FORM 10-Q

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549
(Mark One)

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

For the quarterly period ended    March 31, 1998
                              --------------------------------------------------
                                       OR

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

For the transition period from _______________ to ______________

Commission file number               0-24900
                      ----------------------------------------------------------

                             ITI Technologies, Inc.
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

               Delaware                                  06-1340453
-------------------------------------       ------------------------------------
   (State or other jurisdiction of          (I.R.S. Employer Identification No.)
   incorporation or organization)

               2266 North Second Street, North St. Paul, MN 55109
--------------------------------------------------------------------------------
                    (Address of principal executive offices)
                                   (Zip Code)

                                 (612) 777-2690
--------------------------------------------------------------------------------
              (Registrant's telephone number, including area code)

                                 Not applicable
--------------------------------------------------------------------------------
      (Former name, former address and former fiscal year, if changed since
                                  last report)

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

                      APPLICABLE ONLY TO CORPORATE ISSUERS

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

         As of April 29, 1998, there were 8,506,254 shares of common stock
outstanding.

<PAGE>


                             ITI TECHNOLOGIES, INC.

                                    FORM 10-Q

                          QUARTER ENDED MARCH 31, 1998


                                      INDEX                                 PAGE
                                      -----                                 ----

PART I --  FINANCIAL INFORMATION

           Item 1 --      Financial Statements                                3

           Item 2 --      Management's Discussion and Analysis               10
                          of Financial Condition and Results
                          of Operations

PART II    OTHER INFORMATION

           Item 1 --      Legal Proceedings                                  13

           Item 5 --      Other Information                                  13

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

           Signatures                                                        14

<PAGE>


                                     PART I
                              FINANCIAL INFORMATION

Item 1. Financial Statements.



                        REPORT OF INDEPENDENT ACCOUNTANTS


To the Board of Directors and Stockholders of ITI Technologies, Inc.

We have reviewed the accompanying consolidated balance sheet of ITI
Technologies, Inc. and Subsidiaries as of March 31, 1998, and the related
consolidated statements of operations and cash flows for the three-month periods
ended March 31, 1998 and 1997. These financial statements are the responsibility
of the Company's management.

We conducted our reviews in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures to
financial data and making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit conducted in
accordance with generally accepted auditing standards, the objective of which is
the expression of an opinion regarding the financial statements taken as a
whole. Accordingly, we do not express such an opinion.

Based on our reviews, we are not aware of any material modifications that should
be made to the accompanying consolidated financial statements for them to be in
conformity with generally accepted accounting principles.

We have audited, in accordance with generally accepted auditing standards, the
consolidated balance sheet of ITI Technologies, Inc. and Subsidiaries as of
December 31, 1997, and the related consolidated statements of operations, cash
flows and stockholders' equity for the year then ended (not presented herein);
and in our report dated March 9, 1998, we expressed an unqualified opinion on
those consolidated financial statements. In our opinion, the information set
forth in the accompanying consolidated financial statements is fairly stated, in
all material respects, in relation to the consolidated financial statements from
which it has been derived.



/s/ Coopers & Lybrand L.L.P.

COOPERS & LYBRAND L.L.P.
Minneapolis, Minnesota
April 28, 1998

<PAGE>


                             ITI TECHNOLOGIES, INC.

                      CONSOLIDATED STATEMENTS OF OPERATIONS

                      (IN THOUSANDS, EXCEPT PER SHARE DATA)

                                                          FOR THE THREE
                                                           MONTHS ENDED
                                                            MARCH 31,
                                                   --------------------------
                                                      1998            1997
                                                   ----------      ----------
                                                           (UNAUDITED)

Net sales ...................................      $   23,914      $   23,740

Cost of goods sold ..........................          13,050          12,216
                                                   ----------      ----------
Gross profit ................................          10,864          11,524

Operating expenses:

       Marketing, general and administrative            4,794           3,942

       Research and development .............           2,014           1,648

       Amortization of intangible assets ....             353             228
                                                   ----------      ----------
Operating income ............................           3,703           5,706

Other income (expense):

       Interest, net ........................             180             264

       Other, net ...........................              79             (19)
                                                   ----------      ----------
Income before income tax expense ............           3,962           5,951

Income tax expense ..........................           1,428           2,207
                                                   ----------      ----------
Net income ..................................      $    2,534      $    3,744
                                                   ==========      ==========
Per share amounts:

Basic .......................................      $      .30      $      .45

Weighted average shares outstanding - basic .           8,487           8,376

Diluted .....................................      $      .29      $      .44

Weighted average shares outstanding - diluted           8,863           8,556


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

<PAGE>


                             ITI TECHNOLOGIES, INC.

