SECURITIES AND EXCHANGE COMMISSION
                          Washington, DC 20549
                               FORM 10 - QSB/A

                QUARTERLY REPORT UNDER REGULATION SB OF THE
                       SECURITIES EXCHANGE ACT OF 1934

For the Quarter Ended                        Commission File Number:
   June 30, 1998                                    2-96976-D
-----------------------                         ------------------

                      DCI TELECOMMUNICATIONS, INC.
       (Exact Name of Registrant as specified in its charter)

             COLORADO                            84-1155041
          ---------------                  -----------------------
   (State or other jurisdiction          (IRS Employer Identification
  of incorporation or organization)               Number)


           611 Access Road, Stratford, Connecticut  06615
     -------------------------------------------------------------
           (Address and zip code of principal executive offices)

                              (203) 380-0910
                            -----------------
           (Registrant's telephone number, including area code)

Indicate  by check mark whether the Registrant (1) has filed all  reports
required  by Regulation SB 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  the
filing requirements for at least the past 90 days.
                      YES __X__              NO_____

Indicate the number of shares outstanding of each of the issuer/s classes
of common stock, as of the last practicable date:

Number of Shares Outstanding        Class               Date
----------------------------       -------           ----------
       21,277,689              Common Stock,        August 14, 1998
                              $.0001 par value

<PAGE>

                        DCI TELECOMMUNICATIONS, INC.

                                  Index


     PART I  FINANCIAL INFORMATION

       Balance Sheet June 30, 1998                                    3

       Statements of Operations
        Three Months Ended June 30, 1998 and 1997                     4

       Statements of Cash Flow
        Three Months Ended June 30, 1998 and 1997                     5

       Notes to Unaudited Financial Statements
        June 30, 1998                                                 6

       Management's Discussion and Analysis of
        Financial Condition and Results of Operations                 9

PART II
       Other Information                                              15

       Signatures                                                     17






                                  2

<PAGE>

                      DCI Telecommunications, Inc.
                       Consolidated Balance Sheet
                               (unaudited)

                                                          June 30
          ASSETS                                            1998

Current Assets:
    Cash                                                 $3,611,830
    Restricted cash                                          34,475
    Investments                                              45,632
    Accounts receivable                                   4,964,023
    Receivable from SmarTalk                                650,000
    Prepaid expenses                                        128,818
    Inventory                                               462,101
                                                          ---------
Total Current Assets                                      9,896,879

Fixed Assets                                              1,778,640
Less: Accumulated depreciation                             (234,386)
                                                          ---------
Net Fixed Assets                                          1,544,254
                                                          ---------
Accounts receivable                                         682,253
Deferred costs                                              269,876
Deposits                                                    113,188
Other investments                                            63,905
Prepaid deemed dividend                                     250,000
Other Assets
   -    costs in excess of
      net assets acquired:
     CardCall International                              3,818,476
     Muller Media                                        1,266,626
     CyberFax                                            1,033,975
     Edge Communications                                 6,823,586
     Travel Source                                          86,329
                                                         ----------
                                                         13,028,992
Less: Accumulated amortization                              398,308
                                                         ----------
Net other assets                                         12,630,084
                                                         ----------
Total Assets                                            $24,450,439
                                                        ===========

                                    3

<PAGE>

LIABILITIES AND SHAREHOLDERS' EQUITY

Current Liabilities:
    Accounts payable and accrued expenses                $5,200,729
    Preferred stock dividend                                278,642
    Deferred Revenue                                        328,433
    Due to shareholders                                     200,370
    Income Taxes Payable                                    138,400
                                                         ----------
Total Current Liabilities                                 6,146,574

Long Term accounts payable                                  506,000
Long Term Debt                                              135,000
Due to joint venture partner                                660,157
Redeemable, convertible preferred stock $10,000 and
  $1,000 par and redemption value, 2,000,000
  shares authorized, 3,019 shares issued and
  outstanding (3,000 shares at $1,000 par and 19
  shares at $10,000 par)                                  3,197,550
                                                          ---------
Total Liabilities                                        10,645,281
                                                         ----------
Minority interests                                           31,213

