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

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

For the Quarter Ended                        Commission File Number:
  September 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
----------------------------       -------           ----------
       21,657,435              Common Stock,        November 16, 1998
                              $.0001 par value

<PAGE>

                        DCI TELECOMMUNICATIONS, INC.

                                  Index


     PART I  FINANCIAL INFORMATION

       Balance Sheet September 30, 1998                               3

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

       Statements of Cash Flow
        Six Months Ended September 30, 1998 and 1997                  5

       Notes to Unaudited Financial Statements
        September 30, 1998                                            6

       Management's Discussion and Analysis of
        Financial Condition and Results of Operations                 11

PART II
       Other Information                                              15

       Signatures                                                     17






                                  2
<PAGE>

                      DCI Telecommunications, Inc.
                       Consolidated Balance Sheet
                               (unaudited)

                                                       September 30
          ASSETS                                            1998

Current Assets:
    Cash                                                 $2,696,536
    Restricted cash                                          34,475
    Investments                                              43,675
    Accounts receivable                                   4,699,374
    Receivable from SmarTalk                                650,000
    Prepaid expenses                                        140,700
    Inventory                                             1,178,059
                                                          ---------
Total Current Assets                                      9,442,819

Fixed Assets                                              2,057,780
Less: Accumulated depreciation                              317,377
                                                          ---------
Net Fixed Assets                                          1,740,403
                                                          ---------
Accounts receivable                                         919,171
Deferred costs                                              713,623
Deposits                                                     94,661
Other investments                                            61,256
Other Assets
   -    costs in excess of
      net assets acquired:
     CardCall International                              3,870,249
     Muller Media                                        1,712,403
     CyberFax                                            1,033,975
     Travel Source                                           86,379
                                                         ----------
                                                          6,703,006
Less: Accumulated amortization                              401,500
                                                         ----------
Net other assets                                          6,301,506
                                                         ----------
Total Assets                                            $19,273,439
                                                        ===========

                                    3

<PAGE>

LIABILITIES AND SHAREHOLDERS' EQUITY

Current Liabilities:
    Accounts payable and accrued expenses                $5,234,607
    Preferred stock dividend                                635,225
    Deferred Revenue                                        757,304
    Due to shareholders                                     137,939
    Income Taxes Payable                                    152,100
                                                         ----------
Total Current Liabilities                                 6,917,175

Long term accounts payable                                  666,000
Long Term Debt                                              136,495
Deferred Income Taxes                                       367,810
Due to joint venture partner                                677,076
                                                          ---------
Total Liabilities                                         8,764,556
                                                         ----------
Minority interests                                           14,400

Redeemable, convertible preferred stock,
  $1,000 par and redemption value, 2,000,000
  shares authorized, 2,510 shares issued and
  outstanding                                            2,510,050

Commitments and Contingencies

Shareholders' Equity:
    Common stock, $.0001 par value,
     500,000,000 shares authorized,
     21,677,802 shares issued and outstanding                 2,168
    Paid in capital                                      13,146,194
    Treasury Stock (1,155,000 shares at cost)            (4,104,378)
    Currency translation adjustment                         ( 4,949)
    Retained earnings subsequent to 12/31/95, date of
       quasi-reorganization (total deficit
       eliminated $4,578,587)                            (1,054,602)
                                                          ---------
Total Shareholders' Equity                                7,984,433
                                                         ----------
Total Liabilities and Shareholders' Equity              $19,273,439
                                                        ===========

         See Accompanying Notes to Consolidated Financial Statements





                                    3(a)
<PAGE>

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

                              Three Months Ended      Six Months Ended
                                September 30,           September 30,
                              1998         1997       1998         1997

  Travel Service Sales     $  286,760  $  280,987  $  617,822  $ 579,400
  Product Sales            10,701,318   2,939,499  16,395,098  5,267,658
                           ----------  ----------  ---------- ----------
  Net Sales                10,988,078   3,220,486  17,012,920  5,847,058

  Cost of Sales - Travel      280,055     240,758     564,949    521,791
                - Product   9,571,269   2,509,190  14,604,700  4,523,636
                           ----------   ---------   --------- ----------
    Gross Profit            1,136,754     470,538   1,843,271    801,631

