<PAGE>   1

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                     
                                   FORM 10-Q

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

                 For the Quarterly Period Ended March 31, 1998

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

                 For the Transition Period From __________ To __________

                           DOMINION BRIDGE CORPORATION
           (Exact name of registrant as specified in its charter)

<TABLE>
<S>                             <C>                          <C>
         DELAWARE                     1-10372                           23-2577796
(State of Incorporation)       (Commission File No.)         (IRS Employer Identification No.)

</TABLE>
                            500 Notre Dame Street
                                 3rd Floor              
                        Lachine, Quebec  CANADA H8S 2B2
                    (Address of principal executive office)

       Registrant's telephone number, including area code: (514) 634-3550

                                 NOT APPLICABLE
                  (Former name, if changed since last report)

Check whether the Registrant: (1) filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 
12 months (or for such shorter period that the Registrant was required to file 
such reports), and (2) has been subject to such filing requirements for the 
past 90 days.

                       (1)   Yes   X       No _____
                       (2)   Yes   X       No _____

APPLICABLE ONLY TO REGISTRANTS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PAST FIVE YEARS

Check whether the registrant has filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934
subsequent to the distribution of securities under a plan confirmed by a court.

                             Yes   X       No _____  

                     APPLICABLE ONLY TO CORPORATE ISSUERS:

The number of shares outstanding of the Registrant's sole class of common stock,
as of May 20, 1998, is 33,370,725.
<PAGE>   2
                          DOMINION BRIDGE CORPORATION

                                     INDEX
 
<TABLE>
<CAPTION>
                                                                                          PAGE
                                                                                          -----
<S>         <C>         <C>                                                               <C>
PART I      FINANCIAL INFORMATION*

            Item 1.     Consolidated Balance Sheets at March 31, 1998 (Unaudited) and
                        September 30, 1997                                                    3

                        Consolidated Statements of Operations for the Three Months
                        and Six  Months ended March 31, 1998 and 1997 (Unaudited)             4

                        Consolidated Statements of Cash Flows for the Six Months ended
                        March 31, 1998 and 1997 (Unaudited)                                   5

                        Consolidated Statements of Stockholders' Equity for the Six
                        Months ended March 31, 1998 (Unaudited)                               6

                        Notes to consolidated Financial Statements                            7

            Item 2.     Management's Discussion and Analysis of Financial Condition and
                        Results of Operation                                                 13

PART II     OTHER INFORMATION

            Item 1.     Legal Proceedings                                                    19

            Item 2.     Changes in Securities                                                19

            Item 3.     Defaults Upon Senior Securities                                      19

            Item 4.     Submission of Matters to a Vote of Security Holders                  19

            Item 5.     Other Information                                                    19

            Item 6.     Exhibits and Reports on Form 8-K                                     20
</TABLE>
 
*The accompanying financial information at March 31, 1998 and the quarter and
six months then ended is unaudited.

                                        2
<PAGE>   3
                                        
                         PART I - FINANCIAL INFORMATION
                                        
                          DOMINION BRIDGE CORPORATION
                                        
                          CONSOLIDATED BALANCE SHEETS
                  as at March 31, 1998 and September 30, 1997
              (in thousands of U.S. dollars, except share amounts)


<TABLE>
<CAPTION>
                                                                    March 31        September 30
                                                                      1998              1997     
                                                                   ---------       -------------
                                                                       $                 $
                                                                   Unaudited          Audited

<S>                                                                <C>               <C>
ASSETS
CURRENT ASSETS
  Cash......................................................        20,830              9,021
  Accounts receivable, net..................................       100,721            107,956
  Inventories...............................................        49,629             47,621
  Prepaid expenses and other current assets.................         7,990              5,862
                                                                   -------            -------
  TOTAL CURRENT ASSETS......................................       179,170            170,460
                                                                   -------            -------
  Property, plant and equipment, net........................        56,412             51,827
  Goodwill..................................................         9,156              9,306
  Pension assets............................................         2,579              2,652
  Investments in unincorporated joint ventures..............             -                996
  Other assets..............................................         9,635              7,523
                                                                   -------            -------
  TOTAL ASSETS..............................................       256,952            242,764
                                                                   =======            =======

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
  Bank indebtedness (Note 4)................................         4,451              7,165
  Term loan (Note 4)........................................             -             15,000
  Accounts payable and accrued expenses.....................       139,882            132,010
  Customer advances.........................................         8,374              8,447
  Deferred income taxes.....................................         2,441                805
  Current portion of obligations under capital leases.......         1,738              3,779
                                                                   -------            -------
TOTAL CURRENT LIABILITIES...................................       156,886            167,206
                                                                   -------            -------
  Long term debt (Note 4)...................................        35,218                  -
  Deferred income taxes.....................................         5,334                492
  Accrued post-retirement benefits other than pensions......         1,643              1,791
  Obligations under capital leases..........................         6,253              9,363
  Minority interest.........................................        20,705             19,243
  Negative goodwill.........................................         5,256              7,812
  Other long-term liabilities...............................         5,285              1,458
                                                                   -------            -------
TOTAL LIABILITIES...........................................       236,580            207,365
                                                                   -------            -------

STOCKHOLDERS' EQUITY
  Common Stock..............................................            36                 34
  Additional paid-in capital................................        79,525             74,529
  Deficit...................................................       (45,034)           (32,511)
  Cumulative translation adjustment.........................       (12,331)            (4,829)
                                                                   -------            -------
                                                                    22,196             37,223
  Subscription receivable...................................        (1,824)            (1,824)
                                                                   -------            -------
  TOTAL STOCKHOLDERS' EQUITY................................        20,372             35,399
                                                                   -------            -------
  TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY................       256,952            242,764
                                                                   =======            =======

