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 March 31, 1997

   [   ]    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 March 31, 1997,  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 - (Unaudited)
           March 31, 1997  and June 30,1996.........................        3

           Consolidated  Statements of  Operations - (Unaudited)
            Three months and nine  months  ended  March 31, 1997 and
            March 31, 1996 and for the period from October 7, 1983,
            inception, to March 31, 1997............................        4 

           Consolidated  Statements of Cash Flows - (Unaudited)
            Three months and nine months ended March 31, 1997
            and March 31, 1996 and for the period from
             October 7, 1983, inception, to March 31, 1997..........      5-6

           Notes to Consolidated Financial Statements...............      7-8

Item 2.  Managements' Discussion and Analysis of
           Results of Operations and Financial Condition............     9-12


                           PART II. OTHER INFORMATION

Item 1.  Legal Proceedings..........................................    13-14

Item 2.  Changes in Securities......................................       14

Item 3.  Defaults on Senior Securities..............................       14

Item 4.  Submission of Matters to a Vote of Security Holders........       14

Item 5.  Other Information..........................................       14

Item 6.  Exhibits and Reports on Form 8-K...........................       14

         Signatures.................................................       15


                                        2

<PAGE>

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

                           CONSOLIDATED BALANCE SHEETS
                                   (Unaudited)

                                                     March 31,        June 30,
                                                       1997             1996
                                                     ---------        ---------
                                     ASSETS


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

Investment in DOL                                      361,430          403,619
                                                     ---------        ---------

      Total Assets                                   $ 361,430        $ 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                  2,244,606         1,311,914

      Total Liabilities                             2,369,678         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                            (13,465,135)      (12,490,254)
                                                 ------------      ------------
      Total Shareholders' Equity                   (2,008,248)       (1,033,367)

      Total Liabilities and
       Shareholders' Equity                      $    361,430      $    403,619
                                                 ============      ============


                (See accompanying notes to financial statements)

                                        3

<PAGE>
<TABLE>
<CAPTION>

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

                                          CONSOLIDATED STATEMENTS OF OPERATIONS
                                                        (Unaudited)
                                                                                                October 7, 1983
                                     Three Months Ended               Nine Months Ended       Inception through
                                          March 31,                        March 31,                March 31,
                                     1997           1996            1997            1996            1997
                                ------------    ------------    ------------    ------------    -------------
Revenue:
<S>                             <C>             <C>             <C>             <C>             <C>          
 Licensing and exclusivity fees $        ---    $        ---    $        ---    $        ---    $   2,500,000
 Royalty fees                            ---             ---             ---             ---          320,047
 Product and equipment sales         110,000             ---         110,000             ---        1,353,935
 Consulting                              ---             ---             ---             ---           60,000
 Other                                   ---             ---             ---             ---        1,037,971
                                ------------    ------------    ------------    ------------    -------------
      Total Revenue                  110,000             ---         110,000             ---        5,271,953

Expenses:
   Cost of Goods                     199,306             ---         244,740             ---        1,249,354
   Marketing                             ---             ---             ---             ---          741,463
   Research and development           28,638         125,800         105,214         273,409        3,863,059
   General and administrative        289,219         148,143         742,463         409,038       12,178,642
                                ------------    ------------    ------------    ------------    -------------
        Total Expenses               517,163         273,943       1,092,417         682,447       18,032,518
                                ------------    ------------    ------------    ------------    -------------
Operating (Loss)                    (407,163)       (273,943)       (982,417)       (682,447)     (12,760,565)

Other Income (Expenses):
   Other income                          ---             ---             ---             ---          696,799
   Interest income                     2,304           2,919           7,536          10,077          301,003
   Loss on assets disposed               ---             ---             ---             ---       (1,002,838)
   Interest expense                      ---             ---             ---             ---         (699,534)
                                ------------    ------------    ------------    ------------    -------------
  Total Other Income (Expense)         2,304           2,919           7,536          10,077         (704,570)
                                ------------    ------------    ------------    ------------    -------------

   Net Loss                     $   (404,859)   $   (271,024)   $   (974,881)   $   (672,370)   $ (13,465,135)
                                ============    ============    ============    ============    =============


Net Loss per Common Share            $ ( .11)        $ ( .07)        $  (.25)        $ ( .18)
                                     =======         =======         =======         =======

Weighted Average Number of Common
   Shares Outstanding              3,834,055       3,834,055       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
                                                              (Unaudited)
                                                                                                 October 7, 1983
                                         Three Months Ended             Nine Months Ended         Inception through
                                               March 31,                      March 31,                March 31,
                                         1997           1996            1997           1996             1997
                                     ------------   ------------    ------------   ------------    ---------------