 Selling, General &
  Admin. Expenses             825,600     355,982   1,302,256    543,587
 Salaries and
  Compensation                650,366     453,515   1,193,124    580,766
 Amortization &
  Depreciation                 98,434       6,780     265,548     16,463
 Professional and
    Consulting Fees           112,775     180,877     444,097    287,267
                            ---------    --------   --------- ----------
                            1,687,175     997,154   3,205,025  1,428,083

 Income (Loss)
   from Operations         (  550,421)   (526,616) (1,361,754)  (626,452)

Other Income and (Expense):
  Interest Expense            (11,560)    (47,797)    (91,913)   (97,715)
  Interest Income              24,746       1,011      42,933      1,036
                            ---------  ----------   ---------  ---------
                               13,186     (46,786)    (48,980)   (96,679)

  Net (Loss) - Continuing
               Operations  (  537,235)   (573,402) (1,410,734)  (723,131)

Minority interest              15,214          --      12,001         --

Loss from discontinued computer
  board operations                 --    (526,178)         --   (558,958)

Discontinued prepaid phone
  card segment - U.K.                    (585,775)         --   (551,265)

  Net Income (Loss)        (  522,021) (1,685,355) (1,398,733)(1,833,354)

  Preferred dividend         (750,000)   (195,352)   (750,000)  (204,538)
                           ----------   ---------   ---------  ---------
                           (1,272,021) (1,880,707) (2,148,733)(2,037,892)


 Basic and diluted Net
  Income (Loss) per share
   - continuing operations     ($.06)     ($.05)      ($.11)     ($.07)
   - discontinued operations      --      ($.08)         --      ($.08)
                               -----     ------      ------    -------
Net Income (Loss)
   per common share            ($.06)    ($ .13)      ($.11)     ($.15)

  Weighted average common
   shares outstanding     20,912,730 14,139,574  20,046,974 13,323,928

     See Accompanying Notes to Consolidated Financial Statements






                                   4(a)

<PAGE>

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

                                               Six Months Ended
                                                 September 30,
                                               1998          1997

Cash flows from (used in) operating activities:
Net loss from continuing operations       ($1,398,733)     ($723,131)
Adjustment to reconcile net loss from
 continuing operations to net cash from
 (used in) operating activities:
        Depreciation and amortization         265,548         16,463
        Stock issued for services                  --            800
        Minority interest                      12,001             --

   Changes in assets and liabilities:
     (Increase) Decrease in:
        Restricted cash                      (325,771)            --
        Accounts receivable                (2,057,260)      (857,861)
        Inventory                          (1,030,566)        32,583
        Deposits                              ( 4,668)         2,894
        Prepaid expenses and deferred costs  (493,715)            --

     Increase (Decrease) in:
        Accounts payable and
          accrued expenses                  1,451,423        637,731
        Deferred revenue                      439,654             --
                                             --------       --------
           Total Adjustments               (1,743,354)      (167,390)
                                             --------       --------
Net cash (used in) operating activities    (3,142,087)      (890,521)
                                             --------       --------

Cash flows from (used in) investing activities:
        Additions to fixed assets            (475,495)       (17,468)
        Investment in CardCall International       --       (110,000)
        Cash acquired with acquisition      1,170,486             --
                                             --------       --------
Net cash from (used in) investing
    activities                                694,991       (127,468)
                                             --------       --------

Cash flows from (used in) financing activities:
        Proceeds from stock
          options exercised                   432,007         38,507
        Purchase of treasury stock         (2,355,318)       (85,000)
        Due to joint venture                  677,076             --
        Payment of notes payable           (5,038,942)      (144,072)
        Increase in long term debt            101,320             --


                                    5

<PAGE>

        Proceeds from sale of
          preferred stock                   2,750,000      1,350,000
        Common stock dividend                (203,962)            --
        Advances from shareholders           (368,058)       395,142
        Sale of equity securities           8,124,761             --
                                             --------       --------
Net cash from financing activities          4,118,884      1,554,577
                                             --------       --------