Commitments and contingencies (Note 5)
</TABLE>

See accompanying notes
     
<PAGE>   4
                                        
                          DOMINION BRIDGE CORPORATION
                                        
                UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
                      Period ended March 31, 1998 and 1997
                         (in thousands of U.S. dollars)

<TABLE>
<CAPTION>                               
                                                               THREE MONTHS ENDED                    SIX MONTHS ENDED            
                                                          ---------------------------           -------------------------- 
                                                           March 31          March 31           March 31          March 31
                                                             1998              1997              1998               1997   
                                                          ---------          --------           --------          --------
                                                              $                  $                  $                  $

<S>                                                       <C>                <C>                <C>                 <C>        
Sales.............................................         123,785            132,732            237,719            257,536
                                                           -------            -------            -------            -------
Cost of sales.....................................         116,657            120,199            215,764            232,080
Selling, general and
administrative expenses...........................          14,375             14,949             28,051             27,268
                                                           -------            -------            -------            -------
                                                           131,032            135,148            243,815            259,348

Income from operations of a joint venture..........              -                268                  -                483
                                                           -------            -------            -------            -------
(Loss) income from operations.....................          (7,247)            (2,148)            (6,096)            (1,329)

Interest expense..................................          (2,877)            (1,530)            (4,418)            (2,919)
Other Income......................................           1,765              3,967              1,832              4,319
                                                           -------            -------            -------            -------
(Loss) before income                                                                                                       
taxes; and minority Interest......................          (8,359)               289             (8,682)                71
                                                           -------            -------            -------            -------

Income taxes
Current...........................................             141               (529)            (2,108)            (1,149)
Deferred..........................................          (1,100)                 -                  -                  -
                                                           -------            -------            -------            -------
                                                              (959)              (529)            (2,108)            (1,149)
                                                           -------            -------            -------            -------
(Loss) Income before minority interest............          (9,318)              (240)           (10,790)            (1,078)

Minority interest-common stocks...................            (569)               (96)            (1,733)              (373)
                                                           -------            -------            -------            -------
Net (loss) Income.................................          (9,887)              (336)           (12,523)            (1,451)
                                                           =======            =======            =======            =======
Net income (loss) per
common share and
common share                                                                                                                
equivalents                                                                                                                 
Primary...........................................           (0.31)              (0.01)            (0.40)             (0.05)
Fully diluted.....................................                                   -                 -                  -

Weighted average
number of common
shares and common
share equivalents
Primary...........................................      31,447,648         28,963,204         31,447,648         28,138,171
Fully diluted.....................................      31,447,648         28,963,204         31,447,648         28,893,818
                                                                        
</TABLE>
<PAGE>   5
                                        
                          DOMINION BRIDGE CORPORATION
                                        
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                    Six months ended March 31, 1998 and 1997
                         (in thousands of U.S. dollars)

<TABLE>
<CAPTION>

                                                                         1998                  1997    
                                                                     -----------           -----------
                                                                     $ Unaudited           $ Unaudited

<S>                                                                    <C>                   <C>
Cash flow from operating activities
Net (loss) ..................................................           (12,523)              (1,451)
Adjustments to reconcile net income to the
  cash provided by (used for) operating activities
    Minority interest in net income..........................             1,733                  373
    Gain in disposal of subsidiaries common shares...........                 -               (3,000)
    Common stock issued for services.........................                 -                  553
    Depreciation and amortization............................             5,766                5,360
    Amortization of negative goodwill........................            (2,406)              (2,513)
    Deferred income taxes....................................             6,478                  995
    Deferred pension cost....................................                 -                 (121)
    Income from operations of a joint venture................                 -                 (483)
    Cash advance received from joint venture.................               996                1,637
    Decrease (Increase) in accounts receivable...............             7,235               25,544
    (Increase) in prepaid expenses an other
        assets...............................................            (2,128)              (3,676)
    Increase in inventories..................................            (2,008)             (13,226)
    (Decrease) increase in accounts payable..................             8,726              (17,099)
    (Decrease) increase in customer advances.................               (73)               7,021
    Other - net..............................................              (273)                 345
                                                                        -------              -------
Net cash provided by (used in) operating activities..........            11,523                  259
                                                                        -------              -------
Cash flow from investing activities
Increase in short term deposits..............................                 -               (6,255)
Proceeds on disposal of subsidiary common shares.............                 -               10,436
Decrease of pension asset....................................                73                    -
Cash payment for purchase of equipment.......................           (10,351)              (8,427)
(Increase) in other assets...................................            (2,112)              (3,310)
                                                                        -------              -------
Net cash provided by (used for) investing activities.........           (12,390)              (7,556)
                                                                        -------              -------
Cash flow from financing activities
Term loan (Note 4)...........................................            35,218                    -
(Repayment) issuance of term loan............................           (15,000)             (10,000)
Proceeds from issuance of common stock.......................             5,000                    -
Accrued post retirement benefits
   other the pension.........................................              (148)                   -
(Decrease) in bank indebtedness..............................            (2,714)              (4,151)
Other long-term liabilities..................................             3,827                1,728
Decrease) Increase in capital lease obligations..............            (5,151)                 502
Issue costs of subsidiary preferred shares...................                 -                    -
                                                                        -------              -------
Net cash provided by financing activities....................            21,032              (11,921)
                                                                        -------              -------
Effect of foreign exchange rate fluctuations on cash.........            (8,356)                 140
                                                                        -------              -------
Net change in cash...........................................            11,809              (19,078)
Cash, at beginning of period.................................             9,021               26,231
                                                                        -------              -------
Cash, at end of period.......................................            20,830                7,153
                                                                        =======              =======
Non-cash investing and financing activities
Issuance of common stock on conversion of
  minority interest preferred shares.........................                 -                8,537
Purchase of preferred stock minority interest
  of subsidiaries............................................                 -               (8,537)
</TABLE>
See accompanying notes
     
