SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   Form 10-QSB
(Mark One)

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

                    For the Quarter Ended September 30, 1996

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

           For the transition period from ____________ to ____________

                         Commission file number: 0-15224

                       ADVANCE DISPLAY TECHNOLOGIES, INC.
                      --------------------------------------
                     (Exact name of small business issuer as
                            specified in its charter)

                COLORADO                               84-0969445
        ----------------------                    ----------------------
       (State of incorporation)                  (IRS Employer ID number)


                1251 South Huron, Unit C, Denver, Colorado 80223
                ------------------------------------------------
                (Address of principle executive offices) (Zip Code)


                                 (303) 733-5339
                 ----------------------------------------------
                (Issuer's telephone number, including area code)



Check  whether  the issuer  (1) has filed all  reports  required  to be filed by
section 13 or 15(d) of the  Securities  Exchange  Act of 1934 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
                                -----               -----

As of September 30, 1996,  3,834,055  common  shares,  $.001 par value per share
were outstanding.

           Transitional Small Business Disclosure Format (check one):

                            YES                  NO   X
                                 -----              -----


<PAGE>



                       ADVANCE DISPLAY TECHNOLOGIES, INC.


                                      INDEX


                                                                       Page
                                                                       ----

                          PART I. FINANCIAL INFORMATION


Item 1.  Consolidated Balance Sheets -
              September 30, 1996 and June 30,1996..................       3

             Consolidated  Statements of Operations - 
              Three months ended September 30, 1996 and
              September 30, 1995 and for the period from
              October 7, 1983, inception, to September 30, 1996.....      4

             Consolidated Statements of Cash Flows -
              Three months September 30, 1996 and
              September 30, 1995 and for the period from
              October 7, 1983, inception, to September 30, 1996.....    5-6

             Notes to Consolidated Financial Statements.............      7

Item 2.  Managements' Discussion and Analysis of
             Results of Operations and Financial Condition..........   8-10


                           PART II. OTHER INFORMATION

Item 1.  Legal Proceedings..........................................     11

Item 2.  Changes in Securities......................................     11

Item 3.  Defaults on Senior Securities..............................     11

Item 4.  Submission of Matters to a Vote of Security Holders........     11

Item 5.  Other Information..........................................     11

Item 6.  Exhibits and Reports on Form 8-K...........................     11

         Signatures.................................................     12


                                        2

<PAGE>



                       ADVANCE DISPLAY TECHNOLOGIES, INC.
                          (A Development Stage Company)

                           CONSOLIDATED BALANCE SHEETS


                                               September 30,     June 30,
                                                   1996            1996
                                               ------------    -----------
                                     ASSETS


Property, and Equipment                        $    124,203    $    124,203
   Less:  Accumulated depreciation                 (124,203)       (124,203)
                                               ------------    ------------
      Net Property and Equipment                       --              --
                                               ------------    ------------

Investment in DOL                                   389,556         403,619
                                               ------------    ------------

      Total Assets                             $    389,556    $    403,619
                                               ============    ============


                      LIABILITIES AND SHAREHOLDERS' EQUITY

Current Liabilities:
   Accrued expenses                            $     92,748    $     92,748
   Due to affiliated parties                         32,324          32,324
                                               ------------    ------------
      Total Current Liabilities                     125,072         125,072

Research and Development Liability                1,614,330       1,311,914
                                               ------------    ------------
      Total Liabilities                           1,739,402       1,436,986

Shareholders' Equity:
   Preferred stock, $.001 par value                   2,991           2,991
   Common stock, $.001 par value                      3,834           3,834
   Additional paid-in capital                    11,450,062      11,450,062
   Accumulated deficit                          (12,806,733)    (12,490,254)
                                               ------------    ------------
      Total Shareholders' Equity                 (1,349,846)     (1,033,367)
                                               ------------    ------------
      Total Liabilities and
       Shareholders' Equity                    $    389,556    $    403,619
                                               ============    ============


                (See accompanying notes to financial statements)

                                        3

<PAGE>
<TABLE>
<CAPTION>
                                            ADVANCE DISPLAY TECHNOLOGIES, INC.
                                              (A Development Stage Company)

                                          CONSOLIDATED STATEMENTS OF OPERATIONS

                                                                                      
                                                      Three Months Ended                      October 7, 1983
                                                         September 30,                      (Inception) through
                                             -------------------------------------             September 30,
                                                 1996                    1995                       1996
                                             ------------             ------------             ------------
Revenue:
<S>                                          <C>                      <C>                      <C>         
 Licensing and exclusivity fees              $       --               $       --               $  2,500,000
 Royalty fees                                        --                       --                    320,047
 Product and equipment sales                         --                       --                  1,243,935
 Consulting                                          --                       --                     60,000
 Other                                               --                       --                  1,037,971
                                             ------------             ------------             ------------
      Total Revenue                                  --                       --                  5,161,953

