UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington,D.C. 20549

                                  FORM 10-QSB

            (X)   QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE
                  SECURITIES EXCHANGE ACT OF 1934

                 For the quarterly period ended August 31, 1998

            ( )   TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
                  EXCHANGE ACT

                   For the transition period from_____to_____

                         Commission file number 0-2749

                           DISTINCTIVE DEVICES, INC.
                 (Name of small business issuer in its charter)

                                    New York
                    (State of incorporation or organization)

                                   13-1999951
                          (I.R.S. Identification No.)

            Suite 134, 1324 Motor Parkway, Hauppauge, New York 11788
                    (Address of principal executive offices)

                   Issuer's telephone number:  (516)751-1375

              Former name, former address and former fiscal year,
              if changed since last report:  N/A

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

Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court.  Yes(X)  No( )

4,119,902 shares of issuer's common stock, $.05 par value, were outstanding at
August 31, 1998.  Issuer has no other class of common equity.

                    DISTINCTIVE DEVICES, INC. AND SUBSIDIARY

                                     INDEX
                                                    Page

PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements

     Consolidated balance sheeets--
       August 31, 1998 and February 28, 1998         3

     Consolidated statements of income--
       Three months and six months ended
       August 31, 1998 and 1997                      4

     Consolidated statements of cash flows--
       Six months ended August 31, 1998 and 1997     5

     Notes to financial statements--
       August 31, 1998                               6


Item 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF 
         FINANCIAL CONDITION AND RESULTS OF
         OPERATIONS                                  7


PART II - OTHER INFORMATION

Item 1.  LEGAL PROCEEDINGS                           7

Item 6.  EXHIBITS AND REPORTS ON FORM 8-K            7



SIGNATURES                                           8


PART I - FINANCIAL INFORMATION
Item 1.  Financial Statements

                    DISTINCTIVE DEVICES, INC. AND SUBSIDIARY
                          CONSOLIDATED BALANCE SHEETS

                                      August 31,     February 28,
                                         1998          1998
                                      (Unaudited)    (Audited)
ASSETS
Current Assets
  Cash and cash equivalents            $ 329,543      $ 339,539
  Investments available-for-sale          99,906         99,500
  Receivable, covenant not to
    compete, current portion               7,932          7,574
                                         -------        -------
       Total Current Assets              437,381        446,613

Receivable, covenant not to 
  compete, long term portion               7,197         11,255
Property and Equipment, net                  450            630
                                         -------        -------
                                       $ 445,028      $ 458,498
                                        ========       ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
  Accounts payable and accrued
    expenses                           $   3,930      $   5,920
                                        --------       --------
      Total Current Liabilities            3,930          5,920

Commitments and contingencies--
  See accompanying notes

Shareholders' Equity
  Preferred stock, $1.00 par value
   Shares authorized - 1,000,000
    Issued and outstanding - None
  Common stock, $.05 par value
   Shares authorized - 20,000,000
    Issued and outstanding - 4,119,902   205,995       205,995
  Additional paid-in capital             630,178       630,178
  Accumulated deficit                   (395,691)     (383,805)
  Unrealized gain on investments             616           210
                                        --------      --------
      Total Shareholders' Equity         441,098       452,578
                                        --------      --------
                                       $ 445,028     $ 459,498
                                        ========      ========

The accompanying notes are part of the financial statements.


                    DISTINCTIVE DEVICES, INC. AND SUBSIDIARY
                       CONSOLIDATED STATEMENTS OF INCOME
                                  (UNAUDITED)



                           Three months ended    Six months ended
                               August 31,           August 31,
                             1998      1997       1998      1997
                             ----      ----       ----      ----

Revenues:                                                       
  Covenant not to compete   $ 6,750  $ 3,285    $13,500  $ 4,500
  Interest income             5,626    6,739     11,959   13,742
                             ------   ------     ------   ------
                             12,376   10,024     25,459   18,242

Administrative expenses     (17,898) (17,434)   (37,345) (34,642)
                             ------   ------     ------   ------

Net (loss)                  $(5,522) $(7,410)  $(11,886)$(16,400)
                             ======   ======     ======   ======

Net (loss)per
  share of common stock
  (basic and diluted)       $(0.001) $(0.002)   $(0.003) $(0.004)
                             ======   ======     ======   ======

Average number of
  common shares
  outstanding              4,119,902   4,119,902   4,119,902   4,119,902


The accompanying notes are part of the financial statements.


