<PAGE>   1
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                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

 [  X  ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1997.

                                       OR

 [     ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES 
         EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM __________________
         TO ________________.


                         Commission File Number: 0-23686

                             PC SERVICE SOURCE, INC.
             (Exact name of registrant as specified in its charter)


           DELAWARE                                        52-1703687
           --------                                        ----------
(State or other jurisdiction of                         (I.R.S. Employer
 incorporation or organization)                        Identification No.)


2350 VALLEY VIEW LANE, DALLAS, TEXAS                               75234
------------------------------------                               -----
(Address of principal executive offices)                         (Zip Code)


                                 (972) 481-4000

              (Registrant's telephone number, including area code)


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) 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 such filing
requirements for the past 90 days. Yes  X  No   
                                       ---    ---


As of October 31, 1997, there were 5,752,320 shares of the registrant's common
stock outstanding.

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                     PC SERVICE SOURCE, INC. AND SUBSIDIARY
                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                             Page
                                                                                            Number
                                                                                            ------
<S>                                                                                           <C>
PART I.     FINANCIAL INFORMATION

            Item 1.  Financial Statements

                     Condensed Consolidated Balance Sheets
                     September 30, 1997 (Unaudited) and December 31, 1996 .................   1

                     Condensed Consolidated Statements of Operations (Unaudited)
                     Three and Nine Months Ended September 30, 1997 and 1996 ..............   2

                     Condensed Consolidated Statements of Cash Flows (Unaudited)
                     Nine Months Ended September 30, 1997 and 1996 ........................   3

                     Notes to Condensed Consolidated Financial Statements (Unaudited)......   4

            Item 2.  Management's Discussion and Analysis of
                     Financial Condition and Results of Operations ........................   5


PART II.    OTHER INFORMATION

            Item 6.  Exhibits and Reports on Form 8-K......................................   9

SIGNATURES  ...............................................................................  10
</TABLE>









<PAGE>   3




PART I.  FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS


                     PC SERVICE SOURCE, INC. AND SUBSIDIARY
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                    (Unaudited)
                                                                    September 30,    December 31, 
                                                                         1997            1996      
                                                                    -------------    ------------     
                  ASSETS                                                                            
<S>                                                                    <C>              <C>         
Current assets:                                                                                     
  Cash and cash equivalents ......................................     $   444          $ 3,650     
  Accounts receivable, net .......................................      16,011           12,978     
  Inventories ....................................................      19,585           19,590     
  Income taxes receivable ........................................         990             --       
  Deferred income taxes ..........................................         371              866     
  Other current assets ...........................................       1,158              763     
                                                                       -------          -------     
         Total current assets ....................................      38,559           37,847     
                                                                                                    
Property and equipment, net ......................................      12,961           10,418     
Other assets, net ................................................       5,025            1,909     
                                                                       -------          -------     
                                                                                                    
  Total Assets ...................................................     $56,545          $50,174    
                                                                       =======          =======     
         
         LIABILITIES AND STOCKHOLDERS' EQUITY                                  
                                                                                                    
Current liabilities:                                                                                
  Accounts payable ...............................................     $ 9,671          $ 7,821     
  Accrued liabilities ............................................       4,509            2,600     
  Income taxes payable ...........................................        --                 38     
  Revolving line of credit .......................................       4,598            3,053     
  Current installments of obligations under capital leases .......       1,059              841     
                                                                       -------          -------     
         Total current liabilities ...............................      19,837           14,353     
                                                                                                    
Obligations under capital leases .................................       3,056            3,059     
Deferred income taxes ............................................         724              566     
Stockholders' equity .............................................      32,928           32,196     
                                                                       -------          -------     
                                                                                                    
  Total Liabilities and Stockholders' Equity .....................     $56,545          $50,174     
                                                                       =======          =======     
</TABLE>








     See accompanying notes to condensed consolidated financial statements.