Commitments and Contingencies

Shareholders' Equity:
    9.25% cumulative convertible, preferred stock
      $100 par value, 5,000,000 shares authorized,
      3,972 shares issued and outstanding;                  305,000
    Common stock, $.0001 par value,
     500,000,000 shares authorized,
     20,598,678 shares issued and outstanding                 2,060
    Paid in capital                                      16,316,783
    Treasury Stock (1,155,000 shares at cost)            (1,104,379)
    Unrealized capital loss                                  (5,495)
    Currency translation adjustment                         (16,736)
    Retained earnings subsequent to 12/31/95, date of
       quasi-reorganization (total deficit
       eliminated $4,578,587)                              (723,288)
                                                          ---------
Total Shareholders' Equity                               14,773,945
                                                         ----------
Total Liabilities and Shareholders' Equity              $25,450,439
                                                        ===========

         See Accompanying Notes to Consolidated Financial Statements





                                    3(a)
<PAGE>

                     DCI Telecommunications, Inc.
               Consolidated Statements of Operations
                               (unaudited)

                                                  Three Months Ended
                                                        June 30,
                                                    1998         1997
                                                    ----         ----
Sales - travel                                   $  331,062 $  298,413
Sales - products                                  4,601,734    442,197
                                                  --------- ----------
Net Sales                                         4,932,796    740,610

Cost of sales - travel                              284,894    281,033
Cost of sales - products                          4,105,983    374,016
                                                 ---------- ----------
Cost of sales                                     4,390,877    655,049

Gross profit                                        541,919     85,561

Selling, general and administration expenses        433,184    114,379
Salaries and compensation                           512,937     40,255
Professional and consulting fees                    322,609     92,510
Amortization and depreciation                       225,222     17,339
                                                  --------- ----------
                                                  1,493,952    264,483

Loss from operations                               (952,033)  (178,922)

Other income and (expense):
  Investment income                                  18,187         25
  Interest expense                                  (77,860)   (25,582)
                                                  --------- -----------
                                                    (59,673)   (25,557)

Loss from continuing operations before
  minority interest                              (1,011,706)  (204,479)

Minority interest in earnings of subsidiary          (3,213)       --
                                                 ---------- -----------
Loss from continuing operations                  (1,014,919)  (204,479)

Discontinued operations:
  Loss from operations, net of tax:
  Computer board - Alpha division                        --    (49,124)
  Privilege card operations - PEL                        --     16,145
  Prepaid phone card segment - UK                        --     34,510
                                                   --------   --------
Net income (loss) before dividends
  on preferred stock                             (1,014,919)  (202,948)


                                    4

<PAGE>

Dividends on preferred stock                        543,951      9,185

Income (loss) applicable to
  common shareholders                           ($1,558,870) (212,133)
                                                  =========  =========
Basic and diluted income (loss) per common share

Continuing operations                                $(.09)    $(.03)

Discontinued operations:
  Gain from operations                                  --        --

Total                                                $(.09)    $(.03)
                                                  =========  =========

Weighted average common shares outstanding       17,719,279   8,122,567

     See Accompanying Notes to Consolidated Financial Statements
















                                   4(a)

<PAGE>

                       DCI Telecommunications, Inc.
                  Consolidated Statements of Cash Flows
                               (unaudited)

                                               Three Months Ended
                                                    June 30,
                                               1998          1997
Cash flows from (used in) operating activities:
Net loss from continuing operations       ($1,014,919)     ($204,479)
Adjustment to reconcile net loss from
 continuing operations to net cash from
 (used in) operating activities:
        Depreciation and amortization         225,222         17,339
        Stock issued for services                  --            800
        Minority interest                       3,213             --

   Changes in assets and liabilities:
     (Increase) Decrease in:
        Restricted cash                        25,771             --
        Accounts receivable                (1,997,214)      (203,862)
        Inventory                            (259,669)         1,043
        Deposits                              (56,171)       (60,971 )
        Prepaid expenses                      (38,879)            --
        Other assets                           57,885        (39,355)

     Increase (Decrease) in:
        Accounts payable and
          accrued expenses                    565,526        (24,327)
        Deferred revenue                      104,545             --
                                             --------       --------
           Total Adjustments               (1,369,771)      (309,333)
                                             --------       --------
Net cash used in operating activities      (2,384,690)      (513,812)
                                             --------       --------

Cash flows from (used in) investing activities:
        Additions to fixed assets            (265,076)       (19,453)
        Investment in CardCall                     --       (110,000)
        Cash acquired with acquisitions     1,548,947             --
        Investment in Muller Media         (2,000,000)            --
                                             --------       --------
Net cash used in investing activities        (716,129)      (129,453)
                                             --------       --------