                    DISTINCTIVE DEVICES, INC. AND SUBSIDIARY
               CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)


                                           Six months ended August 31,
                                             1998              1997


CASH FLOWS FROM OPERATING ACTIVITIES
  Net loss                                 $(11,886)         $(16,400)
  Adjustments to reconcile net income
    to net cash provided by (used in)
    operating activities:
      Depreciation and amortization             180               180
      Decrease in operating assets:
        Accrued interest receivable               0            (1,335)
      Decrease in operating
        liabilities:
          Accounts payable and
            accrued expenses                 (1,990)           (4,598)
                                                               ------
                                            (13,696)          (22,153)
                                             ------            ------

CASH FLOWS FROM FINANCING ACTIVITIES
  Decrease in non-trade receivable            3,700            16,269
                                              -----            ------
                                              3,700            16,269
                                              -----            ------

CASH AND CASH EQUIVALENTS
  Decrease during period                     (9,996)           (5,884)

  At beginning of period                    339,539           361,269
                                            -------           -------
  At end of period                          329,543          $355,385
                                            =======           =======


SUPPLEMENTAL CASH FLOW INFORMATION

  Interest paid                            $    --          $    --  

  Franchise taxes paid                     $    380          $    775

The accompanying notes are part of the financial statements.


                    DISTINCTIVE DEVICES, INC. AND SUBSIDIARY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
                                August 31, 1998



NOTE A - BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements have been prepared
in accordance with generally accepted accounting principles for interim
financial information and the instructions to Form 10-QSB and Article 10 of
Regulation S-X.  Accordingly, they do not include all information and footnotes
required by generally accepted accounting principles for complete financial
statements.  In the opinion of management all adjustments considered necessary
for a fair presentation have been included.  Operating results for the
six-month period ended August 31, 1998 are not necessarily indicative of
results that may be expected for the year ending February 28, 1999.  For
further information refer to the consolidated financial statements and
footnotes thereto included in the Company's annual report on Form 10-KSB for
the year ended February 28, 1998.


NOTE B - CURRENT AND LONG-TERM RECEIVABLES FROM COVENANT NOT
         TO COMPETE
As discussed in its Annual Report on Form 10-KSB for the year ended February
28, 1997, the Company's operating assets and businesses were sold on July 12,
1996.  Upon closing, the Company received cash equal to the approximate book
value of receivables, inventories and equipment.  Added consideration is
payable monthly, over a four-year term following the sale date, in exchange for
the Company's commitment not to compete with the buyer.  Such payment amounts
are subject to reduction if control of the Company changes during the four-year
term.

The date of such control change cannot be predicted.  In the interim, financial
statements reflect amounts received under non-compete provisions of the
business sale agreement and the discounted value of probable future payments,
based upon management's best estimate.


NOTE C - NON-CASH INVESTING ACTIVITY
Investments available-for-sale are 4-3/4% U.S. Treasury Notes par value
$100,000 due October 31, 1998, valued at market.  Market value rose $406 during
the six-month period ended August 31, 1998.

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

RESULTS OF OPERATIONS:  Since the sale of its businesses on July 12, 1996, the
Company has had no operating income.  As a consequence, losses resulted from
continuing operations for the three- and six-month periods ended August 31,
1998 and 1997.  For information regarding the business sale agreement reference
is made to the Company's Annual Report on Form 10-KSB for the year ended
February 28, 1997.

Revenues include noncompete consideration and interest earned on cash
equivalents and investments.  Noncompete consideration earned during the latest
three- and six-month periods does not include payments received which were
previously classified (on a discounted basis)as receivable from the covenant
not to compete.

FINANCIAL CONDITION:  Except for estimated amounts to be received from the
buyer of the Company's businesses, assets consist of cash and marketable
investments.  Liabilities represent routine administrative expenses, either
payable or accrued at the balance sheet date.  The Company has no debt and no
financial commitments outstanding.  

CURRENT ACTIVITIES:  The Company is actively continuing efforts to identify a
suitable merger partner, preferably a profitable, privately-held business
seeking public ownership.


PART II - OTHER INFORMATION

Item 1.  LEGAL PROCEEDINGS

     None


Item 6.  EXHIBITS AND REPORTS ON FORM 8-K

     No Report on Form 8-K was filed during the period for which this Quarterly
Report is filed.

                                   SIGNATURES



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




                                DISTINCTIVE DEVICES, INC.





September 26, 1998                  /s/ EARL M. ANDERSON, JR.
                                    Earl M. Anderson, Jr.
                                    President and Principal
                                    Executive Officer






September 26, 1998                   /s/ JAMES R. HAWK
                                    James R. Hawk
                                    Treasurer and Principal
                                    Accounting Officer