                                       1
<PAGE>   4


                     PC SERVICE SOURCE, INC. AND SUBSIDIARY
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                    (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
                                   (UNAUDITED)


<TABLE>
<CAPTION>
                                             Three Months Ended       Nine Months Ended
                                                September 30,            September 30,
                                             -------------------     -------------------
                                               1997        1996        1997        1996
                                             -------     -------     -------     -------
<S>                                          <C>         <C>         <C>         <C>    
Net revenues ...........................     $33,495     $28,478     $97,627     $81,545
Cost of revenues .......................      23,579      20,490      69,253      57,668
                                             -------     -------     -------     -------
  Gross margin .........................       9,916       7,988      28,374      23,877
                                             -------     -------     -------     -------
                                                         
Operating expenses:
  Selling, general and administrative ..       8,756       7,122      24,260      19,359
  Depreciation and amortization ........         943         570       2,487       1,502
                                             -------     -------     -------     -------

    Total operating expenses ...........       9,699       7,692      26,747      20,861
                                             -------     -------     -------     -------

    Earnings from operations ...........         217         296       1,627       3,016

Interest expense, net ..................         208          31         478         502
                                             -------     -------     -------     -------

    Earnings before income taxes .......           9         265       1,149       2,514

Income tax expense .....................           4          86         426         922
                                             -------     -------     -------     -------

    Net earnings .......................     $     5     $   179     $   723     $ 1,592
                                             =======     =======     =======     =======



Earnings per common share ..............     $   .00     $   .03     $   .12     $   .31
                                             =======     =======     =======     =======

Weighted average common shares
     outstanding .......................       5,880       5,991       5,882       5,095
                                             =======     =======     =======     =======
</TABLE>









     See accompanying notes to condensed consolidated financial statements.



                                       2
<PAGE>   5




                     PC SERVICE SOURCE, INC. AND SUBSIDIARY
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                   Nine Months Ended
                                                                                      September 30
                                                                                ------------------------
                                                                                  1997            1996
                                                                                --------        --------
<S>                                                                             <C>             <C>     
Cash flows from operating activities:
  Net earnings ..........................................................       $    723        $  1,592
  Adjustments to reconcile net earnings to net cash provided by (used in)
      operating activities:
      Depreciation and amortization .....................................          2,487           1,502
      Deferred income taxes .............................................            653             583
      Other, net ........................................................         (1,444)            (75)
  Changes in operating assets and liabilities:
      Accounts receivable ...............................................         (3,033)         (2,550)
      Inventories .......................................................              5          (5,900)
      Other current assets ..............................................           (383)           (158)
      Accounts payable ..................................................          1,850            (603)
      Accrued liabilities ...............................................          1,909           1,236
      Income taxes receivable/payable ...................................         (1,028)            184
                                                                                --------        --------
  Net cash provided by (used in) operating activities ...................          1,739          (4,189)
                                                                                --------        --------
Cash flows from investing activities:
     Capital expenditures ...............................................         (3,990)         (2,736)
     Payment for acquisition of business ................................         (1,485)           --
     Payment for purchase of equity interest ............................           (332)           --
                                                                                --------        --------
Net cash used in investing activities ...................................         (5,807)         (2,736)
                                                                                --------        --------
Cash flows from financing activities:
    Net revolving line of credit borrowings (repayments) ................          1,545          (8,934)
    Principal payments under capital lease obligations ..................           (692)           (333)
    Net proceeds from public offering ...................................           --            18,521
    Proceeds from exercise of common stock options ......................              9             177
                                                                                --------        --------
Net cash provided by financing activities ...............................            862           9,431
                                                                                --------        --------

Net increase (decrease) in cash and cash equivalents ....................         (3,206)          2,506
Cash and cash equivalents at beginning of period ........................          3,650             833
                                                                                --------        --------
Cash and cash equivalents at end of period ..............................       $    444        $  3,339
                                                                                ========        ========
</TABLE>









     See accompanying notes to condensed consolidated financial statements.