Net cash used in discontinued operations           --       (443,349)

Net increase (decrease) in cash             1,671,788         93,239

Cash, beginning of year                     1,024,746        764,559
                                           ----------      ---------
Cash, end of period                        $2,696,534     $  857,798


                                              Six Months Ended
                                                 September 30,
                                             1998           1997

Supplemental disclosures of cash flow information:

Cash paid for interest                      $91,000       $  97,000

Non cash investing and financing transactions:
     Acquisitions by stock issuance:
        CardCall International                   --      $7,008,952
        CyberFax                                 --      $1,033,975
     Preferred stock dividends             $750,000      $  204,538
     Stock issued for liabilities                --       $  40,000


     See Accompanying Notes to Consolidated Financial Statements

                                  5(a)

<PAGE>

DCI Telecommunications, Inc.
Notes to Unaudited Financial Statements September 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 restatements of prior year
numbers have been made to conform to the current years presentations,  to
report  the  acquisition of Edge Communications, Inc.  as  a  pooling  of
interest,  to  account  for discontinued operations  and  to  revise  the
effective  acquisition  dates of Muller Media and CardCall  International
Holdings.

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 filed for the year ended March 31, 1998.

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

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.


                                    6

<PAGE>

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 September 30, 1998,  4,860,777  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  was  initially recorded under the  purchase  method  of
accounting, effective April 1, 1997, however the Securities and  Exchange
Commission has ruled that the effective acquisition date is May 29, 1997.
The  total  purchase  price includes the $1,610,000 in  cash,  $2,545,000
assigned  value for the stock options, and assumption of net  liabilities
of  $2,853,000.  Goodwill  was  recorded  at  $7,008,000.  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. The stock offering agreement called for the exchange  of
shares  by  DCI in the acquisition of CardCall. A condition in the  offer
was  that  the  number of DCI shares to be issued would be reduced  on  a
share  for share basis by the difference between 545, 455 and the  actual
number  of  shares  issued  in  the Series C preferred  stock  conversion
described  in  Note 10 to the financial statements. There  was  no  value
assigned  to the common stock that would be distributed per the  offering
agreement  as  these shares were not issued due to the number  of  common
shares  issued  in  the conversion of  the series C  preferred  stock  to
common stock. There was no value assigned to the common stock warrants as
the  exercise price of $4 was greater than the market value of the common
stock. The Company valued the options issued at $.30 per option ($.50-.20
exercise price). The difference ($1.60) between the exercise price,  $.20
and  the  stock valuation price of $1.80 was reduced by $1.30 for  a  50%
dilution factor, a 10% factor because the shares issued upon exercise  of
the options would be restricted and a 10% factor based upon the time from
when the shares could be exercised and tradable.
 
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 as a pooling of interests, and

                                    7
<PAGE>

accordingly, the accompanying financial information has been restated  to
include the accounts of Edge for all periods presented. Net sales and net
(loss)  earnings of the separate companies prior to date  of  acquisition
are as follows:
                                                            Three Months
                        April 1, 1998     Six Months Ended      Ended
                            through         September 30,   September 30,
                        April 30, 1998            1997          1997
                        --------------    ---------------     ---------
Net Sales:
DCI                         $  737,836         $2,253,302    $1,454,993
Edge Communications, Inc.    1,092,500          3,593,756     1,765,493
                            ----------         ----------    ----------
Combined                    $1,830,336         $5,847,058    $3,220,486
                             =========         ==========    ==========

Net(Loss) From Continuing Operations:
DCI                          ($301,528)       ($1,075,847)    (895,169)
Edge Communications, Inc.      (56,492)           369,568      321,767
                            ----------         ----------    ---------
Combined                     ($358,020)         ($706,279)   ($573,402)
                            ==========         ==========    =========

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.

                                    8

<PAGE>

The transaction was recorded under the purchase method of accounting. The
total  purchase price includes $3,000,000 in cash, Goodwill was  recorded
at $1,712,403. 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 six months ended September 30, 1998, the holders of  $687,500
of  preferred shares of Series F Convertible Preferred Stock  and  deemed
dividends of $171,750 were converted to 564,387 common shares.