                           CONSOLIDATED BALANCE SHEETS

                      (IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
                                                                   MARCH 31,       DECEMBER 31,
                                                                      1998             1997
                                                                   ----------       ----------
                                                                   (UNAUDITED)
                                     ASSETS
<S>                                                                <C>              <C>       
Current assets:
     Cash and cash equivalents ..............................      $   10,031       $    5,838
     Accounts receivable ....................................          13,279           14,510
     Inventories ............................................          21,513           21,962
     Deferred income taxes ..................................           1,300            1,300
     Other current assets ...................................           1,322            1,721
                                                                   ----------       ----------
         Total current assets ...............................          47,445           45,331

Property and equipment ......................................           9,810            9,825
Excess of cost over net assets acquired .....................          28,179           28,380
Other intangible assets .....................................          20,042           18,834
Notes receivable, net of current portion ....................           1,591            1,589
                                                                   ----------       ----------
         Total assets .......................................      $  107,067       $  103,959
                                                                   ==========       ==========

                      LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
     Accounts payable .......................................      $    4,883       $    5,108
     Accrued wages ..........................................           2,010            1,880
     Other accrued expenses .................................           2,566            2,007
                                                                   ----------       ----------
         Total current liabilities ..........................           9,459            8,995
Income taxes ................................................           7,263            7,263
                                                                   ----------       ----------
         Total liabilities ..................................          16,722           16,258
                                                                   ----------       ----------

Commitments and contingencies

Stockholders' equity:
     Common stock ($0.01 par value; 30,000 shares authorized;
         9,205 shares issued, 8,493 shares outstanding at
         March 31, 1998; 9,190 shares issued, 8,478 shares
         outstanding at December 31, 1997) ..................              92               92
     Additional paid-in capital .............................          74,685           74,575
     Retained earnings ......................................          24,629           22,095
     Treasury stock, at cost (712 shares at March 31, 1998
         and December 31, 1997) .............................          (9,061)          (9,061)
                                                                   ----------       ----------
         Total stockholders' equity .........................          90,345           87,701
                                                                   ----------       ----------
         Total liabilities and stockholders' equity .........      $  107,067       $  103,959
                                                                   ==========       ==========
</TABLE>

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

<PAGE>


                             ITI TECHNOLOGIES, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                               FOR THE THREE
                                                                MONTHS ENDED
                                                                  MARCH 31,
                                                         ---------------------------
                                                            1998             1997
                                                         ----------       ----------
<S>                                                      <C>              <C>       
OPERATING ACTIVITIES:                                            (UNAUDITED)
Net income ........................................      $    2,534       $    3,744
Adjustments to reconcile net income to net cash
      provided by operating activities:
      Amortization of intangible assets ...........             378              250
      Depreciation and amortization ...............             548              356
      Provision for doubtful accounts .............              59              150
      Changes in operating assets and liabilities:
            Accounts receivable ...................           1,172            1,577
            Inventories ...........................             449             (599)
            Other assets ..........................             397              666
            Accounts payable ......................            (225)           1,087
            Income taxes payable ..................             498            1,451
            Accrued expenses ......................             191               71
                                                         ----------       ----------
Net cash provided by operating activities .........           6,001            8,753
                                                         ----------       ----------

INVESTING ACTIVITIES:
Additions to property and equipment ...............            (533)            (464)
Additions to other intangible assets ..............          (1,385)            (270)
Issuance of notes receivable ......................                             (500)
                                                         ----------       ----------
Net cash used in investing activities .............          (1,918)          (1,234)
                                                         ----------       ----------

FINANCING ACTIVITIES:
Proceeds from exercise of common stock options ....             110
Payments for treasury stock .......................                           (1,395)
                                                         ----------       ----------
Net cash provided by (used in) financing activities             110           (1,395)
                                                         ----------       ----------
NET INCREASE IN CASH AND
      CASH EQUIVALENTS ............................           4,193            6,124
CASH AND CASH EQUIVALENTS
      AT BEGINNING OF PERIOD ......................           5,838           13,352
                                                         ----------       ----------
CASH AND CASH EQUIVALENTS
      AT END OF PERIOD ............................      $   10,031       $   19,476
                                                         ==========       ==========
</TABLE>