Cash flows from (used in) financing activities:
        Proceeds from stock
          options exercised                   248,589         28,702
        Purchase of treasury stock           (355,318)            --
        Due to joint venture                  688,157             --
        Payment of notes payable           (4,938,942)            --



                                    5
<PAGE>

        Proceeds from sale of
          preferred stock                   2,750,000             --
        Common stock dividend                (203,962)            --
        Advances from shareholders           (305,627)       392,299
        Sale of equity securities           8,124,761             --
                                             --------       --------
Net cash from financing activities          6,007,658        421,001
                                             --------       --------

Net cash used in discontinued operations           --        (24,368)

Net increase (decrease) in cash             2,906,839       (246,632)

Cash, beginning of year                       704,991        350,468
                                           ----------      ---------
Cash, end of period                        $3,611,830      $ 103,836


                                              Three Months Ended
                                                    June 30,
                                             1998           1997

Supplemental disclosures of cash flow information:

Cash paid for interest                      $78,000       $  26,000

Non cash investing and financing transactions:
     Acquisitions by stock issuance:
        CardCall International                   --      $6,956,000
        CyberFax                                 --      $1,033,975
        Edge Communications              $6,823,586              --
     Preferred stock dividends             $543,951      $    9,185
     Stock issued for liabilities                --       $  40,000


     See Accompanying Notes to Consolidated Financial Statements

                                  5(a)

<PAGE>

DCI Telecommunications, Inc.
Notes to Unaudited Financial Statements June 30, 1998

   

NOTE 1.
-------

The  accompanying  unaudited financial statements have been  prepared  in
accordance  with  generally accepted accounting  principles  for  interim
financial   information  and  with  the  provisions  of  Regulation   SB.
Accordingly,  they  do not include all of 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 adjustments) considered necessary  for  a
fair  presentation have been included. Certain reclassification of  prior
year   numbers   have  been  made  to  conform  to  the   current   years
presentations, and to account for discontinued operations.

The  previously  issued  financial statements  included  the  results  of
operations  of  CardCall International, Inc., as if the  acquisition  had
been  completed  as  of  April  1, 1997, under  the  purchase  method  of
accounting. The accompanying financial statements include the results  of
operations of CardCall International, Inc. since May 29, 1997  under  the
purchase  method of accounting based upon comments and questions  by  the
Securities  and  Exchange Commission with respect to the  timing  of  the
acquisition of CardCall. In addition, as a result of inquiries  from  the
Securities  and Exchange Commission, this form 10QSB/A has been  restated
to  record the acquisition of Muller Media as of June 9, 1998 instead  of
November  26, 1996, to account for the acquisition of Edge Communications
on April 30, 1998 using the purchase method of accounting rather than the
pooling  of  interest method, to account for Travel Source as a  purchase
instead of a pooling and to adjust the preferred dividend calculation.

                                                       June 30
                                                 1998          1997
                                                 ----          ----
Revenue, as previously reported               $6,305,302   $4,195,785

Adjustments for Edge, Muller Media, Inc.,
Travel Source, Inc. and CardCall              (1,372,506)  (3,455,175)

Restated revenue                              $4,932,796   $  740,610

Net income (loss) as previously reported      $ (849,678)  $  199,076
Net change in income as a result of
 restatement,                                   (709,192)   ( 411,209)

Restated net income (loss)                   $(1,558,870)  $( 212,133)

Earnings (loss) per share
 as previously reported,                      $    (.04)   $      .02

Net change in as a result
 of restatement,                                   (.05)        (.03)

Restated net earnings (loss)                  $    (.09)   $    (.01)
 per shares

The consolidated financial statements include the accounts of the Company
and  its  wholly  and majority owned subsidiaries. Material  intercompany
balances and transactions have been eliminated in consolidation.

The  results  of operations for the periods presented are not necessarily
indicative  of  the  results  to be expected  for  the  full  year.   The
accompanying financial statements should be read in conjunction with  the
Company's form 10-KSB/A filed for the year ended March 31, 1998.

Income (loss) per share was computed using the weighted average number of
common shares outstanding.

