<PAGE>   1
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                   ---------
                                  FORM 10-Q/A
                                   ---------

                                Amendment No. 1

                   Quarterly Report Under Section 13 or 15(d)
                     Of the Securities Exchange Act of 1934

                     For the Quarter Ended December 31, 1998
                         Commission File Number 0-16072


                             DECORA INDUSTRIES, INC.
             (Exact name of registrant as specified in its charter)


                  DELAWARE                                     68-0003300
       (State or other jurisdiction of                    (I.R.S. Employer
        incorporation or organization)                    Identification No.)

               ONE MILL STREET
               FORT EDWARD, NY                                   12828
    (address of principal executive office)                     (Zip code)

         Registrant's telephone number
           (including area code)                             (518) 747-6255

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 
                                   ---        ---

At February 8, 1999 there were 7,340,385 shares of Common Stock of the
registrant outstanding. This document consists of 11 pages.

<PAGE>   2

                         PART I - FINANCIAL INFORMATION


        This amendment is being filed solely to correct a typographical error
regarding certain income per share data for the nine months ended December 31,
1997 as set forth in the Condensed Consolidated Statements of Income, namely,
the diluted income before extraordinary item was $.04 per share (instead of
$.05), and the basic net income was $.05 per share (instead of $.04).

ITEM 1.  FINANCIAL STATEMENTS


                             DECORA INDUSTRIES, INC.

                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                    DECEMBER 31, 1998   MARCH 31, 1998
                                                    -----------------   --------------
                                                              (IN THOUSANDS)
<S>                                                      <C>            <C>
ASSETS

Current assets:
  Cash and cash equivalents                               $ 18,884      $  1,682
  Restricted cash                                               63           125
  Accounts receivable, less allowance                       25,132        26,049
  Inventories                                               41,479        26,964
  Deferred income taxes                                      1,913         1,913
  Prepaid expenses and other current assets                  1,181         1,481
                                                          --------      --------

         Total current assets                               88,652        58,214

Property and equipment, net                                 54,629        44,152

Goodwill and other intangibles, net                         79,505        22,478

Deferred income taxes                                        3,623         3,787

Other assets                                                 6,317         2,585
                                                          --------      --------
                                                          $232,726      $131,216
                                                          --------      --------
</TABLE>





 See accompanying Notes to Unaudited Condensed Consolidated Financial Statements


                                      -2-
<PAGE>   3

                             DECORA INDUSTRIES, INC.

                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                   (UNAUDITED)


<TABLE>
<CAPTION>

                                                 DECEMBER 31, 1998    MARCH 31, 1998
                                                 -----------------    --------------
                                                             (IN THOUSANDS)

<S>                                                    <C>            <C>
LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
  Accounts payable                                     $  10,182      $   9,577
  Accrued liabilities                                     17,363         17,104
  Current portion of long-term debt                       19,649         10,472
  Other current liabilities                                5,985          4,928
                                                       ---------      ---------
       Total current liabilities                          53,179         42,081

Long-term debt                                           134,677         50,644

Pension obligation                                        16,105         13,424
                                                       ---------      ---------

       Total liabilities                                 203,961        106,149
                                                       ---------      ---------

Minority interest in subsidiary                            7,534          6,978
                                                       ---------      ---------

Shareholders' equity:
  Preferred stock, $.01 par value;
    5,000,000 shares authorized                             --             --
  Common stock, $.01 par value;
    20,000,000 shares authorized;
    7,340,000 and 7,331,000 shares issued
    and outstanding at December 31, 1998
    and March 31, 1998, respectively                          73             73
  Additional paid-in capital                              33,627         33,775
  Accumulated deficit                                    (13,903)       (14,984)
  Cumulative translation adjustment                        1,434           (775)
                                                       ---------      ---------
       Total shareholders' equity                         21,231         18,089
                                                       ---------      ---------
 Total liabilities and shareholders' equity            $ 232,726      $ 131,216
                                                       ---------      ---------
</TABLE>





 See accompanying Notes to Unaudited Condensed Consolidated Financial Statements


                                      -3-
<PAGE>   4

                             DECORA INDUSTRIES, INC.