Costs and Expenses:
   Cost of Goods Sold                                --                       --                  1,004,614
   Marketing                                         --                       --                    741,463
   Research and development                        62,091                   58,289                3,819,936
   General and administrative                     257,067                  122,990               11,693,246
                                             ------------             ------------             ------------
      Total Expenses                              319,158                  181,279               17,259,259
                                             ------------             ------------             ------------
Operating (Loss)                                 (319,158)                (181,279)             (12,097,306)

Other Income (Expenses):
   Other income                                      --                       --                    696,799
   Interest income                                  2,679                    3,743                  296,146
   Loss on assets disposed                           --                       --                 (1,002,838)
   Interest expense                                  --                       --                   (699,534)
                                             ------------             ------------             ------------
      Total Other Income (Expense)                  2,679                    3,743                 (709,427)
                                             ------------             ------------             ------------

   Net Loss                                  $   (316,479)            $   (177,536)            $(12,806,733)
                                             ============             ============             ============


Net Loss per Common Share                    $      ( .08)            $      ( .05)
                                             ============             ============

Weighted Average Number of Common
   Shares Outstanding                           3,834,055                3,834,055
                                             ============             ============


                          (See accompanying notes to financial statements)

                                                 4
</TABLE>

<PAGE>
<TABLE>
<CAPTION>
                                           ADVANCE DISPLAY TECHNOLOGIES, INC.
                                              (A Development Stage Company)

                                          CONSOLIDATED STATEMENTS OF CASH FLOWS

                                                                                
                                                         Three Months Ended                     October 7, 1983
                                                            September 30                      (Inception) through
                                                 -------------------------------------           September 30,
                                                     1996                    1995                    1996
                                                 ------------             ------------           ------------

Cash Flows from Operating Activities:
<S>                                              <C>                     <C>                     <C>          
   Net loss                                      $   (316,479)           $   (177,536)           $(12,806,733)
   Adjustments to reconcile net loss
    to net cash (used in)
    operating activities:
     Depreciation and amortization                     14,063                  14,063               3,266,217
     Deferred revenue                                    --                      --                  (315,004)
     Stock issued for services                           --                      --                 2,133,727
     Loss on disposal of assets                          --                      --                 1,002,838
     (Increase) decrease in:
       Due from affiliates and other                      836                  18,913                (224,182)
     Increase (decrease) in:
       Accounts payable                                  --                      --                   349,811
       Accrued expenses                                  --                      --                   568,360
       Due to officers, stockholders
        and affiliated parties                           --                      --                    (7,639)
                                                 ------------            ------------            ------------
      Net cash used in
        operating activities                         (301,580)               (144,560)             (6,032,605)
                                                 ------------            ------------            ------------

Cash Flows from Investing Activities:
   Additions to property and equipment                   --                      --                (3,692,226)
   Other assets                                          --                      --                  (677,675)
   Acquisition of subsidiary                             --                      --                   (85,524)
   Cash from disposal of assets                          --                      --                   273,417
                                                 ------------            ------------            ------------
     Net Cash used in
         investing activities                            --                      --                (4,182,008)
                                                 ------------            ------------            ------------

 Cash Flows from Financing Activities:
   Proceeds from affiliates                              --                      --                    39,960
   Issuance of common stock                              --                      --                 6,774,027
   Increase in treasury stock                            --                      --                   (22,280)
   Increase in notes payable                             --                      --                 2,862,760
   Sale leaseback proceeds,
      net of certificate
      of deposit ($550,000),
      loan fees ($30,000)                                --                      --                   180,000
   Payments of principal on
      notes payable and capital
      lease obligations                                  --                      --                (1,882,780)
   Deferred loan costs                                   --                      --                   (55,556)
   Royalty fees received in advance                      --                      --                   315,000
   Settlement of capital lease                           --                      --                  (163,199)
   Issuance of preferred stock                           --                      --                   349,999
   Research and development liability                 301,580                 144,560               1,816,682
                                                 ------------            ------------            ------------
    Net Cash provided by
      financing activities                            301,580                 144,560              10,214,613
                                                 ------------            ------------            ------------


                                     (See accompanying notes to financial statements)
                                                        (Continued)


                                                             5
</TABLE>


<PAGE>
<TABLE>
<CAPTION>
                                          ADVANCE DISPLAY TECHNOLOGIES, INC.
                                            (A Development Stage Company)

                                         CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                     (Continued)
                                                                                       
                                                                   Three Months Ended                 October 7, 1983
                                                                      September 30,                 (Inception) through
                                                            ---------------------------------          September 30,
                                                                1996                 1995                  1996
                                                            ------------          ------------          ----------