During  the six months ended September 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.

During  the six months ended September 30, 1998, the holders of  $305,000
of   preferred  shares  of  Series  A  Convertible  Preferred  Stock  and
dividends of $177,717 were converted to 321,811 common shares.

In  addition, options to purchase 2,536,214 common shares were  exercised
from which the Company received $432,007.

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. Subsequent Event
------------------------
                                    
On November 6, 1998, DCI Telecommunications, Inc. signed a definitive

                                    9

<PAGE>

merger agreement with Wavetech International, Inc. The acquisition will
be accounted for as a reverse merger.

NOTE 6. Pro Forma Financial Information
---------------------------------------------------

The  following  table  summarizes  the unaudited  pro  forma  results  of
operations of the Company for the six months ended September 30, 1998 and
1997,  assuming  the  acquisitions of CardCall,  CyberFax,  Muller,  PEL,
Travel Source, Edge Communications, Wavetech International, Inc. 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.

                              Six Months Ending     Three Months Ending
                                 September 30,          September 30,
                             1998          1997        1998       1997
                             ----          ----        ----       ----

Net sales              $17,335,848    $ 8,254,629 $10,988,078 $3,400,275
                       -----------     ---------- -----------  ---------
Income (loss):
 Continuing operations $(1,808,575)  $ (1,465,990)  $(747,737) $(799,331)
 Discontinued operations        --     (1,110,223)         -- (1,111,953)
                      ------------   ------------  -----------  ---------
Net income (loss) before
 preferred dividends   $(1,808,575)   $(2,576,213) $(747,737)$(1,911,284)
                          ========       ========  ========= ===========
Net income (loss) per share:
  Continuing operations  $   (.10)     $     (.08)     $(.06)      $(.05)
  Discontinued operations      --            (.05)        --        (.06)
                         --------     -----------  ---------  ----------
     Net income (loss)    $  (.10)      $    (.13)     $(.06)      $(.11)
                         ========       =========  =========  ==========
Weighted average shares
  outstanding          24,466,441      20,076,624 24,386,441  18,746,856
                         ========        ======== ==========  ==========
                                    
                                   10

<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 six months ended September 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 six months ending September 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 pooling of interests.



                                   11

<PAGE>

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

At September 30, 1998 the Company had unrestricted cash of $2,697,000 and
$43,000 of marketable securities. During the quarter ended June 30, 1998,
the Company sold 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,  on  June 9, 1998 the former shareholders of Muller Media exercised
their  put  options  to  receive $2,000,000  in  cash,  and  the  Company
repurchased 800,000 shares of its common stock.

Other  sources  of  cash during the first six months included  $2,750,000
from the sale of preferred stock, and $432,000 from the exercise of stock
options.

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.

                                           Six Months Ended
                                             September 30,
                                            1998         1997
                                            ----         ----
Net Sales                              $17,012,920  $ 5,847,058
---------

Net  sales increased $11,165,862 in the 1998 six months compared  to  the
comparable  1997  period.  Edge sales of prepaid  phone  cards  increased
$9,004,000 due to rapid growth and new contracts. Muller Media, which was
acquired  as  of June 9, 1998, accounted for approximately $1,098,000  of
the  increase. The prepaid phone card sales of PhoneLine in 1998 exceeded
CardCaller Canada 1997 sales by $793,000 in the first six months.  Travel
Source  sales  were  up  $39,000 in 1998,  and  European  sales  were  up
$113,000.

                                           1998        1997
                                           ----        ----
Cost of Sales                          $15,169,649  $5,045,427
-------------

Cost  of  sales in 1998 exceeded 1997 by approximately $10,124,000.  Edge
cost  of  sales  associated with higher sales  noted  above  resulted  in
$8,822,000  of the increase. Costs associated with the recently  acquired
Muller Media accounted for $741,000 of the increase. PhoneLine 1998 costs
exceeded  CardCaller  Canada  by $431,000. Cost  of  sales  for  European
operations were up $122,000 on increased sales.