                   CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                                   (UNAUDITED)


<TABLE>
<CAPTION>
                                    THREE MONTHS ENDED DECEMBER 31,   NINE MONTHS ENDED DECEMBER 31,
                                       1998            1997              1998         1997
                                       ----            ----              -----        ----
                                              (IN THOUSANDS, EXCEPT PER SHARE DATA)

<S>                                    <C>            <C>            <C>           <C>    
Net sales                              $41,174        $36,909        $136,670      $56,364

Cost of goods sold (see Note 2)         26,641         27,194          88,009       41,648
                                       -------        -------        --------      -------

Gross profit                            14,533          9,715          48,661       14,716

Selling, general and administrative
     expenses                            9,056          7,153          31,423        9,720
Non-recurring charges                       --             --              --        1,461
                                       -------        -------        --------      -------


Operating income                         5,477          2,562          17,238        3,535

Interest expense, net                    3,774          1,601          10,446        2,439
                                       -------        -------         -------      -------

Income before income taxes,
  minority interest in earnings of
  subsidiary and extraordinary item      1,703            961           6,792        1,096

Income tax provision                       811            519           2,926          560
                                       -------        -------        --------      -------

Income before minority interest
  in earnings of subsidiary and
  extraordinary item                       892            442           3,866          536

Minority interest in earnings of
   subsidiary                              407            201             766          201
                                       -------        -------        --------      -------

Income before extraordinary item           485            241           3,100          335

Extraordinary item, net of income
  taxes (see Note 2)                        --             --          (2,019)          --
                                       -------        -------        --------      -------


Net income                              $  485         $  241        $  1,081      $   335
                                       -------        -------        --------      -------

Per share of common stock:

Income before extraordinary  item
    Basic                              $  0.06         $ 0.03         $  0.42      $   0.05
    Diluted                               0.05           0.03            0.36          0.04
Extraordinary item
    Basic                                   --             --           (0.28)           --
    Diluted                                 --             --           (0.24)           --
Net income
     Basic                                0.06           0.03            0.14          0.05
     Diluted                              0.05           0.03            0.12          0.04
</TABLE>


 See accompanying Notes to Unaudited Condensed Consolidated Financial Statements


                                      -4-
<PAGE>   5

                             DECORA INDUSTRIES, INC.

                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)

<TABLE>
<CAPTION>

                                                     NINE MONTHS ENDED DECEMBER 31,
                                                          1998             1997   
                                                          ----             ---- 
                                                           (IN THOUSANDS)

<S>                                                     <C>            <C>    
Cash flows from operating activities:
Net income                                              $   1,081     $     335
Adjustments to reconcile net income
  to net cash provided by operating activities:
    Extraordinary item, net of income taxes                 2,019            --
    Depreciation and amortization                           7,329         3,544
    Amortization of debt discount and fees                    720            84
    Provision for notes receivable                             --           789
    Minority interest in earnings of subsidiary               766           201
    Deferred income tax provision                              --           306
    Net changes in current assets and liabilities          (1,779)        4,408
    Other, net                                             (1,027)          371
                                                        ---------     ---------
Net cash provided by operating activities                   9,109        10,038
                                                        ---------     ---------

Cash flows from investing activities:
    Rubbermaid Acquisition                                (65,491)           --
    Acquisition of Hornschuch shares                       (1,289)      (37,511)
    Reduction in notes receivable                             305            --
    Purchase of property and equipment                     (7,732)       (1,828)
                                                        ---------     ---------
Net cash used in investing activities                     (74,207)      (39,339)
                                                        ---------     ---------