    

                                  6

<PAGE>

Note 2.  Acquisitions

CardCall International Holdings, Inc.
-------------------------------------

On  March  31,  1997,  DCI,  entered into  an  agreement  with   CardCall
International  Holdings,  Inc.  (CardCall), a  Delaware  corporation,  to
purchase  all  its  outstanding  common  stock  (8,238,125  shares)   and
warrants.  CardCall's board of directors  had approved the  agreement  on
March 29,1997, subject to shareholder approval.

CardCall  is  the parent company of CardCaller Canada, Inc.,  a  Canadian
corporation, and CardCall (UK) Limited, incorporated under  the  laws  of
the  United Kingdom. CardCall is in the business of designing, developing
and marketing, through distributors, prepaid phone cards that provide the
cardholder  access to long distance service through switching facilities.
DCI had previously invested $1,500,000 in CardCall, for which it received
$1,200,000 in notes payable 120 days from demand. The remaining  $300,000
did  not  have any stipulated repayment terms.  The Company  raised  this
money  through the issuance of DCI convertible preferred stock to certain
shareholders of CardCall.

By   May   29,1997,  the  shareholders  of  CardCall  had  approved   the
transaction. For each 100 shares of common stock of CardCall  held  by  a
shareholder, DCI will issue a warrant to purchase nine shares  of  common
stock  for  $4.00 per share on or before February 28, 2001. In  addition,
each  shareholder of CardCall may acquire 85 shares of DCI  common  stock
under  a subscription agreement, for each 100 shares of CardCall held  by
such  shareholder,  at  a  purchase price of $.20  per  share.  7,002,406
options to purchase DCI stock at $.20 per share were granted as a  result
of this transaction.  As of June 30, 1998, 4,023,685 of these options for
shares of DCI stock had been exercised.

   

Such  options expire on April 30, 2002. In accordance with the agreement,
shares  of  DCI  stock  received  from  the  exercise  of  options   have
restrictions as to when they can be sold ranging from September  1,  1997
to December 1, 1998.

The   transaction  has  been  recorded  under  the  purchase  method   of
accounting, effective May 29, 1997. The total purchase price includes the
$1,610,000  in  cash, $2,545,000 assigned value for the stock  and  stock
options,  and  assumption of net liabilities of $2,801,000. Goodwill  was
recorded  at $6,956,000. The financial statements include the results  of
operations  of  CardCall  since  May 29,  1997,  the  effective  date  of
acquisition. The goodwill is being amortized over 20 years.

                                  7
<PAGE>

Edge Communications, Inc.
-------------------------

On  April 30,1998 the Company issued 4,385,715 shares of common stock for
all   of  the  outstanding  shares  of  Edge  Communications,  Inc.   The
acquisition  has  been  accounted  for  under  the  purchase  method   of
accounting,  effective April 30, 1998. The total purchase price  consists
of  4,385,715  shares  of  common stock  valued  at  $6,644,000  and  the
assumption   of  net  liabilities  of  $179,000.  Edge  is   located   in
Gaithersburg, Maryland and is in the prepaid phone card business. For the
twelve months ended March 31, 1998, Edge had net sales of $8,780,000  and
had  a loss of $271,000. Goodwill of $6,823,586 has been recorded on  the
transaction  and  is  being  amortized  over  20  years.  The   financial
statements  include the results of operations since April 30, 1998,  date
of acquisition.

Muller Media, Inc.
------------------

On  November  26, 1996, DCI entered into a stock purchase agreement  with
Muller  Media, Inc. (Muller), a New York corporation, to acquire 100%  of
the  outstanding  common  stock of Muller in a stock-for-stock  purchase,
with  DCI  exchanging 1,200,000 shares of common stock  for  all  of  the
shares  of  Muller capital stock. The DCI stock was valued at  $2.50  per
share  ($3 million in total) and is included in outstanding common  stock
for the years ending March 31, 1998 and 1997.

At  the  closing, the shares of Muller were transferred to DCI,  and  DCI
shares  were  issued to Muller shareholders and then placed  with  escrow
agents.   This was done to facilitate a "put" option which could only  be
exercised by Muller subsequent to the closing under the put option.   DCI
must  repurchase the shares for $3,000,000 if Muller exercised the  "put"
option,  which  commenced on the earlier of 120 days  from  December  27,
1996,  unless an extension was requested by DCI, which Muller  could  not
unreasonably withhold, or 14 days after DCI had received an aggregate  of
$3,000,000 in net proceeds from the sale of its capital stock. Extensions
were  granted  by Muller through June 3, 1998.  The selling  stockholders
had  an option to keep DCI stock or accept up to $3,000,000 in cash  from
DCI.