                                       3
<PAGE>   6




                     PC SERVICE SOURCE, INC. AND SUBSIDIARY
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                 (IN THOUSANDS)
                                   (UNAUDITED)

(1)      BASIS OF PRESENTATION

         These unaudited condensed consolidated financial statements of PC
         Service Source, Inc. and Cyclix Engineering Corporation, its majority
         owned subsidiary (collectively, the "Company"), for the quarter ended
         September 30, 1997, have been prepared in accordance with generally
         accepted accounting principles for interim financial reporting.
         Accordingly, they do not include all of the information and footnotes
         required by generally accepted accounting principles for complete
         financial statements and should be read in conjunction with the audited
         consolidated financial statements and notes thereto included in the
         Company's Form 10-K for the year ended December 31, 1996. All
         significant intercompany balances and transactions have been eliminated
         in consolidation. In the opinion of management, all adjustments,
         (consisting only of normal recurring adjustments) considered necessary
         for a fair presentation of the interim financial information have been
         included. The results of operations for any interim period are not
         necessarily indicative of the results of operations for a full year.


(2)      EARNINGS PER COMMON SHARE

         Earnings per common share are calculated based on the weighted average
         number of common shares and the dilutive effect of common equivalent
         shares, to the extent they are material.

(3)      SUPPLEMENTAL CASH FLOW INFORMATION

         Net cash flow from operating activities reflects cash payments for
         interest and income taxes as follows:

<TABLE>
<CAPTION>
                                                             Nine Months Ended
                                                               September 30,
                                                           --------------------
                                                             1997         1996
                                                           -------       ------
<S>                                                        <C>           <C>   
   Interest paid, net  ..............................      $   419       $  477
   Income taxes paid, net ...........................          749          150
</TABLE>

         During the first nine months of 1997 and 1996, the Company acquired
         $907 and $1,910 of assets through non-cash capital lease transactions.



                                       4
<PAGE>   7




                     PC SERVICE SOURCE, INC. AND SUBSIDIARY


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

RESULTS OF OPERATIONS

The following table displays the Company's statements of operations as a
percentage of net revenues:

<TABLE>
<CAPTION>
                                                      Three Months Ended         Nine Months Ended
                                                         September 30,             September 30,
                                                      ------------------        ------------------
                                                      1997         1996         1997         1996
                                                      -----        -----        -----        -----
     <S>                                              <C>          <C>          <C>          <C>   
     Net revenues .............................       100.0%       100.0%       100.0%       100.0%
     Cost of revenues .........................        70.4         72.0         70.9         70.7
                                                      -----        -----        -----        -----
         Gross margin .........................        29.6         28.0         29.1         29.3
                                                      -----        -----        -----        -----
     Operating expenses:
         Selling, general and administrative...        26.2         25.0         24.8         23.8
         Depreciation and amortization ........         2.8          2.0          2.6          1.8
                                                      -----        -----        -----        -----
          Total operating expenses ............        29.0         27.0         27.4         25.6
                                                      -----        -----        -----        -----

          Earnings from operations ............          .6          1.0          1.7          3.7

     Interest expense, net ....................          .6           .1           .5           .6
                                                      -----        -----        -----        -----
     Earnings before income taxes .............          .0           .9          1.2          3.1

     Income tax expense .......................          .0           .3           .5          1.1
                                                      -----        -----        -----        -----
              Net earnings ....................         0.0%          .6%          .7%         2.0%
                                                      =====        =====        =====        =====   
</TABLE>


THREE MONTHS ENDED SEPTEMBER 30, 1997 COMPARED TO THREE MONTHS ENDED
SEPTEMBER 30, 1996

Net revenues increased by $5.0 million, or 17.6%, from $28.5 million for the
quarter ended September 30, 1996 to $33.5 million for the quarter ended
September 30, 1997. The increase in revenues was primarily due to increased
sales to existing customers.

The gross margin percentage increased in the third quarter of 1997 to 29.6% from
28.0% in the same period in 1996. The Company's gross margin on each computer
spare part in its inventory is different; therefore, any change in the mix of
parts sold affects the Company's gross margin for a particular period. The
increase in gross margin for the third quarter of 1997 was largely due to
favorable variations in the mix of parts sold during that period coupled with
price increases on products which are offered by the Company, but not readily
available in the marketplace.