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

<PAGE>


NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

1.          BASIS OF PRESENTATION

            The unaudited consolidated statements of operations for the
            three-month periods ended March 31, 1998 and 1997, reflect, in the
            opinion of management of ITI Technologies, Inc. (the "Company"), all
            normal, recurring adjustments necessary for a fair statement of the
            results of operations for the interim periods. The results of
            operations for any interim period are not necessarily indicative of
            results for the full year. The consolidated balance sheet data as of
            December 31, 1997, were derived from audited consolidated financial
            statements but do not include all disclosures required by generally
            accepted accounting principles. The unaudited consolidated financial
            statements should be read in conjunction with the consolidated
            financial statements and notes thereto incorporated in the Company's
            Annual Report on Form 10-K for the year ended December 31, 1997.
            Coopers & Lybrand L.L.P., the Company's independent accountants,
            have performed limited reviews of the interim financial information
            included herein. Their report on such reviews accompanies this
            filing.

            The unaudited consolidated financial statements include the accounts
            of the Company and its wholly owned subsidiaries. All significant
            intercompany accounts and transactions have been eliminated.

2.          LITIGATION

            On August 17, 1995, the Company commenced an action for patent
            infringement against Pittway Corporation and its subsidiary, Ademco
            Distribution Inc., in the United States District Court for the
            District of Minnesota. On March 9, 1998, the jury found that the
            Ademco VISTA Plus/5800 family of wireless security systems infringes
            the Company's Learn Mode patent and awarded the Company damages of
            approximately $36.0 million for lost profits and royalties. In
            addition, on April 9, 1998, the Court entered an injunction
            prohibiting Pittway Corporation from manufacturing and marketing the
            Ademco 5800 series wireless products that infringe ITI's Learn Mode
            patent. Pittway Corporation has previously announced that it intends
            to appeal the verdict. The Company intends to vigorously protect its
            patented technology from infringement. Costs associated with this
            action are being capitalized as a patent asset associated with the
            related technology. As of March 31, 1998, the Company has
            capitalized $4.5 million of costs related to this lawsuit, which are
            included in other intangible assets on the consolidated balance
            sheet.

<PAGE>


3.          OTHER FINANCIAL STATEMENT DATA (IN THOUSANDS):

                                                    March 31,       December 31,
                                                      1998             1997
                                                   ----------       -----------
                                                   (UNAUDITED)
Accounts receivable:
    Accounts receivable .....................      $   14,324       $   15,555
    Allowance for doubtful accounts .........          (1,045)          (1,045)
                                                   ----------       ----------
         Total ..............................      $   13,279       $   14,510
                                                   ==========       ==========
Inventories:
    Raw materials ...........................      $    9,207       $    9,956
    Allowance for obsolescence ..............          (1,420)          (1,660)
                                                   ----------       ----------
                                                        7,787            8,296
    Work-in-process .........................           5,037            4,877
    Finished goods ..........................           8,689            8,789
                                                   ----------       ----------
         Total ..............................      $   21,513       $   21,962
                                                   ==========       ==========

Property and equipment:
    Machinery and equipment .................      $   10,462       $   10,080
    Furniture and fixtures ..................           4,032            3,881
    Building and improvements ...............           1,751            1,751
                                                   ----------       ----------
                                                       16,245           15,712
    Accumulated depreciation and amortization          (6,435)          (5,887)
                                                   ----------       ----------
         Total ..............................      $    9,810       $    9,825
                                                   ==========       ==========

Other intangible assets:
    Trademarks and trade names ..............      $   13,829       $   13,829
    Technology and patents ..................           4,954            3,569
    Customer lists ..........................           3,007            3,007
    Other ...................................             616              616
                                                   ----------       ----------
                                                       22,406           21,021
    Accumulated amortization ................          (2,364)          (2,187)
                                                   ----------       ----------
         Total ..............................      $   20,042       $   18,834
                                                   ==========       ==========

Other accrued expenses:
    Warranty ................................      $      650       $      650
    Professional fees .......................             436              493
    Other ...................................           1,480              864
                                                   ----------       ----------
         Total ..............................      $    2,566       $    2,007
                                                   ==========       ==========

<PAGE>


4.          EARNINGS PER SHARE

            Effective with year-end 1997, the Company adopted SFAS No. 128,
            "Earnings per Share" ("EPS"), and has retroactively presented basic
            and diluted earnings per share in accordance with this standard. A
            dilutive effect on earnings results from the assumed exercise of
            stock options outstanding under the Company's Stock Option Incentive
            Plan.