DCI  repurchased 400,000 shares of such common stock in March,  1998  for
$1,000,000  and completed the repurchase from the exercising  parties  on
June  9,  1998  upon payment of an additional $2,000,000.  The  financial
statements include the results of operations since June 9, 1998.
                                    
The transaction was recorded under the purchase method of accounting. The
total  purchase price includes $3,000,000 in cash. Goodwill was  recorded
at $1,266,626. The financial statements include the results of operations
of  Muller  since June 9, 1998, the date of acquisition. The goodwill  is
being amortized over 20 years.

    

NOTE 3.  Common and Preferred Stock
-----------------------------------

In  April, 1998 the Company issued $3,000,000 of Series F 8% non  -voting
convertible preferred shares. The shares are convertible to common  stock
90  days  from the issue date at the lesser of 75% of the average closing
bid price of the common stock for the ten days prior to conversion or $4.
The  securities must be converted into common shares within two years  of
the  issue  date.  In  connection  with  this  offering  50,000  warrants
exercisable at  $1.56 for a period of five years from the issue date were
granted to these preferred shareholders and 50,000 warrants, at the  same
terms,  were  granted  to  certain individuals as  finder  fees  for  the
placement of the preferred shares with investors.

During  the three months ended June 30, 1998, the holders of $412,500  of
preferred  shares  of  Series E Convertible Preferred  Stock  and  deemed
dividends  of  $98,959  were  converted  to  368,304  common  shares.  In
addition, options to purchase 1,691,122 common shares were exercised from
which the Company received $248,589.


NOTE 4.  PhoneLine CardCall International
-----------------------------------------

On March 31, 1998 the Company and DataWave Systems Inc. (DataWave) formed
a  Canadian  company, PhoneLine CardCall International ("PhoneLine")  for
the  marketing,  sale  and  service of prepaid  long  distance  telephone
calling cards in Canada. DataWave and CardCaller Canada, Inc. contributed
fixed  assets,  Canadian business, and certain liabilities to  PhoneLine.
DCI owns 60% and DataWave 40% of the company.

The  Company's  consolidated financial statements  include  100%  of  the
assets,  liabilities and operations of PhoneLine. The ownership  interest
of  DataWave  is  recorded  as a minority interest  in  the  accompanying
financial statements.

NOTE 5. Pro Forma Financial Information
---------------------------------------------------

The  following  table  summarizes  the unaudited  pro  forma  results  of
operations  of the Company for the three months ended June 30,  1998  and
1997,  assuming  the  acquisitions of CardCall,  CyberFax,  Muller,  PEL,
Travel Source, Edge Communications, and the joint venture had occurred on
April  1,  1997.  The pro forma financial information  presented  is  not
necessarily  indicative  of  the results of operations  that  would  have
occurred  had the acquisitions taken place on April 1, 1997 or of  future
results of operations.

                              Three Months Ending
                                   June 30,
                             1998          1997
                             ----          ----

Net sales              $ 6,305,302    $ 4,195,785
                       -----------     ----------
Income (loss):
 Continuing operations $(  890,973)  $ (  118,444)
 Discontinued operations        --     (    1,531)
                      ------------   ------------
Net income (loss) before
 preferred dividends   $(  890,973)   $(  119,975)
                          ========       ========
Net income (loss) per share:
  Continuing operations  $   (.07)     $     (.02)
  Discontinued operations      --              --
                         --------     -----------
     Net income (loss)    $  (.07)      $    (.02)
                         ========       =========
Weighted average shares
  outstanding          19,181,184      12,508,282
                         ========        ========
                                    


                                    8

<PAGE>

               Management's Discussion and Analysis of
              Financial Condition and Results of Operations

Overview
--------

The   following   discussion  and  analysis  provides  information   that
management believes is relevant to an assessment and understanding of DCI
Telecommunications,   Inc.  and  its  subsidiaries   (collectively,   the
Company), consolidated results of operations and financial condition  for
the  three months ended June 30, 1998. The discussion should be  read  in
conjunction  with  the  Company's consolidated financial  statements  and
accompanying notes.