<PAGE>   6
                                        
                                        
                                        
                          DOMINION BRIDGE CORPORATION
                                        
                Consolidated Statements of Stockholders' Equity
              Three month period ended March 31, 1998 (unaudited)
                 (dollar amounts in thousands of U.S. dollars)

<TABLE>
<CAPTION>
                                                                    Additional                 Cumulative
                                                         Common      Paid-In                  Translation   Subscription
                                         Shares       Stock Amount   Capital      Deficit      Adjustment    Receivable
                                                           $            $            $             $             $         
                                       ----------    ------------- ----------    ---------    -----------   ------------
<S>                                    <C>             <C>         <C>           <C>           <C>           <C>
Balance at September 30, 1997....     31,447,648           34        74,529      (32,511)      (4,829)       (1,824)

Translation adjustment, net
  income taxes of nil............              -            -             -            -        2,870             -

Net loss for the period..........              -            -             -       (2,636)           -             -
                                       ----------          --        ------      -------       ------        ------   
Balance at December 31, 1997.....      31,447,648          34        74,529      (35,147)      (1,959)       (1,824)

Insurance of Common Stock for
  cost consideration.............       1,923,077           2         4,996

Translation adjustments,
  net of income taxes of nil.....               -           -             -            -      (10,372)            -

Net loss for the period..........               -           -             -       (9,887)                         -
                                       ----------          --        ------      -------      -------        ------  
Balance at March 31, 1998........      33,370,725          36        79,525      (45,034)     (12,331)       (1,824)
                                       ==========          ==        ======      =======      =======        ======  

</TABLE>

See accompanying notes

     
<PAGE>   7
                                        
                                        
                                        
                          DOMINION BRIDGE CORPORATION
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  (UNAUDITED)
        

1.   BASIS OF PRESENTATION

     The accompanying Condensed Consolidated Financial Statements include the
     consolidated accounts of Dominion Bridge Corporation, a Delaware
     corporation (the "Company"), and its subsidiaries. All significant
     inter-company accounts and transactions have been eliminated in the
     consolidation. All dollar amounts are presented in thousands of U.S.
     dollars, except per share data.

     The Condensed Consolidated Financial Statements do not include footnotes
     and certain financial information normally presented annually under
     generally accepted accounting principles and, therefore, should be read in
     conjunction with the Company's Annual Report on Form 10-K for the year
     ended September 30, 1997. Accounting measurements at interim dates
     inherently involve greater reliance on estimates than at year-end. The
     results of operations for the six months ended March 31, 1998 are not
     necessarily indicative of results that can be expected for the full year.
 
     The Condensed Consolidated Financial Statements included herein are
     unaudited, however, they contain all adjustments (consisting of normal
     recurring accruals) which, in the opinion of the Company, are necessary to
     present fairly its consolidated financial condition at March 31, 1998, its
     consolidated results of operations for the three and six months ended March
     31, 1998 and 1997, its cash flows for the three months ended March 31, 1998
     and 1997 and its consolidated statement of stockholders' equity for the six
     months ended March 31, 1998.

2.   NATURE OF OPERATIONS

     Dominion Bridge Corporation, a Delaware corporation with executive offices
     in Montreal, Canada, specializes in international engineering,
     infrastructure development and project management and ship building and
     repair.

3.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     These consolidated financial statements have been prepared by management in
     accordance with accounting principles generally accepted in the United
     States, the most significant of which are outlined below. These principles
     require the use of estimates to measure the financial effects of past
     transactions or events and the present status of assets and liabilities.
 
     The preparation of financial statements in conformity with generally
     accepted accounting principles requires management to make estimates and
     assumptions that affect the reported amounts of assets and liabilities and
     disclosure of contingent assets and liabilities at the date of the
     financial statements and the reported amount of revenue and expenses during
     the reporting period. Actual results could differ from those estimates.
 
     Principles of consolidation

     The financial statements include the accounts of the Company and its
     subsidiaries. All significant intercompany accounts and transactions have
     been eliminated upon consolidation.
  
<PAGE>   8
3.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT'D)
    
     During the previous fiscal year, the Company disposed of a portion of its
     interest in McConnell Dowell Corporation Limited ("MDC") reducing its
     interest to 63% at September 30, 1997.  These transactions result in the
     financial results of the six months ended March 31, 1998 including a larger
     minority interest than the comparative period for the six months ended
     March 31, 1997.
    
     Cash

     Cash includes short-term deposits with terms less than 90 days.  Short-term
     deposits with terms longer than 90 days are stated at cost which
     approximates fair market value.
    
     Construction contracts

     Income on construction contracts is recognized on the
     percentage-of-completion basis. Provisions for anticipated losses on
     uncompleted contracts are made in the period in which losses are first
     determinable.
    
     Management establishes these estimates by periodically assessing the status
     of each contract using actual costs incurred compared to budgeted costs and
     hours worked compared to plan.
    
     In the ordinary course of its construction business, the Company, together
     with its client, may conduct a review following the completion of the
     project for the purpose of establishing a final contract amount.  Income is
     recorded only when the Company's entitlement to additional amounts under
     such contracts is established.
    