                                       5
<PAGE>   8




                     PC SERVICE SOURCE, INC. AND SUBSIDIARY


Selling, general and administrative expenses ("SG&A") as a percentage of net
revenues increased to 26.2% in the third quarter of 1997 compared to 25.0% for
the same period of 1996. The increase in SG&A, as a percentage of net revenues,
was primarily attributable to higher personnel related expenses incurred by the
Company during the third quarter of 1997. This increase included one-time
charges relating to a ten percent (10%) reduction in the Company's workforce at
the end of the third quarter of 1997, which included the elimination of
positions added after September 1996. Management effected the workforce
reduction in response to the delay in obtaining significant anticipated revenues
from new original equipment manufacturer outsourcing arrangements. Charges
relating to the reduction in workforce had a $0.02 negative impact on earnings
for the third quarter of 1997.

Depreciation and amortization increased as a percentage of net revenues to 2.8%
in the third quarter of 1997 compared to 2.0% in the same period of 1996. The
increase was due to a higher asset base in 1997 resulting from an increased
level of capital expenditures incurred by the Company relating largely to
hardware and software for internet, purchasing and distribution applications.

Interest expense (net) as a percentage of net revenues increased to .6% during
the third quarter of 1997 from .1% during the same period of 1996 due to higher
average outstanding balances on the Company's revolving line of credit during
the third quarter of 1997.

The Company recorded net earnings of $5,000, or $.00 per common share, on
5,880,000 shares for the third quarter of 1997, compared with net earnings of
$179,000, or $.03 per common share, on 5,991,000 shares for the same period in
1996. Cyclix adversely impacted earnings in the third quarter of 1997 with a
$300,000 loss compared to a $68,000 loss in the 1996 period. Cyclix's loss was
primarily a result of lower than anticipated business volumes from new original
equipment manufacturer outsourcing arrangements. This loss combined with the
other items discussed above constitutes the reduction in net earnings from 1996
to 1997.


NINE MONTHS ENDED SEPTEMBER 30, 1997 COMPARED WITH NINE MONTHS ENDED
SEPTEMBER 30, 1996

Net revenues increased by $16.1 million, or 19.7%, from $81.5 million for the
first nine months of 1996, to $97.6 million for the first six months of 1997.
The increase in revenues for the first nine months of 1997 is attributable to
the reasons set forth above in the three month discussion.

The gross margin percentage decreased in the first nine months of 1997 to 29.1%
from 29.3% in the same period in 1996. As discussed above, fluctuations in gross
margins are attributable to ongoing changes in product mix.

SG&A as a percentage of net revenues increased to 24.8% in the first nine months
of 1997 compared to 23.8% in the same period of 1996. The increase in SG&A for
the first nine months is due to the same reasons discussed above.

Depreciation and amortization increased as a percentage of net revenues to 2.6%
in the first nine months of 1997 compared to 1.8% in the same period of 1996.
The increase was due to a higher asset base in 1997 resulting from an increased
level of capital expenditures incurred by the Company relating largely to
hardware and software for internet, purchasing and warranty system applications.



                                       6
<PAGE>   9




                     PC SERVICE SOURCE, INC. AND SUBSIDIARY


Interest expense (net) as a percentage of net revenues decreased to .5% during
the first nine months of 1997 from .6% during the same period of 1996.

The Company recorded net earnings of $723,000 or $.12 per common share, on
5,882,000 shares for the first nine months of 1997 compared with net earnings of
$1,592,000 or $.31 per common share, on 5,095,000 shares for the same period in
1996. Cyclix experienced a $610,000 loss during the first nine months of 1997,
compared to a loss of $246,000 in the comparable 1996 period as a result of
lower than anticipated business volumes from new service arrangements. High SG&A
expenses in addition to the loss incurred by Cyclix significantly impacted net
earnings.

LIQUIDITY AND CAPITAL RESOURCES

The Company currently maintains a revolving bank line of credit, which provides
a borrowing capacity of $20 million. At September 30, 1997, the Company had $4.6
million outstanding, leaving $15.4 million unused and available. Further, the
Company currently has financing agreements in place for 1997 that allow for the
acquisition of $2.5 million of capital assets through leasing arrangements.
During the first six months of 1997, the Company acquired $.9 million through
these capital lease arrangements.

