<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 quarter ended March 31, 2001

[ ]  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. 1-13392

                               US DIAGNOSTIC INC.
               (Exact name of registrant specified in its charter)

            Delaware                                            11-3164389
 -------------------------------                           --------------------
 (State or other jurisdiction of                             (I.R.S. Employer
  incorporation or organization)                           Identification  No.)

                            250 S. Australian Avenue
                                    Suite 900
                         West Palm Beach, Florida 33401
                    (Address of principal executive offices)

                                 (561) 832-0006
              (Registrant's telephone number, including area code)


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 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 [ ]

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.

           Class                                  Outstanding At May 11, 2001:
----------------------------                      ----------------------------

Common stock, $.01 par value                            22,317,205 shares




<PAGE>   2


                               US DIAGNOSTIC INC.

      SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM
                                  ACT OF 1995

Except for historical information contained herein, certain matters discussed
herein are forward-looking statements made pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995. Any
statements that express, or involve discussions as to, expectations, beliefs,
plans, objectives, assumptions or future events or performance (often, but not
always, through the use of words or phrases such as will likely result, are
expected to, will continue, is anticipated, estimated, projection, outlook) are
not statements of historical facts and may be forward-looking. Forward-looking
statements involve estimates, assumptions and uncertainties that could cause
actual results to differ materially from those expressed in the forward-looking
statements. These forward-looking statements are based largely on the Company's
expectations and are subject to a number of risks and uncertainties, including
but not limited to, the ability to sell assets at favorable prices and in a
timely manner, economic, competitive, regulatory and legal factors, collections
of accounts receivable, the ability of the Company to achieve a restructuring of
its debt on acceptable terms in a timely manner, available financing or
available refinancing for existing debt, cash flow and working capital
availability, the availability of sufficient financial resources to implement
the Plan of Restructuring that was approved by the stockholders, the ability of
the Company to reduce its overhead, the impact of any actions taken by debt
holders as a result of defaults by the Company under its debt instruments, as
well as the Company's inability to successfully execute the Plan of
Restructuring and other factors discussed elsewhere in this report and in other
documents filed by the Company with the Securities and Exchange Commission
("SEC"). Many of these factors are beyond the Company's control. Actual results
could differ materially from the forward-looking statements made. In light of
these risks and uncertainties, there can be no assurance that the results
anticipated in the forward-looking information contained in this report will, in
fact, occur.

Any forward-looking statement speaks only as of the date on which such statement
is made, and the Company undertakes no obligation to update any forward-looking
statement or statements to reflect events or circumstances after the date on
which such statement is made or to reflect the occurrence of unanticipated
events. New factors emerge from time to time and it is not possible for
management to predict all of such factors, nor can it assess the impact of each
such factor on the business or the extent to which any factor, or combination of
factors, may cause actual results to differ materially from those contained in
any forward-looking statements.



                                       2
<PAGE>   3

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

US DIAGNOSTIC INC. AND SUBSIDIARIES
--------------------------------------------------------------------------------

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
--------------------------------------------------------------------------------

    In thousands, except share data

<TABLE>
<CAPTION>

                                                                                    March 31,        December 31,
                                                                                       2001              2000
                                                                                    ---------        ------------
<S>                                                                                 <C>               <C>
ASSETS

CURRENT ASSETS
    Cash and cash equivalents                                                       $   4,411         $   4,458
    Accounts receivable, net of allowance for bad debts of $5,532 and
        $5,194 in 2001 and 2000, respectively                                           1,936             3,976
    Other receivables                                                                      --                55
    Prepaid expenses and other current assets                                             255               283
                                                                                    ---------         ---------
     TOTAL CURRENT ASSETS                                                               6,602             8,772

PROPERTY AND EQUIPMENT, net of accumulated depreciation and
   amortization of $2,901 and $2,679 in 2001 and 2000, respectively                     2,363             2,583

OTHER ASSETS                                                                               99                99
                                                                                    ---------         ---------
    TOTAL ASSETS                                                                    $   9,064         $  11,454
                                                                                    =========         =========

LIABILITIES AND STOCKHOLDERS' DEFICIENCY

CURRENT LIABILITIES
     Accounts payable                                                               $   1,104         $     996
     Accrued expenses                                                                   2,036             4,612
     Net liabilities of discontinued operations (Note 2)                               14,689            13,299
     Current portion of long-term debt                                                     57                56
     Obligations under capital leases - current portion                                   283               277
     Other current liabilities                                                            221               305
                                                                                    ---------         ---------
         TOTAL CURRENT LIABILITIES                                                     18,390            19,545

Long-term debt, net of current portion                                                    110               125
Obligations under capital leases, net of current portion                                  409               479
                                                                                    ---------         ---------
         TOTAL LIABILITIES                                                             18,909            20,149
                                                                                    ---------         ---------

COMMITMENTS AND CONTINGENCIES (Note 6)                                                     --                --

STOCKHOLDERS' DEFICIENCY

   Preferred stock, $1.00 par value; 5,000,000 shares authorized; none
       issued                                                                              --                --
   Common stock, $.01 par value; 50,000,000 shares authorized; 22,417,205
       and 22,412,405 shares issued and outstanding as of March 31, 2001 and
       December 31, 2000, respectively                                                    224               224
   Additional paid-in capital                                                         147,696           147,696
   Deferred stock-based compensation                                                      (80)             (105)
   Accumulated deficit                                                               (157,685)         (156,510)
                                                                                    ---------         ---------
        TOTAL STOCKHOLDERS' DEFICIENCY                                                 (9,845)           (8,695)
                                                                                    ---------         ---------

    TOTAL LIABILITIES & STOCKHOLDERS' DEFICIENCY                                    $   9,064         $  11,454
                                                                                    =========         =========

</TABLE>

See Notes to Condensed Consolidated Financial Statements.