     Inventories

     Inventories consist principally of work in progress related to construction
     contracts which are stated at accumulated costs less amounts charged to
     income based on the percentage-of-completion of individual contracts. Work
     in process inventories, accounted for under the percentage-of-completion
     basis, are adjusted to reflect the lower of cost or net realizable value by
     accruing for any losses anticipated under such construction contracts as
     soon as such losses are identified.  Raw materials consist principally of
     raw steel and supplies not held for resale and are stated at the lower of
     cost (first in, first out) or replacement cost (net realizable value).  The
     policy of carrying these raw material inventories at the lower of cost and
     replacement cost reflects obsolescence or decline in market value of these
     inputs to the Company's end products. Finished goods comprise steel and
     steel hardware products held for sale and are stated at the lower of cost
     (first in, first out) or market (net realizable value).
    
     
<PAGE>   9

3.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT'D)
    
     Property, plant and equipment

     Property, plant and equipment, including assets that were acquired under
     capital leases, are stated at cost. Maintenance and repairs are charged to
     expenses as incurred. When assets are sold or otherwise disposed of, the
     cost and related accumulated depreciation are removed from their respective
     accounts and the resulting gain or loss is reflected in current operations.
     Depreciation is computed on the straight-line method over the estimated
     useful lives of the assets, generally twenty years for machinery and
     equipment and forty years for buildings.
    
     Pension costs

     The Company maintains defined benefit pension plans which cover certain of
     its Canadian employees. Pension plan obligations are valued using the
     projected benefit actuarial method and best estimate assumptions. Pension
     plan assets are valued at market-related values. The Company also
     participates in defined contribution plans for its Australian and certain
     of its Canadian employees.
    
     Post-retirement benefits other than pensions

     The Company accrues for benefits such as health care, life insurance
     coverage and long service leave to which retired employees are entitled.
     The obligation is adjusted on an annual basis to reflect the expected cost
     of providing post-retirement benefits during the years an employee renders
     service.
    
     Translation of foreign currencies and foreign exchange contracts

     All assets and liabilities of the Company's subsidiaries operating outside
     the United States are translated into U.S. dollars using current exchange
     rates and income statement items are translated using weighted average
     exchange rates for the year. The resulting translation adjustment is
     included as a component of stockholders' equity. Other foreign currency
     transaction gains and losses are included in determining net income.
    
     Income taxes

     The Company accounts for income taxes under the liability method. Deferred
     taxes reflect the tax consequences in future years of differences between
     the tax bases of assets and liabilities and their financial reporting
     amounts.
    
     Net income (loss) per share

     Primary net income (loss) per common share is computed by dividing the
     income applicable to common shares by the weighted average number of shares
     of common stock outstanding and common stock equivalents including the
     dilutive effect of options and warrants from the date of grant.
    
     Net income (loss) per common share on a fully diluted basis assumes that
     all convertible instruments were converted to common stock at the earlier
     of the beginning of each year or the date of issuance.
     
<PAGE>   10
                                
    
     Net loss per common share for the periods ending March 31, 1998 and 1997 is
     not presented on a fully-diluted basis as the existence of potentially
     dilutive options have an antidilutive effect on loss per common share.
    
     The loss per common share is computed by dividing net loss by the weighted
     average number of common shares outstanding.

4.   FINANCING ARRANGEMENTS

     On September 26, 1997, with effect on October 8, 1997, the Company entered
     into an agreement with a syndicate of bankers which provides the Company
     with a $40 million revolving credit facility, of which $35.2 million was
     outstanding at March 31, 1998.  The agreement is for an original term of
     three years and shall be automatically renewed for successive terms of one
     year unless terminated, under specific conditions, by the Company or its
     Lenders.  The facility bears interest at prime plus 3% and is secured by
     substantially all assets of the Company's North American operations and the
     shares of MDC owned by the Company.  The Agreement provides for various
     covenants including but not restricted to the maintenance of certain
     financial ratios, such as minimum shareholders' equity, minimum working
     capital and total liabilities EBITDA, limitation on incurrence of
     indebtedness, payment of dividends, capital expenditures and the sale of
     assets.  The facility was used to retire existing debt and for general
     corporate purposes.
    
     Minimum shareholder's equity covenant which was effective as at September
     30, 1997 and thereafter was not met at September 30, 1997, December 31,
     1997 or March 31, 1998. The Company has negotiated waivers for this
     covenant through and until March 31, 1998.  The Company is currently
     negotiating a waiver of or a revision to the covenants on its loan for the
     remainder of fiscal 1998.
    
     
<PAGE>   11
     A subsidiary of the Company has entered into operating credit facilities
     totaling $6.2 million bearing interest at variable rates.  At March 31,
     1998, $4.5 million was outstanding under these facilities. Certain
     facilities have restrictions on their usage and are limited for use on
     specific projects.

5.   COMMITMENTS AND CONTINGENCIES
    
     In December 1996, the Company was notified that a class action shareholder
     complaint had been filed against it and certain executive officers of the
     Company. The complaint alleges that the defendants misled the investing
     public as to the quality and status of a number of contracts obtained by
     the Company as well as failed to disclose various inaccurate and misleading
     accounting practices. Management intends to vigorously defend this claim
     and believes the claim is without merit. As the outcome of this claim is
     indeterminable, no provision has been recorded in the consolidated
     financial statements.
    
     In May 1997, the "Committee to Revitalize Dominion Bridge Corporation" (the
     "Committee") commenced a law suit against the Company seeking a declaration
     that it should be permitted to solicit written consent from the Company's
     stockholders. The claim seeks injunctive relief but no material monetary
     damages.  The Company subsequently filed a counterclaim seeking declaratory
     and injunctive relief against the Committee for its consent solicitation
     and monetary damages. Motions are pending before the courts with respect to
     the continuation of discovery on both the Committee's claim and the
     Company's counterclaim.  As no monetary material damage has been claimed by
     the Committee, no provision has been recorded in the accounts.
    