Cash flows from financing activities:
    Issuance of long-term debt                            110,086        39,205
    Repayment of long-term debt                           (29,166)       (3,732)
    Change in short-term borrowing                          7,787        (4,612)
    Proceeds from issuance of common stock                     --           812
    Payment of warrant exchange obligation                   (200)           --
    Net cash paid for debt penalties and fees              (7,087)           --
                                                        ---------     ---------

Net cash provided by financing activities                  81,420        31,673
                                                        ---------     ---------

Effect of exchange rate fluctuations on cash
  and cash equivalents                                        818          (212)
                                                        ---------     ---------
Net increase in cash and cash equivalents                  17,140         2,160
Cash and cash equivalents at beginning of period            1,807           243
                                                        ---------     ---------
Cash and cash equivalents at end of period              $  18,947     $   2,403
                                                        ---------     ---------
</TABLE>



 See accompanying Notes to Unaudited Condensed Consolidated Financial Statements


                                      -5-
<PAGE>   6

                    NOTES TO UNAUDITED CONDENSED CONSOLIDATED
                              FINANCIAL STATEMENTS

NOTE 1 - Integration of Financial Statements Reported on Form 10-K

The accompanying Unaudited Condensed Consolidated Financial Statements should be
read in conjunction with Decora Industries, Inc.'s ("DII" and, together with its
subsidiaries, the "Company") Audited Consolidated Financial Statements included
in its Form 10-K for the fiscal year ended March 31, 1998, filed with the
Securities and Exchange Commission (File No. 0-16072) (the "Form 10-K"). In the
opinion of the Company, the accompanying Unaudited Condensed Consolidated
Financial Statements contain all adjustments, consisting only of normal
recurring accruals, necessary for a fair presentation of the results for the
interim periods.

Effective April 1, 1998, the Company adopted Statement of Financial Accounting
Standards No. 130, "Reporting Comprehensive Income", which establishes standards
for reporting comprehensive income. Comprehensive income is the change in the
equity of a company, not including those changes that result from shareholder
transactions. The Company's components of other comprehensive income relate to
foreign currency translation adjustments. Total comprehensive income for the
three months ended December 31, 1998 and 1997 was $588,000 and $18,000,
respectively; and for the nine months ended December 31, 1998 and 1997 was
$3,290,000 and $112,000, respectively.

In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133, "Accounting for Derivative Instruments
and Hedging Activities". This standard requires companies to record derivatives
on the balance sheet as assets or liabilities, measured at fair value. Gains or
losses resulting from the changes in the values of the derivatives would be
accounted for depending on whether it qualifies for hedge accounting. The
Company will be required to adopt this standard by the fiscal year beginning
April 1, 2000, but may adopt it sooner. Management does not believe that the
adoption of this statement will have a material impact on the financial
statements.

Certain reclassifications of prior year amounts have been made to conform to the
current year presentation.

NOTE 2 - Acquisitions, Determination of Acquisition Cost, Extraordinary Item and
Acquisition Related One-time Charge to Cost of Goods Sold

Acquisitions

On April 29, 1998, the Company acquired certain assets which had constituted
Rubbermaid's Decorative Coverings Group (the "DCG"), for a purchase price
(subject to a purchase price contingency of $2.5 million based upon calendar
1998 DCG sales levels) of approximately $62.5 million (the "Rubbermaid
Acquisition"). Based upon final 1998 sales of the DCG, the purchase price was
adjusted downward by $2 million to $60.5 million.


The assets acquired included inventory, manufacturing equipment, tradenames
including the Con-Tact trademark and all other rights to three product lines:
(i) the Con-Tact self-adhesive coverings line that was manufactured exclusively
for Rubbermaid by Decora, (ii) Shelf Liner, a proprietary product line, which


                                      -6-
<PAGE>   7

was manufactured by Rubbermaid, and (iii) the Grip Liner non-adhesive covering
line which is manufactured by a third party pursuant to the terms of an
exclusive manufacturing agreement.