                                       3
<PAGE>   4
US DIAGNOSTIC INC. AND SUBSIDIARIES
--------------------------------------------------------------------------------

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS  (UNAUDITED)
--------------------------------------------------------------------------------


In thousands, except per share data
<TABLE>
<CAPTION>

                                                                     Three Months Ended March 31,
                                                                     ----------------------------
                                                                         2001             2000
                                                                       --------         --------
<S>                                                                    <C>              <C>
INTEREST AND OTHER INCOME                                              $     27         $     14
                                                                       --------         --------
COSTS AND EXPENSES:
     General and administrative                                           3,066            3,070
     Depreciation                                                           276              217
     Stock-based compensation                                                25               84
     Interest expense                                                        26               27
                                                                       --------         --------
        TOTAL COSTS AND EXPENSES                                          3,393            3,398
                                                                       --------         --------
LOSS FROM CONTINUING OPERATIONS                                          (3,366)          (3,384)
                                                                       --------         --------

DISCONTINUED OPERATIONS (NOTE 2):
    Income (loss) from discontinued operations, net of income
       taxes                                                              1,214           (1,349)
    Net gain on disposition of discontinued operations, net of
       income taxes                                                         977               --
                                                                       --------         --------
INCOME (LOSS) FROM DISCONTINUED OPERATIONS                                2,191           (1,349)
                                                                       --------         --------
NET LOSS                                                               $ (1,175)        $ (4,733)
                                                                       ========         ========


BASIC AND DILUTED EARNINGS PER COMMON SHARE
     Loss from continuing operations                                   $   (.15)        $   (.15)
     Income (loss) from discontinued operations                             .10             (.06)
                                                                       --------         --------
     Net loss                                                          $   (.05)        $   (.21)
                                                                       ========         ========

     Weighted-average common shares outstanding                          22,414           22,653
                                                                       ========         ========

</TABLE>




See Notes to Condensed Consolidated Financial Statements.



                                       4
<PAGE>   5

US DIAGNOSTIC INC. AND SUBSIDIARIES
--------------------------------------------------------------------------------
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIENCY FOR THE
THREE MONTHS ENDED MARCH 31, 2001 (UNAUDITED)
--------------------------------------------------------------------------------


In thousands

<TABLE>
<CAPTION>

                                                                  Additional                                             Total
                                    Common          Common          Paid-in          Deferred       Accumulated       Stockholders'
                                    Shares          Stock           Capital        Compensation        Deficit         Deficiency
                                    ------        ---------       ----------       ------------     -----------       -------------
<S>                                 <C>           <C>              <C>              <C>               <C>               <C>
BALANCE - JANUARY 1, 2001           22,412        $     224        $ 147,696        $    (105)        $(156,510)        $  (8,695)

Restricted stock issued                  5               --               --               --                --                --

Amortization of deferred
   compensation                         --               --               --               25                --                25

Net loss                                --               --               --               --            (1,175)           (1,175)
                                    ------        ---------        ---------        ---------         ---------         ---------
BALANCE - MARCH 31, 2001            22,417        $     224        $ 147,696        $     (80)        $(157,685)        $  (9,845)
                                    ======        =========        =========        =========         =========         =========

</TABLE>

See Notes to Condensed Consolidated Financial Statements.




                                       5
<PAGE>   6
US DIAGNOSTIC INC. AND SUBSIDIARIES
--------------------------------------------------------------------------------

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS  (UNAUDITED)
--------------------------------------------------------------------------------

In thousands, except supplemental schedule of non-cash activities


<TABLE>
<CAPTION>
                                                                     Three Months Ended March 31,
                                                                     ----------------------------
                                                                         2001             2000
                                                                       --------         --------
<S>                                                                    <C>              <C>
OPERATING ACTIVITIES
      NET CASH USED IN OPERATING ACTIVITIES                            $ (7,100)        $ (1,860)
                                                                       --------         --------

INVESTING ACTIVITIES
      Purchases of equipment                                                (46)          (2,224)
      Payment of purchase price due on companies acquired                    --              (22)
      Proceeds from the sale of imaging centers, net of
          cash retained by purchasers                                    11,840               --
      Proceeds from dispositions of property and equipment                   10               51
      Contribution of capital by minority partners                           --               70
                                                                       --------         --------
      NET CASH - PROVIDED BY (USED IN) INVESTING ACTIVITIES              11,804           (2,125)
                                                                       --------         --------
FINANCING ACTIVITIES
      Proceeds from borrowings                                               --           12,680
      Repayments of notes payable and obligations under capital
          leases                                                         (4,751)          (8,172)
                                                                       --------         --------
      NET CASH - PROVIDED BY (USED IN) FINANCING ACTIVITIES              (4,751)           4,508
                                                                       --------         --------

NET INCREASE (DECREASE)  IN CASH AND CASH EQUIVALENTS                       (47)             523

CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD                           4,458            5,811
                                                                       --------         --------
CASH AND CASH EQUIVALENTS - END OF PERIOD                              $  4,411         $  6,334
                                                                       ========         ========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
      Cash paid during the period for:

      Interest                                                         $  1,591         $  4,926
                                                                       ========         ========
      Income taxes                                                     $    341         $     11
                                                                       ========         ========

</TABLE>

SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:

Borrowings under capitalized leases were $0 and $374,000 during the three months
ended March 31, 2001 and 2000, respectively.

During the three months ended 2001, debt and capital lease obligations decreased
by $4.8 million and property and equipment decreased by $6.3 million as a result
of the sale of imaging centers. The Company also wrote-off net intangibles of
$5.8 million as a result of the sale of imaging centers. The Company used $1.2
million of sale proceeds to repay debt not specifically related to the sold
centers.

During the three months ended 2001, the Company wrote-off net property and
equipment of $132,000 as a result of the closing of non-performing imaging
centers.

The Company issued 4,800 and 17,000 shares of restricted stock during the three
months ended March 31, 2001 and 2000, respectively.



See Notes to Condensed Consolidated Financial Statements.



                                       6
<PAGE>   7
US DIAGNOSTIC INC. AND SUBSIDIARIES
--------------------------------------------------------------------------------
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
--------------------------------------------------------------------------------

[1]  BASIS OF PRESENTATION

INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The accompanying condensed consolidated financial statements as of March 31,
2001, include the accounts of US Diagnostic Inc., its wholly-owned subsidiaries
and non-wholly-owned but controlled subsidiaries (the "Company"), and have been
prepared by the Company pursuant to the rules and regulations of the Securities
and Exchange Commission (the "SEC"). All significant intercompany accounts and
transactions have been eliminated. Certain information related to the Company's
organization, significant accounting policies and footnote disclosures normally
included in financial statements prepared in accordance with accounting
principles generally accepted in the United States of America have been
condensed or omitted. These condensed consolidated financial statements reflect,
in the opinion of management, all material adjustments (consisting only of
normal and recurring adjustments) necessary to fairly state the financial
position and the results of operations for the periods presented and the
disclosures herein are adequate to make the information presented not
misleading. Operating results for interim periods are not necessarily indicative
of the results that can be expected for a full year.