     During 1995, the Company submitted a Claim Notification Letter to a
     customer and issued invoices to another customer against which a cash
     advance of $2.1 million was applied. These amounts were originated with a
     view to recovering substantial cost increases pertaining to the design,
     manufacture and delivery of major infrastructure assets. The Company
     believes that the costs and expenses claimed are justified and has obtained
     a third party analysis as to the reasonability of its claim to the first
     customer. It has also received acknowledgment of the invoices issued to the
     second customer. During 1995, the value of these claims has been recognized
     in sales in the amount of $3.7 million. While management believes that the
     favorable outcome of these claims is probable, their resolution will
     involve further negotiation with the clients, or arbitration, and the
     ultimate realization may vary from the current estimates.
    
     A number of claims and lawsuits seeking unspecified damages and other
     relief are pending against the Company. It is impossible at this time for
     the Company to predict with any certainty the outcome of such litigation.
     However, management is of the opinion, based upon information presently
     available, that it is unlikely that any liability, to the extent not
     provided for through insurance or otherwise, would be material in relation
     to the Company's consolidated financial position.
    
     Certain subsidiaries have given various warranties on asset sales and in
     respect of taxation to purchasers of certain of the Company's former
     subsidiaries and equity investments. A warranty claim from one purchaser of
     a former equity investment is being defended and remains unresolved.
     Management is of the opinion that it is unlikely that any liability would
     be material to the Company's consolidated financial position.
<PAGE>   12
     Certain subsidiaries of the Company are contingently liable for letters of
     credit, commitments and performance guarantees arising in the ordinary
     course of business.
    
     The Company has guaranteed up to $5.0 million of a subsidiary debt.  At
     March 31, 1998, the subsidiary had sufficient assets to meet such
     obligations.
    
     A subsidiary of the Company has guaranteed 49% of the debt of an equity
     investee.  The debt of the equity investee is A $4.9 million.  Accordingly,
     A $2,4 million is guaranteed by the Company's subsidiary.  At March 31,
     1998, the equity investee has sufficient assets to meet such obligations.
    
     In connection with the acquisition of Davie Industries, the Company agreed
     to make CDN $45M in capital additions pursuant to a three year
     revitalization plan.  This investment is on a best efforts basis and is
     subject to financial market conditions and the general conditions in the
     chosen industrial markets contemplated in the revitalization plan.
    
     The Company and its subsidiaries are engaged in manufacturing activities
subject to numerous environmental laws, regulations and guidelines adopted by
various governmental authorities in the jurisdictions in which the Company
operates. The Company's policy is to accrue for environmental costs in the
accounting period in which a loss is known or considered probable and the amount
can be estimated.

6.   SUBSEQUENT EVENTS

     In May 1998 the Company entered into a Management Arrangement with EIFH
     Holdings, Inc., (EIFH). Effective May 1, 1998, EIFH will provide
     management services to DBC in connection with its ongoing, day-to-day,
     operations including financing and administrative support services,
     marketing administration and support services, human resources management
     and overnight and administration of DBC's operating units. In return for
     services, DBC has agreed to pay EIFH a fee of $100,000 per month, and
     reimburse all reasonable out-of-pocket expenses and disbursements EIFH
     incurs in rendering such services. The term of the agreement is for six
     months cancellable by either party with 30 days notice.

     Subsequent to the end of the current quarter, the Company announced an
     agreement in principle to sell its entire interest in MDC to a third party
     for cash consideration of approximately $68 million.  As of the date of
     this Report, there is no definitive  agreement with respect to this
     transaction, which would also be subject to regulatory approval and other
     customary conditions.  No accounting effect has been given to the proposed
     sale of the Company's investment in MDC.

     An affiliate of a principal stockholder, Lamar Investments, Inc. ("Lamar")
     has agreed to provide the Company with a credit facility in the principal
     amount of up to $10 million. In addition, former executive officers of
     Company (the "Executives") agreed to reinvest $4.8 million due them
     under certain settlement agreements into the Company on the same terms.
     These amounts were invested by Lamar and the Executives pursuant to the
     terms of a Credit Agreement ("Credit Agreement") by and among the Company,
     Lamar and an affiliate of the Executives, Wellgate International Ltd.
     ("Wellgate").  The Company is obligated to make monthly interest payments
     to Lamar and Wellgate based on the outstanding principal amount due under
     the Credit Agreement.
    
     Pursuant to the Credit Agreement, the Company issued a Convertible
     Revolving Note to Lamar in the principal amount of up to $10 million (the
     "Lamar Note") and a Convertible Term Note to Wellgate in the principal
     amount of $4.8 million (the "Executive Note" and together with the Lamar
     Note, the "Notes").  The Notes bear interest at the rate of 11.5%, are
     secured by a second priority perfected security interest in substantially
     all of the assets of the Company and are convertible into shares of Common
     Stock of the Company at $2.60 per share.  The Company also issued warrants
     (the "Warrants") to purchase shares of Common Stock of the Company at $3.00
     per share for a three (3) year period; 333,708 Warrants were issued to
     Wellgate and up to 1,668,536 Warrants will be issued to Lamar based on the
     amount of advances made under the Loan.  As of May 11, 1998, approximately
     $7.55 million has been advanced by Lamar to the Company under the Credit
     Agreement.

