prices.

ITEM 3A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     Not applicable

                           PART II - OTHER INFORMATION

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

     (a)  Exhibits

          Exhibit No.           Description
          -----------           -----------

             27.1             Financial Data Schedule

     (b)  Reports on Form 8-K

          None


                                       13
<PAGE>

                                   SIGNATURES

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

                                    IDM ENVIRONMENTAL CORP.


Dated: May 14, 1999                 By:  /s/ Joel Freedman 
                                       -----------------------------
                                        Joel Freedman, President


Dated: May 14, 1999                 By: /s/ Michael B. Killeen                
                                       ------------------------------
                                        Michael B. Killeen, Principal
                                        Financial and Accounting Officer