The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities as of the date
of the financial statements and the reported amounts of revenues and expenses
during the reporting periods. Actual results could differ from those estimates.

The condensed consolidated financial statements included herein should be read
in conjunction with the audited consolidated financial statements and notes
thereto included in the Company's Annual Report on Form 10-K filed with the SEC
for the year ended December 31, 2000.

In order to maintain consistency and comparability between periods presented,
certain amounts have been reclassified from the previously issued financial
statements in order to conform with the financial statement presentation of the
current period.

GOING CONCERN

The accompanying condensed consolidated financial statements have been prepared
assuming that the Company will continue as a going concern which contemplates
the realization of assets and the satisfaction of liabilities in the normal
course of business. The Company has experienced net losses for the years ended
December 31, 2000 and 1999 and as of March 31, 2001 had an accumulated deficit
of approximately $157.7 million. The Company has prepared a business plan and
cash flow projections for the year ending December 31, 2001 which indicates that
the Company's cash flow is insufficient to meet its operating expenses and
service its debt which includes relatively short term maturities. Based on
current estimates, unless the Company can successfully sell imaging centers at
favorable prices and terms, obtain additional financial resources (which is
unlikely), or restructure its debt, the Company's current cash and cash from
operations will be insufficient to meet its anticipated cash needs. Furthermore,
the Company has defaulted on the March 31, 2001 interest payment on its 9%
Subordinated Convertible Debentures due 2003 (the "Debentures"); also, the
Company has defaulted on its obligation to repurchase Debentures which is
required as a result of failing to maintain consolidated net worth of at least
$18.0 million (a "Deficiency Offer"). On May 1, 2001, the




                                       7
<PAGE>   8

Company received a default notice from the Trustee under the Debenture Indenture
("Indenture"). These defaults could give rise to an acceleration of the
maturities of the Debentures. In addition, the Company is unable to borrow
additional amounts because doing so would cause non-compliance with certain
Indenture covenants and constitute an additional default under the Indenture.
Furthermore, the Company currently estimates that it will have insufficient cash
resources to repay $10.0 million due on the June 30, 2001 maturity of its 6 1/2%
Convertible Notes due June 2001 (the "Notes"). In light of these defaults and
other defaults as described in DEBT OF DISCONTINUED OPERATIONS under Note 2 or
other potential defaults, which may also constitute cross defaults under other
debt instruments permitting the acceleration of such debt, the Company will
require a restructuring of its debt. If these uncertainties cannot be resolved
successfully and in a timely manner, the Company could be required to seek a
reorganization under the federal bankruptcy laws. These conditions, among
others, raise substantial doubt about the Company's ability to continue as a
going concern. Management's plans concerning these matters are described below.
The condensed consolidated financial statements do not include any adjustments
that might result from the outcome of this uncertainty.

MANAGEMENT'S PLANS

Despite efforts to reduce expenses and improve the Company's capital structure
and implementation of the Plan of Restructuring, the Company remains highly
leveraged. The relatively short maturities of its indebtedness require the
Company to devote a significant portion of its cash flow to the amortization of
debt. The Company also has ongoing significant capital expenditure requirements
in order to maintain and modernize its imaging equipment. In addition, the
medical diagnostic imaging industry has been confronted since the mid-1990s with
the efforts of private and governmental third-party payors to reduce, or limit
increases in reimbursement rates. The Company's cash flow from operating
activities has been insufficient to meet the Company's operating needs,
scheduled debt repayment obligations and capital expenditure plans.

On May 9, 2000, the Board of Directors reviewed the exploration of strategic
alternatives undertaken to that date, the results of the solicitation conducted
by an investment banker, the status of the pending sales, the market conditions
prevailing in the Company's industry, including the recent bankruptcies of a
number of companies in the Company's industry, and the implied value of the
Company's medical imaging diagnostic centers based upon indications of value
received and the pending sales. Based upon this information, the Board of
Directors determined that a sale of the imaging centers and the adoption of a
restructuring plan was in the best interests of the Company's stockholders. As a
result, the Company's Board of Directors approved a restructuring plan which
allows for the sale of all or substantially all of its imaging centers (the
"Plan of Restructuring"). The stockholders approved the sale of the imaging
centers and the Plan of Restructuring at the annual stockholders' meeting held
on July 21, 2000. Under the Plan of Restructuring, the Company may reinvest in a
new business or businesses the net proceeds from the imaging center sales, if
any. If the Company is unable to or chooses not to reinvest in a new business,
the Plan of Restructuring authorizes the Board to liquidate the Company through
distributions to stockholders. The Plan of Restructuring allows the Board to
seek, at any time, debt refinancing as an alternative to the sale of the imaging
centers.

Although the Company has sold 33 medical diagnostic imaging centers since May
2000 pursuant to the Plan of Restructuring, the pace of such sales at favorable
prices and terms has not met with expectations. The Company also needs to
maintain a corporate infrastructure to operate remaining centers pending sale
and collect accounts receivable of sold centers and is required to devote a
significant portion of its cash flow to the repayment of the principal and
interest of its debt. Based on its current estimates, the Company anticipates
that, absent completion of additional center sales or the availability of
additional short term liquidity, its current cash and cash generated from
operations will be insufficient to meet its anticipated cash needs; however, if
its principal repayments can be appropriately restructured, the Company believes
that its cash flow will be sufficient to permit it to continue to operate its
remaining imaging centers, service its restructured




                                       8
<PAGE>   9

debt obligations and, as market conditions allow, sell the Company as a whole or
complete the sale of the remaining centers over time, although there can be no
assurance in this regard.

Unless the Company can successfully restructure its indebtedness, sell
additional imaging centers or otherwise obtain liquidity in the short term, the
failure to make the payments described above, the related defaults and potential
cross defaults, the lack of working capital and the inability to incur
additional debt will have a material adverse effect on the Company's ability to
maintain its operations as well as its financial condition. Moreover, if these
matters cannot be resolved successfully, the Company would be required to pursue
other options which could include seeking a reorganization under the federal
bankruptcy laws.

The Company is currently formulating a proposed debt restructuring with the
assistance of its financial advisor, Imperial Capital LLC and its counsel,
Greenberg Traurig, P.A. The Company anticipates meeting with its debt holders
during or before June 2001. The Company currently plans to continue selling
imaging centers where appropriate price levels and terms can be obtained and to
reduce its overhead as quickly as possible; however, given the current market
climate for, and relatively slow pace of imaging center sales, the needed debt
restructuring, the need to retain corporate infrastructure to operate imaging
centers pending sale and other factors, the Company's strategic review could
result in a modification or abandonment of the Plan of Restructuring.