The Company, since its recent acquisitions, operates predominantly in the
telecommunications  industry  providing a broad  range  of  communication
service.  The  Company's  services include long distance,  prepaid  phone
cards, motion picture distribution, a travel agency, as well as real-time
fax  over  the  Internet. Through continued investments and  fiscal  1998
business acquisitions, the Company has expanded its business into rapidly
developing markets.

Recent Acquisitions and Dispositions
------------------------------------

In  the  quarter  ended  June  30, 1997, the  Company  acquired  CardCall
International   and   CyberFax.  CardCall  International,   through   its
subsidiaries CardCall UK and CardCaller Canada, sold prepaid phone cards.
In  the  third  quarter of fiscal 1998, the Company sold its  phone  card
distribution  contract in the U.K. for $9,000,000. Due to  a  non-compete
clause  in  the  sale agreement, CardCall UK discontinued its  operations
after  the  sale.  During  fiscal  1998  the  Company  also  discontinued
operations  of  Privilege  Enterprises Limited  and  its  Alpha  Products
division due to a lack of profitability.

On  March  31, 1998 the Company and DataWave Systems, Inc. formed  a  new
company,   PhoneLine   CardCall  International  ("PhoneLine")   for   the
marketing,  sale  and  service of prepaid long distance  phone  cards  in
Canada.  The  accompanying financial statements include  the  results  of
PhoneLine  for  the quarter ending June 30, 1998. This new company  joins
together two of the larger prepaid phone card distributors in Canada, and
the  Company  is  expecting  economies of scale  by  facility  and  staff
reductions, as well as better long distance rates with carriers. DCI owns
60% and DataWave 40% of PhoneLine.

   

During  the  quarter  ended  June  30, 1998  the  Company  acquired  Edge
Communications,  Inc.  This acquisition gave  the  Company  a  meaningful
entrance  into  the  U.S. prepaid phone card market. Edge  had  sales  of
$8,780,000  for  the  twelve months ended March 31,  1998  and  has  been
sustaining  rapid growth in the last several months. Edge  was  accounted
for as a purchase

                                 9

<PAGE>

Also  during the quarter ended June 30, 1998, the former shareholders  of
Muller  Media exercised their put options to receive $2,000,000 in  cash,
and  the  Company  received  back  800,000  shares  of  its  stock,  thus
completing  the  acquisition  of  Muller  Media  on  June  9,  1998.  The
acquisition is accounted for as a purchase.

    

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

At  March  31,  1998 the Company had unrestricted cash  of  $705,000  and
$8,125,000  of  stock of SmarTalk Teleservices, Inc. During  the  quarter
ended  June  30, 1998, the Company sold the SmarTalk stock realizing  net
proceeds of $8,125,000. The Company repaid its loans of $4,939,000  which
it had borrowed against its position in SmarTalk stock.

   

Also during the quarter ending June 30, 1998, the former shareholders  of
Muller  Media exercised their put options to receive $2,000,000 in  cash,
and the Company received back 800,000 shares of its common stock.

Other  sources  of cash during the quarter included $2,750,000  from  the
sale of preferred stock, and $249,000 from the exercise of stock options.

At  June  30, 1998 the Company has a current ratio of 1.6 to 1,  and  has
unrestricted cash of $3,612,000.

The  Company has an agreement to acquire Locus Corporation, a  facilities
based  carrier  located in Fort Lee, New Jersey.  The  Company  has  also
entered  into  a Letter of Intent to enter a European joint venture  with
TIMEWorldCom,  an  international  provider  of  long  distance  services,
located  in  Gaithersburg, Maryland. Management  believes  it  will  need
additional   resources   to   complete  the  acquisitions,   specifically
$10,000,000  for  the Locus acquisition, and to fund the  future  capital
needs  of  these companies and its existing subsidiaries. The ability  of
the  Company to finance all new and existing operations will  be  heavily
dependent  on external sources. No assurance can be given that additional
financing  will  be  available,  or if available,  that  it  will  be  on
acceptable terms.

Year 2000 Issues
----------------

The  Year  2000  issue is the result of computer programs  being  written
using two digits rather than four to define the applicable year. In other
words,  date-sensitive software may recognize a date using  "00"  as  the
year 1900 rather than the Year 2000. This could result in system failures
or  miscalculations causing disruptions of operations,  including,  among
others,  a temporary inability to process transactions, send invoices  or
engage in similar normal business activities.