     
<PAGE>   13
              

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

     Except for historical information, the material contained in Management's
Discussion and Analysis of Financial Condition and Results of Operations is
forward-looking. For the purposes of the safe harbor provisions for
forward-looking statements of the Private Securities Litigation Reform Act of
1995, readers are urged to review the Company's Annual Report on Form 10-K for
the fiscal year ended September 30, 1997 for a list of certain important factors
that may cause actual results to differ materially from those described below.

RESULTS OF OPERATIONS

     GENERAL

     The following discussion relates to selected financial information  from
the Company's Consolidated Statements  of Operations for the three months and
six months ended March 31, 1998  (the  "Current  Quarter" and "Current  Six
Months," respectively) and the three and six months ended March 31, 1998 (the
"Comparable  Quarter" and  "Comparable  Six  Months," respectively).

     THREE MONTHS ENDED MARCH 31, 1998 AND 1997

     Sales for the Current Quarter decreased 6.7% to $123.8 million as compared
to $132.7 million in the Comparable Quarter. The $8.9 million total decrease in
sales in the Current Quarter over the Comparable Quarter is principally
attributable to the North American operations. The Company's North American
operations consist of Dominion Bridge, Inc., Steen Contractors Ltd. and Davie
Industries Inc. These units were adversely affected by uncertainties relating to
the possible sale of the Company and a shortage of working capital. In addition,
these operations were adversely affected by a suspension of the Company's
bonding during a brief period due to the working capital shortage faced by the
Company. Following the end of the quarter the Company underwent a change in its
executive management and obtained a $10 million working capital facility from a
principal stockholder of the Company, as described below under "Liquidity and
Capital Resources." This working capital facility has temporarily addressed the
working capital shortage and the Company is once again bidding for new work with
its normal bonding line. The Company is in the process of formulating a
restructuring plan which will provide a longer-term solution to the Company's
working capital requirements so that the Company can resume normal operations.

     The Company's Australian subsidiary, McConnell Dowell Corporation Limited
("MDC") continued to perform well notwithstanding the difficult economic climate
in the Asia/Pacific region. Sales at MDC increased by 10.8% during the Current
Quarter over the Comparable Quarter to $75.8 million.

     As of March 31, 1998, the backlog in the North American operations,
representing the uncompleted portions of construction and engineering contracts,
was 96.6 million. Not included within the backlog are three offshore drilling
projects for the Company's Davie subsidiary which are subject to financing and
bonding contingencies. The Company's management is in the process of attempting
to finalize the bonding and financing and expect that these projects will
commence by the end of the fiscal year, but there can be no assurances to this
effect. Although the dollar amount of backlog is not necessarily indicative of
the future earnings of the Company, the backlog represents business which is
considered to be firm. However, there can be no assurance that cancellations or
scope adjustments will not occur.
   
<PAGE>   14
     The Company's Current Quarter gross profit margin decreased to 4.8% from
9.4% in the Comparable Quarter.  This decrease reflects the relatively fixed
direct costs in the North American operations being spread over lower revenues.
Gross margin was also adversely impacted by the inability of the Company to
purchase steel directly from manufacturers due to working capital restraints,
leading to higher costs of purchasing steel and other raw material. The
Company's new management is conducting a review of the North American operations
to determine methods to increase the Company's operating margins.

     The accounting for the Company's construction operations are significantly
affected by management estimates of project profitability. As a result of a
re-evaluation of management estimates, during the quarter the Company wrote down
approximately $4.1 million in the carrying value of work-in process, reflecting
lower profit estimates.

     Selling, general and administrative costs in the Current Quarter remained
relatively constant over the Comparable Quarter, but increased as a percentage
of sales due to the lower revenue during the Current Quarter.  As a result of
fees and costs incurred in connection with the Company's recent change in
control, the Company expects that its selling, general and administrative costs
will experience a significant increase in the third quarter of fiscal 1998.

     The Company's net interest expense increased from $1.5 million in the
Comparable Quarter to $2.9 million in the Current Quarter, reflecting greater
loan balances under the Company's credit facility with a syndicate of lenders
led by BNY Financial Corporation of Canada, an affiliate of Bank of New York
("BNY").

     The minority interest attributable to common stock of $569,000, and the
increase of $473,000 in the Current Quarter, is attributable to the 37% of MDC
not owned by the Company as opposed to the 22.6% not owned by the Company in the
Comparable Quarter.  As a result of the loss from operations, the increase in
interest expense associated with the Company's borrowings, income tax provisions
and minority interest, the Company recorded a net loss of $9.9 million in the
Current Quarter as compared to a loss of $336,000 in the Comparable Quarter.

     Exchange rates used in this discussion for the translation of financial
results for the Current Quarter and the Comparable Quarter from Canadian to U.S.
dollars were Cdn $1.00 equals US $.70, and US $.74, respectively and for the
Australian dollar were A $1.00 equals US $.67 and US $.78, respectively.  The
cumulative currency translation loss which has been deferred as part of
shareholders' equity increased to $12.3 million at March 31, 1998 as compared to
$4.8 million at September 30, 1997, reflecting continued weakness in the Asian
currencies where MDC principally operates.

SIX MONTHS ENDED MARCH 31, 1998 AND 1997

     Sales in the Current Six Months were $237.7 million compared to $257.5
million, a 7.7% decline. This decline was likewise caused by a decrease in sales
in the North American operations due to financing and bonding difficulties.
MDC's sales in the Current Six Months increased to $145.8 million from $130.7
million in the Comparable Six Months.

     The gross profit margin declined to 8.2% from 9.9% in the Current Quarter,
reflecting the decline in gross profit margin in the Current Quarter.

     The selling, general and administrative expenses during the Current Six
Months were essentially flat, increasing by approximately $900,000, but as a
percent of revenues increased at a greater rate due to the lower revenues.