In light of the above described matters and other factors, the Company expects
that the net proceeds, if any, from the Plan of Restructuring will be
significantly below the originally estimated range of $1.30 - $1.78 per share of
common stock. Given the uncertainties described above as well as the other
factors, the Company is not currently in a position to provide a revised
estimate. Furthermore, the Plan of Restructuring was not completed by the
original earliest anticipated date of March 31, 2001.

RECENT ACCOUNTING PRONOUNCEMENTS - In June 1998, the Financial Accounting
Standards Board ("FASB") issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities," which requires reporting every derivative
instrument at its fair value on the balance sheet. This statement also requires
recognizing any change in the derivatives' fair values in earnings for the
current period unless specific hedge accounting criteria are met. In June 1999,
the FASB issued SFAS No. 137 "Accounting for Derivative Instruments and Hedging
Activities - Deferral of the Effective Date of FASB Statement No. 133" which
amended SFAS No. 133 and deferred the effective date of adoption of SFAS No. 133
to all fiscal quarters of all fiscal years beginning after June 15, 2000. In
June 2000, FASB issued SFAS No. 138, "Accounting for Certain Derivative
Instruments and Certain Hedging Activities," which amended SFAS No. 133. The
Company adopted both pronouncements concurrently effective January 1, 2001. The
effect of this adoption was immaterial.

[2] DISCONTINUED OPERATIONS

The Company's sales of its imaging centers pursuant to the Plan of
Restructuring, described in Management's Plans above, were not substantially
completed by the original earliest anticipated date of March 31, 2001. For
financial statement purposes, the assets, liabilities and results of operations
(except for cash flows) of the imaging centers have been segregated from those
of continuing operations and are presented in the Company's condensed
consolidated financial statements as discontinued operations. The accompanying
condensed consolidated financial statements have been reclassified to reflect
this presentation.

The continuing operations include the applicable components of the balance
sheets and results of operations of four cost centers (the corporate
headquarters, the billing office, the regional operational center and the MIS
department) plus the retained, net estimated realizable value of receivables of
the imaging centers that were sold or closed during the three months ended March
2001 and during 2000. The discontinued operations




                                       9
<PAGE>   10

include the assets, liabilities and results of operations of all imaging
centers, including, for the period to the date of disposition, those that have
been sold or closed during the three months ended 2001 and during 2000.

The components of discontinued operations reflected as net liabilities of
discontinued operations in the condensed consolidated balance sheets and the
revenues included in discontinued operations in the condensed consolidated
statements of operations are as follows:

Balance sheet data:

In thousands
                                                     March 31,    December 31,
                                                       2001           2000
                                                     --------     ------------

Accounts receivable, net of allowance for bad
   debts of $8,334 and $9,094 in 2001 and 2000,
   respectively                                      $ 16,106       $ 17,877
Other receivables                                       1,137          3,191
Prepaid expenses and other current assets               2,018          3,065
Property and equipment (see detail below)              30,067         38,698
Intangible assets (see detail below)                   31,997         38,438
Investment in and advances to unconsolidated
   subsidiaries                                         2,963          3,125
Accounts payable                                       (5,592)        (7,525)
Accrued expenses                                       (7,548)        (9,294)
Other current liabilities                              (2,139)        (5,365)
Subordinated convertible debentures (see detail
   below)                                             (21,866)       (21,843)
Debt (see detail below)                               (53,832)       (62,330)
Obligations under capital leases                       (6,883)        (7,834)
Minority interest                                      (1,117)        (3,502)
                                                     --------       --------
Net liabilities of discontinued operations           $(14,689)      $(13,299)
                                                     ========       ========



Statement of operations data:


In thousands

                                                      Three Months Ended
                                                            March 31,
                                                     -----------------------
                                                       2001           2000
                                                     --------       --------

Net revenue                                          $ 17,020       $ 38,511
                                                     ========       ========


The income (loss) from discontinued operations and the net gain on disposition
of discontinued operations is net of the following income tax amounts:

In thousands

                                                           Three Months Ended
                                                                March 31,
                                                           -------------------
                                                           2001           2000
                                                           ----           ----
Income tax provision applicable to:

Income (loss) from discontinued operations                  $115          $134
Net gain on disposition of discontinued operations           128            --
                                                            ----          ----
     Total income tax provision                             $243          $134
                                                            ====          ====





                                       10
<PAGE>   11
PROPERTY AND EQUIPMENT OF DISCONTINUED OPERATIONS

A summary of property and equipment of discontinued operations is as follows:


In thousands

                                                      March 31,    December 31,
                                                        2001           2000
                                                      --------       --------
Land                                                  $  1,179       $  1,844
Buildings                                                1,784          3,014
Medical equipment                                       34,943         46,128
Furniture and fixtures                                     947          1,064
Office, data processing equipment and software           4,996          5,470
Vehicles                                                    44            137
Leasehold improvements                                   5,578          6,593
                                                      --------       --------
  Total                                                 49,471         64,250

Less:  Accumulated depreciation and amortization       (19,404)       (25,552)
                                                      --------       --------

    Property and equipment, net                       $ 30,067       $ 38,698
                                                      ========       ========

Included in property and equipment of discontinued operations is equipment under
capital leases amounting to $12.9 million and $13.9 million at March 31, 2001
and December 31, 2000, respectively. Accumulated depreciation for equipment
under capital leases of discontinued operations was $5.8 million and $5.7
million as of March 31, 2001 and December 31, 2000, respectively.

Depreciation expense of discontinued operations amounted to $1.9 million and
$4.2 million during the three months ended March 31, 2001 and 2000,
respectively, of which $464,000 and $920,000, respectively, was attributed to
equipment under capital leases.

During the quarter ended March 31, 2001, property and equipment (net of
accumulated depreciation) decreased by $6.4 million in connection with the
disposition of discontinued operations.

INTANGIBLE ASSETS OF DISCONTINUED OPERATIONS

A summary of intangible assets of discontinued operations is as follows:

In thousands

                                         March 31,        December 31,
                                           2001               2000
                                         --------         ------------

Goodwill                                 $ 37,565           $ 45,078
Covenants not to compete                    1,275              2,551
Customer lists                              2,039              2,540
Other intangibles                               8                124
                                         --------           --------
Total                                      40,887             50,293

Less: Accumulated amortization             (8,890)           (11,855)
                                         --------           --------
         Intangible assets, net          $ 31,997           $ 38,438
                                         ========           ========

Goodwill of discontinued operations consists of the cost of purchased businesses
in excess of the fair value of net tangible assets acquired.