Cash Flows from Operating Activities:
<S>                                  <C>            <C>             <C>            <C>             <C>            
   Net loss                          $  (404,859)   $  (271,024)    $   (974,881)  $   (672,370)   $  (13,465,135)
   Adjustments to reconcile net loss
    to net cash (used in)
    operating activities:
     Depreciation and amortization        14,063         14,063           42,190         42,190         3,294,344
     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      29,745         17,323           39,737         56,495          (185,281)
     Increase (decrease) in:
       Accounts payable                      ---            ---              ---            ---           349,811
       Accrued expenses                      ---           (126)             ---           (126)          568,360
       Due to officers, stockholders
        and affiliated parties               ---            821              ---            821            (7,639)
                                     -----------    -----------     ------------   ------------     -------------
      Net cash used in
        operating activities            (361,051)      (238,943)        (892,954)      (572,990)       (6,623,979)
                                     -----------    -----------     ------------   ------------     -------------

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    361,051        238,943          892,954        572,990         2,408,056
                                     -----------    -----------     ------------   ------------     -------------
    Net Cash provided by
      financing activities               361,051        238,943          892,954        572,990        10,805,987
                                     -----------    -----------     ------------   ------------     -------------


                                            (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
                                                               (Unaudited)
                                                               (Continued)
                                                                                                      October 7, 1983
                                          Three Months Ended               Nine Months Ended        Inception through
                                               March 31,                       March 31,                March 31,
                                         1997            1996            1997            1996             1997
                                     ------------    ------------    ------------    ------------    --------------

<S>                                   <C>            <C>             <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)

</TABLE>
                                                                    6

<PAGE>



                       ADVANCE DISPLAY TECHNOLOGIES, INC.
              NOTES TO UNAUDITED 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 audited
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.  During the reporting period, the Company acted as a general partner
and the  Partnership  was managed by Display Group,  LLC. The Company  conducted
substantially all of its business through the Partnership. The Company accounted
for its relationship  with DOL as a research and development  partnership  which
required the Company to record certain  expenses  incurred by DOL as expenses of
the Company and a liability to the investors.  In May 1997, the Company acquired
all of the equity interests of the Partnership. (See Note 4.)

Note 4.

     Subsequent to the end of the fiscal  quarter,  ADTI, the  Partnership,  the
Managing  General Partner of the  Partnership  and other investors  completed an
Exchange  Agreement  in an effort to simplify  administration  of the  Company's
affairs  including  public  reporting  required by the  Securities  and Exchange
Commission.

     Pursuant to the terms of the Exchange  Agreement,  the Company acquired all
of the assets of the  Partnership,  together with those of the Managing  General
Partner in exchange for the issuance of a  combination  of Common and  Preferred
Stock. Assets of the Partnership on the date of the exchange include patents and
other intangible  rights in technology  underlying a fiber optic display screen.
Simultaneously, Partnership debt outstanding prior to the exchange was converted
into equity of ADTI.  ADTI issued an  aggregate of  17,508,868  shares of Common
Stock and  1,843,900  shares of newly  created  Series C Preferred  Stock to the
former  investors of the  Partnership  and the  Managing  General  Partner.  The


                                        7

<PAGE>



Preferred Stock carries dividend and liquidation  rights designed to provide the
investors  economic  benefits  substantially  equivalent  to those  they held as
investors in the Partnership and the Managing General Partner.




                                        8

<PAGE>



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

General
-------

     During December 1993,  Advance Display  Technologies,  Inc. ("ADTI" or "the
Company")  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  and to
manufacture and market the display screen products  world-wide.  ADTI acted as a
general  partner  and the  Partnership  was managed by Display  Group,  LLC (the
"Managing General Partner"). The Company formerly conducted substantially all of
its business through the Partnership.

     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 was being recorded as a research
and development  arrangement which required ADTI to record the expenses incurred
by the  Partnership  as a liability to the  investors.  At March 31,  1997,  the
research  and  development  liability  was  $2,244,605,  net of advances due the
Company  from the  Partnership.  The  investors  were  entitled to  preferential
payment from  available cash flows from the  Partnership  which would reduce the
research and  development  liability of the  Company,  subject to the  following
events.

     Subsequent to the end of the fiscal  quarter,  ADTI, the  Partnership,  the
Managing  General Partner of the  Partnership  and other investors  completed an
Exchange  Agreement  in an effort to simplify  administration  of the  Company's
affairs  including  public  reporting  required by the  Securities  and Exchange
Commission.