     Exchange rates used in this discussion for the translation of financial
results for the Current Six Months and the Comparable Six Months from Canadian
to U.S. dollars were Cdn. $1.00 equals US $.72 and US $.74, respectively, and
for the Australian dollar were A $1.00 equals US $.67 and US $.78, respectively.

     Notwithstanding the increase in the net loss during the Current Quarter,
the Company's consolidated operations were essentially cash neutral, with an
EBITDA for the six months of ($231,000).

LIQUIDITY AND CAPITAL RESOURCES
     
     The Company's principal sources of liquidity since the Company's
reorganization have been proceeds from seller financing provided in connection
with the Company's acquisitions and the private placement of debt and equity
securities, bank financing and cash from operations.  In addition, in connection
with the Company's acquisition of Davie, the Company received $18.5 million in
cash from SGF, to fund Davie's operating deficit and to modernize Davie's
operating facilities.
     
<PAGE>   15

     As of the fiscal year-end, the Company had a $30 million credit facility
from BTCC, of which $15 million was outstanding as of September 30, 1997. This
facility provided funding for the Company's acquisition of MDC.  During the
quarter ended December 31, 1997, the Company entered into $40 million credit
facility (the "BNY Facility") with a syndicate led by BNY.  The BNY Facility was
used to pay off BTCC and to provide working capital for the Company's North
American operation.  The amount available to the Company under the BNY Facility
is based upon a percentage of the value of certain eligible assets of the
Company, including the MDC shares owned by the Company and the accounts
receivable, inventory and property, plant and equipment of the North American
operations. As a result of the decline in the value of the Australian dollar,
which affects the amount the Company can borrow tied to the value of the
Company's shares in MDC, the Company has limited availability under the BNY
Facility.

     The BNY Facility matures in three years and bears interest at a floating
rate based upon BNY's prime rate. The BNY Facility agreements provide for an
acceleration of the maturity date in the event of an "Event of Default" (as such
term is defined in the BNY Facility agreements).  An Event of Default includes
failure to pay when due any installment of interest on or principal of the
Facility and any failure to observe the covenants provided in the BNY Facility
agreements, including certain financial covenants.

     The BNY Facility contains various financial and other covenants including
maintaining a minimum shareholders equity of $32 million as of September 30 and
December 31, 1997.  This covenant was not met as of these dates and thereafter
and constituted a technical default under the BNY Facility.  The Company has
negotiated waivers for these defaults through March 31, 1998.  The Company is
currently negotiating a waiver of or a revision to the shareholders equity and
other covenants contained in the BNY Facility for the remainder of fiscal 1998.
There can be no assurance that such negotiations will result in a waiver or
revision of such covenants.  The Company's failure to successfully negotiate
such waiver or revisions would adversely affect the Company's ability to obtain
necessary working capital and would have a material adverse effect on the
continuing operations of the Company.

     Since November 1997, Davie has been engaged in the upgrade of the Spirit of
Columbus, an oil production platform.  The Company has yet to obtain financing
for this project and has been incurring costs on behalf of Davie.  As of the
date of this Report, Davie has received a portion of the progress payments for
the work performed.  In order to conserve limited working capital, the Company
has determined to cut back on the scope of work authorized until such time as
progress payments are received and financing is in place.
     
<PAGE>   16
                                

     To address the Company's working capital needs the Company issued Units
consisting of Common Stock and Warrants to American Eco Corporation for gross
proceeds of $5 million and entered into a $10 million credit facility with Lamar
Investments, Inc. ("Lamar"), an affiliate of a principal stockholder of the
Company.  Lamar has agreed to provide the Company with a credit facility in the
principal amount of up to $10 million.  In addition, former executive officers
of Company (the "Executives") agreed to reinvest the $4.8 million due them under
certain settlement agreements into the Company on the same terms.  These
obligations were invested by Lamar and the Executives pursuant to the terms of a
Credit Agreement ("Credit Agreement") by and among the Company, Lamar and an
affiliate of the Executines, Wellgate International Ltd. ("Wellgate").  The
Company is obligated to make monthly interest payments to Lamar and Wellgate
based on the outstanding principal amount due under the Credit Agreement.

     Pursuant to the Credit Agreement, the Company issued a Convertible
Revolving Note to Lamar in the principal amount of up to $10 million (the "Lamar
Note") and a Convertible Term Note to Wellgate in the principal amount of $4.8
million (the "Executive Note" and together with the Lamar Note, the "Notes").
The Notes bear interest at the rate of 11.5%, are secured by a second priority
perfected security interest in substantially all of the assets of the Company
and are convertible into shares of Common Stock of the Company at $2.60 per
share.  The Company also issued warrants (the "Warrants") to purchase shares of
Common Stock of the Company at $3.00 per share for a three (3) year period;
333,708 Warrants were issued to Wellgate and up to 1,668,536 Warrants will be
issued to Lamar based on the amount of advances made under the Loan.  As of May
11, 1998, approximately $7.55 million has been advanced by Lamar to the Company
under the Credit Agreement.

     As a result of the recent change in control, the Company retained the
services of EIF Holdings, Inc. to conduct a review of the Company's operations.
This review is intended to identify alternatives to restructure the Company to
return it to profitability.  As of the date of this Report, this review is
continuing and no definitive recommendations have been made.  The Company is
exploring the possibility of a sale of its stake in MDC and recently announced
an agreement in principle which would provide the Company with gross proceeds of
$68 million, which would be used to retire debt and provide the Company with
operating capital for its North American operations.  However, as of the date of
this Report there is no definitive agreement with respect to this transaction,
which would also be subject to regulatory approvals and customary conditions.
The Company also recently engaged a principal stockholder of the Company, Deere
Park Equities LLC, to identify potential financing sources for the Company.
There can be no assurances that the Company will be able to complete these
transactions successfully or that the Company will be able to restructure its
North American operations to return them to profitability.

