U.S. SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 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  SEPTEMBER  30,  1997
                                                     --------------------

[ ]   TRANSITION  REPORT UNDER SECTION 13 OR 15(d) OF THE  SECURITIES  EXCHANGE
       ACT OF 1934 FOR THE TRANSITION PERIOD FROM ____________ TO ____________


                          Commission file number 0-5887
                                                 ------

                                    RTI INC.
       -----------------------------------------------------------------
       (Exact name of small business issuer as specified in its charter)


                    NEW YORK                           11-2163152
          ------------------------------            -------------------
         (State or other jurisdiction of            (I.R.S. Employer
          incorporation or organization)            Identification No.)


            P.O. BOX 3048, 301 ANTONE, SUNLAND PARK, NEW MEXICO 88063
            --------------------------------------------------------
               (Address of principal executive offices) (Zip Code)


                                 (505) 589-5431
                                 --------------
                (Issuer's telephone number, including area code)



      Check whether the issuer (1) filed all reports required to be filed by
Section l3 or l5(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 [ ] No
[X]

      State the number of shares outstanding of each of the issuer's classes
of common equity, as of the latest practicable date.
  
     October 31, 1997  -   1,481,166   shares of common stock
     ----------------     -----------


    Transitional Small Business Disclosure Form    Yes [ ] No [X]



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<PAGE>

                            RTI INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS


                                         September 30,         December 31,
                                              1997                1996
  LIABILITIES AND STOCKHOLDERS' EQUITY    (unaudited)
  ------------------------------------   ------------         ------------


CURRENT:
  Accounts payable                       $    807,735         $     19,811
  Short-term borrowings (Note 5)              593,000                   --
  Current portion of long term debt            44,990                   --
  Accrued expenses                            174,975               74,433

        TOTAL CURRENT LIABILITIES           1,620,700               94,244

Long-term debt, net of current portion
 and discount of $5,500 and $22,000           259,500              265,000
Other liabilities (Notes 3 and 4)           1,032,035              970,935
                                         ------------         ------------

         TOTAL LIABILITIES                  2,912,235            1,330,179
                                         ------------         ------------

STOCKHOLDERS' EQUITY:
 Preferred stock, $.05 par value -
  shares authorized 2,000,000;
  issued and outstanding: 100,000               5,000                   --
Common stock, $.08 par value -
  shares authorized 15,000,000;
  issued and outstanding, 1,481,166           118,495               88,094
 Additional paid-in capital                17,679,624           16,053,542
   
 Deficit                                  (14,624,532)         (13,227,131)
                                         ------------         ------------
    

         TOTAL STOCKHOLDERS' EQUITY         3,178,587            2,914,505
                                         ------------         ------------

         TOTAL LIABILITIES AND
          STOCKHOLDERS' EQUITY           $  6,090,822         $  4,244,684
                                         ============         ============


         See accompanying notes to consolidated financial statements.

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<PAGE>



ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

         (a) Exhibits: None

         (b) Reports on Form 8-K
             The Company filed a Current Report on Form 8-K/A dated February 24,
             1997, reporting the consummation of the acquisition of the business
             of Quality Air Inc. An Amendment No.1 to this Current Report was
             filed with the Securities and Exchange Commission on May 9, 1997.
             It contained a Pro Forma Condensed Consolidated Balance Sheet of
             the Company as of December 31, 1996.


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<PAGE>


                                    SIGNATURE


         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.



                                     RTI  INC.




Date: November 3, 1997            By: /s/ THEO W. MULLER
                                      ---------------------------
                                          Theo W. Muller
                                          Chief Executive Officer



                                  By: /s/ JAMES M. CAYLOR
                                      ----------------------------
                                          James M. Caylor
                                          Controller and Principal
                                          Accounting Officer




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