Determination of Acquisition Cost

The acquisition cost for the DCG of approximately $62.6 million (final purchase
price of $60.5 million, adjusted for acquisition related closing costs of
approximately $3.6 million, less amounts related to transition services of $1.5
million paid to Rubbermaid) was allocated to the assets acquired as follows:


               Inventory                               $7,500,000
               Property and equipment                   1,000,000

               Intangible assets:
                 Con-Tact tradename                    20,300,000
                 Customer relationships                27,400,000
                 Goodwill                               6,400,000


In order to finance the Rubbermaid Acquisition and to improve its capital
structure, the Company issued $112,750,000 of 11.0% senior secured notes (the
"Notes"). The Notes were issued with an original issue discount of $2,664,000
with interest payable semi-annually and no principal payments required prior to
maturity on May 1, 2005. In addition, Konrad Hornschuch AG ("Hornschuch"), a 79%
owned subsidiary, borrowed under its secured credit facilities approximately
$10.0 million. Of the total amount raised, approximately $58,300,000 was used
for the Rubbermaid Acquisition at the closing, approximately $32,100,000 was
used to refinance existing debt and related fees (including an $18.0 million 13%
subordinated loan which had been used to finance the Hornschuch Acquisition (the
"Subordinated Loan")), approximately $8,000,000 will be used to finance a tender
offer (which commenced on February 3, 1999) for the remaining 21% equity
interest in Hornschuch, approximately $7,500,000 was used to pay acquisition and
financing related transaction fees and expenses and the remaining net proceeds
are being used for general corporate purposes including working capital
requirements and the relocation of manufacturing assets purchased as part of the
Rubbermaid Acquisition. At the same time Decora, Incorporated ("Decora"), a
wholly owned subsidiary of the Company, entered into a three year, $15.0 million
secured revolving line of credit (the "Credit Facility"). Its availability is
based on a factor of the amount of accounts receivable and inventory held by
Decora. As of December 31, 1998, the Credit Facility had not been utilized.

Direct financing transaction costs incurred of approximately $4.9 million were
deferred and are being amortized, using the effective interest rate method, over
the term of the respective financings.

The accompanying Condensed Consolidated Statements of Income include the results
of the Company (including Hornschuch since the acquisition of 73.2% of the
outstanding shares on October 1, 1997 (the "Hornschuch Acquisition")) and
reflect the effects of the Rubbermaid Acquisition since April 29, 1998, the date
of the acquisition. Pro forma unaudited consolidated operating results for the
nine months ended December 31, 1997, assuming the Hornschuch Acquisition had
been made as of April 1, 1997, are summarized below (in thousands, except per
share amounts). The Rubbermaid Acquisition was an acquisition of product lines
and comparative information is not available; therefore, the pro forma unaudited
consolidated


                                      -7-
<PAGE>   8

operating results for the nine months ended December 31, 1997 reflect only the
effect of the Hornschuch Acquisition.


<TABLE>
<CAPTION>

                                                    Nine Months Ended
                                                    December 31, 1997
                                                    -----------------
                                                  (In thousands, except
                                                      per share data)

             <S>                                      <C>       
              Net sales                               $  115,327
              Net loss                                      (856)
              Basic net loss per common share              (0.12)
              Diluted net loss per common share            (0.11)
</TABLE>


These pro forma results have been prepared for comparative purposes only and
include adjustments as a result of applying purchase accounting and conversion
to generally accepted accounting principles in the United States, such as
additional depreciation expense due to the step-up in the basis of property and
equipment, goodwill amortization and increased interest on the Hornschuch
Acquisition debt. The pro forma information is not necessarily indicative of the
operating results that would have occurred if the acquisition had taken place on
the aforementioned date or of future results of operations of the consolidated
entities.