            The Company calculated basic and dilutive earnings per share as
            follows for the quarter ended March 31 (in thousands, except per
            share data):

                                                          1998           1997
                                                          ----           ----
              Net income                                 $2,534         $3,744
              Weighted average shares outstanding:
                    Basic (actual shares outstanding)     8,487          8,376
                    Effect of dilutive options              376            180
                                                         ------         ------
                    Diluted                               8,863          8,556
                                                         ======         ======

              Per share amounts:
                    Basic                                $  .30         $  .45
                    Diluted                              $  .29         $  .44

<PAGE>


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

            When used in this discussion, the words "believes," "anticipates"
      and similar expressions are intended to identify forward-looking
      statements. Such statements are subject to certain risks and uncertainties
      which could cause actual results to differ materially from those
      projected. Readers are cautioned not to place undue reliance on these
      forward-looking statements which speak only as of the date hereof. The
      Company undertakes no obligation to publish revised forward-looking
      statements to reflect events or circumstances after the date hereof or to
      reflect the occurrence of unanticipated events. Readers are also urged to
      carefully review and consider the various disclosures made by the Company
      which attempt to advise interested parties of the factors which affect the
      Company's business, not only in this report, but also in the Company's
      periodic reports on Forms 10-K, 10-Q and 8-K filed with the Securities and
      Exchange Commission.

GENERAL:

            On April 30, 1997, the Company purchased all of the outstanding
      stock of CADDX-CADDI Controls, Inc. ("CADDX") for $19.0 million in cash
      (the "Acquisition"). In conjunction with the Acquisition, the Company also
      purchased from the majority shareholder of CADDX the manufacturing
      facility leased by CADDX for $530,000. Immediately following the
      Acquisition, the corporate name was changed to CADDX Controls, Inc. CADDX,
      located in Gladewater, Texas, designs, manufactures and markets hardwire
      electronic security systems.

            On May 22, 1997, the Company also completed the cash purchase of the
      Regency product line and dealer program from the Silent Knight Division of
      Willknight, Inc., located in Minneapolis, Minnesota, for $1.8 million. In
      the event sales of Regency products over the 36 month period ending May
      2000 exceed certain levels, a contingent payment of up to $800,000 will be
      made.

RESULTS OF OPERATIONS:

            NET SALES. Net sales increased by $174,000, or 0.7%, from $23.7
      million for the three months ended March 31, 1997, to $23.9 million for
      the three months ended March 31, 1998. The increase in sales is primarily
      attributable to business acquisitions and volume increases, as prices
      remained relatively stable over these periods.

            Excluding the effect of the acquisitions and sales to the Company's
      1997 largest customer's branch operations, which decreased from
      approximately 43% of total sales in the first quarter of 1997 to less than
      1% in the first quarter of 1998, sales to all other customers increased
      30% from the first quarter of 1997.

<PAGE>


            GROSS PROFIT. Gross profit decreased $660,000 from the first quarter
      of 1997 to $10.9 million for the first quarter of 1998 and decreased as a
      percentage of net sales from 48.5% to 45.4%. The decrease in gross margin
      is due to a combination of inherently lower gross margins on CADDX sales,
      as those sales are made through distribution rather than directly to
      dealers, and excess factory capacity at the Company's wireless
      manufacturing facility due to the decrease in first quarter 1998 sales to
      what was the Company's largest customer in 1997.

            MARKETING, GENERAL AND ADMINISTRATIVE EXPENSES. Marketing, general
      and administrative expenses increased from $3.9 million for the first
      quarter of 1997 to $4.8 million for the first quarter of 1998. As a
      percentage of net sales, marketing, general and administrative expenses
      for the first quarter increased from 16.6% in 1997 to 20.0% in 1998. The
      increase is primarily due to the addition of CADDX and costs associated
      with additional sales personnel and product technical support for the
      acquired Regency product line.

            RESEARCH AND DEVELOPMENT EXPENSE. Research and development expenses
      increased $366,000 to $2.0 million for the first quarter of 1998. As a
      percentage of net sales, research and development expenses for the first
      quarter increased from 6.9% in 1997 to 8.4% in 1998. The increase was
      primarily due to the Company's continued emphasis on research and new
      product development. New products scheduled to be introduced in 1998
      include Concord(TM), a modular hybrid control panel which allows dealers
      to start with a low-cost hardwire platform with the ability to add
      wireless sensors, and the release of upgrades to the feature content of
      the Company's traditional control panels. The Company also continues
      development on its Advent(TM) platform, which is designed for the
      commercial burglary and fire market. The Company anticipates that
      expenditures for research and development activities for all of 1998 will
      be between 7.5% and 8% of net sales.