     Pursuant to the terms of the Exchange  Agreement,  the Company acquired all
of the assets of the  Partnership,  together with those of the Managing  General
Partner in exchange for the issuance of a  combination  of Common and  Preferred
Stock. Assets of the Partnership on the date of the exchange include patents and
other intangible  rights in technology  underlying a fiber optic display screen.
Simultaneously, Partnership debt outstanding prior to the exchange was converted
into equity of ADTI.  ADTI issued an  aggregate of  17,508,868  shares of Common
Stock and  1,843,900  shares of newly  created  Series C Preferred  Stock to the
former  investors of the  Partnership  and the  Managing  General  Partner.  The
Preferred Stock carries dividend and liquidation  rights designed to provide the
investors  economic  benefits  substantially  equivalent  to those  they held as
investors in the Partnership and the Managing General Parter.

     The Company  intends to continue  the  business  formerly  conducted by the
Partnership,  including development, marketing and sale of its large fiber optic
display screen and other related display technologies.


                                        9

<PAGE>

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

     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,  in
January 1997. The Company  manufactured the screen internally,  primarily during
November and December, 1996 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.

     Due to the  promotional  nature of this  installation,  the Company  deeply
discounted the sale price of the 9' x 12' screen  discussed  above. In addition,
the Company incurred excess costs in meeting a tight  installation  deadline due
to scheduled events at the center.  As a result,  the Company reported a loss on
the sale of $134,740.  The Company did not report any sales or cost of sales for
the same fiscal periods of the prior year.

     For the quarter and nine months ended March 31, 1997, the Company  reported
total net loss of $404,859 and $974,881,  respectively, as compared to total net
loss of $271,024  and  $672,370,  respectively,  for the same fiscal  periods of
1996.  The  increase in net loss for the quarter and nine months ended March 31,
1997 from the same periods of the prior fiscal year is primarily  due to: 1) the
excess costs of  producing  the screen for sale as  described  above,  partially
offset by a decrease in research and development expenses, and 2) an increase in
general and administrative expenses.

     General and administrative  expenses for the quarter and nine month periods
increased by $141,076 and  $333,425,  respectively,  relating  primarily  to: 1)
increased  interest  expense on outstanding  debt of  approximately  $23,400 and
$67,000,  respectively,  2) increased  salaries and employee related expenses of
approximately  $37,100 and $85,000,  respectively,  and 3)  increased  legal and
professional  fees of  approximately  $96,200 and  $200,000,  respectively,  for
administrative issues of the Partnership,  ongoing litigation and auditing fees.
Research  and  development  expenses  for the  quarter  and nine  month  periods
decreased by $76,576 and $147,609, respectively, from 1996 to 1997. The decrease
in  expense is  primarily  due to the  Company's  decision  to  suspend  further
development  of the LED  projection  system and focus  efforts on marketing  and
manufacturing the fiber optic screen to be used in conjunction with commercially
available  projectors,  including the screen  installation  described above. The
Company continued other  development and refinement of its technologies  through
the Partnership during fiscal 1997, spending approximately $28,638 and $105,214,
respectively on development activities during the quarter and nine months ended.

     Interest income  decreased from $10,077 for the nine months ended March 31,
1996 to $7,536 for the nine months ended March 31, 1997 due to the  reduction of
the  amount  due  ADTI  from  the  Partnership.  Amounts  receivable  for  funds
previously  advanced from ADTI to the Partnership  were reduced as debts of ADTI
were accrued by the Partnership.  At March 31, 1997, the balance due ADTI by the
Partnership was approximately $163,449, including interest.


                                       10

<PAGE>

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

     The Company  was totally  dependent  on the ability of the  Partnership  to
obtain capital to fund  operations for more than three years.  During the fiscal
quarter and nine months ended March 31, 1997, exclusive of the revenues received
for the sale of the 9' x 12'  screen,  the  Company  was funded  entirely by the
issuance of convertible debt to Partnership investors. Borrowings of the Company
totaled $1,670,046 at March 31, 1997.

     Subsequent to completion of the Exchange Agreement, the Company completed a
private  placement  of  its  Common  Stock  in a  transaction  exempt  from  the
registration  requirements  of the 1933 Act.  The Company  sold 10%  Convertible
Promissory  Notes in the  aggregate  principal  amount of  $500,000  to a single
accredited  investor pursuant to the provisions of Regulation D, Rule 506 of the
1933 Act. The  Promissory  Notes are  convertible  into shares of the  Company's
Common  Stock at the rate of $.1315  per share  until the  earliest  to occur of
completion of a subsequent  private placement or December 31, 1997.  Proceeds of
the private  placement  will be utilized by the Company for  repayment  of debt,
marketing of the display screens, development of related technologies,  accounts
payable and working capital.

     At March 31,  1997,  ADTI  reported  negative net worth of  $2,008,247  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  through debt
or equity  financing.  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.