<S>                                                         <C>                   <C>                   <C>   
Increase (decrease) in cash                                          --                    --                 --
Cash and cash equivalents
   at beginning of period                                            --                    --                 --
                                                            -------------         -------------         ----------
Cash and cash equivalents at end
   of period                                                $        --           $        --           $     --
                                                            =============         =============         ==========



SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:


Cash paid for:
   Interest                                                 $        --           $        --           $  718,515
                                                            =============         =============         ==========
   Taxes                                                    $        --           $        --           $     --
                                                            =============         =============         ==========
Property and equipment through
   capital leases                                           $        --           $        --           $1,332,376
                                                            =============         =============         ==========

Assets acquired for liabilities assumed in
   purchase of Video View, Inc.                             $        --           $        --           $  297,130
                                                            =============         =============         ==========

Acquisition of certain assets (including
   patents) for common stock and
   assumption of liabilities                                $        --           $        --           $  200,000
                                                            =============         =============         ==========

Settlement of trade payables and accrued
   salaries through issuance of common
   stock                                                    $        --           $        --           $  599,803
                                                            =============         =============         ==========


                                         (See accompanying notes to financial statements)

                                                                 6
</TABLE>

<PAGE>



                       ADVANCE DISPLAY TECHNOLOGIES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1.

     The accompanying  unaudited interim consolidated  financial statements have
been  prepared in  accordance  with the  instructions  to Form 10-QSB and do not
include  all the  information  and  footnotes  required  by  generally  accepted
accounting  principles  for  complete  financial  statements.  In the opinion of
management, all adjustments (consisting of normal recurring accruals) considered
necessary for a fair presentation have been included.  The results of operations
for any interim period are not necessarily  indicative of results for the entire
fiscal year. These  statements  should be read in conjunction with the financial
statements  and related notes included in the Company's Form 10-KSB for the year
ended June 30, 1996, as the notes to these  interim  financial  statements  omit
certain information required for complete financial statements.

Note 2.

     The consolidated  financial  statements include the accounts of Video View,
Inc., a subsidiary which the Company owns 100 percent of the voting stock. Video
View, Inc. has been inactive since 1991.

Note 3.

     In December  1993,  the Company  organized a limited  partnership,  Display
Optics,  Ltd.  (the  "Partnership"  or "DOL"),  to obtain  capital  to  continue
development of the fiber optic video technology and other related display screen
technology. The Company acts as a general partner and the Partnership is managed
by Display Group,  LLC. The Company conducts  substantially  all of its business
through the Partnership. The Company accounts for its relationship with DOL as a
research  and  development  partnership  which  requires  the  Company to record
certain  expenses  incurred by DOL as expenses of the Company and a liability to
the investors.



                                        7

<PAGE>



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

General
-------

     During December 1993, Advance Display Technologies, Inc. ("ADTI") and other
individual investors organized a limited partnership,  Display Optics, Ltd. (the
"Partnership"), to obtain capital and to continue development of the fiber optic
and other  related  video  technology.  ADTI acts as a general  partner  and the
Partnership is managed by Display Group, LLC (the "Managing  General  Partner").
ADTI  conducts  substantially  all  of its  business  through  the  Partnership.
Accordingly,  all references to "the Company" and its operations  since December
1993  in  this  report  refer  to the  Partnership  unless  specifically  stated
otherwise.  

     Following  the  organization  of the  Partnership  the  Company was able to
increase  its  research  and  development  efforts  on the  product  as  well as
administrative activities,  including raising additional capital, developing and
demonstrating  the technology and taking steps necessary to preserve and protect
the technology.  Based on an analysis of the Partnership Agreement and generally
accepted accounting principles,  the transaction is being recorded as a research
and development  arrangement which requires ADTI to record the expenses incurred
by the Partnership as a liability.

Results of Operations
---------------------

     For the fiscal quarter ended  September 30, 1996,  ADTI and the Partnership
reported net loss of ($316,479)  as compared to  ($177,536)  for the same fiscal
period of 1995.  There were no sales of the  Company's  products  during  either
period.  Management believes the lack of sales of products has been attributable
to the inadequacies or cost  inefficiencies of projection  systems. In addition,
the Company's  abilities to adequately  develop and market its products has been
severely  limited  over  the past  several  years  due to the  lack of  adequate
operating  capital.  The Company seeks to raise additional capital for continued
development and marketing of its products.

     During 1996, projection technology took a major leap in terms of brightness
and resolution  capabilities.  At the same time,  prices of projectors have gone
down and  continue  to  decline.  This  enabled  the Company to sell one screen,
subsequent to the end of the fiscal quarter. The Company manufactured the screen
internally and installed the 9' x 12' fiber optic screen at the National Western
Event Center in Denver,  Colorado in January 1997. This installation  represents
the first sale of the Company's product since the late 1980's. The Company plans
to use this installation for continued marketing of its products.