                                       11
<PAGE>   12

During the quarter ended March 31, 2001, intangible assets (net of accumulated
amortization) decreased by $5.8 million in connection with the disposition of
discontinued operations.

DEBT OF DISCONTINUED OPERATIONS

The Company has a financing agreement with DVI Financial Services, Inc.
("DVIFS") subject to certain conditions including maintenance of at least $5.0
million in cash during all reporting periods. On May 4, 2001, the Company
informed DVIFS that it was not in compliance with this covenant as of March 31,
2001. DVIFS has agreed to waive this requirement and amend the cash maintenance
level to a lower amount, equal to the outstanding borrowings directly related to
this financing agreement. The Company is in compliance with such amendment.

The Company did not make an interest payment on the Debentures that was due
March 31, 2001 which failure constitutes an event of default under the Indenture
and could give rise to an acceleration of the maturity of the Debentures. A
default on the Debentures could also allow other debt holders to accelerate the
maturity of their debt instruments. The amount of past due interest as of May
15, 2001 is $991,935. As of September 30, 2000, December 31, 2000 and March 31,
2001, the Company was not in compliance with the consolidated net worth covenant
under the Indenture; as a result, the Company is obligated to conduct a
Deficiency Offer (see GOING CONCERN under Note 1). On May 1, 2001, the Company
received a default notice from the Trustee for the Indenture regarding certain
technical defaults and the failure to make a Deficiency Offer. Given the
Company's current cash resources and pending the Company's efforts to
restructure its debt, the Company does not currently expect to conduct the
Deficiency Offer in a timely fashion, if at all. Such failure could also
constitute a default under the Indenture permitting the acceleration of maturity
of the Debentures. Such an event could also give rise to the acceleration of
other debt issued by the Company and could have a material adverse effect on the
Company's financial condition and ability to execute the Plan of Restructuring.
In addition, as of March 31, 2001, the Company's debt to operating cash flow
ratio was insufficient under the debt incurrence test thereby limiting its
ability to incur additional debt. The Company also estimates that it will have
insufficient cash to repay its 6 1/2% Convertible Notes, the $10.0 million
principal balance of which matures on June 30, 2001. See MANAGEMENT'S PLANS
under Note 1 for further detail.

During the quarter ended March 31, 2001, the Company repaid $1.3 million of the
revolving credit loan with DVI Business Credit Corporation ("DVIBC") including
$1.2 million from the proceeds of the sold imaging centers.

During the quarter ended March 31, 2001, debt and obligations under capital
leases decreased by $4.8 million in connection with the disposition of
discontinued operations.

SOLD/CLOSED IMAGING CENTERS OF DISCONTINUED OPERATIONS

On January 2, 2001, the Company sold the assets of three imaging centers to
Comprehensive Diagnostic Imaging, Inc. and Comprehensive Medical Imaging, Inc.
(collectively referred to as "CMI"). CMI had previously purchased 13 imaging
centers from the Company in August and September 2000. The sales price was $13.9
million, consisting of $11.2 million cash and the assumption by the purchaser of
debt and other obligations amounting to $2.7 million. The Company also repaid
$1.2 million on its revolving credit loan with DVIBC from the proceeds of this
sale.

On January 18, 2001, the Company sold its partnership interest in an imaging
center with an effective date of January 1, 2001. The sales price was $350,000
in cash.




                                       12
<PAGE>   13

On March 5, 2001, the Company sold its assets in an imaging center. The sales
price was $2.0 million, $1.1 million of which was cash. As a result of the sale,
the Company also repaid $900,000 on a loan with DVIFS.

On January 19, 2001, the Company entered into an agreement concerning the sale
of its 80% interest in two imaging centers in Louisiana, with an effective date
of January 1, 2001. The consideration was approximately $2.3 million. The
conditions of the agreement were fully satisfied on March 20, 2001.

The Company closed one underperforming imaging center in each of the first
quarters of 2001 and 2000.

No imaging centers were sold in the first quarter of 2000.

The following is a summary of the gains and/or losses recognized on the above
described sales for the quarter ending March 31, 2001 as well as the losses on
the closing of non-performing imaging centers. There was no gain (loss) on
disposition of discontinued operations as of March 31, 2000.

             In thousands

                                                                          2001
                                                                         ------

             Net gains on sold imaging centers                           $4,498
             Losses on closed imaging centers                              (135)
                                                                         ------

                Net gain on disposition of discontinued operations        4,363

             Less:
             Minority interest in gain on sale of subsidiaries            3,258
             Income tax provision                                           128
                                                                         ------

             Net gain on disposition of discontinued operations,
                net of income taxes                                      $  977
                                                                         ======

SUBSEQUENT EVENTS OF DISCONTINUED OPERATIONS

On May 9, 2001, the Company sold the assets of an imaging center. The sales
price was $8.0 million, consisting of $6.4 million cash, $1.0 million deferred
consideration subject to certain conditions and targets being met, and the
assumption by the purchaser of debt and other obligations amounting to $0.6
million. As a result of the sale, the Company also repaid $1.8 million on a
revolving credit loan with DVIBC and $1.0 million on the DVIFS unsecured loan.




                                       13
<PAGE>   14

[3] PROPERTY AND EQUIPMENT

A summary of the property and equipment remaining in the Company's continuing
operations is as follows:

In thousands

                                                     March 31,     December 31,
                                                      2001            2000
                                                     -------       -----------

Furniture and fixtures                               $ 1,208         $ 1,208
Office, data processing equipment and software         3,899           3,894
Leasehold improvements                                   157             160
                                                     -------         -------
  Total                                                5,264           5,262

Less: Accumulated depreciation and amortization       (2,901)         (2,679)
                                                     -------         -------
    Property and equipment, net                      $ 2,363         $ 2,583
                                                     =======         =======


Included in property and equipment is equipment under capital leases amounting
to $1.2 million at March 31, 2001 and December 31, 2000, respectively.
Accumulated depreciation for equipment under capital leases was $435,000 and
$379,000 as of March 31, 2001 and December 31, 2000, respectively.

Depreciation expense amounted to $276,000 and $217,000 during the three months
ended March 31, 2001 and 2000, respectively, of which $55,000 and $40,000,
respectively, was attributed to equipment under capital leases.