<PAGE>   17
                                

     The Company is subject to a risk of claims for construction and product
liability. If a liability claim exceeding the Company's insurance coverage or
its own available resources was to be successfully asserted against the Company,
it could have a material adverse effect on the Company's financial condition.
The Company has general liability insurance of approximately $5 million per
occurrence, with a maximum of $5 million of claims payable during any policy
year.  There is no assurance that such coverage will be sufficient to fully
insure against claims brought against the Company and its subsidiaries, or that
the Company will be able to maintain such insurance at affordable rates or
obtain additional insurance covering the products.

     In connection with the acquisition of Davie, the Company agreed to make Cdn
$45 million in capital additions pursuant to a three year revitalization plan.
This investment is on a best efforts basis and is subject to financial market
conditions and the general conditions in the chosen industrial markets
contemplated in the revitalization plan.


     
     
                          PART II - OTHER INFORMATION

ITEM 1.   LEGAL PROCEEDINGS


     From time to time, disagreements with individual employees and
disagreements as to the interpretation, effect or nature of individual
agreements arise in the ordinary course of business and may result in legal
proceedings being commenced against the Company.

     During the three month period ended March 31, 1998, the Company has not
become a party to any material legal proceeding which requires reporting under
this Item and to the Company's knowledge, no other material proceeding involving
the Company is currently contemplated by any governmental authority.

     Other than as reported in Part I, Item 3 captioned "Legal Proceedings" of
the Company's Annual Report on Form 10-K for the fiscal year ended September 30,
1997, the Company is not currently involved in any litigation or proceeding
which is material, either individually or in the aggregate and other than as set
forth below, as of the date of this report, there have been no material
developments in any of these matters.

     On March 5, 1998 the United States District Court for the Eastern District
of Pennsylvania in the case captioned Smith v. Dominion Bridge Corporation
entered an order certifying as a class, investors who purchased shares of the
Company's common stock through the NASDAQ between April 20, 1995 and May 18,
1996. The court also dismissed from the case those investors during the same
period who purchased common stock through the Vancouver Stock Exchange.


ITEM 2.   CHANGES IN SECURITIES

     On April 28, 1998, the Company issued 2,002,224 Common Stock Purchase
Warrants (the "Warrants") and Convertible Promissory Notes (the "Notes") in the
aggregate principal amount of up to $14.8 million pursuant to an exemption from
the registration requirements of the Securities Act of 1933, as amended,
provided by Section 4(2) thereunder. This transaction is described in detail in
the Company's Current Report on Form 8-K dated April 28, 1998 which is
incorporated herein by reference.

     The Warrants are exercisable at $3.00 per share for a three (3) year
period. The Notes bear interest at 11.5%, are secured by a second priority
perfected security interest in substantially all of the Company's assets and
mature on September 30, 1999. The principal amount due under the Notes is
convertible at any time at the option of the holder thereof into shares of the
Company's Common Stock at $2.60 per share.

     A Note in the principal amount of $4.8 million together with 333,708
Warrants were issued to Wellgate International, Ltd, an affiliate of certain
former executive officers of the Company, representing payments owed by the
Company to these former executives under certain settlement agreements. A Note
in the principal amount of up to $10 million together with 1,668,536 Warrants
were issued to Lamar Investments, Inc. ("Lamar"), an affiliate of Deere Park
Equities, LLC, which is a principal stockholder of the Company, for cash
proceeds. As of May 11, 1998, approximately $7.55 million has been advanced
under this Note. The Company may be obligated to pay an advisory fee to its
former financial advisor equal to 5% of the aggregate proceeds advanced by
Lamar.
     
<PAGE>   18
                                

ITEM 3.   DEFAULTS UPON SENIOR SECURITIES

     None

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

     The Company's 1998 Annual Meeting of Stockholders was adjourned to May 21,
1998.  The results of the  Annual Meeting of Stockholders will be reported under
this Item in the Quarterly Report on Form 10-Q, for the fiscal quarter ending
June 30, 1998.

ITEM 5.   OTHER INFORMATION
     
     
     None

ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K

          (a)  Exhibits

<TABLE>
<CAPTION>

          Exhibit No.               Description
          -----------              ------------
          <S>                      <C>          
          11                       Statement Re: Computation of Per Share Earnings
                    
          27                       Financial Data Schedule.
</TABLE>                    

          (b)  Reports on Form 8-K

     Report on Form 8-K, dated April 28, 1998, reporting on the a change in
Control of the Company.
     
<PAGE>   19
                                

                                   SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Form 10-Q to be signed on its behalf by the
undersigned, thereunto duly authorized.


DOMINION BRIDGE CORPORATION


By: /s/ Allen S. Gerrard                   Dated:  May 20, 1998
   -----------------------------
   Allen S. Gerrard
   Chairman of the Board
   Chief Executive Officer
   (Principal Executive Officer)




By: /s/ Robert Chartier                    Dated:  May 20, 1998
   -----------------------------
   Robert Chartier
   Vice President and Interim Chief
   Financial Officer
   (Principal Financial
   and Accounting Officer)

     
<PAGE>   20
                                

                                 EXHIBIT INDEX

<TABLE>
<CAPTION>

Exhibit No.                         Description
-----------                         -----------
<S>                                 <C>            
11                                  Statement Re: Computation of Per Share Earnings
            
27                                  Financial Data Schedule.

</TABLE>