     ADTI reported general and administrative  expenses of $257,067 and $122,990
for the quarters ended September 30, 1996 and 1995,  respectively.  The increase
in 1996 from amounts reported in 1995 was due to several  factors:  1) increased
interest expense on outstanding debt of approximately $18,500, 2) an increase in
salaries and related expenses of approximately  $14,100, 3) an increase in legal
and professional fees of approximately  $89,500 due to administrative  issues of


                                        8

<PAGE>



the Partnership,  ongoing  litigation and auditing fees. ADTI reported  research
and  development  expenses of $62,091 and $58,289 for the fiscal  quarters ended
September 30, 1996 and 1995, respectively.  The Company continued development on
projection technologies during the first quarter of fiscal 1997.


     Interest  income  decreased  from  $3,743  for  the  fiscal  quarter  ended
September  30,  1995 to  $2,679  for the same  fiscal  period of 1996 due to the
reduction of the amount due ADTI from the  Partnership.  Amounts  receivable for
funds  previously  advanced from ADTI to the Partnership are reduced as debts of
ADTI are accrued and ultimately paid by the Partnership.  At September 30, 1996,
the balance due ADTI by the Partnership was  approximately  $202,350,  including
interest.


Liquidity and Capital Resources
-------------------------------

     ADTI has been totally dependent on the ability of the Partnership to obtain
capital to fund  operations for more than three years and expects to continue to
be dependent, in total or in part, for the foreseeable future. During the fiscal
quarter  ended  September  30,  1996,  the  Company  was funded  entirely by the
issuance of convertible  debt.  Borrowings of the Company totaled  $1,670,046 at
March 31, 1997.

     At September 30, 1996,  ADTI reported  negative net worth of $1,349,846 and
negative  working  capital of  $125,072.  The Company  will  require  additional
capital for  administrative  expenses,  continued  development  of the  product,
manufacturing  start up costs and  marketing  the product.  The Company hopes to
obtain additional  funding to support working capital  requirements.  Management
anticipates  continuing to  manufacture  the product for sale,  initially to the
large display screen markets,  in 1997.  Management  believes that the Company's
continued existence is dependent upon its ability to: 1) successfully market the
product;  2) obtain  additional  sources of funding through outside financing or
equity investments; and 3) achieve and maintain profitable operations.  Although
Management believes it will be able to achieve these objectives, there can be no
assurance that the Company will be able to obtain additional capital or sell its
products on terms and conditions satisfactory to the Company.

     Due to significant  costs  associated with development and marketing of the
Company's  technology,  ADTI and the Company have  experienced a continuing need
for  working  capital  since  inception.  This need  became  particularly  acute
beginning  in  1989,   following   protracted   litigation  over  the  Company's
technology.  To alleviate this situation,  ADTI formed the Partnership in fiscal
1994 to obtain capital to continue development of its technology.  (See General,
above)


     ADTI reported a working capital deficit  position at September 30, 1996 and
September  30, 1995.  ADTI's sole asset at September  30, 1996 and September 30,
1995 was its  investment  in the  Partnership.  Therefor,  the  working  capital
deficit  position at September 30, 1996 and September 30, 1995 was the amount of
the current liabilities reported of $125,072 and 124,376, respectively.

                                        9

<PAGE>


     Cash  flows  from  financing  activities  for  the  fiscal  quarters  ended
September 30, 1996 and 1995  consisted  entirely of the increase in the research
and  development  liability of $305,180 and $144,560,  respectively.  Total cash
flows from financing  activities for both 1996 and 1995 were used completely for
operating activities.

     The Company's efforts will continue to be focused on further development of
the projection system and screen, and on raising additional capital through debt
or equity  investments.  There can be no  assurances  that the  Company  will be
successful obtaining additional capital needed to sustain operations.


                                       10

<PAGE>



                           PART II. OTHER INFORMATION


ITEM 1.  LEGAL PROCEEDINGS.
---------------------------

None.

ITEM 2.  CHANGES IN SECURITIES.
-------------------------------

None.

ITEM 3.  DEFAULTS ON SENIOR SECURITIES.
---------------------------------------

None.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
-------------------------------------------------------------

None.

ITEM 5.  OTHER INFORMATION.
---------------------------

None.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K.
------------------------------------------

None.

                                       11

<PAGE>



                                   SIGNATURES


In accordance with the  requirements of the Exchange Act, the registrant  caused
this  report  on Form  10-QSB to be  signed  on its  behalf by the  undersigned,
thereunto duly authorized.


                                              ADVANCE DISPLAY TECHNOLOGIES, INC.
                                                 (Registrant)



Date: May 19, 1997                                           /S/ Darrell D. Avey
      -----------                             ----------------------------------
                                                                 Darrell D. Avey
                                                           Chairman of the Board
                                                             Corporate Secretary
                                                  Acting Chief Financial Officer





                                       12