[4] INCOME TAXES

Income taxes have been provided based upon the Company's anticipated annual
effective income tax rate.

[5] EARNINGS PER SHARE

The Company had a loss from continuing operations for the three months ended
March 31, 2001 and 2000, and all potentially dilutive securities were excluded
from the computations of basic and diluted earnings per share during such
periods since the effect would be anti-dilutive. Such potentially dilutive
securities consist of the following: (i) unexercised stock options and warrants
to purchase 2.1 million and 3.4 million shares of the Company's common stock as
of March 31, 2001 and 2000, respectively; (ii) 3.6 million shares of the
Company's common stock issuable upon conversion of convertible debt as of March
31, 2001 and 2000, respectively; and (iii) unissued restricted stock amounting
to 91,800 and 148,600 shares of the Company's common stock as of March 31, 2001
and 2000, respectively.

[6] LITIGATION

US DIAGNOSTIC INC. VS. UNITED RADIOLOGY ASSOCIATES, INC. AND L.E. RICHEY; LISA
BROCKETT, AS TRUSTEE FOR REESE GENERAL TRUST VS. US DIAGNOSTIC INC., JEFFREY A.
GOFFMAN, KEITH GREENBERG AND ROBERT D. BURKE; US DIAGNOSTIC INC. VS. UNITED
RADIOLOGY ASSOCIATES, INC. ET AL. - In April 1999, the Company sued United
Radiology Associates, Inc. ("URA") in the United States District Court for the
Southern District of Texas for breach of contract and related claims relating to
the sale of the stock of U.S. Imaging Inc. ("USI") to URA by the Company in
February 1999, and the Company simultaneously filed a claim in the same court
against Dr. L.E. Richey, a former director and chairman of the Board of the
Company, for breach of a personal guaranty in connection therewith. Dr. Richey
is the chief executive officer and a director of URA. URA has filed
counterclaims against the Company. The Company intends to vigorously prosecute
its suit against URA and




                                       14
<PAGE>   15

Dr. Richey and believes it has substantive defenses to URA's counterclaims,
although there can be no assurances. In June 1999, Lisa Brockett, as Trustee for
the Reese General Trust, filed suit against the Company, among others, in the
333rd Judicial District Court of Harris County, Texas, alleging, among other
claims, that (a) undisclosed facts regarding the background of Keith Greenberg,
who provided consulting services to the Company, were material to the Trust's
decision to receive 1,671,000 shares of Company common stock as partial
consideration for the sale by the Trust of the stock of USI to the Company in
June 1996; and (b) the value of the shares was diminished by the Company's
failure to register the shares under the Securities Act and by the Company's
subsequent restatement of its quarterly report for the quarter ended March 31,
1996. Lisa Brockett is the daughter of Dr. Richey. The Plaintiff has not
specified the amount of actual damages sought and the suit remains in an early
stage. The Company intends to vigorously defend the suit, and it believes it has
substantive defenses and counterclaims but there can be no assurances that the
Company will prevail.

In connection with the sale of USI, the Company received a secured promissory
note of $1.9 million, due February 12, 2001, with interest at 6% payable
semi-annually (the "Note") as part of the total consideration in selling its
interest in USI to URA. URA and Dr. Richey have acknowledged the existence of
the Note and Dr. Richey has further acknowledged his personal guaranty of that
Note. The Company sued URA for, among other things, a declaratory judgment,
specific performance and breach of contract, which breach accelerated the due
date of the Note.

Both cases were stayed by agreement of the parties until early 2001 pending
settlement discussions. The Company attended mediation on these matters in April
2001, which resulted in a preliminary settlement; however, there can be no
assurance that a final settlement will be reached. The preliminary settlement
provides that both lawsuits would be dismissed with prejudice; the Note would be
cancelled; Dr. Richey would have a thirty day option to acquire certain
equipment for $200,000; URA and Dr. Richey would be responsible to pay all
accounts payable for the centers originally sold to URA; and the parties would
exchange full and complete mutual releases.

SHELBY RADIOLOGY, P.C. V. US DIAGNOSTIC INC. ET AL. - In June 1997, the
plaintiff, Shelby Radiology, P.C. ("Shelby Radiology"), filed suit against US
Diagnostic Inc. (the "Company") alleging breach of a contract to provide
radiology services and specifically improper termination of the contract. In
January 1998, Shelby Radiology amended its complaint to include allegations of
promissory fraud, misrepresentation and suppression. Under both its fraud and
breach of contract claims, Shelby Radiology was seeking compensatory damages in
the amount of $1.2 million as amounts it would have been paid under the "oral
agreement." In addition, Shelby Radiology sought punitive damages pursuant to
its fraud claims. On May 3, 1999, this matter was tried before a jury in
Montgomery County, Alabama. The trial concluded on May 7, 1999 and the jury
returned a verdict against the defendant in the amount of $1,134,000 as
compensatory damages on plaintiff's fraud claim. The jury did not award any
punitive damages. The Company paid $600,000 to a bonding company which posted a
bond to secure payment of the judgment and appealed the verdict to the Alabama
Supreme Court which ruled against the Company in a split decision. The
Company's request for a rehearing of that decision was rejected. The
plaintiff's initial attempt to collect the $1.4 million judgment, inclusive of
interest, from the bonding company was unsuccessful. If the bonding Company is
unable to, or refuses to perform under the bond, the plaintiff would have
recourse against the Company for the full amount of the judgment. Assuming the
bonding company performs under the bond, the Company would owe it approximately
$800,000. The Company has recognized the settlement expense as of December 31,
2000 as a result of this lawsuit.

OTHER MATTERS - The Company could be subject to legal actions arising out of the
performance of its diagnostic imaging services. Damages assessed in connection
with, and the cost of defending, any such actions could be substantial. The
Company maintains liability insurance which it believes is adequate for its
continuing and discontinued operations. There can be no assurance that the
Company will be able to continue




                                       15
<PAGE>   16

or increase such coverage or to do so at an acceptable cost, or that the Company
will have other resources sufficient to satisfy any liability or litigation
expense that may result from any uninsured or underinsured claims. The Company
also requires all of its affiliated physicians to maintain malpractice and other
liability coverage.

The Company is also a party to, and has been threatened with, a number of other
legal proceedings in the ordinary course of business. While it is not feasible
to predict the outcome of these matters, and although there can be no
assurances, the Company does not anticipate that the ultimate disposition of any
such proceedings will have a material adverse effect on the Company.