                                 10
<PAGE>

Company's State of Readiness

One   of  the  Company's  critical  internal  areas  is  its  information
technology   systems,  including  general  ledger,  accounts  receivable,
payable,  inventory  and  related  packages  for  DCI  and  each  of  its
subsidiaries.  In  this  regard, the parent  company  has  installed  new
software  that  is  Year 2000 compliant and plans  to  install  the  same
systems in each of its subsidiaries prior to September 30, 1999.

All  of  the  Company  owned switches, used to direct  and  monitor  long
distance  telephone traffic, are currently Year 2000 compliant  according
to  the  manufacturer.  Other  less critical  internal  systems  such  as
telephone and voice mail systems are in the process of being evaluated.

The  Company also has relationships with outside third parties that could
impact its business. The most important are the carriers that process and
monitor the Company's long distance and prepaid card phone calls. All the
carriers  expect to be Year 2000 compliant and are in various  stages  of
readiness.  The  Company's travel business is partially dependent  on  an
outside  reservation  system  representing  many  airlines.  This  system
expects  to  be  compliant by the end of 1998, and  accepting  year  2000
bookings by January 4, 1999.

Costs

The  Company  is addressing Year 2000 issues in house and at the  present
time  the  only  other costs involve the purchase of  financial  software
packages. Total costs are estimated at $110,000. Costs incurred  to  date
are approximately $23,000.

Risks

The Company believes that its most reasonable likely worst case Year 2000
scenario  would  be  if  any of its third party long  distance  telephone
carriers  were  unable to properly monitor or admit  authorized  personal
identification  numbered prepaid phone card calls through their  systems.
The  time frame for the carrier to fix the problem, or the ability of the
Company to recall prepaid phone cards and switch to another carrier  with
competitive rates, could cause a material business interruption.

The  risks  associated  with  the  failure  of  the  Company's  financial
software,  or third party payroll preparation and stock transfer  system,
are  considered  less  severe in that the Company believes  switching  to
other vendors or using other methods would be relatively easy.

The risk of failure of the third party airline reservation system is that
the  Company would have to secure its travel arrangements by methods that
would  be  more cumbersome and time consuming than the current  automated
system.

                                 11
<PAGE>

Contingency Plan

The  Company  is still evaluating whether it will develop  a  contingency
plan for any of the risks noted above. A decision is expected by June 30,
1999.

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

Changes  reflected in the following analysis that refer to PhoneLine  are
gross  changes.  It  should be noted that the Company  owns  60%  of  the
PhoneLine.

                                            Three Months Ended
                                                June 30,
                                            1998         1997
                                            ----         ----
Net Sales                                $4,932,796   $  740,610
---------

Net  sales  in the quarter ended June 30, 1998 increased $4,192,186  over
the 1997 first quarter. Phone card sales by Edge Communications since its
April 30 acquisition date account for approximately $3,339,000. Sales  of
newly formed PhoneLine were $505,000 more than CardCaller Canada sales in
1997, primarily due to CardCaller only included for one month in the 1997
quarter. Muller sales since its acquisition on June 9, 1998 accounted for
$242,000  of  the  increase. Travel Source and Spain also  had  increased
sales.
     
                                           1998        1997
                                           ----        ----
Cost of Sales                           $4,390,877   $  655,049
-------------

Cost  of  sales increased $3,735,828 in the 1998 first quarter.  Cost  of
sales  for newly acquired Edge amounted to $3,164,346. PhoneLine cost  of
sales in 1998 exceeded CardCaller 1997 costs by $457,439 due to the  fact
that  CardCaller  was only included for one month of  the  1997  quarter.
Costs associated with newly acquired Muller also contributed to the first
quarter 1998 increase.

                                               1998        1997
                                             --------    --------
Selling, General & Administration Expense    $433,184    $114,379
-----------------------------------------

Selling, general and administrative expenses increased $318,805 in  1998.
Expenses  of  newly  acquired Edge totaled  $82,080  in  the  1998  first
quarter. PhoneLine expenses in 1998 exceeded CardCaller 1997 expenses  by
$85,568  since  CardCaller was included for only one month  in  the  1997
quarter.  Expansion  of European operations increased  1998  expenses  by
$54,253, and newly acquired Muller incurred $12,865. Administrative

                                12

<PAGE>

expenses at the parent level primarily accounted for the balance  of  the
increase  as  the  Company has grown and became  more  globally  diverse.
Travel  costs ($30,000) and establishing a west coast presence  ($26,000)
are the largest increases.