The Company has historically financed its working capital requirements and its
capital expenditures from its revolving bank credit facility, financing
agreements, equity financing and internally generated funds. Cash provided by
operating activities was $1.7 million for the first nine months of 1997 compared
with cash used by operating activities of $4.2 million. The increase in cash
provided by operations in the 1997 period was primarily due to lower working
capital requirements as a result of improved operating efficiencies experienced
through inventory management.

During January 1997, the Company acquired a 19.5% equity interest in a service
parts and logistics company in the United Kingdom for approximately $332,000.

During August 1997, Cyclix acquired Hi-Tek Services, Inc. of Hayward, California
for approximately $1.5 million. Hi-Tek Services, Inc. provides the Company a
repair and remanufacturing presence close to many of its customers in the
Silicon Valley.

Capital expenditures, including capital assets acquired through leasing
arrangements, totaled $4.9 million for the first nine months of 1997 compared
with $4.6 million in 1996. Expenditures in the 1997 period were primarily used
for improvements and modifications to the Company's information systems.

The Company believes the cash generated from operations, its revolving bank
credit facility and equipment financing agreements will be sufficient to meet
its 1997 working capital and capital expenditure requirements.



                                       7
<PAGE>   10




                     PC SERVICE SOURCE, INC. AND SUBSIDIARY


EFFECTS OF INFLATION

The Company believes that the effects of inflation on its operations have not
been material during the past two years.

CAUTION REGARDING FORWARD-LOOKING STATEMENTS

The Company occasionally makes forward-looking statements concerning its plans,
goals, product and service offerings, and anticipated financial performance.
These forward-looking statements may generally be identified by introductions
such as "outlook" for an upcoming period of time, or words and phrases such as
"should", "expect", "hope", "plans", "projected", "believes", "forward-looking"
(or variants of those words and phrases) or similar language indicating the
expression of an opinion or view concerning the future.

These forward-looking statements are subject to risks and uncertainties based on
a number of factors and actual results or events may differ materially from
those anticipated by such forward-looking statements. These factors include, but
are not limited to: the growth rate of the Company's revenue and market share;
the consummation of new and the non-termination of existing OEM outsourcing
arrangements and service provider alliances; the Company's ability to
effectively manage its business functions while growing the Company's business
in a rapidly changing environment; the ability of the Company to adapt and
expand its services in such an environment; the effective and efficient
purchasing of parts and processing of sales orders; and the quality of the
Company's plans and strategies, and the ability of the Company to execute such
plans and strategies.

In addition, forward-looking statements concerning the Company's expected
revenue or earnings levels are subject to many additional uncertainties
applicable to competitors generally and to general economic conditions over
which the Company has no control. The Company does not plan to generally
publicly update prior forward-looking statements for unanticipated events or
otherwise and, accordingly, prior forward-looking statements should not be
considered to be "fresh" simply because the Company has not made additional
comments on those forward-looking statements.



                                       8
<PAGE>   11




                     PC SERVICE SOURCE, INC. AND SUBSIDIARY
                           PART II. OTHER INFORMATION


ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

     A.  EXHIBITS

         The following exhibits are filed as part of this report:

                  EXHIBIT
                    NO.                   DESCRIPTION
                  -------                 -----------
                    27             Financial Data Schedule

     B.  REPORTS ON FORM 8-K

         No reports on Form 8-K have been filed by the Registrant during the
         three (3) months ended September 30, 1997.





                                       9
<PAGE>   12




                     PC SERVICE SOURCE, INC. AND SUBSIDIARY


                                   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.





                                    PC SERVICE SOURCE, INC.
                                    ---------------------------------------
                                    (Registrant)



November 12, 1997                   /S/  DANNY G. HAIR
                                    ---------------------------------------
                                    Danny G. Hair
                                    Senior Vice President and 
                                    Chief Financial Officer
                                    (Principal Financial Officer)






                                       10
<PAGE>   13




                                INDEX TO EXHIBITS


<TABLE>
<CAPTION>
EXHIBIT
   NO.            DESCRIPTION
-------           -----------
<S>               <C>                                  
    27            Financial Data Schedule
</TABLE>



                                       11