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

FORWARD-LOOKING STATEMENTS AND ASSOCIATED RISKS

Certain matters discussed herein are forward-looking statements made pursuant to
the safe harbor provisions of the Private Securities Litigation Reform Act of
1995. These forward-looking statements are based largely on the Company's
expectations and are subject to a number of risks and uncertainties, including
but not limited to, the ability to sell assets at favorable prices and in a
timely manner, economic, competitive, regulatory and legal factors, collections
of accounts receivable, the ability of the Company to achieve a restructuring of
its debt on acceptable terms in a timely manner, available financing or
available refinancing for existing debt, cash flow and working capital
availability, the availability of sufficient financial resources to implement
the Plan of Restructuring that was approved by the stockholders, the ability of
the Company to reduce its overhead, the impact of any actions taken by debt
holders as a result of defaults by the Company under its debt instruments, as
well as the Company's inability to successfully execute the Plan of
Restructuring and other factors discussed elsewhere in this report and in other
documents filed by the Company with the SEC. Many of these factors are beyond
the Company's control. Actual results could differ materially from the
forward-looking statements made. In light of these risks and uncertainties,
there can be no assurance that the results anticipated in the forward-looking
information contained in this report will, in fact, occur.

OVERVIEW AND RECENT DEVELOPMENTS

The Company's current cash resources are limited because its cash flow is
insufficient to meet its operating expenses and service its debt which includes
relatively short term maturities. Based on current estimates, unless the Company
can successfully sell imaging centers at favorable prices and terms, obtain
additional financial resources (which is unlikely), or restructure its debt, the
Company's current cash and cash from operations will be insufficient to meet its
anticipated cash needs. Furthermore, the Company has defaulted on the March 31,
2001 interest payment on the Debentures as well as the compliance with a number
of other covenants under the Indenture including the obligations to make a
Deficiency Offer; these defaults could result in the acceleration of maturities
of the Debentures. Furthermore, the Company currently estimates that it will
have insufficient cash resources to repay $10.0 million due on the June 30, 2001
maturity of the Notes. In light of these defaults or potential defaults, which
may also constitute cross defaults under other debt instruments permitting the
acceleration of such debt, the Company will require a restructuring of its debt
and has retained Imperial Capital and Greenberg Traurig to advise in this regard
and assist the Company in reviewing its strategic plans. If these uncertainties
cannot be resolved successfully and in a timely manner, the Company may be
required to seek a reorganization under the federal bankruptcy laws.

Pursuant to the Plan of Restructuring, the Company has sold a total of 33
imaging centers since May 2000. Although the Company has been successful in the
past in selling centers at advantageous prices and in a



                                       16
<PAGE>   17

timely fashion, there can be no assurance that the Company will be able to sell
the remaining imaging centers at favorable or acceptable prices or at all and
there is currently substantial uncertainty that the Plan of Restructuring can be
completed as originally intended. The sales of the Company's imaging centers
pursuant to the Plan of Restructuring were not substantially completed by the
original earliest anticipated date of March 31, 2001.

For financial statement purposes, the assets, liabilities and results of
operations (except for cash flows) of the imaging centers have been
differentiated from those of continuing operations and are presented in the
Company's condensed consolidated financial statements as discontinued
operations.

DISCONTINUED OPERATIONS

Income (loss) from discontinued operations, net of income taxes increased by
$2.5 million from a loss for the three months ended March 31, 2000 of $1.3
million to income of $1.2 million for the comparable 2001 period. Part of this
increase was due to a gain resulting from a legal settlement for $2.4 million
received in March 2001 which was offset by a loss from another unrelated legal
settlement for $2.1 million. In addition, during the 2000 period the Company had
an additional $0.5 million relating to amortization of equity participation fees
that were fully amortized as of December 31, 2000. Furthermore, due to sale of
imaging centers pursuant to Plan of Restructuring and additional repayments of
debt, interest expense decreased by $2.0 million from $4.2 million for three
months ended March 31, 2000 to $2.2 million for three months ended March 31,
2001.

During the three months ended March 31, 2001, the Company recognized a pre-tax
loss of $135,000 relating to the closing of one imaging center that was
non-performing and recognized a pre-tax net gain of $4.5 million on the sale of
seven imaging centers. Offsetting the pre-tax net gain of $4.5 million is $3.3
million of gain attributable to minority interests in some of the subsidiaries
that were sold. See SOLD/CLOSED IMAGING CENTERS OF DISCONTINUED OPERATIONS under
Note 2 of Notes to Condensed Consolidated Financial Statements.

RESULTS OF CONTINUING OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 2001
COMPARED WITH THE THREE MONTHS ENDED MARCH 31, 2000.

Costs and expenses of continuing operations for the three months ended March 31,
2001 (the "2001 three month period") remained comparable at $3.4 million to that
of the three months ended March 31, 2000 (the "2000 three month period").
Operating expenses from continuing operations primarily consist of general and
administrative ("G&A") expenses related to the day-to-day operating activities
of the Company which is comparable at $3.1 million for both periods. Even though
certain costs such as salaries decreased during the 2001 three month period as
compared to the 2000 three month period, this decrease was offset by increase in
other costs such as legal and consulting fees relating to the implementation of
the Plan of Restructuring. As a result, overall G&A expenses did not decrease
during 2001. Furthermore, the Company has been unable to reduce overhead to the
extent desired due to the need to maintain corporate infrastructure to operate
remaining centers, collect accounts receivable and conduct imaging center sales.
The costs and expenses also include charges for stock-based compensation of
$25,000 for the 2001 three month period and $84,000 for the 2000 three month
period.



                                       17
<PAGE>   18

LIQUIDITY AND CAPITAL RESOURCES

At March 31, 2001, the Company had a working capital deficiency of $11.8
million, which included net liabilities of discontinued operations of $14.7
million, compared to a working capital deficiency of $10.8 million at December
31, 2000, which included net liabilities of discontinued operations of $13.3
million. The increase in the working capital deficiency from 2000 to 2001 is
primarily due to an increase in the net liabilities of discontinued operations
by $1.4 million. The Company's primary short-term liquidity requirements as of
March 31, 2001 include obligations under debt and capital leases, accounts
payable, other current liabilities and capital expenditures related to the
replacement and enhancement of existing imaging equipment and imaging centers.