                                          1998       1997
                                          ----       ----
Salaries and Compensation                $512,937   $ 40,255
-------------------------

Salaries were $473,000 higher in the 1998 first quarter. Of the increase,
$156,000  was  associated  with the European operations  which  were  not
operational  in  1997 and $133,000 was due to corporate staff  increases.
Newly   acquired  Edge  and  Muller  account  for  $67,000  and   $30,000
respectively.  Increases are also associated with CyberFax and  PhoneLine
(2 companies) versus CardCaller Canada alone in 1997.

                                         1998        1997
                                         ----        ----
Professional and Consulting Fees      $322,609     $ 92,510
--------------------------------

Professional  and consulting fees increased approximately  $230,000  over
1997 levels. Acquisitions, dispositions and general corporate growth  all
contributed  to an increase of $180,000. Newly acquired Edge  and  Muller
account  for  $25,000. PhoneLine 1998 costs exceed CardCaller  (1  month)
1997 costs by $15,000.

                                          1998       1997
                                          ----       ----
Amortization and Depreciation          $225,222     $17,339
-----------------------------

Amortization  and  depreciation rose approximately  208,000  in  1998  as
compared  to  the  1997 first quarter. Amortization in 1998  of  goodwill
associated  with  CyberFax of $12,500, Muller of $24,000,  CardCaller  of
$50,000, Travel Source $1250, and Edge of $56,858 account for most of the
increase.  The  balance  is  due  to  depreciation  expense  on  the  new
companies.

                                13

<PAGE>

                                        1998        1997
                                         ----       ----
Interest Income                       $ 18,187     $    25
Interest Expense                      ($77,860)   ($25,582)
---------------

The  $18,000 increase in investment income is a result of $13,000  earned
by  DCI  on  short-term  investments plus  $5,000  earnings  from  Muller
Investments.

Interest  expense increased $52,000 in 1998. Interest expense  on  short-
term  debt  borrowed  by DCI against the SmarTalk  stock  resulted  in  a
$72,000  increase.  This  was  partially offset  by  lower  interest  for
CardCaller  Canada  which had paid off debt it  had  in  the  1997  first
quarter.

                                           1998       1997
                                           ----       ----
Discontinued operations - Alpha              --    ($49,124)
                        - Privilege Card     --     $16,145
                        - CardCall U.K.      --    $ 34,510

These  balances  in  1997 represent the net operating gains  (losses)  of
operations that were discontinued in 1998.

    
                                    14
<PAGE>

                           PART II
                      OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS.
          Not applicable.

ITEM 2.  CHANGES IN SECURITIES.
          Not applicable.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES.
          Not applicable.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
          Not applicable.

ITEM 5.  OTHER INFORMATION.
          Not applicable.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K.
          Page 16








                                    15
<PAGE>

ITEM 6 - Exhibits and Reports on Form 8K

On  May  14,  1998  the  Company  filed a Form  8K  which  described  the
acquisition of Edge Communications, Inc.

On  May  19,  1998  the  Company  filed a Form  8K  which  described  the
termination  of  acquisition  discussions with  WorldPass  Communications
Corporation, the declaring of a $.01 per common share cash dividend,  and
the signing of a Letter of Intent with Locus Corporation.

On  June  16,  1998  the  Company filed a Form  8K  which  described  the
exercising  of put options under the stock purchase agreement  among  the
Company, Muller Media, Inc., and Robert Muller and Daniel Mulholland.

On  July 7, 1998 the Company filed a Form 8K which included a copy of the
Escrow Agreement among the selling shareholders of Muller Media, Inc. and
the Company.

On  July 27, 1998 the Company filed a Form 8K which described the signing
of  a  definitive agreement to acquire privately owned Locus Corporation.
Also described was the activity of stock options issued through July  22,
1998.

On August 17, 1998 the Company filed a Form 8K which included the audited
financial statements for Edge Communications, Inc.






                                   16
<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.

                                      DCI TELECOMMUNICATIONS, INC.
                                              (Registrant)


Dated: May 10, 1999                By:  Joseph J. Murphy
                                        ----------------
                                        Joseph J. Murphy
                                        President

                                    By: Russell B. Hintz
                                        ----------------
                                        Russell B. Hintz
                                        Chief Financial Officer



                                   17