            AMORTIZATION OF INTANGIBLE ASSETS. Amortization of
      acquisition-related intangible assets increased from $228,000 for the
      first quarter of 1997 to $353,000 for the first quarter of 1998. The
      increase is attributable to the Company's acquisitions in the second
      quarter of 1997.

            NET INTEREST INCOME. Net interest income decreased from $264,000 for
      the first quarter of 1997 to $180,000 for the first quarter of 1998 as
      previously invested cash and cash equivalents were used in the second
      quarter 1997 acquisitions.

            INCOME TAX EXPENSE. Income tax expense decreased from $2.2 million
      for the first quarter of 1997 to $1.4 million for the first quarter of
      1998. The Company's effective tax rate for these periods varies from the
      federal statutory rate primarily due to state income taxes, net of federal
      benefit, and the non-deductibility for income tax purposes of the
      amortization of excess of cost over net assets acquired. The effective tax
      rate decreased from 37.1% for the first quarter of 1997 to 36.0% for the
      first quarter of 1998 due to a higher portion of revenues taxed as foreign
      sales income as well as increased research and development tax credits
      resulting from increased product development spending.

<PAGE>


LIQUIDITY AND CAPITAL RESOURCES

            The Company has funded its operations primarily with cash from
      operations. For the first three months of 1998, the Company generated net
      cash from operating activities of $6.0 million. Net cash provided by
      operating activities resulted primarily from $2.5 million in net income,
      $926,000 in depreciation and amortization charges and $2.5 million from
      changes in operating assets and liabilities, principally accounts
      receivable.

            During the first quarter of 1998, the Company invested $1.4 million
      in other intangible assets, primarily capitalized costs associated with
      the patent litigation, and $533,000 in equipment. For the year ended
      December 31, 1998, the Company expects that purchases of property and
      equipment will be approximately $4.0 million.

            For the first three months of 1998, cash provided by the exercise of
      stock options was $110,000.

            A substantial amount of the Company's working capital is invested in
      accounts receivable and inventories. The Company periodically reviews
      accounts receivable for noncollectibility and inventories for obsolescence
      and establishes allowances it believes are appropriate. In addition, the
      Company periodically assesses the recoverability of intangible assets
      based on undiscounted cash flows.

            The Company believes that its current cash position, along with cash
      flows from operations and funds available through the Company's credit
      facility, will be adequate to fund its working capital and capital
      expenditure requirements at least through the end of 1998.

EFFECT OF INFLATION AND FOREIGN CURRENCY TRANSACTIONS

            The Company believes that inflation and foreign currency
      fluctuations have not had a significant effect on its operations.

<PAGE>


                           PART II - OTHER INFORMATION

Item 1.     Legal Proceedings.

            On August 17, 1995, the Company commenced an action for patent
            infringement against Pittway Corporation and its subsidiary, Ademco
            Distribution Inc., in the United States District Court for the
            District of Minnesota. On March 9, 1998, the jury found that the
            Ademco VISTA Plus/5800 family of wireless security systems infringes
            the Company's Learn Mode patent and awarded the Company damages of
            approximately $36.0 million for lost profits and royalties. In
            addition, on April 9, 1998, the Court entered an injunction
            prohibiting Pittway Corporation from manufacturing and marketing the
            Ademco 5800 series wireless products that infringe ITI's Learn Mode
            patent. Pittway Corporation has previously announced that it intends
            to appeal the verdict. The Company's management will vigorously
            defend any such appeal.

            In addition, the Company experiences routine litigation in the
            normal course of its business. The Company does not believe that any
            of this routine litigation will have a material adverse effect on
            the financial condition or results of operations of the Company.


Item 5.     Other Information.

            None.


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

            (a)   The following exhibits are filed as part of this Quarterly
                  Report on Form 10-Q:

                  15.   Letter regarding unaudited interim financial
                        information.

                  27.1  Financial data schedule (for electronic filing purposes
                        only).

            (b)   No Current Reports on Form 8-K were filed by the Company
                  during the quarter ended March 31,1998, or during the period
                  from March 31, 1998, to the date of this Quarterly Report on
                  Form 10-Q.

<PAGE>


                                   SIGNATURES

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


Dated:  May 8, 1998                       ITI TECHNOLOGIES, INC.



                                          By  /s/ Jack A. Reichert
                                             -----------------------------------
                                              Jack A. Reichert
                                              Vice President of Finance
                                              (Chief Accounting Officer)