Net cash used in operating activities during the 2001 three month period was
$7.1 million, compared to $1.9 million used in operating activities during the
2000 three month period. The main increase in negative cash flow from operations
in the 2001 three month period was due to a decrease in revenues and operating
cash flows directly related to the sale of seven imaging centers and closing of
one imaging center in the three months ended March 31, 2001 (in addition to the
sale of 25 imaging centers and closing of 10 imaging centers in 2000).
Furthermore, a $2.4 million gain resulting from a legal settlement was recorded
in the 2001 three month period which was offset by a $2.1 million loss from
another legal settlement recorded during the same period.

Net cash provided by investing activities was $11.8 million during the 2001
three month period, compared to net cash used in investing activities of $2.1
million during the 2000 three month period. During the 2001 three month period,
the Company received $11.8 million in net cash proceeds from the sale of imaging
centers, compared to zero during the 2000 three month period. Equipment
purchases were $46,000 during the 2001 three month period, compared to $2.2
million during the 2000 three month period.

Net cash used in financing activities was $4.8 million during the 2001 three
month period, compared to $4.5 million provided by financing activities during
the 2000 three month period. Proceeds from new borrowings were zero during the
2001 three month period, compared to $12.7 million during the 2000 three month
period. Repayments of notes and capital leases totaled $4.8 million during the
2001 three month period, compared to $8.2 million during the 2000 three month
period. As discussed in DEBT OF DISCONTINUED OPERATIONS under Note 2 of Notes to
Condensed Consolidated Financial Statements, the Company repaid an aggregate of
$1.2 million under its revolving credit loan with DVIBC from proceeds received
upon the sale of imaging centers during the 2001 three month period.

As of March 31, 2001, the Company has no purchase commitments for capital
expenditures and approximately $2.5 million of commitments to enter into
operating leases. This forward-looking statement is subject to a number of
uncertainties, including the Company's ability to collect accounts receivable,
to manage expenses, to obtain financing or refinancing of existing debt on
acceptable terms, regulatory changes in Medicare reimbursement rates, and other
factors discussed elsewhere in this report.

Based on current estimates, unless the Company can successfully sell imaging
centers at favorable prices or obtain additional financial resources (which is
unlikely), the Company's current cash and cash from operations will be
insufficient to meet its anticipated cash needs. In light of this, its actual
and potential defaults on its indebtedness and its inability to borrow
additional amounts due to non-compliance with certain Indenture covenants, the
Company will require a restructuring of its debt. If these uncertainties cannot
be resolved successfully and in a timely manner, the Company could be required
to seek a reorganization under the federal bankruptcy laws. These conditions,
among others, raise substantial doubt about the Company's ability to continue as
a going concern. See MANAGEMENT'S PLANS under Note 1 of Notes to Condensed
Consolidated Financial Statements.

For additional information regarding contingencies and uncertainties related to
litigation and regulatory matters, see Note 6 of Notes to Condensed Consolidated
Financial Statements.




                                       18
<PAGE>   19

ITEM 3. QUANTITATIVE INFORMATION ABOUT INTEREST RATE RISK

The table below represents in tabular form contractual balances of the Company's
capitalized lease and long-term debt financial instruments as they relate to
continuing operations at March 31, 2001. The expected maturity categories take
into consideration actual amortization of principal and do not take prepayments
into consideration. The weighted-average interest rates for the various
liabilities presented are as of March 31, 2001.

There is no disclosure required with respect to interest rate risk relating to
the Company's capitalized lease and long-term debt financial instruments as it
relates to discontinued operations because either these debt instruments will be
assumed by the buyers or will be paid off in full with sales proceeds.

In thousands

<TABLE>
<CAPTION>

                                                   Principal Amount Maturing in:
                           -----------------------------------------------------------------------------------  Fair Value
                             2002          2003          2004         2005        2006    Thereafter    Total    At 3/31/01
                           -------       -------       -------       ------       ----    ----------   -------   ----------
<S>                        <C>           <C>           <C>           <C>          <C>       <C>        <C>           <C>
Interest rate
sensitive
liabilities:

Long-term debt
fixed-rate
borrowings                      57            67            43           --         --         --          167        167

Average interest rate         9.58%         9.55%        10.03%          --         --         --         9.68%

Capitalized lease
obligations
fixed-rate
borrowings                     283           185           177           47         --         --          692        692

Average interest rate        11.84%        11.54%        12.22%       12.17%        --         --        11.88%
                           -------       -------       -------       ------       ----      -----      -------       ----
Total                      $   340       $   252       $   220       $   47       $ --      $  --      $   859       $859
                           =======       =======       =======       ======       ====      =====      =======       ====
Weighted-Average
Interest Rates               11.46%        11.01%        11.80%       12.17%        --         --        11.45%
                           =======       =======       =======       ======       ====      =====      =======

</TABLE>





                                       19
<PAGE>   20

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

See Note 6 of Notes to Condensed Consolidated Financial Statements which is
incorporated herein by reference.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

The Company did not make an interest payment on the Debentures that was due
March 31, 2001. Since this default has remained uncured for 30 days, it could
give rise to an acceleration of the maturities of the Debentures. A default on
the Debentures would also allow other debt holders to accelerate their debt
instruments. The amount of past due interest as of May 15, 2001 is $991,935. See
GOING CONCERN under Note 1 and DEBT OF DISCONTINUED OPERATIONS under Note 2 of
Notes to Condensed Consolidated Financial Statements which are incorporated
herein by reference.

ITEM 5. OTHER EVENTS

Effective April 20, 2001, Warren G. Lichtenstein was elected to the Company's
Board of Directors and C. Keith Hartley resigned as a director. Mr. Lichtenstein
is the managing member of Steel Partners, LLC, the general partner of the
Company's largest shareholder, Steel Partners, II, L.P.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits

None.

(b) Reports on Form 8-K

A report on Form 8-K dated January 16, 2001 was filed during the quarter ended
March 31, 2001 disclosing an Item 5 event.

A report on Form 8-K dated March 2, 2001 was filed during the quarter ended
March 31, 2001 disclosing an Item 5 event.

Items 2 and 4 are not applicable and have been omitted.





                                       20
<PAGE>   21
                                   SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended,
the registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

                                      US DIAGNOSTIC INC.



Dated:  May 21, 2001                  By: /s/ Leon F. Maraist
                                          --------------------------------------
                                          Leon F. Maraist
                                          President and Chief Executive Officer




                                      By: /s/ P. Andrew Shaw
                                          --------------------------------------
                                          P. Andrew Shaw
                                          Executive Vice President and
                                          Chief Financial Officer








                                       21