     The Company  reported a working capital deficit  position at March 31, 1997
and March 31,  1996.  The  Company's  sole asset at March 31, 1997 and March 31,
1996 was its  investment  in the  Partnership.  Therefor,  the  working  capital
deficit  position  at March 31,  1997 and March 31,  1996 was the  amount of the
current liabilities reported of $125,072 for both periods.

     Cash flows from  financing  activities  for the nine months ended March 31,
1997 and 1996 consisted entirely of the increase in the research and development
liability  of  $892,954  and  $572,990,  respectively.  Total  cash  flows  from
financing  activities for both 1997 and 1996 were used  completely for operating
activities.


                                       11

<PAGE>



     The Company's  efforts will continue to be focused on marketing,  sales and
further  development of its products,  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.



                                       12

<PAGE>

                           PART II. OTHER INFORMATION


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

     ADVANCE DISPLAY TECHNOLOGIES, INC., et al. vs. VISUAL OPTICS, INC., et al.
     --------------------------------------------------------------------------

     As reported in the Company's Form 10-KSB for the fiscal year ended June 30,
1996, the Company was a plaintiff in a civil action pending in the United States
District  Court  for  the  District  of  Colorado,   captioned  Advance  Display
Technologies,  Inc., Display Optics,  Ltd. And Display Group, LLC, Plaintiffs vs
Visual Optics, Inc., Michael A. Nixon and Jeffrey D. Blackard, Defendants, Civil
Action No.  96-D-1616 (the "Civil Action") that was settled  effective  February
28, 1997.  The Civil Action was brought to enforce  Plaintiffs'  rights under an
agreement  executed with  Defendants  Visual  Optics,  Inc. and Michael A. Nixon
regarding the conversion of a non-exclusive  license for LED technology combined
with fiber  optic  screens to an  exclusive,  perpetual  and  worldwide  license
pursuant to a letter agreement between the parties dated February 9, 1995.

     This LED  technology  was in  development  by the  Company  in an effort to
improve the  performance  of its fiber optic screen  technology.  The  Complaint
sought a preliminary and permanent injunction enjoining the Defendants, and each
of them, from  transferring  rights to the technology,  soliciting rights to the
technology or disclosing any confidential  information  regarding the technology
to any third party.  Plaintiffs  also sought a declaration  that the license was
exclusive,  perpetual  and  worldwide  and  sought  damages  for  breach  of the
agreement.

     Plaintiffs and  Defendants  have settled the Civil Action and dismissed the
case. The principle terms of the settlement include the following:


     1.   The Company has received a transferable,  royalty-free,  assignment of
          the patent which was the subject of the original  dispute for the full
          term of the patent.

     2.   All rights, title and interest in any intellectual  property developed
          in  whole  or in  part by  Defendants  and  related  in any way to the
          technology are the sole and exclusive property of the Plaintiffs.

     3.   Plaintiff Display Group, LLC paid $41,000 to Defendants.

     4.   Defendant  Michael  Nixon has  resigned as an officer and  director of
          ADTI and terminated his employment agreement with the Company.

     5.   The  parties  have  executed  reciprocal  releases  as to  all  claims
          encompassed in the Civil Action.

     6.   The Defendants have returned all stock of the Company owned by them to
          Display Group, LLC, believed to be 350,000 shares of common stock.

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<PAGE>



                  

     7.   The Civil Action has been dismissed with prejudice.



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

     On May 22, 1997,  the Company  completed a private  placement of its Common
Stock in a transaction  exempt from the  registration  requirements  of the 1933
Act. The Company conducted the Private Placement without the participation of an
underwriter.  The Company sold 10% Convertible Promissory Notes in the aggregate
principal  amount of $500,000 to a single  accredited  investor  pursuant to the
provisions of Regulation D, Rule 506 of the 1933 Act. The  Promissory  Notes are
convertible  into 3,802,282  shares of the Company's Common Stock at the rate of
$.1315 per share  until the  earliest  to occur of  completion  of a  subsequent
private placement or December 31, 1997.


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.
-----------------------------------------

Exhibits.
---------

Exhibit 2.1  Exchange  Agreement by and between the  Company,  the  Partnership,
Display  Group,  LLC and  the  Investors,  dated  May 19,  1997,  with  exhibits
(incorporated by reference, Form 8-K dated May 19, 1997).


Reports on Form 8-K.
--------------------

     ADTI  filed a Form 8-K  dated May 19,  1997 to  report a Change in  Control
pursuant to the Exchange Agreement.




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<PAGE>



                                   SIGNATURES

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


                                             ADVANCE DISPLAY TECHNOLOGIES, INC.
                                             ----------------------------------
                                                       (Registrant)



Date: June 10, 1997                                         /S/ Darrell D. Avey
      -------------                          ----------------------------------
                                                                Darrell D. Avey
                                                          Chairman of the Board
                                                                      President
                                                 Acting Chief Financial Officer






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