Extraordinary Item

As noted above, in conjunction with the Rubbermaid Acquisition, the Company
raised sufficient funds through the issuance of the 11.0% Notes to refinance
$32.1 million of its existing debt and related fees, including the Subordinated
Loan bearing a coupon of 13%. As a result of the repayment of the Subordinated
Loan and other debt, the Company paid a one-time prepayment penalty of
approximately $2.2 million and wrote-off unamortized deferred loan costs of
approximately $1.1 million. Consequently, an extraordinary charge of
approximately $2.0 million (net of income taxes) was recorded in the nine months
ended December 31, 1998.


Acquisition Related One-time Charge to Cost of Goods Sold

The results for the nine months ended December 31, 1998 were also impacted by a
one-time non-cash charge of approximately $797,000 for the step-up in basis of
certain DCG inventory acquired in the Rubbermaid Acquisition. This charge
related primarily to inventory sold by Decora to Rubbermaid prior to the
Rubbermaid Acquisition. Pursuant to purchase accounting, the manufacturer's
profit related to such inventory must be reflected in the inventory basis upon
the sale of such inventory.


                                      -8-

<PAGE>   9

NOTE 3 - Inventories

Inventories at December 31, 1998 and March 31, 1998 consisted of the following:

<TABLE>
<CAPTION>
                              DECEMBER 31, 1998   MARCH 31, 1998
                              -----------------   --------------
                                       (IN THOUSANDS)

        <S>                      <C>                <C>    
         Raw Materials            $ 5,268           $ 7,335
         Work-in-Process            6,132             4,634
         Finished Goods            30,079            14,995
                                  -------           -------
                                  $41,479           $26,964
                                  -------           -------
</TABLE>



NOTE 4 - Net Income Per Share

The Company adopted Statement of Financial Accounting Standards No. 128,
"Earnings Per Share", as required, in the quarter ended December 31, 1997, with
all prior periods being restated. The adoption did not have a significant impact
on net income per common share reported for the three and nine months ended
December 31, 1998 and 1997.


The number of shares of common stock and common stock equivalents used in the
computation of net income per common share, assuming dilution for each period,
is the weighted average number of common shares outstanding during the periods
and, if dilutive, common stock options, warrants and convertible securities
which are considered common stock equivalents. The following is a reconciliation
of the denominators for determining basic and diluted net income per common
share for the three and nine months ended December 31, 1998 and 1997. The
numerators were the same for both calculations for all periods (in thousands,
except per share data):

<TABLE>
<CAPTION>

                                      Three Months Ended              Nine Months Ended
                                         December 31,                    December 31,
                                        ------------                    ------------
                                      1998         1997           1998           1997
<S>                                  <C>          <C>              <C>            <C>    

WEIGHTED AVERAGE SHARES:

 Shares outstanding at beginning
         of period                    7,340       7,144            7,331           7,140
 Shares issued                           --         187                4              64
                                      -----       -----            -----           -----

 Shares used in the calculation
        of Basic EPS                  7,340       7,331            7,335           7,204

 Effect of dilutive securities:
    Contingently issuable shares        339         519              339             519
    Options/Warrants                  1,091         155            1,058             170
                                      -----       -----            -----           -----

  Adjusted weighted average shares    8,770       8,005            8,732           7,893
                                      -----       -----            -----           -----

</TABLE>


                                      -9-
<PAGE>   10

The total number of shares of common stock and common stock equivalents that
were not included in the computation of diluted income per common share because
they were anti-dilutive was approximately 752,000 and 2,954,000 for the three
months ended December 31, 1998 and 1997, respectively, and approximately 752,000
and 2,954,000 for the nine months ended December 31, 1998 and 1997,
respectively.


                                      -10-
<PAGE>   11

                                   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.

DECORA INDUSTRIES, INC.
(REGISTRANT)




BY /s/ Timothy N. Burditt
--------------------------------
Timothy N. Burditt
EVP Administration & Finance




DATED:  February 16, 1999



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