                                   12

<PAGE>

                                               1998        1997
                                             --------    --------
Selling, General & Administration Expense  $1,302,256    $543,587
-----------------------------------------

Selling,  general  and administrative increased $759,000  over  the  1997
period.  CyberFax  costs  increased $173,000 principally  due  to  higher
research  and  development costs as its product  got  closer  to  market.
Expenses  of  the  newly  acquired Muller  contributed  $120,000  to  the
increase.  Increased operations in Europe added $70,000 to the  increase.
SG&A  expenses  of  PhoneLine, a much larger  operation  than  CardCaller
Canada in 1997, accounted for $114,000 increased costs. SG&A expenses  of
DCI corporate and Edge increased $280,000 due to the large growth of both
organizations.

                                          1998        1997
                                          ----        ----
Salaries and Compensation             $1,193,124   $ 580,766
-------------------------

Salaries  increased $612,358 over 1997 levels. Salaries at the  corporate
level  increase  $219,000 due to wage increases and additional  personnel
added  due to growth. The acquisition of Muller accounts for $183,000  of
the  increase.  Salaries in Europe have increased $146,000 as  operations
have  now  increased. Salaries at Edge have increased $82,000 principally
due to expanded operations.

                                          1998       1997
                                          ----       ----
Amortization and Depreciation          $265,548     $16,463
-----------------------------

The $16,463 in 1997 represents depreciation expense for continuing
operations. Included in 1998 is depreciation of $114,048, amortization of
Travel Source goodwill of $2,500, Muller goodwill of $24,000, CyberFax
goodwill of $25,000 and CardCaller Canada goodwill of $100,000.


                                         1998        1997
                                         ----        ----
Professional and Consulting Fees      $444,097     $287,267
--------------------------------

Professional  fees  increased $157,000 over the 1997  period.  Profession
fees  at  PhoneLine  were  $71,000 higher than CardCaller  Canada's  1997
charges  principally due to the start up of the new joint  venture.  Edge
professional fees also rose $62,000 due to its dramatic growth. Legal and
accounting fees of the newly acquired Muller and increased CyberFax  fees
principally account for the remaining difference.


                                   13

<PAGE>

                                        1998        1997
                                         ----       ----
Interest Expense                      ($91,913)   ($97,715)
Interest Income                        $42,933     $ 1,036
---------------

Interest expense did not change materially from 1997.

The $42,000 increase in interest income is a result of $22,000 earned  by
DCI  on  short term investments plus $20,000 of interest earned on short-
term investments of the newly acquired Muller Media.

                                           1998       1997
                                           ----       ----
Discontinued operations - Computer Board     --    ($558,958)
                        - Prepaid Phone
                            Card - UK        --    ($551,265)

The  computer board loss in 1997 reflects the discontinuance of the Alpha
Products  division at September 30, 1997. Included in the  loss  was  the
write-off  of  unamortized customer base totaling $493,000.  The  prepaid
phone card discontinued loss was due to a non-compete clause in the  1997
distribution contract sale to Smartalk for $9,000,000, which necessitated
the shut-down of the UK operations.


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

On  July  27, 1998 the Company filed a Form 8K which included  the  Stock
Purchase  Agreement among Locus Corporation, Jason Chon, J.P. Lee,  James
Ju and DCI Telecommunications, Inc.

On  August  17,  1998  the Company filed a Form 8K  which  contained  the
audited financial statements for Edge Communications, Inc. for the  years
ending March 31, 1998 and 1997.

On  August  31,  1998  the Company filed a Form 8K  which  contained  the
audited financial statements for CardCall International Holding, Inc. for
the years ending March 31, 1997, 1996 and 1995.

On  September 11, 1998 the Company filed a Form 8K which included a joint
venture  agreement  between  TIMEWorldcom  U.S.  and  the  Company  Note:
TIMEWorldcom U.S. are not affiliated in any way with WorldCom, Inc.

On September 29, 1998 the Company filed a Form 8k which contained certain
sales agreements between Edge Communications and Latin Debit Technologies
for the sale of Edge's prepaid phone card products.



                                   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: November 16, 1998                By: Joseph J. Murphy
                                        ----------------
                                        Joseph J. Murphy
                                        President

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




                                   17